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 going into today.

nasdaq up more than 2% for the week. treasuries kind of mixed. we saw some buying earlier. our road map begins with renewed geopolitical stocks. rising tariff and trade concerns. we'll break down what investors need to know ahead of these final trading days of 2024. >> all that ahead. plus netflix setting new streaming records for its nfl christmas doubleheader. beyonce, to your point, sara, i think driving a lot of the viewership. we'll give you those numbers ahead. shares of netflix down a little ahead of the open. openai laying out its for-profit plan saying it needs more capital than imagined. which is interesting, because i can imagine a lot of capital. >> turns out it's expensive to make a.i. turning to the markets, though, the ten-year yield holding just above 4.6% with the s&p and nasdaq on pace for another week in the green as mentioned. we are barely positive for the

month of december, at least if you look at the s&p 500. for the nasdaq we're up 4% which speaks to the convergence and leadership by mega cap tech. what's interesting this morning, the turmoil overseas. there's news there on the political front. >> i know. i know. but -- and it says anchor chat, let's chat. i think it's good for america. i think it's good for the united states and something we talked about before. germany was the fourth biggest economy in the world. it was the heart and soul of the industrial europe. it's had its struggles. i've talked about that for three plus years. south korea, okay, a lot of semiconductors, big ships, lng ships. i wonder if all this turmoil in sophisticated capital markets of the world, sends money here. >> 100%. >> and benefits the united states. >> that's been one of the stories of the year, in fact. here's some headlines to run you through what's happening. south korean lawmakers impeach the acting president. >> why would anybody want to be

president of south korea, by the way? they all end up in jail, missing or worse. >> what happened -- >> the last seven or eight. >> the last president, remember, had that short-lived martial law order, plunged the country into political turmoil. there was an accounting president here. not able to fulfill parliament. now he's out. now the deputy prime minister and finance minister is going to be acting. it's a mess. you can see it in the south korean stock market, the yuan. and currency, too, familiar chaos on the germany front. president dissolved the parliament, called for a snap election on february 23rd after olaf scholz -- >> he steroid -- it's not him. let's go back to gerhard schroeder were to walk down the street in munich would get

yelled at because he sold their industrial soul to europe. that was the german economic model. both those things are over. the in order stream nordstream somebody blew it up, we'll never know. lng, first shipment on its way to germany. olaf scholz miscalculated, sht ug down the last three nuclear reactors. their electricity costs just hit a record high last week. last week, hit a record high. they're going to have to choose between industrialization and lower energy prices. that's my rant for it the day. it's 9:04. we have to go home now. >> they also have very little economic growth, if any -- >> why would you start a business there? >> to your point there, brian, all of this continues to draw capital into the united states. the u.s. has outperformed europe this year by the most ever in

dollar terms. mark newton from fund strat has a great pie chart that shows how big the magnificent 7 are, the big tech stocks in the u.s., relative to the entire stock market of europe. i think we have that chart. take a look. >> mark is a hokie, by the way, virginia tech, so that's -- >> magnificent 7, $16.4 trillion. the euro stoxx 600. the entire european stock arket, $17 trillion. it is bigger than that. there's the s&p 500 which is $51.6 trillion and granola which are some growth names, a louis vuitton that fund strat has liked before don't come clothe to the big stock growths in the u.s. that's the story. >> novo nordisk is danish, they're about a fourth of the denmark economy. you have basically lego, novo

nordisk, and what's the -- carlsberg beer. germany is in trouble. i like the nation, looking at the camera, if you don't get your energy costs down, and it's probably too late, if you don't get your energy costs down, you can't compete. why would bmw, bosch, any car or chemical companies start or open up a factory again? you have shell, i know they're not german, $4 billion chemical factory outside pittsburgh, pa. you wonder what the industrial future of germany looks like given their political upheaval and energy. >> that's one issue. the other thing that's interesting to note is divergent monetary policy paths, perhaps. the fed is pausing now, right? they've said they'll be much more cautious on the rate cut story. europe not so much. they don't have the growth we have. europe yaes interesting rates are already down to 3%.

where are ours? 4.25 to -- going up -- >> 4.6 -- >> i'm saying the fed fund rate. we're a lot higher and yet the money has gone into the u.s. rather than europe. even though europe has lower rates and expected to lower rates next year as they find their neutral, which is their rate they don't think shrinks the economy or expands the economy too much. it's a lot lower -- >> i'm the energy expert, you're the fed expert. is that fair to say? the currency -- >> i like to pay attention to the macro. >> the macro for me is a jumbled mess. let me ask you this. is there an -- we can ask ed in a minute. you can be negative on the german economy but positive on the stock market, which sounds weird, but hear me out. if interest rates in germany continue to go down and diverge from here, we go to 5% on the

ten-year, they're at 2.5%, do you make the case that on a relative and absolute basis, europe is a better bargain than the united states. >> you can definitely make that case. here's one additional plus in that side of the story, which is, because of the divergence in monetary policy they're lowering interest rates, they have lower growth. the euro has gotten very cheap. it's ened a lot. we're almost against the parity. that makes exports more competitive. that should help them ultimately -- >> assuming they're exporting anything. >> that and european easier monetary policy. it's why the euro stocks have actually done pretty well this year. they haven't performed as well as the united states. >> germany is up 20 -- on a dollar basis, u.s. dollar basis, the german market is up, don't quote, about 20 -- you're going to quote me. you're going to look. >> you know, that's what -- >> you're putting me on the spot. >> what do you think? let's see. i'll tell you if you're right. >> i would say 20.4% for the --

>> not bad. 19. >> i was going to say 19. >> 19% dax year-to-date. >> i was going to say 19. >> they have had easier policy and that's why. >> do they have dividends? i'm right with dividends. the point is the german economy has stunk up the joint but the perspective has been okay because of low rates. >> the strong case for europe is everyone hates it. the action is in the u.s., right? everyone -- that's one of the most popular trades out of international markets into the u.s. that's why the outperformance of the u.s. economy, of the u.s. stock market, of the u.s. dollar, it's all come in. >> have we topped out in favor of -- at what point -- again, great question for ed. ed, if you're listening, get ready. is there a case where you say, we've just made all the money we can make here and our money is better served over there? by there i mean europe. >> ed yardeni has liked the u.s.

market, right with his optimistic call. is it time to turn the table and go broad now, ed? >> not really. i'm probably going to overstate my welcome in the united states. i've been recommending staying home rather than going global since 2010. and it's worked -- i'm shocked at how well it's worked. at some point i guess it's going to stop working. the u.s. has a lot going for it. for example, earnings are probably going to be up quite dramatically this coming year. we're looking for $285 a share for the s&p 500. i think we're above all the strategists on the street. that's an 18% increase. i see the market going up on earnings -- not on valuation, just on earnings alone, i think there's a lot of upside in the american market. foreign markets, not so much. as you said -- i agree with your thinking along contrarian lines but i can't get there based on what i see in terms of the economic and political fundamentals.

