2024. last day of 2024. take me six months to say 2025. "squawk box" begins right now. ♪ good morning everybody, welcome to squawk box on cnbc, live from times square. andrew is off today. here we go. it is the last day of the year. the last trading day of the year. we are watching u.s. equity futures. at least this morning he will get green arrows early in the session. dow futures are up by 150 points. the s&p is up by 22 and the nasdaq is up by 127.

is early. we have a ways to go before the opening bell. yesterday's stocks plunged. the dow closed lower by 418 points. the s&p 500 and the nasdaq closed lower by more than 1%. as mentioned, these were some of the best levels of the day. things took a downward turn before the opening bell. we saw incredible pressure through the session. despite the downturn we have seen in december, here's a look at how markets are set to close out the year. the dow was up by 13%. it has been a phenomenal year for the s&p 500. the nasdaq is up by nearly 30%. these are phenomenal numbers that we have seen for the market as a whole. december has been rough. yesterday was difficult. if you talk about how far we are off the highs, it is not bad here yes if you nasdaq is down by 3%. the dow is down by 5%. if you look at the major averages, we are seeing real pressure. russell 2000 is down by 9%.

the dow transports are down by more than 10% that is where we are starting to see some cracks. we will see what happens with things. the treasury yields have been something to watch. yields are down a bit this morning. friday we saw the highest level in quite a while. it is above 4.5%. the 2 years at 424. we are wondering what happens to treasury yields, that is a real reason that the stocks have struggled in december. if you were watching it coin, it looks like it is near 94,000. >> there was a big piece on the wall street journal, i don't know if you have seen them. we do get the papers here. the guy that brings them, that is optional, any trouble whatsoever and he is like no-no. to this morning was difficult. >> there is something going on in times square.

the fences, we can't get there. >> i watch them from several blocks away. there are interesting characters on the way. for you have somebody with you. >> i walk by myself forever before i found him. thankfully i found him. >> i bruise on the inside, i am a karate man. i'm ready for anything. i'd walk a couple blocks. what is happening, there's something going on out here? >> there is a lot of confetti planned for later today. they did do a test of it. they are dropping thousands of pounds of confetti. there is the ball. you can see it. for it is the last year for that fall. is on the cover of the journal, and posted online. the best 2 years in a long time back to back, since the 1990s. we had like 3 years ago in the 1990s. even though we are having a bit

of a backing and filling and some rotation toward the end, unless we have a really bad day today, it will be a pretty good year. let's look at crude oil. it is weird we have not talked more about $70-$80 for crude. it has been stable. even with iran and crew, and natural gas jumped more than 16% yesterday. that follows an updated outlook by the weather company and atmosphere g2 that shows the temperature forecast next month is expected to be colder than average in the east, specifically from florida to the state of maine and the great lakes. we could see freeze offset disrupt natural gas production.

that does occur when the water in the natural gas freezes, creating blockages that disrupt the flow of natural gas from a well or through pipelines. you know why it is expected to be cold for the next month? because of global warming. for a payment because it is january. [ laughter ]>> it is so warm right now. >> that's what causes everything. >> what has changed? do you trust the forecast for the month? i like the 50 year forecast. is for the farmer's almanac works pretty good. it is better than some others. the nasdaq and new york stock exchange finish closing on january 9. that is in accordance with the national day of mourning for the death of former president jimmy carter. bond trading will end at 2 pm eastern. the practice dates back to 1885

when the exchange close to honor the 18th president, ulysses s grant. >> does that mean we are programming? >> i am totally behind this. they will find a way to get us in your. or they will give us one of those days that you have to be here and then they give you a day, but you can't really use it. it is a day for me, but it is for somebody else. did you ever try to use those? >> now. u.s. treasury department says the state-sponsored chinese hacking operation is responsible for major cyber security incident. officials said the hackers use third-party software to tap into desktop computers of treasury employees. the software provider notified treasury that the hackers gained access to a key used by the vendor to secure a cloud-

based service use remotely provide tech support for treasury employees. the hackers were able to override certain security measures and access files, including unclassified documents. the beyond the trust service has been taken off-line. officials say there is no evidence indicating that the threat actor has continued access to treasury systems or information. an investigation is underway. this was considered very serious, as any of these threats are to get into these things. there are more vulnerabilities exposed during covid when so many people were working from home. let's talk about your favorite story. you need to fill me in. >> next week, january 5 is when is set to go off. as for when you get hit with this? >> at all times. from 5:00 a.m. until something else, if you are before 5:00 a.m., maybe you pay a esser fee. i was confused.

's to your must be of california. it is like government run amok due to their own incompetence. they have spent the money, so they need to do this. >> they spent over $1 billion. >> they need to do this to continue the terrible management of the mass transit systems that we have here? that is what they are using it for? no one pays for it? >> more than 50% of people on buses are not paying for it. there is something like 30%. >> they are trying to force people into these dangerous and ineffective mass transit systems by making it harder to drive. >> this is a problem, this is such an elitist way of looking at it. the richest people you talk to have no problem with this. they have drivers and they

don't mind paying an extra nine dollars every time they come through. it is a way to make less traffic for the richest people. they need it for the money, but you could've said the money they spent implementing the system to try to make sure the people were actually paying on mass transit. is not going to stop you and i, we will be here. the plus side is, they say will mean there will be less traffic because you made us so other people can afford it. >> you will still get run over by a scooter in the bike lanes, there will be traffic because half of the streets and buses. as for the other half is for restaurants. i do understand having lanes for buses. that makes more sense this is here. >> was the last time you were on a bus? as for i cannot tell you. is to this is the governor setting congestion pricing plan starting january 5. after a

federal judge, largely rejected new jersey's challenge to the plan. a lawyer for new jersey's is a plan cannot proceed while issues in the court fight to remain unresolved. it raises the possibility that the plan could be held up in court. the judge's ruling yesterday, dismissed most of new jersey's concerns about the impact from the new toll. they said the transportation agency needs more explanations about the decision-making. the judge wants more information on how to mitigate the effects from drivers shifting the commutes and parking's to other areas the new york governors moving forward with the plan. they set deadlines for more court filings. the legal future to be in jeopardy. is a weird example of government existing for itself them for the people that it was

set up for the first place to try to do this. this is all about the government's interest. >> i am opposed to this. i will try to present the other arguments, because the people that are in favor of this that point to it working in london and saying it's been pretty effective in cutting back traffic there. i'm trying to think of all the reasons that they use for why this is a good idea. for you are not doing a very good job. for i know, it is hard for me because i disagree with the basic premise of it. i do understand congestion is an issue here. again, by just making is so expensive, and forcing of the people that are actually doing the work down here, and you make your the people should be coming back into the office of people should be coming back to work, this seems like a disincentive to try to convince people to come back down here to work and make sure businesses that are here work.

it seems like a bad idea. >> is bad for new jersey. >> is also new yorkers. the majority of new yorkers hate us. president-elect donald trump said he would get involved. this is supposed to take place before he is inaugurated. the court process slows that down, there are questions on whether that will happen. i don't know what he would do, but there is talk of executive actions i could stop it. we will see. for i can imagine a really happens. >> i thought the same thing. the governor of new york, which he originally stopped before the election, they said she only did it because they didn't want to lose the election. she immediately puts us back in. >> this might be a local story. >> it is, but the implications are broader. for we can convince people there's a reason were talking about this. >> i'm not trying to give reasons for anybody.

work is going to pay for this. it does not seem like the most fair plan. stocks are limping for the end of the year. we will talk about yesterday's declines and the prospects of the first few trading days in january. this is a grinch rally. there has not been a santa claus rally for 2 years row. that's not happened since 2014 or 2013. we have the lump of coal and a switch? >> what santa claus did you get? a switch? >> there is something and a lump of coal. >> i can't remember because of dementia or something. we have the big jump in the natural price of gas as consumers brace for sticker shock in the new year. squawk box will be right back. we had a lump of coal and what?

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job markets is slowing and unemployment is rising? is that fair to say? you think they ought to keep cutting? >> yes, the job market is doing well enough to propel the consumer and send the economy to a nice year. the fed needs to realize that the pace of higher has meaningfully slowed. were talking about this. a few months ago, was the big thing and it was supposed to signal a recession or slowdown. i don't know why the fed is not trying to get to neutral with more haste. i don't know why they don't project getting to neutral for several more years when inflation is back to 2%. it seems like you to neutral, then you assess the outlook going forward. you leave future hikes on the table. >> it is closer to 3% down 2%. one of the parts of the economy , or the markets indicate to you

that we are in restricted territory? >> the housing market, manufacturing has certainly weighed more on the economy. everything outside of consumer services. >> that is the economy. to him talking about the markets. talk about the stock market, the spreads, bitcoin, crypto. it seems like there's a lot more, i don't know, speculation than people being worried about the economy. what is the unemployment rate? it has been rising to what would have been a very low level over the last 50 years, or at least 30 years. >> i'm not arguing for some massive using or zero interest rate policy, or the return of the 2010's. i think getting to neutral,

meeting pace until we get there, which is 3% or 3.25%, makes sense. the trepidation at the most recent meeting was confusing to me. as for the speculation on the weather market looks, evaluations are extended. we have plenty of speculation in the 1990s and the 2000's when rates were higher than they are now. i don't think it is a prerequisite to stop speculation in certain sectors or asset classes. liquidity seems abundant. i think getting to neutral with pace, or the handwringing over the current state of things is unnecessary. >> the move to the cyclicals, and you think there's more left there? do you think the maximum are m.a.g.a. are reasserting themselves next year? >> yes, probably the most

