service body guards from arresting him. it's friday, january 3rd now, 2025 and "squawk box" begins right now. ♪ good morning everybody, welcome to squawk box. we are live from times square. andrew is off today. let's look at what is happening with the equity futures. there are green arrows. dow futures are up 85. as a pr of 14. the nasdaq is up by 75. we saw the assive gains in the futures in the morning. that did not pan out. the markets closed down.

the s&p has been down five sessions in a row. this is a longest daily losing streak since april 2024. treasury yields? they look to be weaker. 4.55 is the yield right now. overnight, stocks in china fell in a volatile session. the financial times reporting that china's central bank is planning a policy overhaul being a close online to the u.s. federal reserve. and comments to the financial times, the central bank said it would prioritize the role of rate adjustments and move away from quantitative objectives for loan growth. in addition to setting interest rates, they have also given guidance to banks on how much they should expand their loan books. now they say that policymakers fear the growth targets will lead to indiscriminate lending without consideration for risk. of away from targets shows a shift to more orthodox monetary policy. they also told the ft they plan to cut interest rates at an

appropriate time this year. china's bond yields a hit record lows overnight. we have in the currency markets moving, as a result. this will take some time to get adjusted to this. for i don't know how this works out, they are if they do are if they don't. it always is with monetary policy. >> there were levels they were defending last year. they have given up on those. that will lead to different terms. >> everything is overbuilt. speaking of dumping, this is not exactly the same thing, but a lot of steel has been dumped. president biden has decided to block nippon's bid. president biden had 15 days to approve or block the deal of the committee on foreign investment in the u.s. failed

to reach consensus and refer the matter to him on december 23. biden, and president-elect trump have spoken in opposition to the deal. >> it was strange to see u.s. deals numbers down on this news. we surprised? >> is 9% a lot based on price? probably not. for it is news to me. for it is down again this morning. >> it would be news to me if they did not block the deal. >> i don't know, is it definitely done? i don't know, we'll see what happens on january 20. >> incoming president trump has also said that. president biden is preparing to issue a degree, permanently banning new offshore oil and gas developments in coastal waters. he is looking to lock in protections that are difficult to provoke in the final weeks of the white house. an executive order would bar the sale of new drilling rights in the outer continental shelf.

unlike other executive actions that can be easily undone when president-elect trump takes office, this is based on the 72- year-old law that gives the white house authority to make the declaration without explicitly empowering presence -- present history book appear president trump try to reverse similar protections enacted by president obama. it was rejected by the district court back in 2019. for they are going back supports, i would wager. the biden administration's considering a rule that could ban chinese drones in the u.s. i don't know that includes the ones in new jersey. the commerce department is seeking comments about the possible impact of such a rule. the deadline for the comment period is march 4. that means the decision will fall to the trump administration. the commerce secretary says that securing the unmanned aircraft systems technologies supply-chain is critical to

safeguarding our national security. this is big news. a federal court has effectively struck down the net neutrality rules. he did rule that the federal communications commission lacks the authority to oversee wireless and home broadband services under the same set of rules that govern utilities. the rules that were enacted in the obama administration permitted broadband providers from playing favorites with websites they carry. republican fcc commissioner, that is that you chair the fcc after the operation, praised the decision. it can lead to significant changes. i know what the impact will be for netflix, that has had so much usage and videos carrying them for free. each administration has a different fcc. that has been a frustrating.

if you are investing a lot, i don't know if you should throttle, you should really make money. if netflix builds its entire company on the idea that a gets a free run of the information superhighway's, that's been a controversial thing as well. they wanted it originally so small players would be able to crave businesses and run them. know your massive businesses sitting on this. >> something this is the final stake in net neutrality. i don't know if i should read it. the new congress convenes today. the first-order business is electing a speaker. at 11:00 a.m., the 118 congress ends and mike johnson is no longer house speaker. the new house will be called to order at them. after that, the clerk will begin nominations for the speaker, followed by the rollcall vote. math gets complicated, it four or more members vote against, i

think, you cannot make trump president if you don't have a speaker. for president trump has come out pretty strongly at this point to say that we need it. there is 12 or 13 members, where if there will be about against it, it will come from those ranks. we can talk more about those ranks. trauma and south korea overnight. investigators tried and failed to arrest the countries in each resident, yoon suk yeol. they were stopped by his secret service bodyguards. he is being investigated for insurrection, among other charges. he has refused three summonses to appear for questioning. the court issued any team warrants that would bring him in front of those investigators. overnight, a park security team bus prevented investigator vehicles from entering the presidential residence.

at 230 best hitters three hours to get in. this couple multiple times with bodyguards as they marched up the road. they were met at the door by yoon suk yeol's lawyers saying they would not comply with what they called an illegal warrant. the investigator said it was virtually impossible to execute that warrant. it is one of security personnel that helped yoon suk yeol defy arrest could be charged with dereliction of duty or obstruction. this is continuing the chaos that we have seen since he declared martial law nearly a month ago. >> i guess. the time flies. it might've been two months for all i know. >> work would have been three weeks. he did ask about the job report and why we don't have it. i do reread does every single time. the employment situation report is released monthly, typically on the third friday after the conclusion of the reference week . is this next week then?