>> what is causing earnings expectations, in your mind, to go up? >> well, my expectations have gone up for sure. and i think it's -- after three years of the most widely anticipated recession of all times, it never happened. for three years there have been fears of a recession. if monetary tightening couldn't cause a recession, if geopolitical cries couldn't cause it to spike up and cause a recession, what's really left? well, you know, i think you can come back and i would come back with, i am concerned about tariffs but i don't think that's going to lead to a recession. i think it's going to lead to serious negotiations about freer trade. at the end of the day, the outlook for earnings is totally dependent on the outlook for the economy, which looks great to me. we've been talking about the roaring 2020s since 2019. and it's been roaring. stock market record high. earnings have actually done very well up till now. we think they're going to be

driven by productivity. >> so, i just posted, ed, to my twitter or x, as they call it, what's your best investment -- not you, but what do the viewers think is the better investment bet for next year, u.s., germany, china or somewhere else. i would like you to answer that question. but i think you have sara and i's macro points. you're the expert. back our macro point is with germany so week and brazil is a disaster and china stimulating, but that's probably not going to work, is this, meaning the u.s., and i'm going to put an eagle on my shoulder and eat apple pie and a hot dog, is this the most investable market in the world? because the rest of the world is still so screwed up? >> yeah. i think that's the bottom line. it summarizes exactly what's going on overseas. things are a mess. and the outlook for the u.s. remains strong. the dollar has been strong.

and, of course, we have a tremendous amount of consumer spending, a lot of baby boomers are retiring and spending their nest egg. so, consumers have been remarkably resilient. they actually like high interest rates and capital spending also hasn't been interest rate sensitive. quite the con temporary. it's remained strong because a lot of its technology -- 50% of nominal spending in the u.s. is technology. you're either make technology or use technology. if you don't use technology, i think you'll be at a tremendous competitive disadvantage. >> ed, you're the guy who coined the term bond vigilantes. people are using that term again when they're looking at higher treasury yields. i don't buy that it's like deficit and debt related. i feel its changing outlook for inflation and growth. what do you think? >> i think it's some combination of all those things. look, i think, you know, i'm thinking of writing a piece for

next week with the headline the doge boys versus the bond vigilantes or the bond vigilantes versus the doge boys. you might recall back in the early days of clinton, he was warned by robert rubin and james carville he had to play kate the bond vigilantes. he couldn't annoy them. you had to have fiscal discipline. i think the bond vigilantes have pushed bonds up 100 basis points on september 18th. so the fed fund rate is down 100 points and the ten-year is up 100 points. i think that's a pretty strong message from the bond vigilantes -- >> when you say bond vij lan tis, aren't you referring to the investors that are pushing fiscal discipline? >> yes. >> that's what you think is happening here? since the fed raised -- since the fed cut rates, hasn't it been that the economy has done really well, better than

expected? that inflation outlook has gone up in light of the election and in light of the easing monetary policy? >> it's unrelated. i mean, inflation and fiscal policy and monetary policy are all clearly related. i think what the bond vigilantes were saying, we've gone through a couple of years where monetary policy was tight and yet fiscal policy was so loose that it triggered inflation. and it took a couple of years of tight monetary policy to bring inflation down. now that inflation is down, does it really make sense to have easy monetary policy and easy fiscal policy? clearly the trump administration is going to put for a continuation of tax cuts. and, you know, how the doge boys are going to come up with $2 trillion in spending cuts. by the way, they haven't made it clear, are they talking about a one-year cut or over the next ten years? usually the cbo, the

congressional budget office, when they look over things, they look over a ten-year period. i can see them doing it over ten years, but one year, i don't think that's likely. i think the bond vigilantes are concerned about inflation. they're concerned the fed is easing stimulating an economy that doesn't need to be stimulated. and they're not convinced that the trump administration is going to do much about the fiscal outlook. >> all right, ed. thank you very much. it's great to talk to you. happy new year. >> happy new year. thank you. >> ed yardeni. just the point for u.s. assets, including u.s. debt, yesterday there was a big auction. last major auction of the year. the seven-year auction. very strong demand. $44 billion sold of seven-year notes. there was a lot of demand. it could be why you're seeing some buying in the last few hours of buying. >> i think your point is well taken. you can record that, that i said it. >> i'll take it. >> the u.s. market is the best market to invest in until it's

not. and ed makes a good point. he didn't bring it up in this interview but only six bear markets in the last 50 years. they hurt more. they tend to be violent and sharp and painful but six bear markets in 50 years. that's why stocks tend to go up. >> long-term bull. >> the end. financials among the best-performing sectors so far this year, but will 2025 see even more opportunity with this group with a trump 2.0 presidency expected to bring with it new deregulation? we'll break down whether it could lead to a boom in m&a and banks. taking a look at futures. we have a lower open coming. dow futures down 230. they have just taken another mini leg lower. still looking at gains for the week. more "squawk on the street" when we come right back.

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in fact, if you've been up and paying attention at home, don't worry, we are. the financial sector up more than 30% since january. but, again, the question is always what happens next. for the year ahead, one word dominating the conversation is consolidation. two words also dominating the conversation are leslie picker and she has details on the banks and financials. good morning, leslie. >> good morning, brian. you're right. the banking bulls see the prospect of consolidation giving a boost to the sector in 2025. over the past few quarters we've actually seen a rebound in activity with u.s. banks notching 14 billion worth of mergers this year, very much surpassing 2022 and 2023 levels. the question is whether that momentum continues and even accelerates into the new year. banks may be emboldened by the recent performance of their peers, as kbw pointed out in a recent note.

examples they cite. kbw recommends buying squares of cadence bank, citizens first bank, prosperity and thompkins. william dencheck has been outspoken about m&a banks with strong core retail markets in desirable markets. washington seems to be amenable as well. the house financial services committee recently proposing measures that would reduce obstacles for community bank mergers and regulate the way they evaluate bank deals. a bank ceo recently named the next chair of the committee. the flip side of deregulation could bring down the cost of compliance. me may opt to use that capital for digitizing operations, expanding capabilities. 2024 saw a cautionary tale of bank m&a. new york community bank had been bumging up through acquisition of flag star and signature and

these pushed the firm above a $100 billion in asset threshold which meant stricter capital rules that it was unprepared for for commercial real estate but soured and that led to losses of 71% year-to-date, guys. >> yeah, good point. remember that? leslie, thank you very much. leslie picker. as we head to break, apple inching higher towards that $4 trillion market cap mark on pace for another week of gains. we'll check in at the open. more "squawk on the street" when we come right back.