optimistic story going into 2025 from the past few weeks when things have really struggled is that mag 7 has reasserted itself. again, it is not the whole economy, but it is the whole market if you are an s&p investor or you have a broad market fund. it makes a big difference on whether darrell's stocks are working. there reasserted themselves as leadership heading in to 2025. we still want to see things like financials and industrial doing well. that trade matters because it is 30% to 40% of the market on a given day. for you think corporations will benefit from deregulation? do you think the specter of higher corporate rates has been removed? you think instead of the mag 7, let's talk about the m.a.g.a. trade? is that real? will it benefit? this is just a hard time to

imagine another year like the last two? >> i think it is yes and no. there are sectors that will benefit from deregulation and the potential of lower corporate tax rates. i think about financials a lot. i think they are set up well going in to 2025. they had a nice move did not look as much of a value. there is a lot working there that can continue to work. on the flipside, look at things like small caps. i get the deregulation and small business owners and the optimism is way up. i think the specter of the area matters more than all of that put together. things like tariffs and the labor supply still matter a lot for those smaller businesses. there are some that will work. i think financials and industrials are great places to be in 2025. i figure large or small will be

in that trunk 2.0 trade bucket. >> hilliard lyons was bought by baird. were you there in louisville at the time? >> yes, i am still in louisville. i started my career hilliard. i've been here for 5 years. >> i'm from cincinnati, so you went to undergrad at ku? do you know what to do if they play one another? which way you go on that? >> i am a big uk fan. i don't have that. i can use the u of l credentials in a pinch. >> you win either way, you say i just love kentucky basketball, okay. all right, i got a. have you been to the office in cincinnati? i know where that is. is in baird now?

>> yes. we have a great cincinnati office. we have a few ohio and northern kentucky spots. all over the state, we are all over the tri-state. it >> that made me like you. [ laughter ]>> i will take it. for it was his winning personality or his smart response? >> he is so young. we get old, you think only young people can't think you get the idea that they don't enough experience to know anything. when did you graduate? for 2013. for this 12 years ago. he has some experience. for you think [ indiscernible ] is the way it is supposed to be? >> i like to look at the mortgage rates to refinance. i can feel that right now. >> good luck. >> well done listening to all of this dribble for me and not

getting mad and sort of going along with that, that is good. >> he looks good. >> is not for you. >> i cannot do it anyway. >> you have show me a picture with the mustache. >> when we come back, we are learning more about a near miss at lax airport involving the gonzaga men's basketball team. we have the details right after this. bill ackman has been a long time investment in fanning mack and freddima e c. now he's looking at the trump administration. we have that story later. squawk box will be right back.

. spacex is launching 9 rocket, carrying a batch of startling satellite into orbit. it lifted off from the kennedy space center in florida. this is the 16th flight for the booster supporting mission. the booster landed on board of a spacex drone ship about minutes after takeoff. the federal aviation administration is investigating a near miss incident at los angeles international airport that happened on friday. you can see it. that is a charter plane that almost cross into the path of that delta airplane. we obtained the video and the charter plane carrying a then zach a men's basketball team had just arrived. it was taxiing to its gate when the larger delta flight was taking off. the gonzaga jet was just about ready to cross when an air

traffic controller was heard repeatedly telling it to stop, stop, and stopped just short of crossing the path of the delta airplane. in the statement, then zach is of the team members on board were unaware of the situation. they are grateful that the incidents ended safely for all. we all are. coming up, apple shares are up more than 30% year to date. we will talk about the to do list for tim cook. as a good break, here's a look at the s&p 500 winners and losers. it all started with a small business idea. it's a pillow with a speaker in it! that's right craig. pulling in the perfect team to get the job done. i'm just here for the internets. at&t, it's super-fast!

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good morning, welcome back to squawk box from the nasdaq marketplace. here the futures. we had a bit of a rebound with a 400 point lost in the down. it was a tough session last week.

in case you're looking for the account of elon musk on x, he has changed his name and his profile picture. this is the photo, is as it is a photo of frog. that is not a frog. that is a man frog. that is a muscular man with a frog's face. >> you say he is pepe. that is a right-wing mascot since late 2015. >> it is right wing? to what is he talking about? >> it is a meme. this is like a big thing in 2015 and 2016. >> the name is of a crypto token

. it was up 9% after he changed his name according to data from another reptile. i guess it is an amphibian. this is from point gecko. for the amphibians predate the reptiles. >> they crawled onto land, that's right. >> how did the snakes come? >> they are ancient. they lost their legs. >> is like having dinosaurs around. >> the birds walk around. for they think rafters may have had feathers. >> what are you talking about? the stock from apple? have we heard of that? apple has a lot to live up to after climbing 30% on the

back of apple intelligence. steve kovach is here, joining is now with what ceo, tim cook asked to manage in 2025. >> he always has a full plate. geopolitics will play the biggest role. two things to share with you. first off, it will be dodging the tariffs of present electronic -- president-elect trump. we are getting apple intelligence off the ground. let's talk about the terror spirit trump is coming in in just a few weeks promising blanket tariffs up to 60% on goods coming out of china. that would hit apple the hardest of any of the mega companies we talk about. most apple products, including the majority of iphones are made in china. some are made in india, but not enough to make up for what's going on in china. how he managed to dodge tariffs, he got a cozy relationship with the then president with partners like

jeff bezos. this culminated in 2019 when cook gave trump a torment apple factory in texas. the factory existed, but he showed trump a new model of mac computers can be made there. it became a win-win for both guys. got to show apple making things in the united states and the following month, apple got relief from tariffs on imports from china. i have trump taking office again, trump said a couple days ago that he came and died with him at mar-a-lago. no mention from apple or trump himself on what this means for tariffs. early in the year, here is what i am paying attention to, any announcements apple with job creation in the u.s. that could be seen as a gift to trump to avoid tariffs. now is talk china, there's competition on the hardware side. more important than that, you want to look at what apple needs to do to get the

government to approve apple intelligence so it can launch on iphones in the country. the man has to improve a.i. models. i did ask him about that during last earnings. he was fresh off one of his trips to china. he did not have a comment at the time. previously he told me they were working with the chinese authorities over there. apple needs apple intelligence to launch in china for chinese consumers that are more obsessed with tech and are waiting for the a.i. features to launch. the man to partner with a company for artificial intelligence since open a.i., which is a partnership here in the united states is blocked to china. tim cook has always been so good at managing difficult relationships. he has done this for a long time. elon musk is the other person that comes to mind, the other ceo though how to manage the relationship here with president trump as well as with china. is this a tougher job, tougher

situation than it was during the last trump administration? >> think it is tougher because keep in mind where we were six or 7 years ago and we talked about the first tariffs. the relationship, there was a trade were going on but we did not have spy balloons going on. that happened during the biden administration year there was this chilly relationship, more so during biden. it will be interesting to see how he toes the line. he does need china. tim cook needs time. he needs to dodge the tariffs. i don't think anybody believes that apple will be subject to the tariffs. it's about how do they dodge. >> that's right, manufacturing in the united states is big. as for the factory in texas, apple did not create it. they have been making mac computers for quite some time. they created a new model there, so trump got to see a new product being made there.

installing tim cook waved a magic one that okay we will build some iphone factories in the u.s. during trump's first presidency, he also claimed that tim cook told him that apple will build three factories and that never happened. it will be interesting. he might just be able to tell trump what he wants to hear. >> in defense of pepe it was neutral. it was co-opted by the old right and by white nationalist, even though he is green. despite the character having been co-opted by these hate groups, it was used in protest in hong kong, where was used positively to protest against repression. i'm just saying, i think if you say it is a right-wing mame and elon musk uses it, it will sell

your saying elon musk is embracing some all right. >> it is a political. >> you wanted not to be, because it is elon musk. >> it started as a silly cartoon. how can you be a white nationalist if he is green? >> they have designated this as a hate symbol due to it being co-opted by white nationalist. >> in 2002 they say it has to be done in context. in fall 2016, they teamed up with the creator, matt furey to create the save pepe campaign. >> are ninja turtles right- wing? he looks like a ninja turtle. as for that was my decoration. >> thank you.

>> i'm doing my best year. when we come back, we have new data on china's economy from the china beige book. that is up after t bakhere. a reminder, you can get the best of squawk box on our daily podcast. follow us and you can listen any time. we will be right back.

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new data from china beige book shows the chinese economy lost steam from november and we are outlining downside scenarios in 2025. joining us to talk about it is the managing director. we knew the chinese economy was not great. it looks like there was a deceleration as we went into the last month. >> absolutely. a lot of the gains from the stimulus announcements that we got in september and some of the pulling forward of growth, training programs and such, the

benefits of that have clearly expired. this is once again a case of canned beijing lift business confidence and consumer sentiment? the short-term measures are not going to cut it. >> let's talk to the numbers and then about what you think will happen next. if you are looking at growth, revenue growth was down month over month. what happened? >> firms are saying they had a spectacular november. by comparison, the did not do as well. year-over-year, it looks okay as far as profitability, but is not a phenomenal story. >> new orders, that was maybe the biggest thing that jumped out at me. new orders were slowing down for manufacturing. and >> absolutely. if you look at orders directly from the u.s., they are in contraction territory. there is a big freak out over the fact that he will get a lot of tariffs. the buildup of inventory in advance took place. we are seeing some of the

benefits expiring. that creates a big question looking ahead, because those big export figures that china was benefiting off of may not be in place as we get into early 2025. >> use of the one thing that can say that, if the threat the tariffs coming from president trump are just hot air. is the damage done? once you move orders in u.s. companies are looking elsewhere for production, even if it turns out not to materialize, maybe the damages done? >> to a certain extent, the damages on. if you think big picture and moving of supply chains, the next question is, if you ordered a bunch of stuff, if the terror threat is not materializing as you get in to early 2025, you think about restocking. will see how companies make those decisions. the larger idea is, if you want