>> that seems late. stock futures pointed gains of the open. we will talk strategy and portfolio.. we will talk about the path of former governor

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futures, after yesterday's dip. joining us now is the cofounder and executive chairman at rs asset management. when i read this, seems like you're not quite as bullish. you are questioning things? our rotation may not happen, a big broadening, because it will continue to be companies that benefit from whatever is happening? it is not just across the board? >> yes, joe, happy new year. it feels like there is a great set up for the market to be fantastic in the second half of this year. we pulled forward a lot of expectations that are xtremely positive about earnings and the economy. there is a sense that we have inflation under control and interest rates are going to do what we want. that was shown the market. you don't have the market up

25% and 26% in 2023 without good things happening. we are feeling that you have to be more sensitive to what we have experienced already, and the fact that, here we are, and now it is about showing us what you can do. there are big expectations for the s&p, as far strategist believing that the market will go higher and earnings will grow. broadly, that is what wall street believes. wall street is usually around about consensus. feelings are benign about 2025. i think it could be just a bit too optimistic. >> what did you say in the mid teens? you don't think that happens? could we do single digit earnings growth? >> i think earnings will accelerate through the year, but starting at a relatively

low rate in the first quarter. you have to see that pickup. it has to come. companies are expecting it and investors are expecting it. i was a a 15 to 18% earnings growth. that is asking a lot. that will be true in some sectors, but not across fourth. it really has to happen with the mega names. that is what the market needs to see them continue to lead higher. almost all of the returns of the s&p came from seven names since the election. we don't think that is possible to be consistently true throughout the year. when he participation in financials. had a great year last year. we can see broadening in certain areas, but it is not uniform. it is on an equal opportunity broadening in the market. everyone thought that would happen last year in september. it petered out pretty quickly. let's see what can happen to sustain it this year.

is not easy to broaden 493 names went 7 have been carrying the load. >> you would have to look at the seven comedy ever predicted for which of them are able to hit those 15% to 18% numbers? it will not be all seven of them. which ones do and which ones don't? you don't know? >> we own most of them. i would say, we look at what we own. don't be google, meta, and amazon. if those have the type of earnings we expect, and none are trading at high market multiples relative to growth. google sells for under the market multiple. we think does have opportunities to have big years. that does not mean that they will be up 50% or 40%, the types of numbers we have seen. meta has been an incredible

stock since the fall of 2022. you cannot expect that to recur. those names should remain strong. i don't think apple is as subtractive as it was. it is tough to dismiss them. is the greatest namebrand in the world and as such a balance sheet, it is phenomenal. microsoft has a connection with a.i. that has been propelling a lot of interest. the stock has faltered. tesla hundred 74% year, in terms of game. it has been weaker for several reasons, one being the orders numbers being weaker. groups like healthcare, healthcare was the laggard of 2024. it was also weak in 2023. things in healthcare, whether it is pfizer, johnson & johnson, or others, they sell for less than half of the market multiple. it does not take much for them to have some loose. these companies innovate.

they continue to have big cash flow and positive businesses. if there is any group that will benefit from a.i. at innovation, that can benefit drug discovery and creation of new molecules in an area where we need them, it is healthcare. that is something you should look at. we own abbott, united healthcare, which has been hurt since the killing. great company. we believe these are companies that can be a surprise in the coming year as banks were last year after the debacle with silicon valley and first republic that the banks would recover in 2021, the price of oil went to zero. no one wanted to own energy. they were the best performing

stock for 18 months. you never know where the market might turn when it is looking for attractive valuations. i think meta was in the 1980s . they blew a lot of money on the metaverse. it got all the way down in the 80s. >> they had the controversy with cambridge analytics. facebook, at the time, and the change of the name did not help. look at the recovery of that stock. it has been fantastic. we have owned it all the way out. it does not mean it will continue, like nvidia and tesla. >> i know you are in boston, this is probably heresy, they are ditching neck, that cannot come too soon, but they are putting in a republican. for use in working since 2018,

but you will be in charge of policy at meta. >> it makes sense, doesn't it? using this across here. >> they will never learn. we are down 2.5% in december. you don't think this means we are going down to attend? >> no, it does not mean it will turn around right away. that was indication that we had all the gains for the year in the first 11 months, they were great gains. you cannot deny was a fantastic year. people took some profits. you are doing reasonable things . that's what investors do. we'll see what happens through earnings. the earnings will tell us something. guidance will be critical. for it is no surprise to see selling at the beginning of the year. if you're waiting to harvest your winners, you have another year to pay your taxes. >> exactly.