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we are heading for a lower start on wall street. dow futures down 255 into the open. nasdaq futures down 142. still chalking up what looks to be a winning week. the opening bell moments away. do not forget, you can catch us any time, anywhere. listen to and follow the "squawk on the street" opening bell 'lbeig bk. wel rhtac

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welcome back here. look at that cfo, chief financial officer, sara, optimism is on the rise. it is a new survey. comes from apollo investments. cfo optimism, they're applauding the graphic. >> it's a good graphic.

>> the opening bell. >> i'm looking at it. so, it's their own company and about the economy, but they're getting more optimistic about the economy in particular. >> let's just call it for the end of the year, more optimistic, people clapping. the bell ringing. >> yes. this is the opening bell. and the cnbc realtime exchange here at the big bad. it's pinstripe bowl, coaches of the university of nebraska football team doing the opening. >> what's your favorite bad boy mower? we were discussing lawn mowers. she lives in an apartment. she went to northwestern. >> i don't know what it is. >> we have a college football

game, nebraska against boston college bad boys. looking at the market sector. every sector is opening lower. i go first to tech and the nasdaq down 0.6% in the early action. again, it's having a strong week and strong month. up more than 4% for the month of december as big cap tech remains the star of the show. despite all those calls for broadening out. yesterday the russell, we'll see if we have some catch-up here. sometimes some of the cheaper stocks are the stocks that have lagged behind all year catch a bid. we did see that in yesterday's action. walgreens, target, some losers were higher -- >> i want to be positive. i want to be positive. as we showed yesterday, carson group brian dietrich, if the market -- if the santa claus rally does not happen, if the stock market goes down between basically now and january 4th, history says january will go

down. so, again, just history doesn't mean it will happen, but we want the market -- not we want. but the market, if it rallies now, it bodes well for january. if it doesn't rally, it doesn't bode well. and i think if we were going to blame something, have to blame two things. the fact we're working and interest rates. the second one is probably bigger. the ten-year yield is ticking -- what if the ten-year yield hits 5%? can stocks keep going up with 5% ten-year? >> i think it depends on the speed and why that's happening. clearly -- >> it's fast, as yardeni mentioned. >> ten-year hovering around 4.6%. it wasn't supposed to happen this way. the fed was supposed to cut rates. we saw that, rates going lower in anticipation and they did that and rates went higher. i don't know if you were looking at the latest mortgage rate numbers on this front. this is how it affects

everybody. average 30-year fixed loan, 6.85% up from 6.72% last week, according to freddie mac and hovering not too far away from 7%. those are high mortgage rates again. >> and i have to be careful what i say. i have a lot of friends, you know who you are, when mortgage rates and interest rates collapse into september, they thought, you know what, i'm going to wait to borrow money because i think rates are -- >> going to go lower. >> go lower. not only have they not gone lower, they've spiked higher. they've been very -- violent is not the word, but quick. >> sudden. is that the right word? >> pronounced. >> pronounced. pronounced. that's a boston -- that's a boston college word. >> still, there have been periods where the rates have gone higher lately. and stocks have managed to do okay. and maybe that's because of the rotation back into mega cap

tech, which are sort of more safe haven, better earning stocks and they typically do well in these kinds of -- >> large caps but not small caps. >> not small caps. >> down 6.7% this month. it's gotten whacked. dare we call the rbis of the year, random and interesting, why not, is that the s&p 500, if you bought the spy etf and think, i'm diversified, guess what, folks -- >> you're not that diversified. >> what she said. you're not diversified. 35% of the s&p 500 is a couple of stocks. you're basically buying nvidia, apple, microsoft, tesla, and a few others. that's it. >> that's what's responsible for half of the gains of the s&p 500. >> i guess it doesn't matter until it does. bring that chart back up again. that was a fascinating chart. you do wonder and goes to our entire macro theme here, what point in our conversation do we

say, valuations matter. they haven't because the rest of the world stinks. and i think that's kind of yardeni's point as well. >> weighting of the top ten holdings of the s&p 500. all-time high. >> if we had a chart of the day, are you also doing the 3:00 p.m. to 5:00 p.m. >> 3:00 to 4:00. >> long day. >> we'll be on tv half of cnbc today. >> i actually like my chart earlier better, which is how the mag 7 has outgrown the ntire european stock market. >> that was the mark newton virginia tech pie chart. >> sure. >> he's a hokie. there it is. >> i love how you know where everyone goes to college. >> because i care. >> mag 7, the entire european stock market, it dwefshs it. because they don't have a.i. companies, in part, and they don't have a lot of growth. it's been a big divergence. >> the biggest software company -- again, you'll check me on this. you got your computer ready because i'm going off memory.

the biggest software company in europe is s.a.p., the german company. i think their market cap is like $250 billion. which used to be big. you think about that in the framework of apple, 253, 263 becomes $4 trillion -- >> $400 billion. >> that's what i do. i understate stuff. >> it definitely follows your point. they don't have $1 trillion -- >> the biggest software company in europe has a market cap of $300 billion, which seems quaint. is that the word? miniscule. >> netflix, speaking of big cap tech because we got the numbers from nfl christmas day. that was the big experiment. 65 million combined viewers watched a pair of nfl games. 24 million for kansas city/pittsburgh steelers.

>> right. >> most streamed nfl games, according to nielsen. beyonce bowl, much hyped, beyonce, it did peak during that -- >> we have a streaming product called peacock, it's excellent. they say the most streamed. the reality is it's the most streamed because more people have netflix than any other streaming service. you can't stream it if you don't have it. >> that's fair. >> if you just have cable -- people say, who has cable? tens of millions of people. i think 65 million people have cable television. this guy is nodding, over here. thank you, by the way. the reality is, 24 million watched the peak, i think, was 27 for the ravens' crushing defeat of the texans of houston, 31-2. netflix will have the highest numbers because they're the biggest. >> netflix, in their statement, thrilled with the numbers. the dazzling performance by

beyonce on an historic day for the nfl, as they say. the biggest day of the year is the super bowl. right? kansas city versus 49ers, 123.4 million viewers. >> wow. and it's -- and you also think, you know, maybe you had it on. the sullivan household had it on. >> we had it on. >> were we watching? no, we were talking, embracing the holiday but it was also on. you wonder how much of that number is reflective of like really watching. >> engagement. we were watching. my 7-year-old was coming in and giving us updates because he's a big nfl fan. >> who does he like, though? >> he likes the philadelphia eagles. >> well, he has great taste, by the way. >> and he also was cheering for the ravens in that gram so he was happy. >> on a totally separate note, merry christmas to rick san telly who sent us a note that the japanese ten-year government

bond has the highest yield back to july 2011. so, a 13 1/2 year high for the ten-year. i bring that up not because we care about japanese government borrowing costs -- >> we do. >> 1.1% is the highest. how much would we -- that would put a mortgage at, what, 3.5%? >> pretty low. >> we would love to have that. >> for them it's high because they're getting out of decades of deflationary spiral. they're finally seeing deflation and the market is trying to push them to raise interest rates. >> remember last week when i spoke japanese and you were shocked. >> you always surprise me with your knowledge, random knowledge. >> random but interesting. i can't say that in japanese. >> i'm impressed. [ speaking global lack nguage ] thank you very much. >> i know that from going to sushi restaurants. nvidia, one of the biggest outperformers of the year. every day -- >> are you -- i'm bringing up my facts.