supply chains out of china, the threats have been big enough. you did hear the major producers saying look, we are removing factories and so forth. >> why wouldn't china, get religion and see that this is the future? if we try to retaliate, and this is what happens when we have not even retaliated yet, they mainline the u.s. economy. china has made some progress becoming a consumer society, but it is still an export country? >> they need a way to save face. >> i don't think they have a lot of leverage. as for they don't have a lot of leverage. at the same time, i think a lot of the attitude coming up can be summarized as bring it on. >> how's that possible? they keep making this stuff and

they don't have consumers to use it. they have to dump it. we don't let them dump it, sooner or later, seems like something will pop. >> it depends on how aggressive we get. >> it is in everyone's best interest to make nice. >> what they will say is we cannot ship directly to you. we will do a from vietnam, or mexico. it returns to the cat and mouse game. that'll have an infinite capacity, but they have a lot of capacity to take pain and still be able to sell and subsidize at home with zero credit loans. >> what is the average capital gdp? about $15,000? they don't care? >> this is a developing country at the end of the day. >> there are a lot of other countries like that were the people suffer and the ruling class decides they have to do what they have to do? is that what will be the end

result? >> yes, you have a handful of elites that is exercising the country. yes, it is driven by the fact that they have national security ambitions. those are paramount. that's what you focus on and everything else is secondary. is to staying in power is the big thing. >> that is the ultimate goal. >> thank you. happy new year. people that invested money are receiving the final payout. we have the details coming up. squawk box will be right back.

the justice department is nearly completed the recovery effort for the victims of madoff and the ponzi scheme. overall, it has distributed $4.3 billion to 40,000 victims. that is 94% of the fraud losses. it does not include any hypothetical gains, interest on the money invested, and madoff died in 2022 ipronn is. way to jump of 22%. we look at the outlook for prices this winter, coming up next.

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the reason forecast for winter storms and cold january temperatures are bring up the price of natural gas. joining us now is tom, the global head of global energy analysis at the oil price information services. this was the highest level we have seen since sometime last year. using, near term, there are some bullish factors for crude oil and natural gas? and then the trumpet fact mike again for the second half of next year? >> yes. i think the first 100 days of 2025 will be a bit of a head fake. we have a cold winter in the northern hemisphere for the first time in six or 7 years.

if you look at the cold weather and the dome of cold weather, it will gripped the country in the places where we use heating oil or natural gas from january 6 through january 20 when the president takes office. that could provide a bit of a boost. that will be especially true if europe and asia are cold as well. we have plenty of natural gas in the ground, we don't have a lot downstream. you get these interruptions where utilities get cut off from natural gas and they have used oil. that is one thing that will push prices up. the other thing will be from 2.0 with tougher sanctions on iran and venezuela. not be lost in this, the biggest fundamental ball is money flow. we have a lot of new money flowing into oil futures and options in january. that is not necessarily what we will see through the rest of the year, but we will be off to

a riproaring start. for even though you point out big money is more enamored of crypto and big tack, beginning of the year, you still expect the energy complex to attract some of that money. you think 80 is not out of

6 million-barrels a day of extra capacity, that's going to wear on the market, i think, in 2025. >> and trump's promise, president-elect promise of adding 3 million-barrels of oil equivalent per day in his term, you think he can do that with his eyes closed. with his score keeping with golf, i think it's funny you said that. all presidents are pretty good. i knew bill clinton shot 80, after only swinging the club 110 times. he was able to post an 80. >> we all shoot 80 on the first 14 holes. >> exactly. >> it is not a reach. it's not a dramatic moon shot. 3million-barrels a day, because it's barrels of oil equivalent. some of it is natural gas, some of it is crude oil. a lot of gas liquids.

we're the propane supplier to the world. >> $2.25 for retail for the next couple of years. even for next year, about $3 a gallon for much of the year? >> yeah. that's removing california from the capital. california is a special beast and they may be $4, $5, $6 a gallon. when you remove them from the calculation. they are very reasonable numbers we'll see. you can blame a lot of things for lack of american prosperity, but you won't be able to blame what happens in the energy patch at all. >> right. blame california, maybe, but they have so much going for them out there. you really need a guy like gavin to, you know, work almost 24 hours a day to screw things up it seems like. tom, thank you. good to have you on. >> see you later. >> you, too. it's just after 7:00 a.m.

on the east coast, you're watching squawk box. among the top stories, the treasury department says computers were hacked by a chinese threat actor. what the department is calling a major incident in a letter to congressional leaders, treasury says the operation used third party software to tap into desktop computers of treasury employees earlier this month. the fdic reportedly gave black rock a january 10 deadline to accept an agreement over compliance on the stakes and banks. the agency is pushing the asset manager on the deal that would allow it to step up scrutiny of blackrock's informsments in fdic regulated institutions. and the new york stock exchange will close trading on thursday, january 9, in accordance with the national day of mourning for the death of former

president jimmy carter. bond market trading will end early at 2:00 p.m. eastern. and i just, that's screaming shark tank reruns to me on that day. >> our coverage of the day of mourning. >> is that what we're going to do? >> potentially, i don't know. >> i don't think you can cover the funeral. i don't think you can cover the day of mourning. >> i assumed it was tied. it's eight days. that might be. they said it was going to be in eight days. maybe that is then. >> although eight days is before then. i don't know. >> maybe not. maybe the day of mourning is after the funeral and after laying in state and all those other things. >> bond market is open. at least until 2:00 p.m. >> that will be like watching paint dry. i better not talk. are we going to be here? >> probably a good idea to not

talk. >> well, you said it. all right. let's get a check on the futures this morning. you are going to see some green arrows. this is a pretty different view than we got yesterday when the red arrows were racking up losses the longer you watched yesterday morning. you'll see right now, the dow futures are indicated up by about 160 points. s and p futures up by 22. nasdaq up on the last trading day of the year. let's get over to frank holland. he has a look at the movers. >> happy new year. we'll start off with shares of tesla. they are higher. up 1.5% after pulling back over the last week, down 8.5%. some of that may be profit taking. estimates are at 505,000. expecting the maker to miss those numbers, but price target

of 226, basically about half where the stock is trading at right now. tesla shares up about 1.5%. some eakness over the last week. all right, moving on. taking a look also at, well, this is tesla right here. we'll move on to the next stock right now. waiting for the chart. waiting for the chart. here it goes. microstrategy shares up more than 4%. again, another pull back over the last week. maybe profit taking as well. down about 12%. so, the stock actually has fallen over the last week, including an 8% fall yesterday after the company announced a disclosure of 592 shares they will sell. the company announcing at the same time, it bought around $209 million more in bitcoin. they are up just about 4%. similar to tesla. another big winner since the election. you can see the big moves right

here. super micro. shares are up double digit since the election. the company reported earnings. this stock, according to dow jones, the most volatile with a score of 7.6. just to put that in perspective. that is more than double the next stop. the stock hit an all-time high back in march. some accounting issues. resigning from the relationship with super micro. an audit from the company finding so accounting issues, leading to a year end rise back here on the back end. well off the highs of the highs earlier this year. a wild story. the most volatile stock year to date, up about 9%. back over to you guys. >> frank, thank you. we will check in with you in a little bit. we aren't going to let you sail into the new year just yet. we need you this morning. >> it's good to be needed. >> yes. >> in a lengthy post on x, about fanny and freddie, he

expects president-elect trump to remove fannie mae and freddie mac, and a public listing could potentially happen around 2026. the move should generate more than $300 billion in additional profits to the federal government and remove $8 trillion in liabilities from the government's balance sheet. in his words, trump likes big deals and this would be the biggest deal in history. he said held fannie and freddie's common stock for more than a decade and they soared follow ackman's post. >> this is something they have talked about. john paulson mentioned something. >> i can remember owning it back in the 80s. coming up, the bulls ran wild on 2024 despite some of

the wild swings over the last couple of trading sessions. will the new year bring more positive vibes for the markets? we'll talk to jim paulson about what could be ahead for investors in the new year. squawk box coming right back.

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well, the markets rolling with some year end volatility with some big swings over the last couple of trading sessions. on the year, the s & p 500 is up about 24%. that's back to back years of

some pretty significant gains. joining us right now with more on the markets is jim paulson. he's former chief investment strategist, also at wells capital management. he is now the author of paulson perspectives and a long time friend of the show. jim, it's great to see you this morning as we are closing out the last day of the year. i guess i wonder what you think things are setting up for, for 2025. >> happy new year to you, thanks for having me this morning. you know, i think that we might have another positive year in the overall market. i think it's going to be a lot bumpier ride here in 2025. and i think we're due for a correction probably maybe in the first half. we haven't had one in a year and a half now, and we're due for one. i think there's a lot of optimism. the gdp is at 3% on the gdp now number for the third quarter.

the fed paused or at least slowed the easing campaign because they think the economy is almost too strong. bond yields backed up because they share the sentiment. i think the opposite will be the issue. i think the economy will slow fairly significantly here in the first half. there's a lot of tightening force, even though the fed is easing. bond yields are back up a full percent. mortgage rates are up over that period of time. the dollar has been really strong. maybe 6 to 8% real dollar terms this year. and money growth, while it's rising, is still a little over 3%, no . typically, when money growth is less than gdp growth, the real gdp decelerates by almost a percent, going back to the 1960s. the combination will slow the

economy down to 2%. maybe less. and i think that will reignite recession fears. even though i don't think we'll have a recession. i think we'll be worried about it again. with that, i think we could get a correction in the stock market. the good news, is all that plays out, then it will open the path for the fed to ease again. >> that's what what i was going to say. if there's a pull back. if the economy does slow down, if inflation comes down, the fed is poised to jump back in and lower rates again. so you think it would be a short lived correction, if it happens? >> i do. it might drag out. it might take awhile for it to unfold. i think it's a good buying opportunity again. i don't think it's over. i think private sector balance sheets in the corporate sector are way too strong, becky, to really tip them over into recession. liquidity is over. net cash flowed, gps and the corporate sector were high, and