that is so sensible. if you have a position started the year with, it was 2%, now it's 4%, you take some gains and find other places to put it. rotation is normal, rotation is expected. what i struggle with is the idea that the entire market will broaden. i think that is wishful thinking. you to find the right places to put the money. that is the idea, that is what we try to do all the time. when you say broadly, the whole as of you will participate in what has come out of nvidia or apple, that is not it. 12 we see the banana on the wall? >> i have the hatch, i don't have the banana. this one is danish, it is a nice one. for wynot by banana and do it for me was some duct tape. [ laughter ] >> jj may have had that behind

him. >> a banana? >> yes, 70 taped it up behind him. >> who was that? for it was jj. all right, thank you. when we come back, eli lilly is asking to join the fda in a lawsuit against compounding pharmacies and make versions of it weight loss drugs. as we go to break, let's look at tesla. the company reported its first annual drop in deliveries. at a higher number rate. it was not enough to overcome what lays on the first 11 months. shares are trading at $381. shares are trading at $381. squawk box will be right back.nt the way home.

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eli lilly has asked to join the fda in imposing a lawsuit brought by the compounding pharmacies. they are disrupting the fda's determination that the blockbuster weight loss drug is no longer in short supply, preventing them from selling cheaper versions. the compounding pharmacies are seeking a court order, reverse an agency's decision. eli lilly says they cannot rely on the fda to defend its interest in the case because i cannot be sure that the fda

would yield if the court ruled against it. this is their way of staying in it to make sure of that. there have been many questions raised about the compounding pharmacies and whether those things are actually safe. there have been questions on whether people can get their hands on is that they don't fit the profile that has been set up for obesity. i'm looking at that chart. that is a stock that is moving around a little bit. we talked about crypto. on the left that is 600, up to just under 1000, or close. natural gas is pulling back. they are up about 16%. we will dig into the expectations for energy prices next. here's a look at yesterday's s&p 500 winners and losers.

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good morning, welcome back to squawk box. we are live from the nasdaq market in times square. we are in the green. not by the levels we saw yesterday this time and we were looking at the dow up by 320 points. now you look at dow futures up by 75.50 nasdaq is up by 77. s&p futures are up by 12. we are in the green, but yesterday, that did not matter. throughout the session, we were in the red and closed the day lower. natural gas, it's not just the u.s. on the move, but in europe as well. dear hovering around the highest level in a year. we are looking at what is behind the move. european natural gas is crossing records since 2023 there pulling gas out of storage at a fast rate.

there are three reasons, the first is that it has been a cold research winter compared to last year, which was abnormally warm. the next is known as cloudy days with low wind speeds. there is a higher the number of days like that, meaning renewables are not performing at maximum capacity, leading to higher gas used for power generation. a transit agreement is not gas flow from russia through ukraine and into countries like austria and slovakia just expired, forcing countries to look elsewhere. it was widely expected. the deal lapsing does not threaten eu energy security. they do estimate that by the end of the with drawl, it will be down from 58.5% last year. that means they will need to refill at a faster rate in order to meet the mandated, 90% threshold by november 1. that could boost lng industry. in the u.s. is the largest

supplier in the world. supplying about half of europe's lng. it could raise 18% year-over- year. that could be good for u.s. producers. we will take it. we like producing for the world. it is cold this morning. it is supposed to be cold in january. for that's why we are seeing a u.s. gas on the move, due to the cold snap. coming up, what is coming up? house speaker mike johnson has a razor thin margin for error in his bid for reelection as speaker. jake sherman will join us next.

that houses voting on the speaker in a few hours. the current speaker, mike johnson, needs to win the support of every republican to keep his job. we have jake sherman, home of the punch bowl news. is this the same that it used to be? is it deadly with trump in the background? do you think he goes down and does not get it? us to it is worse than it used to be. he has lost one vote, that is tom massey, kentucky that says he will not vote for him. he could lose one more. if people about present, it is different for voting somebody else. donald trump endorsed paul ryan that ended up leaving.

he endorsed kevin mccarthy the got thrown out. he endorsed mike johnson has a dozen or so lawmakers against him. donald trump also endorsed lifting the debt limit, a legitimate request, 30 republicans voted against that on the house floor after mike johnson executed on that request. there is no question that donald trump is a powerful figure. that goes without saying, he will be president in however many days, 17 days. on internal house members, he has not had this way that he does in other rooms of his power matrix.. i think he is at incredible risk of losing the speakership. he needs one more. he says he is not negotiating on the internal machinations of the house of representatives. >> does it matter?