are you year-to-date? quarter-to-date? what are you -- >> i'm looking right now. >> month-to-date? >> sure. >> best performing nasdaq 100 stock, broadcom, up 48%. number two? >> it had a game-changing quarter. >> your buddy, elon musk and tesla, but 20 points less. the number one performing stock, broadcom 48% this month. number two, tesla, 28%. broadcom destroying everybody this month. >> this month the best performing sector in the s&p is consumer discretionary. that's because tesla is a big weight in that. these sectors are up more than 5% apiece. communication services up more than 5%. alphabet has had a good month. some people were worried about alphabet and the rise of a.i. and whether that would threaten the dominance -- >> is search good? if you believe a.i. is everything, okay, then you've got microsoft's copilot, gemini, you have sora, grok from x, openai --

>> perplexity. >> perplexity. can they all win? or, again, do some die? do we start to see mergers? or do people test things out and say, which one of these right now is the best? i don't know. >> no. and i think they also cater to different ones. there are some catering specifically to the enterprise. salesforce, for instance. oracle, larry ellison having a great year. the stock rallied the most since the dotcom boom. richest man behind -- >> i think on the last interview he's ever given. >> he never talks. >> no, i think i'm the last. i'm not joking. redwood city, years ago. >> have him back. >> he and i sat down. it didn't go well, i don't think. larry, i love you. i saw him at the paribas tennis tournament. if he's there, i would love to chat with you. what you've done at oracle has been amazing. what they've done to turn a, dare i say, boring database company into this a.i. darling has been nothing short of

amazing. >> oracle shares have shot up 63% this year. and the net worth for larry ellison, more than $217 billion, according to forbes. >> that's sara eisen money. >> good to see you. the important thing is poor opening, three to one declining to advancing stocks. all 11 sectors were down at the open. energy turned around. looks mildly positive. if you look here, everything is down roughly 1%, 1.5%. even big cap tech, all the magnificent 7 started to the downside here. the big story is what we're going to see next year here. and the important thing is, what we're going to see in terms of earnings growth. so, mega cap tech is still going to see significant earnings growth next year but it's decelerating. it's not as strong as 2023 or 2024. you might think, look, nvidia is

expected to be up 50% earnings growth. you might think, my heavens but it was 120% this year. broad cam will see an increase, roughly 20%, this year going up to 25%. and that's one of the reasons broadcom has been so strong recently. earnings acceleration for next year. amazon is going to be down from the mid-50s. moat meta also. apple, microsoft, alphabet, double digit growth gain but not as big as 2024. overall as a group mag 7 up to be 24%, next year 18%. great numbers but decelerating growth. and that's got some people very hopeful that maybe we might get some rotation. what about the other 493 stocks? so, here's the estimate. the current one for the -- the other 493 for this quarter up 4%. next fourth quarter, one year from now, 14%.

okay. that's accelerating earnings growth. that's what you want to see. so, some of the rotation crowd is getting excited saying, maybe we can finally entice people to do this. what would it take investors? if you look at 2025 number says, tech is the leader for earnings growth. there's very good earnings growth in other sectors that nobody cared about. like health care has got very strong expected numbers but the valuations are far, far lower than technology. so, has industrials. so do some of the other ones. materials, which nobody has cared about for a long time, almost equals technology. and on the bottom, if you look at some of the bottom ones like consumer staples and energy, you can see why nobody is particularly caring about them. but the point is, there are a lot of sectors out there that have tremendous growth potential on the earnings front. the question is whether you can get the people who have grown up in the last decade with growth

stocks interested in the valuation call, which means these stocks may still see some earnings growth but it's very modest. and it's a valuation call. and the bottom line, guys, we haven't been able -- the value people have been pulling their hair out for a decade because, in theory, people should be enticed by some of these valuations now. but it hasn't worked so far. now, whether this decelerating earnings growth story with big cap tech works or not still remains. my position is going to take an awful lot. i don't know if it will take a collapse of the a.i. story. it will take an awful lot to entice people away from nvidia at 50% earnings growth to talk about health care stocks that might still have earnings growth but nothing near that. it's a very interesting question here. i certainly would like to see a year when value stocks, the rest of the 493 started doing a little something for the markets here. by the way, we talked to ed yardeni about why profits are up. when you have 3% gdp economy and

higher prices from corporate america and better cost controls and, sara, i think you've talked about this, the net profit margins, 12% on the s&p. that's a record. not only are they making more money, they're retaining more on the bottom line relative to the top line. this is why the stock market's at a new high. if that changes, you've got problems. my heavens, this is a tremendous handoff from 2024 into 2025. >> efficiency, they're getting more efficient, they're using a.i. they're doing more with less. and productivity. we've seen some decent productivity growth in the u.s. that helps corporations as well. bob, thank you. bob pa san any. by the way, brian, energy is catching a bid along with materials and health care. this is end of the year bargain hunting type stuff. >> a little bargain hunting. i think to bob's point, as usual, is correct. until the a.i. trade stops making money, why would you put your money anywhere else? it's this momentum -- >> valuations.

>> nobody cares. it's just momentum. >> well, at a time where you're searching for earnings growth and worried about yields, i think the equation changes a little bit. >> the day nvidia, if it ever comes out -- i don't want to say nvidia. any a.i. company says we don't have enough electricity to run all the data centers, if, when that happens, you'll see a large correction. it is time for the bond report. bonds have been front and center. let's show you what treasuries are doing this morning. we have seen this big selloff in bonds with yields marching higher through the end of the year here. we're headed that way again today. below 4.6 because we had buying overnight. just under 4.6% on the ten-year. the two-year is catch a bid with yields at 4.3%. wholesale inventories this morning. perhaps that is having an affect. also strong seven-year auction yesterday. we'll be right back.