$7 trillion in money market funds on the household sector. still a good deal of cautiousness underlying on main street. that's not a recession recipe. but we certainly could grow slowly. with the unemployment rate at 4.2, you can just imagine the fear that might happen if it tips up to 4.3, 4.4. and it could be punishing, you know, selloffs and i think even maybe the tech darlings for a period of time. that will represent a good buy later in the year. >> what kind of a pullback are you thinking? what would make you say okay, this is the time to jump in. are you talking 5, 10%? or more than that? >> 'm talking about a correction. 10 to 15%. in that ballpark. i got to tell you, forecasting corrections is a perilous activity. the front end and the rear end. i wouldn't raise cash. i still think we're in a

secular bowl that could last a few more years. i don't want to miss that, for the sake of a bump along the way. i would rather raise cash. what i would do, take your winners, and lighten up on the areas of the market, including some of the technology, don't sell out entirely. lighten up, and buy defensive things, like high dividend yield or high quality or the s and p low volatility stocks. and then if the market keeps running all year, you're going to participate, but if it does pull back, you're in a position where you can go back and stop with fear, and much better prices and reestablish more of an aggressive position again. >> jim, for people who are indexed to the s & p 500, it's been a phenomenal year. even with the pull back we have seen, it's 3% from all-time

highs. maybe a little more than that. and that's because of the strength of just a handful of stocks. i think something like 40% of the s & p 500 and market cap is now in ten stocks. it is 8 stocks if you're looking at 35%. that's up from 22% not too long ago. you're talking about massive allocation in some of those big names. you think that those names are safe and will that protect the s & p 500 no matter what comes with volatility along the way? >> i think those names will do okay longer term, becky, but i think they could take a hit this year for a period of time. i would, you know, the thing about new era tech technology. if i look back to 1960, they do well when real gdp growth is above 2.75%.

bond yields are rising rather than falling. i think if we get into a recession scare and bring bond yields down again, we'll have a selloff in the tech stocks like we did in july and august among the manic seven, for example, and maybe deeper than that. that could get a little more frightening, to your point. the s and p might just have a gain this year, but i think the real winners might be outside of the s and%. the broader marketplace does a little better than s and p at 20256789 i wouldn't entirely sell out of tech. i think it's still the leadership going forward. i think if you're going to sit and high concentration levels, you'll suffer and you'll be nervous. i think if we get into a decent pullback. >> jim paulson. we always appreciate seeing you. we hope you have a wonderful new year. >> you, too. >> forecast for cold weather in

minnesota, paulson. i don't know, i don't know whether you saw that, likely 14- 2 for the vikings. did you see that? 14-2. coming up, u.s. has been making gains in productivity, but just not on capitol hill. why 2024 is going down as one of the least productive years for congress in decades. hence, the great stock market activity. squawk talk is coming right back. time now for today's aflac trivia question. how long was orville and wilbur's first successful airplane flight? the answer when squawk box returns. insurance doesn't cove. aflac! health insurance does leave a gap. but aflac gives people money to help close that gap. aflac! oh! coach prime got one on the line too baby! uh huh! see that's how you hold up a trophy. trust me. get help with expenses health insurance doesn't cover.

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and now the answer to today's aflac trivia question. how long was orville and wilbur wright's first successful airplane flight? the answer, 12 seconds, flying 120 feet. >> 2024 is going to go down as one of the least productive years for congress in decades. this is just -- i'm not going to say anything. just too easy. emily wilkins joins us with more. hey emily. >> hey joe, i know, i know,

right? with the new 119th congress coming in on friday, the 118th is all but officially over. it was one of the least productive in recent years. it's a good time to look back on it. in the past two years, 501 bills were enacted and became law. on their own or part of a larger package. between the time we created this graphic and now, it looks like biden signed a number of bills and it's not 427, it's 501. and look, 501, it might sound like a lot, but as you can see on that chart, it is still dwarfed by the last several years when you saw more than 1,000 bills pass each session. including in the 116th, if you remember, of course, it was a split government. now, a number of factors have led to this last congress being less productive. several weeks battling over the

speaker, plus, a divided party. there could be some of the same issues in the next congress. >> the realities that republicans in the house are split. there are almosts that want to go further, and more republicans that are traditional, republicans that have traditional notions of what they want to do. as a consequence, the majority in the house to do things is going to be very difficult. >> with republicans in control of both chambers of the house and the senate and the white house, congressman, lawmakers like congressman shiproy, are hoping they will have a more productive next two years. >> now we're going to have the house, the senate, and the white house. now will be the time to put up or shut up. so we'll see what republicans can do. >> republicans already have a very ambitious agenda for the first 100 days. they want to do a bill that

includes border security and energy policy and then once that's done, another package on taxes. and of course, in the meantime, they will have to deal with the debt limit, fund the government, and confirm trump's cabinet, so joe, of course, the big question here, are we going to see more republican unity than we saw in the last few weeks when they were trying to fund the government? >> and they don't question it, you know, what some people want congress to do versus what other people don't want them to do. and i mean, border security, it's hard for me to say that it wouldn't be a positive. but, my point was, and i can't help myself. if every market strategist or person that has any experience in business regardless of political affiliation, if they all say, we want gridlock, or the market is up because it is predicting gridlock, or the best scenario for the market is gridlock. how come congress can't get the message that maybe they do more

harm than good most of the time? >> i mean, joe, it's a good question. you look at all of these bills individually. everything that passed, it clearly had bipartisan support. it clearly had wide buy-in. a lot of these bills go through a process where they are expedited. you have more than a bare majority voting for them. at the same point, what gets passed and what that looks like. there are different ways of measuring the productivity. you can measure it by the size of the bills that passed, the overall impact that it has, they noted that some congresses, if you have a divided country, a congress that doesn't get a lot done is reflecting the will of the american people, because the american people can't agree on much. >> after awhile, you have some big problems that build up. if you look at immigration or other issues. >> if all you're going to do is just throw money at a problem,

you just are adding. that was reagan's -- he was a president long ago who said the worst sentence in the english language. i'm from the government and i'm here to help you. so, and the uniparty, the bipartisan bills might be the worst of all. emily, thank you. said without commentary. we stkpwhrá that's you without commentary? >> i have to bring back my commentary. >> opinion. >> right opinion, right opinion. to the right. >> i was going to say. but it is interesting. look, i think the problem becomes when you have parties that elect people that are far one direction or the other, it's really hard to get a bipartisan bill. i think most americans -- >> bills to reverse previous bills. i would like them to, you know, maybe pass a law to those. >> the ceos are leading companies that want certainty and the outlook for what

happens. most americans are probably in the middle of where you see the extremes of the parties. they want common sense, rationality, it doesn't necessarily line up with an entire platform. >> there was a time when things were going, like i said, you can't really compare it. government was 7% of gdp. and things seemed to be fine. now, it's 25%. >> no question that the government needs to be looked at. >> right. >> easier said than done. >> dealing with big bureaucracies, they are never a good thing. whether it's in business, whether it's in government. i also think back to the days where you had a greg and an evan bye, a republican and a democrat who work together and find, you know, logical people who can sit down at a table and say this makes sense and this doesn't. >> all right, when we come back, the treasury department says that its computers were hacked and what it is calling a major incident. we'll get more reaction to that story, and check out the risks

for cyber threats on the horizon. and by the way, evan would say there's too much spending in government, too. they would both agree on that. check out some of the names in 'lseri sto utyecr. wel talk more about these issues when squawk box comes right back. ..living with conditions many have never seen. for more than 40 years, mercy ships has deployed floating hospitals with volunteer doctors who give their time to provide the free surgeries these children desperately need. - i feel like my reason for being here is driven bylove . i think it is the love that changes the patients first. - [female narrator] join us by calling or going to mercyships.org now. $19 a month will give children and families

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the treasury department says its computers were hacked by a chinese threat actor in what the department is calling a major incident. joining us right now with more on this and with cyber security risks in the new year is teresa payton. she is he ceo, and teresa, thank you for being with us today. we have a lot to talk about. let's start with this latest news about the hack of the treasury department. saying this is a major issue, but then saying there's no threat that they are still in, they don't think the hackers

are still having access to what's taken place there. you know this better than just about everybody. i feel like there's a lot we're not getting from the headlines on this story. >> well, i read the letter they wrote to report what had happened. there will be another letter coming in about 30 days. these investigations take time. the one thing that gives me some optimism about this that it has been contained is they mention that the affected service, which was a third party service, which gave basically if you think about it, almost like a master key to a support person, a trusted person. it basically gave that authenticated master key to these bad actors who have been traced back to china. china has denied it. the thing they said, they have actually identified the service, taken it offline, and doing the proper remediation steps. so, hopefully what that means is, the threat actor no longer has per assistance. we know from the litter that

they produced the documents were accessed. what we don't know is what documents. they did say it was unclose anied. >> right, that's the part that i don't get. these are documents we shouldn't necessarily care about, because they are not classified documents or this is also a very serious issue if you have a chinese actor that has access into the treasury department. >> i think it's very serious, because as we used to say when i worked at the white house for president george w. bush, small pieces of unclassified information put together a piece of the puzzle that could lead to classified information. and so anything that you steal gives you sort of, even if it's just an interdepartment memo, about new hr policies, that gives patterns of life of the operations. it gives names. it gives heads of departments. it gives the tone and the type of vocabulary that is used, which can be used in subsequent

social engineering that are much more sophisticated targeted and spoke in custom. you have this knowledge of the inner workings. >> you say that a lot of attacks come over the holiday season. i guess that's because teams aren't paying as close of attention? a lot of people on vacation? >> this is tough. we've done studies on this and found that not only do cyber criminals not take a holiday, they typically speed up their attacks in the days and weeks leading up to what they know to be a country's holidays. and the reason being is they know that people are tired and a lot of times, teams are taking much-needed vacations. there could be skeleton crews on board, and they have this opportunity to strike when people deserve, you know, kind of a well deserved break after a really tough year. so we've seen this time and time again. it doesn't mean that the best and the brightest aren't at the helm watching everything. it means they are out manned

and sort of out designed by nation state, cyber criminal syndicates, and others and it is just tough because you have to get it right every day. cyber criminals only have to get it right once. >> what would you advise krerbgs os, ctos, what do they need to be prepared for in 2025? >> 2025, if you thought 2024 was bad, right now people are saying that ransomware will go down as the worst on record since we have been tracking in 2024. companies never spent more on cyber security. so we have to ask ourselves some tough questions. are we really attacking this problem the right way? what i would say to ceo and boards, focus on the human user story. what are your customers, employees doing before they engage with technology, while they are engaging with

technology and after they engage the technology. really understand that human user story, because cyber criminals can teach a master class and human behavior. they know what we're going to do before we do, which is why you see these attacks, the treasury department, they went off a third party support platform. you see the google two factor authentication, where they are stealing cookies from browser -- going into browser extensions and trying to steal secure cookies. you'll see these attacks really accelerate in 2025, ransomware is here to stay. go after ai systems, it will go after smart buildings, potentially locking people in builds until ransom is paid, using the computer systems. >> what? >> yes. i also foresee the potential for -- >> where is that backup that you're talking about? commercial buildings that have been turned into smart

buildings? kind of being turned against us? >> yes, absolutely. ransomware syndicates see an opportunity for quick and easy payouts. very few of them see jail time. you know, we're doing a better job internationally hunting down the syndicates and trying to bring about justice for all the victims. they will not stop. companies do a better job not having to pay ransom, they will move to smart buildings. >> do you think smart buildings are a bad idea in general? would you work in one? do you think we're doing these things, smart cars, smart homes, can we keep ourselves safe? >> i love technology. i love what technology can do to improve businesses, make them more efficient. make buildings more energy efficient. make them more safe from a physical security perspective. think about all the smart

technology we have in buildings. at the same time, these computer systems are vulnerable to attack. so this is where ceos and boards need to assume it is not a matter of if we get targeted in 2025, it is a matter of when we are targeted and when cyber criminals are successful, what will they do and what are our different types of kill switches around the technology where we can go to manual processes, where we can protect people, protect systems. this starts with understanding the human user story. don't skip to the technology solution. don't skip to the security product. start with that story first and becky and joe, we'll be able to protect the systems and the people. we have to assume technology will fail us. we have to assume cyber criminals will be successful. if you design the kill switches for the systems knowing a breech will happen, the design will actually be your safety net. >> all right, that's good

advice. there's something else you raised in the notes that i hadn't thought of, haven't heard before. that's the idea of cryptocurrency being potentially threatened by quantum computing. i think of crypto being the safest of any way of holding on to currency of having money. but you bring up an issue. i hadn't considered. do you want to explain? >> absolutely. i'll do it in 30 seconds or less here. here's the thing. block chain and cryptocurrency, what's great about it is, based on today's computing power, it would take you about, you know, millions of years and lots of super computers to really think through how to break all of that encryption. to be able to sort of steal cryptocurrency, like bitcoin and things like that off the block chain. the different attacks you hear about today typically happen when it has to leave the block

chain to be consumed. to be turned into fiat currency or move from platform to platform. those are the typical hacks you hear about today.. stealing someone's wallet. you don't hear about encryption being cracked wide open. them saying something that used to take an eternity to do now takes five minutes. the incorruption is basically just one big math problem. and now with quantum computing, you'll be able to decrypt the encryption. now, a lot of experts say, there's no cause for alarm. we probably have about ten years. what i would tell you is based on my career in studies technology and cyber criminal syndicates, is that ten years, cyber criminals are always innovative. they are going to find a way to cut that time in half, maybe three 3/4, so we should be

preparing now, especially since cryptocurrency tends to be decentralized in nation. there's not a body deciding how cryptocurrency is created, consumed, you.net have international standards. you don't have a lot of regulation. so we need to be talking about this now or we're never go inc. to be ready. >> teresa, that gives us a lot to think about as we head into a new year. thank you for joining us. >> thanks for having me on. would there be anything left in my bank account >> >> your bank would get hacked first. that's where the money is. >> we'll check it after we go to break. markets ending a strong year with volatility. are investigators taking advantage? as we head to break, check out the s & p 500 winners and losers. squawk box is coming right back. can get with any sportsbook. ohhh! the highs!

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still to come this morning, much more on the markets. tech stocks and the future of

interest rates, squawk box will be right back.

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2024 was a strong year for stocks. that bullish sentiment continue into the new year? 2023 was pretty strong as well. joining us now is tom, founder and ceo. we just had paulson on, not jim -- not hank paulson, not pat paulson. but john paulson. he thinks maybe not quite as great and maybe a correction in the meantime. what are retail clients and their actions indicating to you at this point, tom? >> at this point, joe, they are saying, i mean, they had a good year. this was a great year for retail customers, obviously. i would say that general consensuses, they are maintaining a long bias. i think that is pretty obvious

across the board. customers are at this point, retail customers would rather be long and in the market than not be in the market. >> december is usually good. it's supposed to be good. it was not good. was that normal? and healthy the last month? >> healthy, yes. maybe it wasn't as normal because the rest of the year had been so strong. i think a pullback was you know, i don't think a 1 or 2 or 3% percent pullback is a bad thing or a surprise to anybody. if you look at the entire year, it's a pretty impressive display this year. so, i think the little tiny pull back in december didn't mean anything. >> what are going to be the most important macro forces for 2025? do you care about those? or do you just watch the action of the market itself and not try to explain it? >> yeah, i'm a trader. i couldn't care less about

macro forces, because you know, in the world of efficient market theor which is where i live, the market takes everything into account almost instantly as it happens or before in some cases. so, i think everything is kind of priced in. if you want to look at macro forces, those are fun for engagement and fun for talking about. i think from markets and trading, the markets are going to do, i mean, the market is going to do whatever it wants regardless of macro forces. >> right. i think that if the tenure would continue to back up. i'm not sure if you call that a macro force. we don't need to say why it's happening. if it were to happen, that might not be a good sign. >> i agree with you. if the ten-year were to break below. right now, it's trading. it's up the last two days, heading back towards the 109

level. i thought it would hold at 110. i think at this point, if it were to break 108, 107, in that change, on the ten-year, you're looking at plus 5%. i think that would disrupt the markets a little bit. i think that the one risk out there is the ten-year and 30- year, are hovering at levels that make people uncomfortable if they break down from here. i agree with you there. >> because -- i think in general, do you think that the economy at this point is at least moderating from all the fiscal, you know, over spending and the post pandemic stimulous. so maybe we don't -- i don't know if 3% is possible. here we are talking macro again. if the ten-year continues to go up, even though the economy doesn't look like it's quite as strong, then that is indicating we have a double whammy.

we have maybe stubbornly high, you know, inflation and maybe a slowing economy. that's usually the worst thing for equity. >> i think that right now, that's kind of what most traders are looking at. there's a little bit of the growth stocks had been so strong and the concentration of strong stocks has been carrying this market, that in spite of what happens with respect to the bonds, you know, the bonds have dropped pretty significantly. both the 30 year and the ten- year. and so when you start to look at that, it does put a little bit of a dark cloud over this market. so far, the growth stocks have been able to dominate the story and i don't know if that changes any time soon. but if the bonds do break down and rates do go up to kind of new highs in rates and new lows in bonds, i think that would make for a tough -- that makes for a tough sledding going

forward. >> we point out again and again, even for the past two years, this wasn't a rally that people really loved or thought was going to continue or really embrace. is it still like that at this point? or do people say yeah, it's easy to make money in the stock market. >> i think that the good thing for retail investors is that the big name stocks that they like to participate in both with options and essentially buying stocks, all the big names, you know, they really out performed. so even though it was highly concentrated, you talk about the top 10, 15, 20 stocks. they delivered spectacularly. so, on top of that, you also had, you know, on the retail side, you had a huge move in digital assets over in 2024. it was that year where you could almost throw a dart if you had a long bias. if you tried to get cute and

play some of the contrary plays, they didn't work out well. if you went with the chalk, it was a strong year for retail. >> do you have a record year? >> did we have a record year? >> yeah. >> as a firm? sure. i mean t -- >> you did, right? >> say that again. >> you did, right? i don't know how you couldn't in a year like that. i wondered, does that mean anything? >> not really. you know, volumes were really strong and i think that's just more a function of really good, you know, financial content today compared to what it was. >> really good management, you know, and a great founder and ceo. it's really not the markets. >> i'll take that. we'll take those, sure. >> i just say, i'm sure you had the record. and probably expect records in 2025. >> i am a positive drift

person. so, i'm thinking, joe, that if we're everything is not getting better every year, then something is wrong. so i think everything should go up every single year. so i'm positive drift on everything, yes. >> i wish health was like that. maybe it is. here we are. we're still aboveground. we're heading out of here. very good. good to haveoun. y o squawk box will be right back. meets bold new thinking. ( ♪♪ ) partnering to unlock new ideas, to create new legacies, to transform a company, industry, economy, generation. because grit and vision working in lockstep puts you on the path to your full potential. old school grit. new world ideas. morgan stanley.