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one of a.i.'s biggest names, openai, the company behind chatgpt lays out plans to become a for-profit company. kate rooney with the details. how will this work? >> openai confirming they're going to become a public benefit corporation that now $157 billion a.i. company was founded at first as a nonprofit research lab about a decade ago. openai says the existing for-profit arm is going to transform into pbc, as they're also known, with ordinary shares of stock. we did report this pivot was in the works. they are now acknowledging cash realities in a blog post saying, we once again need to raise more capital. investors want to back us but at the scale of capital need conventional equity and less, what they call, structural

bespokeness. that bespoke structure wasn't something investors loved. those i'm talking to are relieved at the pivot. right now the company involves multiple entities. you have a capped company, that will still pursue charitable initiatives with a significant interest in the new public benefit corporation. pbcs do operate with the traditional governance and share structure but they have a dual mandate, both a fiduciary benef. no word on when this will happen and the elon musk factor. suing to block the company from making this for-profit pivot. described it as a total scam on social media. openai has fired back saying, musk is trying to slow the

company down as he builds his competitor, xai and that elon pushed for this for-profit transition before he left the company, guys. >> yeah, isn't that sort of the brouhaha here, kate, which is that openai firing back at elon musk saying, wait a minute. you were for-profit before you were against profit. >> yes. this -- >> this is turning into a war of words. >> absolutely. they came out with some receipts. they showed emails saying despite elon musk filing multiple lawsuits, you accusing musk of wanting, yeah, to change the structure and saying, you were for this all along and highlighting the fact he now has a major competitor, which is xai. a name to watch next year, elon a lot more influence in washington at this point. it is seen as a headwind for openai, as much as they might want to change the structure. according to elon musk, xai, you also had meta and mark

zuckerberg's side of this piling on and writing a letter to the attorney general, saying they also supported blocking openai's transition here. so, interesting that it's actually not just musk. you also had meta coming in and saying, this might not be the best thing for the industry. as much as they want this transition to happen, i think there's some questions of if and when this could actually go down. >> it's really confusing just because it has taken so much outside money from venture capital, microsoft. it seems like it's for profit. thank you very much, kate rooney. when we come back, 2024's charts of the years. we'll tell you what they are and what they could spell for 2025. more "squawk on the street" after a quick break. checking on the broader markets after the open. we're lower. s&p down three-quarters of 1%. there are some bright spots. financials and real estate just turned positive as well. tech is under a little pressure, led lower by nvidia, microsoft, tesla and amazon. we'll be right back.

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>> happy friday, good morning and welcome to another hour of squawk on the street. today live at the new york stock exchange, carl and david have the morning off. the snp almost down a full percent. nasdaq is down 1 1/2% after was been a very strong run this week, this month, this year for the week even with these declines the nasdaq is still up about three quarters of 1% and s&p is up. nvidia, all the winners, amazon even apple was flirting with the mark didn't quite get there. we will watch it but it's down 1% in today's trade. treasuries has been one of the stories, the culprit of some weakness in the rotation we

have seen lately. the tenure just below 4.6 today. a little buying on the short end of the curve. for 30 minutes here into the trading session here are three big movers. official numbers for netflix as christmas day nfl games that's a record for the biggest audience for streaming matchup. we should mention ratings did fall short of the audience of last year's christmas games that ran on old-school broadcast tv. cbsn fox. netflix two games averaging 24.2 million viewers. a volatile week for natural gas head of the january contract expiration. treating as high as four dollars for the first time in nearly two years. united healthcare extending the deadline to close more than $3 billion merger with home hospice, until next year. after the doj and three states sued to block the acquisition last month they now have until december 31st of next year or 10 days after final court

decision on the case to settle that deal. >> a lot of people didn't know the football games were on netflix. christmas day tends to be a basketball day, not a football day. natural gas but super cold. all over the country it's been cold. not in phoenix or miami but you get my point. by the way, hospice, they do great stuff. no comment on the deal. saying for what they do it's a necessary service. >> ugly there's comments on my top five charts for the year. it's always charts for me. >> just so the viewers know i did not know what these were. >> you will like them i think. they are emblematic. you'll have something to say. i have no doubt. argentina is number one. argentina, the stock market has boomed. 176% higher year-to-date. it's

the best-performing market. this is local currency, but this is the impact of the president. using social media with him and the chainsaw. he is an economist and he has gone against the establishment, slashed spending and bureaucracy in a major way and has also effectively cut down the country's inflation rate. when he came on we received monthly readings of 25% inflation, he's got it below 3%. 2.6% inflation rate the flipside is unemployment has been high and there's been poverty, but his approval ratings are strong at nearly 50% and a lot of people arsaying look at what he's done on the deficit in argentina. he does have a good relationship with elon musk and with president-elect trump. >> i don't have an opinion yet. i think what he's doing is

bold, aggressive. let's be clear, argentina is not the united states. they want to say our economy, i hope it works in argentina but the gdp is 650 billion, that's about the same as the state of michigan. while it's not nothing this is not the united states, it's a country that's been beset by poverty, so we will see what happens. i think it's defaulted more or as much as any nation in the world. that said, i like the beginning of the milei experiment. >> a lot of hedge funds piled into this trade. second chart of the year, it's me so will be the u.s. dollar. it is a big deal because if you look at the year to date chart of the dollar you can see before the election and after the election. look at the chart. after the election -- the u.s. dollar and the spike we saw post early november when trump one and republicans swept.

this is america first policies. this is a brighter outlook for the u.s. economy, potentially more inflation but also tariffs. every time there's a threat of tariffs against mexico, canada or china their currencies weaken, ours strengthens. we have the upper hand. the capital has flocked into the united states. we have talked about this all morning. that strengthens the dollar. >> is a chart of something that goes up if you're on the radio. great. does it make u.s. exports more expensive? if you make a car here and want to sell it somewhere else it's going to be a headwind and headache. >> if your business that sells a broad this is a headwind. it's a badge of honor and strength, it's not necessarily progrowth because it hurts exports. >> it makes it cheaper i think for us to travel and go abroad.

>> japan, cheap. europe cheaper because the dollar is strong but president trump does not like a strong dollar in the past. it might set up a tension point with the federal reserve. >> respectfully i don't think he's got a lot to say about the direction of the dollar or 10 year bond yields. >> that is coming later. let's do bitcoin because this was the year of bitcoin. it was the election. we have now in this incoming administration a crypto czar. he will look after crypto and a.i. that happened very quickly and they will lead if they get approved. the treasury that are funneling toward crypto. that is a major sea change. we have a strategic bitcoin reserve. this is the year bitcoin hit $100,000. there's so much momentum and excitement of what could come.