well, drink up everybody. it is midnight somewhere. and that somewhere is just about to be sydney, australia. you're looking at a live shot of the new year celebration right there. you can see the countdown coming. 7, 6, 5, 4, 3, 2, 1. happy new year, everybody. wow. that is a fireworks show. the aussies know how to do this right. >> they did the finale at the

beginning. >> well we don't know. it could be even bigger. but you have to hit it right at midnight, and they did. so this is the first of many new years celebrations we'll see throughout the day. let's get rid of the banner, because you can't see with it. there you go. it's midnight somewhere. even if you're just waking up, have a drink. cheers. sing auld lang syne. that's really cool. look across the entire harbor. the music choice is not the best. but the fireworks show is pretty fantastic. all right, folks, it is midnight in sydney, australia, and it is 8:00 a.m. right here on the east coast. you're watching "squawk box" here on msnbc. i'm becky with andrew kernin. >> we are right where it's

going to happen. >> crossroads here in america. at times square. it's right behind us. things are gearing up. they've already shut down traffic for hours at this point. that is not a live look, i don't believe. it is? wow. it's way brighter up there than it is down here. so that is a live look at the ball that will be hoisted later tonight, and then dropped down. like i said, things are closed down here in times square. not crowds just yet, but you can't get through if you don't have a car. so we are awaiting new years. among our top stories this morning, the treasury department says that a state responserred chinese hack operation tapped into employees desktop computers. treasury says the breach occurred through a chinese access to third party software from a vendor that's called beyond trust. china denied the hacking claims and a ministry of foreign affairs spokesperson told us

china consistently opposes all forms of hacking. we are watching natural gas this morning. the commodity pulling back after a more than 16% surge yesterday. that surge followed reports of a colder than normal temperature outlook for january. year to date, nat gas is up 58%. the new york stock exchange will be closed next thursday, january 9th, in accordance of a national day of mourning for the late president jimmy carter. carter died on sunday at the age of 100. the bond market trading will end early at 2:00 p.m. eastern time on that day. carter's funerals will be held on thursday the 9th at the national cathedral in washington. the futures this morning, better position than we were yesterday at this time. at least if you were a bull. look at the dow futures up by triple digits. up by 12. the nasdaq by 54.

if you've been watching treasury yields, they've been a little low this morning. it's at 4.52. we want to get down to mike santoli standing by. what are you focusing on for the last day of the year? >> the indexes did get some traction over the course of the day yesterday. still a 1% decline. more stocks than up consistently. more new lows than highs. really, some profit taking has been churning through this market for a while. i have a two year chart here, because interestingly, we're going to basically have on a point to point basis, a year to date gain, approximately equal to last year. here was the turn of the year. and you see there was a little bit of flattening out, december into january last year. but this has been a little bit more of a pronounced kind of pause in the rally we've had.

we've spend about a third of all days over the last 30 or so trading days in the range of november 6th, which was basically that pop high right after the election result was apparent. we've kind of been just testing and testing right in that zone right there. so we haven't kind of gotten below that. there is some support maybe below that level. but interestingly, internally, this market is looking like it's over-sold. so maybe it's in a decent position going into january. one of the big stories of course was that the winners kept winning. look at the momentum, momentum stocks relative to value. obviously maintained that lead all year. value did have a little bit of a comeback, but it's rolled over just a little bit. it's not exactly equivalent to saying cyclical stocks are equivalent to economy. with the index rebound recently, apple and microsoft are the biggest holdings in the value etf, so they kind of

split the stocks, so like a percentage is in the growth index. more to the point, obviously, it's been a momentum market, the winners kept winning, and obviously, not terrible. if you said a year ago, value stocks are going to be up close to 10%, you might have taken it. commodities, big move in natural gas. everyone he's talking about the huge rally. interesting ten year chart of wti crude relative to natural gas. looks like a massive catch up move, obviously, they operate on different dynamics. but on absolute basis, really undemanding energy costs right now if you just look where they're trading in nominal terms, guys. >> mike, let's talk a little about the santa claus rally that wasn't. that rally never showed up. it didn't happen last year either. that's a pretty rare occurrence for two years in a row to not

get a santa claus rally. that goes against the statistics. i guess it happened in 2014 and 2015, back-to-back. the stuff i've been reading talks about how it's a bad indicater for january. we also know the january indicater usually goes for the year. you still had a great year overall in terms of the markets. what would you tell people who try to follow this stuff? >> sure. one thing is there's still a couple of days left. today, thursday and friday, are still within the santa claus rally. in theory, you can rescue the indicater. and it used to be this idea that oh, it's an early warning signal of trouble if you don't have gains over that period of time. it kind of worked. i think it was like a one third of all bear markets were proceeded by a negative santa claus market period. the point is it was always kind

of a blunt instrument. i think it's pent up after a good market for two years. but the predictive powers are just not there. these are very widely watched seasonal effects these days. i can remember starting in this business, and you had to kind of dust off the books from the archives to kind of get a handle on these things. i'm just not clear as to whether you want to pin too much on them in the way of actually forming a strategy. >> no, you're right. we're better off going with the super bowl indicater. >> yeah, of course. we've got over a month to sort that out. >> exactly. >> nfc's good. >> is it the old? >> well the old national -- >> the original nfl. >> but those were the good ones. who would that be? i don't know. afc is possible. detroit last night. yeah. that was an easy one. i won that one. >> thanks mike. >> thanks, mike. the megacap internet stops

getting hit by some volatility. joining us now, mark mahaney. there's some big caps, large caps in that group that are like part of the magnificent 7. there are some small caps. but just in general, mark, are you still bullish on internet stocks in general after what is an incredible run? nothing grows to the sky. you sort of have to believe things do grow to the sky to be as bullish as you were the last couple of years. >> okay. happy new year, joe. i think these multiples can hold, so compound constructive. i look at these trends that i'm seeing, even going into the december quarter and retail, travel, advertising, and even cloud spend. it looks like that year over year growth is the same or stronger than it was at the

beginning of '24. i think a.i., genaid performance, improving products, improving improving profit. i see a lot of these companies, especially the largest tech companies have really gotten the memo about the years of efficiency, and have been very judicious in terms of hiring. i think they're going to continue into next year. there's always the possibility of shocks, and i do think there's going to be an issue with the march quarter guidance that these companies give, because they're all going to face really tough comps and a lot of international exposure. the dollar is super strong in the last three months. so it's going to cause a little bit of caution in terms of the guidance. so i wouldn't be surprised to see a pull back off the december quarter results, not because of those results, but because of caution into the march quarter. but barring that, i like the stocks going into next year.

>> so the a.i. tailwind was real up to this point. you didn't really see it monetized necessarily yet. so you've got the actual promise of all of this could still be ahead of us. but you think that keeps the bullish sentiment in tact and also adds to the company being able to post better results than on a comparative basis than in the last year. so multiples hold up. earnings continue to go higher. >> yeah, i think so joe. but the set up was we had two phenomenal years back-to-back. so yeah, that should give you some caution going into next year. there's very little dislocation in this group. most of the stocks that i look at, a high quality net stocks are at all-time highs. with one exception, i like uber here. it's my favorite stock, because it's so dislocated. that's the one that's really

traded off the most. all of the other ones are within spitting difference. 2% to 4% off their all-time highs. there aren't any back up the truck buying opportunities here in the large cap nets that i look at, except for uber. the other names, the fundamentals will largely hold. you want to wait for a real correction to really step up and be an aggressive buyer. >> we'll talk to you at the end mark. you're a good sport. so large cap and small cap. give me your favorite large cap internet stocks and then your favorite small cap internet stocks. >> large cap, i'm going to give you uber and amazon. small mid-cap, i like grab. i refer to it as the uber of southeast asia. and we like pinterest and wicks in that small space. >> becky and i both looked at

twitter at the same time. when people said i wore a toupee at one point, becky is used a leaf blower on my hair to prove it was real. someone on twitter said, does mark use a leaf blower instead of a comb in the morning. >> it's unusual. your hair is a little more blown out than it usually is. >> it's blown out. maybe a little more drier. could be. >> but joe does the same thing. >> i hope i can get the seam in the back easily, and hopefully the glue holds. >> it's early in the morning here, but joe your hair looks great. don't worry about it. >> thank you, so does yours. i like keeping people on their toes, mark. and we both do. >> how early is it there, mark? >> you start laughing, and then you pointed at me, so that's how that happened.

>> i knew we were doing that. how early is it? are you in san francisco this morning? >> yes, i am. >> holy cow, you are a good sport. >> don't worry, i'll be celebrating in a few hours. >> are you going to be taking a nap? i'd like to see midnight tonight. >> i asked whether i had to be there for that. >> just take a nap in the afternoon. highly recommend. >> that requires a nap for most of us, i think. that's okay. naps are good. >> you'll see. i take a lot of naps that aren't planned. and i don't even know until they're over. that's the scary thing. that's the scary thing. coming up, just watching tv, it's like oh, wow. rewind. coming up the trump economy in focus. we're less than three weeks until the president-elect takes office. after break, we'll debate some of the top economic challenges that he's going to face, and

whether his plans can make it through that narrowly divided congress. stay tuned. you're watching "squawk box" on cnbc.

president-elect trump throwing his full support behind louisiana representative mike johnson. throwing his full support behind the speaker, mike yawn johnson. lawmakers are getting ready to face new battles over spending and debt. in a weekend post, trump said democrats should be forced to vote on raising the debt ceiling before he takes office. joining us to take more about the debt and spending in 2005, kitty richards, she's now senior strategic adviser with progressive, a policy organization. groundwork collaborative. and joel griffith, a policy organization founded by former vice president mike pence.

thank you both for joining us. joe, i could see for a while why someone might say that all we do is spend the money and then we go through this kabuki dance of raising it. why not get rid of it? in your view, you keep it so that there could be a time where you're able to use it to extract some concessions or spending cuts, but that never happens, so why bother? >> good morning. thanks for having me. this debt ceiling is highly important. it would be a gross mistake for congress to lift the ceiling or choose to spend it all together prior to president trump taking office yet again. if you look back in the past, most recently, actually, during the barack obama era, conservatives in the house and senate were actually able to use the threat of this debt ceiling to get great concessions, even out of president obama. you actually saw discretionary

spending level off following a big struggle with president obama over the debt ceiling. this is exactly what conservatives in the house and senate can do next year in the months up to passing a year- long budget. they can use this as a tool to at least slow the growth in federal spending. >> the growth, kitty, we talked about it earlier, there was a time -- it was a long time ago, but government was 7% of gtp. it's like 23 or 24% now. is there anything, is there any stopping it? is it just a runaway freight train, we should just throw up our hands saying it's nondiscretionary, just throw up our hands and print more? >> i think it's a little odd we're so focused on spending at this point. if we're talking about debt, the mange driver of the debt has been tax cuts for the wealthy and corporations. when we talk about discretionary spending, it

makes it sound like, what could that be? it's just the government out there spending people's money. but discretionary spending is roads and bridges. it's education for our children. it's food support for people who need it. it's really, really important programs that people rely on, and that are incredibly popular. that's also true if we're talking about the growth of government as a share of gdp. back when it was 7% of gtb, we didn't have medicare or social security. cutting them is incredibly unpopular and totally unnecessary. and frankly, that's why folks who want to cut medicare and social security want to have the ability to take the government hostage. it's because they could never pass their agenda under regular order. the debt limit is really a dangerous tool. it has gone from what it used to be as you were saying, sort

of a silly dance, a talking point, totally disingenuous, to a loaded weapon in the hand of extremist hostage takers in congress. it would really be great if congress took trump up on his offer for a clean repeal. >> joe, when i hear that tax cuts cause a deficit, it's just hard for me to understand that, really, because we start with where, you know, the private sector generates the capital and makes the money, and they start at 100% of what they make, and then from there we decide to qleive levy taxes for goods and services. so it's backwards, isn't it? >> joe, the data just simply don't back up our other guest's point here. if you look at government

revenue as a percent of gdp, it actually increased following the tax years. we're talking about in the years immediately following those taxes that produced growth. this is one thing former president trump has been exactly right on. we need to extend and make permanent those tax cuts. things like permanent expensing for businesses. lowering our corporate tax rate even more. guess what, when you add in taxes on states and corporations, we are still taxing them at higher rates than our competitors. and lastly, we should see this congress indexing capital gains. because we know that inflation is actually robbing investors of their gains and they're taxed on that illusion. but no, tax cuts have not produced the deficits. we have an increasing share of the economy going to fund the federal government. and we're borrowing nearly $20,000 per family per year

right now. that is unsustainable. >> kitty, would you have a problem with this doge? the private sector, people do work hard for the money. obviously we expect a lot of goods and services from the government, but shouldn't we ask that if you're going to tax us at -- i don't know what you think a fair rate is, but we should actually be getting our money's worth, and do we ever really get that from government programs? it seems like there's no one minding the store ever. >> so people actually like what they get from social security, medicare, and a lot of other government programs. the major problem is that you're right. the middle class is not getting what it's paying for. and that's largely because programs are being starved of money for these tax giveaways to again, really the very wealthiest and corporations.

and you know, saying that tax cuts can't create a deficit, is like saying if you have a good middle class job and you're paying your mortgage every month and then you decide to take a three year vacation that your lack of income had nothing to do with your increasing credit card debt. we have been shoveling money to the very, very wealthiest and corporations. >> if you didn't tap out your credit cards -- >> should you stop paying your mortgage? should you stop feeding your kids? this is really what we're talking about. >> it's a chicken and egg thing. you've spent too much. if you've spent too much then you've got to worry about taxes. >> no, you're assuming that you're spending too much instead of looking at what we're actually spending our money on, and saying the american people want childcare. they want home healthcare and medicare for their aging parents. they could have all of these things. but they can't because you have

folks like elon musk backing massive tax cuts. again, our other guest just said we should cut the corporate tax rate even further. corporate tax rate was cut by 40%, and by the way that was the most unpopular moment for president trump during his first term. he would be wise to consider just sticking with the economy that he is inheriting where we have growing corporate investment in manufacturing, thanks not to tax cuts, but to the inflation reduction act. we have growing wages. low unemployment, falling inflation. and this agenda of allowing billionaires to push corporate tax cuts and tax cuts for their wealthy cronies, and then turn around and cry poor and try to cut medicare and medicaid, and social security, and the programs that people rely on, is going to be roundly rejected by the american people. it already has been.

>> joel. >> joe, if you look at what's happened over the past really five years now with the explosionive growth in government spending to the tune of spending $50,000 per family of four per year, we've been trying to finance that through borrowing, and printing, and it has produced misery for american families over the past few years. i know if you invest in the stock market, yes, you've done quite well. but if you're talking about the day-to-day americans, the last four years have been real stagnant real wages and all- time unaffordable levels for housing costs. this is in large part due to the government footprint growing, not just during covid, but continuing in the years after. we are spending substantially more now, still, than anywhere prior to that covid era. the way to induce growth is to make this a more business and worker-friendly environment. to the point on the business cuts, if you look at what happened in the years following the reduction of our business

tax rate, we saw hundreds of billions of dollars flowing into this country. we saw capital investment increase, and there's still room for improvement. our tax rate on businesses is unbelievably -- it's still higher than that what you're finding in communist china. we need to continue to be more competitive. this is a very competitive global marketplace, and a starting point should be to actually lower business tax rates while also reducing the growth in government spending. >> all right. we're going to have to leave it there. kitty, thank you. joel, thank you. we'll do it again in the new year. probably have the same discussion. i predict. but thank you both. >> happy new year. >> okay, when we come back, we've got some inside looks at several key sectors that investors will want to focus on in 2025. everything from transports to fixed income to commodities. and as we head to a break on this final day of the year, we

want to check out where the small cap russell 2000 is trading. it's up about 10% for the year, but it's down more than 8% this month alone. that puts it on pace for its worth ntsimoh nce september of 2022. small caps, something we've been watching so closely, a lot of that tied to interest rates and expectations from the fed. "squawk box" will be right back. you locked us out?! and when thrown a curveball... arrggghh! ahhhh! [crashing sounds] we had everything we needed. is the internet out? don't worry, we have at&t internet back-up. the next level network for small business. ♪♪ i sold a pillow!

it's been a big year for the transportation sector, and there are more than a few storylines that we're going to be looking at when the calendar flips to 2025. frank collins joins us now with a look back and a look forward. hello again, frank. >> hello to you becky, hello again, joe. let's take a look at the dow transports. they're entering the last day of the year fractionally lower. down just about 8 basis points

off of being flat right now. there's a number of reasons for that. a two year freight recession. that's one factor. we've seen shifting in consumer spending from goods to services over to tracking. also higher interest rates that continue to weigh on the sector. also, if you're a believer in dow theory, where the dow jones industrial averages and the dow transports move in the same direction. this chart could be concerning. you see the dow industrials and transports moving down recently in the same direction. a downward trend overall. still, there's a number of questions going into the new year. the first is tariffs and how they could affect the global supply chain. the tariffs are proposed to be higher than this 10% here. also the 25% on mexico and the 25% on canada as well. the second question is, if those tariffs will lead to a

major increase in reshoring and near shoring, which equals a higher margin freight and higher volumes. obviously those are both tailwinds. take a look at this chart. it actually underperformed since the election. one factor could be that hawkish cut from the fed. lower rates are generally seen as a key to spark industrial production. at the same time, we saw a big pull forward of freight. if you exclude the thanksgiving week. this is thanksgiving week right here. take a look at this rail time data. you see container shipments, they've moved double-digits higher. still, kind of a steady upswing since the election of container imports. these are generally computers, laptops, other consumer goods. also more freight moving to the west coast as companies prepare for a potential strike at the east and the gulfports if a new

deal isn't reached between port workers and port operators. also, mid-january, we could see an overall huge supply chain tariff. then we have an earlier than normal lunar new year. there's a pull forward ahead of that holiday where workers take off ahead of that in asia. in mid-january, we could see a big logjam when with he look at the u.s. supply chain. >> we've heard a lot about artificial intelligence, a lot of sectors, transportation no exclusion to that. do you think there's going to be an impact that shows up in the transport sector stocks? >> one of the functions of a.i. that you hear being used is dynamic pricing and retail companies that try to figure out where to put things and maybe have less things in inventory and warehouse. so that would actually hurt supply chain companies. but at the same time, other companies like ch robinson, he says he's using it for a pricing function and also to

kind of free his workers from lower level tasks and kind of hopefully increase productivity. i've heard ups told me earlier this year, ups is using it for pricing as well. so really a lot of questions about how a.i. is going to play out in 2025 when it comes to transports. >> okay, frank, thank you. >> thank you. >> coming up, more of this morning's top stories, clinanother payout for the victims of bernie madoff's ponzi scheme. "squawk box" is coming right back.