>> a polarizing guy. had him on a lot and look forward to having him on power lunch. maybe a little bit behind the curve, i know there's good people at the s.e.c. there's others that don't get a lot of attention that are a little more aggressive about expanding bitcoin offerings and to your point i think the year bitcoin, things go up when they are more widely available. my fear of any crypto is supposed to be decentralized. if you live in argentina and you're worried about inflation and valuation of currency you would buy bitcoin. one of the early acolytes of bitcoin is an argentinian guy. because the currency kept crashing. i think if you want bitcoin to keep going up it's getting so expensive. i just worry are people going to move to riskier currencies and get there you know what's handed to them? >> it's speculative, very speculative.

next is inflation. inflation is still the story of the year. americans feel it, we fill it at the grocery store, everywhere. it's not solved. it's down. this is pce. this is what they look at most when they target policy. yes, we are doing pretty well. between two and 3% it's better than the 7% we peaked in 2022. look at what happened lately. after coming down pretty sharply rising to stubbornly unchanged. where at 2.4% right now. food and energy is a little bit higher than that. the fed wants it to go down to 2%. they are on the right track, but let's see what happens if we do have tariffs in any widespread way economist is one that could be inflationary and stronger growth as well. that is the key, that's what they have. >> can i be critical of this?

so many good people on this channel, here's where i think we don't get it right. we are in our little bubble here at the new york stock exchange and do pretty well financially. these government numbers that show inflations coming down, i've talked to people all over the country. you're from ohio. here's the thing. the burger went from $12-$18. the fact is going from 18 to 19 and the pace of inflation is down and the white house wants a jump at this nobody cares. the burger went from 12 to 19 then it went from 12 to 18 and 18 to 19 people don't care. they care about the fact the burger is 19. until the federal reserve can do something about auto insurance rates, home insurance rates which they can't i just don't know -- under the new administration, over inflation is going to be over. >> i think that was part of the story of the election. >> people were ticked about inflation.

i talked to hundreds of thousands all across -- >> just because the rate goes down to your point there is a cumulative impact where some prices of what you're eating have gone up 30, 35% in 2019. people feel that. my final chart is the 10 year yield. that is the most relevant now for the market and what we have seen as higher yields in the back half of the year despite the fact the federal reserve has been cutting interest rates. that is what we will continue to pay attention to. >> if only -- will stocks be able to go up if the yield keeps going up questing mark if only we had a guest like that. >> lucky us. research chief investment strategist. sam, are you worried about the 10 year yield as a barrier for stocks? >> yeah, i think it is something that's going to be the headwind. we are going back to where we were about a year ago. we were at the 5% threshold a

year ago but we were able to overcome that concern. i think the market is a bit concerned about the inflationary numbers. i think the data that will come out in january for december will also show a little hotter than expected growth but i think as we move into 2025 we will likely end up seeing both cpi and pce start to track lower once again. as a reminder, the 10 year yield averaged about five and three-quarter percent since 1953. the cpi and core cpi about three and three-quarter percent. pce has average about 3 1/4%. we are below all those levels right now even if we do move up with the 10 year yield. >> so, if the yield gets to 5% can nvidia still trade 39 times

four? i'm asking for 1 million friends. >> well right now we are looking at the market and technology trading. i believe pretty high levels. certainly not at the most extreme but relatively high. s&p is trading over the past 10 years at a 22% premium over the last 20 years it's a 40% premium to its average forward ratio. currently a 10 year average, but a 65% premium over the last 20 years. yes, we are looking at pretty expensive valuations right now, but it seems to be the only game in town. as brian mentioned before the market is not trading necessarily on valuations, is more momentum. >> i cited you yesterday in saying how important this santa claus rally comes to fruition is for january and for the

coming year. just review the historical data for us of why we should care. >> this is popularized by the stock trader's almanac. if we are up in the last five days of one year, first two days of the next year the average gain is 10.4% for the coming year rising 74% of the time which is really just a shade better than the market as a whole. if the santa claus rally fizzles out the average gain is 5.7% with only about a one in three chance of the market being higher. i really lean more toward the january barometer, so goes the year. there you are talking about real differentials, positive january, especially in a first year of a president's term in office, the market gained 91% of the time rising more than 18%, but if we did not get the january gain the market was down 2% on average for the full year

and rose in price only one third of the time. >> what does history tell us about the market after the s&p goes up 26%? no one expected that one. >> nope. my target was for a positive year. i like to say target prices are more like a weathervane than a laser beam. i think very few people are able to get this number at the beginning of 2024. i think that a three-peat, even three successive double-digit years is pretty rare, only one in five chance. >> in 2023 it went up 24% which was a big comeback from 22. >> exactly. i would say we are likely to see a mid to higher single digit gain in 2025 and a one in five chance of us having another double digit gain. reasons being we are in the third year of a bull market and really

only three of 11 times have we had double-digit gains. six of those 11 times we ended up with negative returns. i also think volatility is likely to be higher because the first year of a president's term in office 90% of the time we had declined to 5% or more with the average being more than 17%. >> what about earnings expectations, they've been remarkably stable. that makes it a little bit different too. growth has been revise higher continuously. >> it does. right now expectations are about a 13% gain in s&p 500 earnings in 2025. even if we don't get any pe multiple expansion we are still looking at a nice upward move because obviously we are going to be focusing on 2026, come to the end of 25. there again we are looking for a near 13% advance. because of the enhanced

productivity that was mentioned earlier with a.i. and also because of the anticipated continued decline in interest rates i think investors are pretty optimistic about earnings. >> thank you. happy new year to you. here is our road map for the rest of the hour. a strong 2024 for megacap tech hitting record after record. we have topics for the new year. >> are the energy markets finally running out of steam or are they going to power up in the next year? >> more tough economic data out of china overnight. what a trump residency could meet for the world's second biggest economy later this hour. squawk on the street will be right back with the down down down. don't go anywhere. and using workday to put finance and h.r. on one platform. tim, you are a rock star. using responsible ai doesn't make you a rock star.

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>> all right we know energy has underperformed the broader market this year. sector one of the biggest so far this year but you've got president trump taking office in the new year. your next guest anticipates significant policy shifts ahead. joining us now is head of commodity strategy, notorious, halima croft who said she would've come down had she known i was filling in today . it's great to see you nonetheless. are those policy shifts significant? are they president trump saying

drill because if so maybe we go to 50 or 60 bucks a barrel or does he realize that higher prices actually do make a difference for u.s. companies? >> i think he's obviously going to say drill. we have our incoming treasury secretary, but the question is are u.s. producers prepared to unleash a flood of oil this year? you hear it, i hear it, they still talk about capital discipline for 2025. the question is are we having to look to other stories in the choose your own adventure for energy? should we think about a return of maximum pressure or sanctions? i think that is potentially the biggest catalyst for oil next year. incoming administration officials are saying we are going to look to remove potentially 750,000 of oil off the market. that is pretty significant.

they have the bandwidth to do so. what happened in china? i think china is the biggest for oil markets. if we do have significant tariff pressure is that five or seven more down? we just have to see what is going to be the dominant policy trajectory when it comes to trump an energy? >> what is going to be the relationship with saudi arabia? a lot of people want to knock, we talk about it a lot but i will say the price of a barrel of crude oil in september 2021 was $70 a barrel. we had a spike when there was the invasion of ukraine. guess what the prices now? $70. outside of that event, the invasion of ukraine by russia, the price of crude oil remained relatively calm. what do you think the president's relationship is going to be with saudi arabia and opec vis-@-vis u.s. production?