welcome back to "squawk box" right here on cnbc. among our top business stories this morning, billionaire investor bill ackman says he expects donald trump to remove fannie mae and freddie mac from conservatorship, once he takes office. says he's owned fares of the companies for more than a decade, but they haven't been

great investments. now ackman says he's seeing a credible path for them to be taken out of conservatorship. the tenth and final distribution for a fund of the victims of bernie madoff has begun. that's according to the justice department. that pot of more than $130 million is being sent to 23,000 victims worldwide. once that's completed, the justice department says the $4.3 billion that would have been send out will make up about 94% of the estimated total losses from madoff's scams. those are the total losses of the money that was originally put in. not the estimated fake gains in investments or any gains that would have made from interest or anything else along the way. china's market regulator says that tesla will fix software in more than 77,000 locally made model 3 and model y cars over safety hazards. that move is classified as a

product recall under chinese regulations. it's because of software that could lead cars to not display the tire pressure immediately after startup. we continue to show some rebound from that weak session yesterday. there's the dow up triple digits. nasdaq and s & p following suit. take a quick look at what we have been watching pretty closely, and that is the 10 year yield up to 4.52 right now. there are concerns if it continues, you know, they continue cutting rates and the 10 year keeps going up, it seems like it's going up most of the time. >> 80 basis points since the time they've been cutting. all right, let's get further into the rate complex in light of this week's market volatility. joining us for that is tom, who is strategas's head of research. also, the lead fixed income portfolio there. tom, thanks for being with us

this morning. what do you think about this conundrum we've seen in rates? rates have had their own mind. fed hasn't had control here. >> this has been a very bad year for the bond market. it's been a year where both bears and bulls have looked like they've been wrong quite a few times along the way. but we would agree fundamentally with why yields are rising at this point in time. we just think the bond market is getting a little ahead of itself. in particular, there's a few headwinds to further increases in yields that are likely to hit in early 2025. those head winds have been dealt with before yields can creep higher. but fundamentally, it makes sense that yields have crept higher. the market was looking past at that point in time when 10s were down to 360, the enormous supply that is going to have to come onboard in the next few years as the treasury one,

continues to finance large deficits, and two begins to refinance the treasury bills that the yellen treasury had pushed into the market over the last two years. so that has to be dealt with. this is the bigger reason why yields are rising. but we've got to get through this soft patch in the first quarter of 2025, which we think is going to hit. there's going to be a shortage of treasuries entering the market. shorts are going to have to be very cautious about maintaining positions with yields at these levels. there's a lot of risk that yielded deliver drastically lower. >> i guess the good news is you're not talking about inverted yield curve between the 2s and 10s anymore. >> that's true, with the cut still likely to cut at least two more times next year. even if they only deliver one

more cut, you're looking at 2s around 4%, so 2s 10 spread should still be positive in 2005. >> the point you made about janet yellen and the treasuries that had been issued to this point, you're saying that's the biggest issue for the roons right now, because of the length of duration? >> it is as of today. if you assume we're going to be running trillion dollar plus deficits beyond 2025, that will overwhelm it. we're saying end of 2024, the treasury pumped about $2 trillion of excess t bills into the market. those are going to have to gradually be scooped and tossed out to the 2 to 5 year majority. the deficit next year should actually come down materially versus 2024. so it's scooping and tossing those bills that's a bigger concern at this point in time. >> the big question is what

happens with inflation? is it stickier, than had been anticipated? and what about the economy? how does it hang in there? >> i think they're going to be working against each other for much of next year. what we mean by that is inflation is probably going to be coming down for a little bit next year into we'll see end of first quarter, we think inflation is going to trickle a little bit lower. then it's going to get sticky again around 2.25 to 2.5. we're kind of there right now. during that period, you're also going to see, we believe a soft patch in the u.s. economy, driven in large part, i think cnbc has written about this recently, credit card debt continues to be a drag on the consumer and that hits hardest in the first quarter. we think there's going to be a soft patch next year. then if you assume the economy reaccelerates, inflation is probably going to be going with it higher. so in the secretary half of the year, you're going to see inflation trickling back towards 3%. by the end of next year, it

might be above 3% again. >> okay. you would tell investors to do what at this point? >> well, we've been advising investors to actually put on tactical duration longs with treasury yields where they are today. on the view that there is going to be a soft patch in the first quarter next year. there is going to be a debt ceiling hit which is going to result in -- i should say a debt ceiling standoff which is going to result in 200 to $400 billion of treasury cash coming into bank reserves. that tends to temporarily flatten the curve. we should also be looking at the fed continuing to project two more rate cuts next year. all of that should bring 10s down temporarily down to the 4, to 4.25% range. so about a 30 to 40 basis point rally lower. that should prove temporarily as the second half of the year shows the u.s. economy accelerating and inflation picking up again. we would fully expect ten year levels to be out fully to where they are today by the end of

next year, if not higher. so it's going to be a roller coaster. by the way, this is what 2004 and 2005 was very much like. bouncing almost like a roller coaster. this is what we've seen in 2024. i think that's what we're going to see again in 2025. so it means you've got to be tactical in your bond positioning in 2025. >> yeah, it sounds like buckle up. tom, thank you. >> my pleasure. thank you. coming up, coffee prices have shot up this year. when we come back, we're going to talk about what's behind the move and what to expect on the commodities front next year. "squawk box" will be right back. you're the man! i wish. the future isn't scary. not investing in it is. nasdaq-100 innovators. one etf. before investing, carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com

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the top performing commodity this year isn't energy-related or metals, but a much smaller area of the markets seeing big gains. pippa stevens joins us now with more. what is it? >> good morning, joe. when you think about

commodities, cocoa, coffee, and orange juice probably aren't the three things that come to mind, but the three are the top commodities this year by a long shot. orange juice is pacing for the best year since 2009. cocoa and coffee both require very specific growing conditions, and crops have been hit hard by bad weather. steve told me unless there is a big improvement in cocoa supply from ghana and ivory coast, we've got a big issue, he said one the market is just now realizing. brazil is on its fifth consecutive poor crop thanks to climate change. it is also investing in orange juice, with supply expected to decline 15%. for the time being, companies have managed the surge through

smaller chocolate bars, and increasing juices like pear. but they can't be fixed by adding more supply. meaning there has to be a demand side response. with prices elevated across the board, that hasn't happened just yet, which means we could see even higher prices on the horizon. joe. >> okay, thanks, pippa. all right, when we come back, we're going to wrap up the year with what else? big tech. it's been driving things all year. we wonder what's in store for the star sector in 2025. we'll have more on that when "squawk box" comes right back.

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joining us now to talk tech stocks and what could be in store next year is ray wong, founder and chairman. hi, ray. >> happy new year's eve. >> happy new year's eve. thanks for getting up early with us. what happens next year? do we see this continuation with these mega tech stocks? >> we definitely do. but we have to look at this

differently. we're big on a.i., but what are the a.i. derivatives. looking at software companies taking advantage of a.i. they're interesting because you're going to be looking at their service revenue. the other thing really important is a mag 7 rotation. if you're afraid to get into all 7, you're going to move out of nvidia, meta, microsoft and apple, and go into amazon, tesla and google, and play that for the rest of the year. >> is that what you're advising? >> definitely, but i'm in all 7. we're also looking at rpo markets and that's going to be very interesting on the tech side. a lot of rpo's coming. you see discord, stripe, you're also going to be big there. so people are going to want to play that game as well going into 2025. the other thing to think about as well is the fact that m and

a's, are going to be on the rise and a lot of these a.i. companies are only going can to be able to grow by acquiring more data scale sets, by acquiring more scale. >> that's an interesting play too. if you get into m and a, you've got to question whether some of these big tech companies are actually going to be able to get bigger, because even though m and a is expected to rise, big tech may be facing similar problems coming from a new trump administration. where would you focus when it comes to mergers and acquisitions? where would you think there would be deals that could be done and maybe some move for room for some of these stocks to move up? >> well, there's an interesting thing that's going on. you're either at a trillion dollars of market cap or you don't get to play at scale. and there are a couple of companies sitting just about 500 billion. you see the oracles and the broad coms and they used to

grow through acquisition. then another group of tech companies sitting at $250. those are names like service now and ibm and adobe and s salesforce. it would be interesting to see if a banker coming into play to go compete with the trillion dollar players. >> that's really interesting, especially when you see ibm. you think of them as being the big tech from years ago, now being at $250 billion could make them an acquisition target.? >> it could make them an acquisition target. i'm not saying that's where they want to go, but there could be a lot of companies that become acquisition targets. broad comhas done that better than anyone else. they're known for chips, but they're done a really good job acquiring vm ware to get services revenue. so companies in hardware that don't have services will go in that direction. companies that are in software

that want to get into another area may also make those types of acquisitions. >> really quickly, a.i. spend has been the mantra. people are making ways, finding ways to spend continually on a.i. will that continue to happen if it's a downturn in the economy? >> i think it's only going to accelerate. what we're seeing right now is exponentially efficiency. if you're not 10x the cost you don't get to play in the market. i'll give you a great example. if you look at ach transactions, $1.50. in india, basically playing 0 cents for transactions in the government's api, which is their peer to peer network. if this continues, companies that think they have emote are going to be dismantled. so software companies are now too expensive for most companies. so for example, you could buy salesforce at $400 per user per month, but you could also go to zoho at $10.

that's the gap we're going to see going forward in the future. that exponential efficiency. >> ray, thank you for joining us, and for being our last guest on "squawk box" for 2024. >> happy new year. >> happy new year. >> you scared me off tomorrow. make sure you join us on thursday. we wish you a happy new year, and we'll see you again for a great 2025. >> we can only hope. >> we hope. it's time for "squawk on the street" right now. good tuesday morning, and welcome to the final "squawk on the street" for the year of 2024. we're posted at the new york stock exchange. carl and jim, they're missing this big day. they have the morning off. let's take a look at futures this morning as we get ready for the final training day. sec reversing things a bit from yesterday where at this time we were looking