>> remarkably stable oil prices is what we've seen in this era of managing the market. the question is going to be if you do have maximum pressure coming back. if you have them essentially say if you take iranian barrels we will sanction you it gives the ability to do so are they going to turn to opec and say we basically have taken iranian barrels off the market and want more from you? remember in 2018 that infamous june meeting we exited the nuclear agreement, we asked for an additional million barrels, they provided it and yet we give exemption to reporters of iranian oil and prices crashed into the 30s. the question is would opec be willing to give more barrels because there's a policy shift or will they wait to see an actual disruption? saudi arabia actually has normalized with iran. they did that in march of 2023. the iranians who are looking th

significantly weaker than they have ever? do you still want to fight with them at this stage? >> why do you think if it's the biggest risk for the market, the maximum pressure campaign from the trump administration on iran, why is it not of the price? we've heard him and a number of people he's appointing to these key roles pretty much confirm that's where they're heading. >> they have been completely transparent that this policy is coming. i think market participants got burned setting on a russian disruption that didn't materialize. i think they got burned betting on a disruption coming out of this war in the middle east. they are very much in show me the barrel. we will price this when we see this. even if you look at our forecast we have not removed 750,000 to 1 million barrels because we had these events in the middle east and the war that has not led to disruption.

we will take the barrels at once the policy is announced. i think that's where market participants are as well. i think some are expecting and opec off-site to be a simultaneous offset. we think opec will be in watch and wait mode to see if there is a serious disruption and then that will have to be a conversation. >> i can't see anything changing . the last meeting went virtual. let's wait for the meeting to happen. great to see you as always, even remotely. always love your intuition. >> happy new year. >> one of the worst sectors of the year behind materials and they are actually working today on that theme. the top sectors of the year, tech and cmucaon omniti services. we will get jeffries topics in that space in just a moment.

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plane was shot down by russian air defenses. there is evidence suggesting russia was jamming the planes gps system to protect against ukrainian drones. the kremlin previously denied any involvement in the plane crash. south korea plunges deeper into political crisis today. lawmakers voted to impeach the interim president less than two weeks after ousting the previous leader who attempted to declare martial law earlier this month. the ruling people's power party surrendered -- surrounded the speaker's podium cruising parliament of committing tyranny. border control agents found two backpacks containing more than $1 million worth of cocaine near the canadian border. officials say they discovered the 78 pound backpacks in a wooded area approximately 100 miles north of seattle. authorities did not reveal how the bags got there and who they might belong to or if any arrests have been made. back to you. >> somebody was 78 pound

backpacks. forget about what they were filled with through the canadian wilderness and decided to drop them and run off? >> there are some unanswered questions here. >> i would say so. if you are the owner of the backpacks please alert authorities you've lost your backpacks. thank you very much. as we had to break let's check out we have a mystery chart. i have no idea. this is an under performer of the year, but it is on pace for its best quarter since last year and jefferies says it's one of their top picks for next year. bad year, great quarter, pick for next year. no idea what it is. don't forget you can catch squawk on the street any time, anywhere just by checking out your favorite podcast hosts and check out squawk on the street podcast. we are back.

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>> welcome back. we are live on squawk on the street. there's your mystery chart. sarah ruined it. the stock is down 21% year to date but it had a great quarter. it's one of jefferies topics in software for next year. that name is? snowflake. >> there we go. i still call it google because i'm old. i say the atari and commodore computer. this is the analyst at jefferies for which this is one of his top picks. number one, why do you like snowflake so much, it had a bad year but a great quarter. what is changed around snowflake in the last two and half months? >> good morning. there was a reset this year. new strategy, effectively this was a huge year of investment.

margins are going higher. is the highest operating margin across software. this was really a pit stop. they needed tires, a windshield wiper and stereo put in to amp things up. we think this new strategy, the new ceo initiative will start to take hold in 2025. the front half was really a pit stop year. i think what you're starting to see is the back half of the year payoff in terms of seeing some re-engagement back with customers. we think ultimately there was definitely a storm cloud over the software's head. everything was focused on a.i. infrastructure, nvidia, hardware, energy. we think that starts to shift the software as we go into 2025. we think this leaves snowflake in a better position at this point and we think a lot of new initiatives will pay off as we

go into the end of next year. >> to be clear, is it an a.i. story now? is that what's happened with salesforce as well? >> it's not a full aa starter. no one has a full a.i. story. the majority of the software industry today including like a soft single-digit percent total will be from a.i. it will emerge into a bigger a.i. story for the industries across 2025 and 26 but this will happen slowly because companies aren't letting a.i. run around in the wild. most of this is in projects or small deployments. it will become a larger a.i. story as we had through this but i want to be very clear it's not a lightswitch you don't turn a.i. on across software. it'll be a very slow, steady buildup over the next 2 to 3 years. we think that'll be a better tailwind for the industry. our

industry underperformed internet, everything this year and that is because you had to put that foundation in before softwares like you have to essentially put it in before you can hang it. now it will help the rest of the industry as we go through the next couple years. >> i know you and your team operate on months, quarters and years is the timeline. that's kind of what we do also. we are seeing the nasdaq down right now, just over 2% for the nasdaq 100. a lot have had a good month. a lot are down fairly large right now. do you have any short-term reason why we are seeing this level of weakness heading into the new year? i know it's a short-term question but i have to ask it because these are relatively large moves. >> i think what's happening is we have said we are seeing a broadening from just that small set of companies into a broader

group of companies. part is being driven by the trump movement as we go more business friendly. we are seeing more small businesses see better momentum. we have seen boards and ceo confidence levels rise. we think this is a broadening trait to small and mid-cap as well and we think ultimately that was the place to be. we still think it's the place to be in many a.i. stories for amazon and microsoft or enterprise a.i.. this is a broadening trait. again, you've had a pretty good performance from many names throughout the year. part of this may be cleaning up the year for some investors and setting up for next year, but i don't think there's anything that is suddenly changing. i think there is a broadening trait and i think we will see

other names that have a better benefit because the backdrop and demand is getting better. we have more business friendly leadership, so that would basically suggest that there's going to be a broader rally across many other names than just the mag7. >> all right. snowflake, one of the top picks. thank you very much. nasdaq 100 is down 2.2%, 400 points right now, not exactly the kind of and of your action i know a lot want. >> it's not on par with santa claus rally but they have been big winners so perhaps there is profit. broadcom, apple, amazon, google, they are all weaker. >> great year. really good month for most of them. right now we are seeing some weakness. speaking of technology we have

a battle brewing across washington and wall street when it comes to immigration, particularly on immigration's impact on silicon valley and jobs. megan. >> good morning. this is a showdown between the big tech wing of the republican party led by elon musk and the far right wing of the party. the debate is over the visas reserved for highly skilled workers in fields like math and engineering. this started with a far right activists laura loomer criticizing a stance on expanding skilled immigration. she called it alarming that career leftists were joining the administration with views in opposition to transamerica first agenda. that started a fight with musk, vivek ramaswamy as the incoming all of them saying they need these visas and workers in order to stay competitive. they say trump is on their side. he said this summer anyone who graduates from college in the u.s. should automatically get a

green card to stay. these visas aren't a huge part of overall immigration. they are capped at 85,000 per year but they are used primarily by tech companies. amazon applied for more h-1b visas than any other company. other big names among top users as well, tesla applied for 742 of these this year. you can see a couple others as well. it's a small but influential sliver of the workforce but it's also the first time we are seeing real division within the party on this. musk versus maga. the question is whether this might preview more fights to come between these two camps. >> i don't know how influential she is in that part of the party or that wing of the party. is this suggesting the immigration policies we expect to start day one as promised might be more nuanced? >> they could be. it'll depend on what can happen. trump has fashioned himself of wanting to sort of expand the skilled immigration process of

fixing the legal immigration process in addition to stopping illegal immigration so i think there's a way he can try to appease everybody here by saying we will still continue with mass deportation even as we look at maybe expanding green cards and skilled visas. that is sort of where there might be something to watch. i wouldn't say laura loomer on her own is impactful or would make a big difference but i think her comment ignited this debate. suddenly there's a wing of the party that has been loyal to trump for years now and been standing behind him and a big part of what they like is his immigration stance, so now they're saying will you backtrack on that? there is sort of a target now maybe on elon musk who are seen as newcomers to trump swing. >> it was bound to happen. thank you, megan. a tale of two markets when it comes to the u.s. and china since election day. what the trump presidency could mean overseas and white one

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>> long and yields have been on the rise but is a market misreading that? one trader will talk about the yield curve breaking their resistance and his strategy for 2025. tune into our segment today on power lunch at 2:00 p.m. eastern.

>> further deterioration for stocks shaping up to be an ugly session. s&p down 1 1/4%, only energy is higher now, everyone else is lower. the nasdaq down 2% now and the dow is down 351 points. a lot of big winners of the year are giving back some gains. nvidia, tesla, microsoft. declines for nvidia of about 3% but the stocks have gotten so large we see a big weight on tesla down 4 1/4%.

it had more than 65% run-up this year, but still taking a look today and the only winning stocks are a few of the winning stocks are ones that have lagged all year. chevron, j and j, coca-cola, mcdonald's. most big winners are lower. >> not making a prediction. i will say that according to data, great stuff, that when we see the santa claus rally fail, when we see markets go down from december 27th to january 3rd or fourth this week, basically, into early next week e- >> it started the 24th. >> basically when stocks fall -- first two. five into. that equal seven. when stocks don't perform history says we tend to not have a good january. it's historical data, it doesn't mean anything, just something in the back of your noggin. >> good point as we have seen

stocks losing steam throughout the morning. trade tensions with the u.s. remain a top concern for china. the country's counsel for the promotion of international trade warning today that the u.s. has the highest risk for trade friction with china. they actually track this on an index and say that the highest level. our next guest is as if they enter a trade war there could me more pain than president trump is anticipating. china and strategies founder and former assistant ustr for china. it's great to have you. so, how do you expect this trump to point out to be different than the last when it comes to a trade confrontation with china? >> i think there's a number of things here. there's the possibility of some kind of grand bargain. leadership on both sides is inclined to bargain. there's a lot of institutional memory. there are key people that were in the first administration

that are in the second including the u.s. trade representative. a lot of homework has been done in studying the chinese economy and they have a lot to discuss. there is the 2020 phase one agreement china did not deliver on including the $200 billion in purchases. during the last trade negotiations, 150 page document that discussed industrial policies and other things china disavowed that should be revisited. i think this is time for creative thinking. the chinese have hinted that they may be willing to accept voluntary export restraints, but suppose if the u.s. on the toughest issue, which is eb, say we will allow you to manufacture and sell tvs in the u.s. if you accept the same conditions you impose on american automakers when they open for business in china. yes that hemisphere is sour but a lot of the infrastructure is in place and there's possibilities that should be

explored. >> i wonder if tiktok is an early test of the appetite for confrontation. he has spoken well lately of tiktok but it'll have to make the decision about whether it is banned, sold, what do you think happens? >> that's right. this may be the first concrete action in terms of trade that comes onto his desk. we need to remember trump tried to ban tiktok in 2020 and changed his position in march of this year. he said as recently as last sunday that he favors allowing tiktok to keep operating in the u.s. for at least a little while . meanwhile, the toe is that all of his recent comments focused on the popularity tiktok brings him with the youth vote rather than the national security concerns about china accessing the personal data of children. there's a couple possibilities. the supreme court will hear the case on january 10th, include the issue on injunction, under the statute trump could direct his attorney general who has

responsibility for enforcing the act to pause enforcement temporarily permanently. trump could declare they have performed what is called a mollified investiture. whether that is true or not. the last possibility is congress could repeal which i think is very unlikely. this was not the first battle i think trump wanted to choose to take on and his first administration. >> long shot, i hope, what happens if china invades taiwan? >> if china invades taiwan all bets are off. all business stops. a massive implication for the stock market. that would eclipse everything we are talking about. >> are they going to continue to make noise but nothing will happen? >> i don't think they will. i think they will continue to be threatening. i think they will continue to tighten the space which taiwan

operates politically and militarily. i do not think they will invade. >> we appreciate you joining us with some predictions and expectations. jeff moon of china and strategies. >> coming up, j powell productivity problem. what it is, what it means for your money, what it means for rates. the markets, there being hit. we don't know pain attention to the dow but the nasdaq is about 1.8% off 355. not the kind of end of the year we wanted to see. yeah, we wanted some holiday cheer. bitcoin also going down. basically everything is selling but rates. bitcoin is at 94,300, more than $10,000 off the highs. >> not your battered energy socks either. they are having a good day. >> you're welcome. we are back right after this.

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particularly in the best rates of the year. that coin was one of them. flat now on the week and the month but still up nearly 50% on the quarter and 120% for the year. it's been a volatile story for related stocks in the bitcoin space. marathon digital, coin base are all lower on the month but have had epic years on just the buying of bitcoin enthusiasm around the election and out of it and some of the appointments from the trump team in places like the s.e.c. and treasury. >> i have no opinion. i don't know anything about where it's going to, but i will say trying to learn about it a couple books. digital gold, it's a very good book on maybe six or seven years old on bitcoin. a book about the silk road. bitcoin was like a dime. $.25. it became the use case for what all brooke sold. you know, most of it was

illegal. the little book of bitcoin just came out recently. if you want to learn. a lot ask me about crypto, i tell them i don't know. >> there isn't mainstream adoption and we don't use it as currency. it's just a thing that goes up. >> is had 1080+ percent decline. be careful. >> big pressure on big th. ec don't go anywhere.

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♪ good friday morning. welcome to "money movers" live from the new york stock exchange. today the rate conundrum. despite the fed beginning to cut rates, yields continue to rise. lus, you have two wars overseas and tension with china. president trump walking into the oval office with a lot of geopolitical