let's say there's five, if the one that goes first get tarnished with that? >> i went down the list yesterday, alphabetically, goes alphabetically, everyone is sitting on the war. they say they are voting for johnson, hakeem jeffries, or someone else. it's a matter of the alphabet. if we get so amazing nowhere early, it is over for johnson on the first ballot. they can go to another valid. kevin mccarthy went $15 back in 2023. the question to me, i don't know the answer, does donald trump say, this dude is not going to win, we have to go to plan b? you get into all of the warring factions. this is steve scalise

against tom jordan, and all the people that have long-standing relationships, and don't get along terribly well on these kinds of matters. for we would be back talking these three guys again? for i don't know who else. mike johnson was not an obvious speaker choice. it does not really matter who the speaker is, because donald trump is going to control everything. they will do whatever donald trump says. this is not the 1980s when the house is its own body that executes on its own priorities and a pen of the white house. in a trifecta, with the president controls the house and the senate, they will do whatever donald trump says. the question is, who can get to 218 without the least amount of pain. that way they can get to january 6 where they have to certify the presidential

election and january 20 where they have a new president that is hungry for things like tax cuts, border, and energy. he rightfully wants to get this executed in the right six months to a year of his presidency. for we need a speaker for those things to happen? for that is correct. the only thing that could happen, the first thing that needs to happen before the house is anything, the rule of the house of representatives, that cannot be changed, the house needs a speaker as its first order of business. you cannot do anything else until there is a speaker, especially now that we have a new congress. in the past, the speaker was thrown over, patrick mchenry took over around he took over for kevin mccarthy if he got the boot, which he did. there is no speaker, come noon today. there is no control of the house of representatives mike johnson has two by four. it will be rocky.

it will be high drama from 2:00 p.m. through 4 pm. what is the end game for the republicans that might vote against him? is it back the same way was? is it just personal publicity? it does not seem like it is well thought out. >> there are a couple of ways to look at this, there are legitimate gripes with mike johnson, which i understand intellectually. they are upset that he did not get what he wanted to get with democrats in control of the presidency and the senate. that is nonsense. you have one branch of government. they don't like that he did pass ukraine eight. they tried to boot him out because of that. they don't like that he pass the clean government funding bill, which was his only way. they want changes to the way the house operates. those are things that you can make promises on, but he cannot execute on it that much.

the republican party, you know, you follow this as well as anybody, it is split into two or three factions. the part of the republican party that is opposed to mike johnson are not really republicans in the same flavor as the rest of the party. they want things that are not achievable. they don't want only conservative wins, they want purity. purity is not possible. i think that is where a lot of folks get frustrated with this wing of the gop. they cannot get the things they want, and they want to break the system to guarantee outcomes. this is all personality. they don't like it was in power. they cannot get empower themselves, so they try to tear down the few where people who are in power. for i remember how ugly a guy with kevin mccarthy and afterwards. that was my initial question, there were some people in the caucus that did not give a rats

patootie how ugly god. they could care less that what was happening. is that still possible? >> i think it is less possible because there are real consequences here, which is, the president needs to be certified. every day they waste past january 20, and passed january 6 , is a day less that donald trump has to enact his agenda. when kevin mccarthy was ousted, when he was reelected speaker in 2023, they do not really care. joe biden was in the white house and democrats control the senate. i think if we get into the five round situation, johnson will drop out and there will be somebody that emerges, that would be my guess, and they will get on with business. i don't think this will last four or five days, but those are famous last words. the stakes are higher and the dynamics are different.

for on january 6, you know, that used to be the three wise guys with the frankincense, and. my uncle said it was a presentation was a great holiday of the catholic church. it is my birthday. now look what happened to it. it is ruined, forever, for me. for her 25th birthday, i think we will have the first. i think they get this wrapped up today or over the weekend. again, these are not people that follow traditional paths of logic. that is the thing that frustrates somebody like mike johnson. >> it was the most famous person answer birthday, do you know? for my birthday was december 16. i don't know anyone famous. for and the scrimmaging is mine

and so does henry kravis and eric trump. >> that is a great lineup. >> catherine of aragon was born on your birthday. as was beethoven. december 16. >> i can't believe we have to help you with this. as for i try to keep the focus on me. for we have billy gibbons. you have some good ones, jake. for i worked hard for that.[ laughter ] there are not a lot of college games on. and we have virginia tech. this is huge. as for i have my george washington colonials playing

basketball against dayton. my 7-year-old son wants to go to that game. i'm hoping that mike johnson can figure this out. >> the flyers are good, perennially. >> all right, jake. the bengals play tomorrow at 2:00 in the afternoon. they play the steelers. you are going to lose. when we come back, berkshire hathaway is outpacing the s&p 500 last year. we will show you that move, next. it has been nearly one year since the door plug blowout on an alaska airlines flight. we will talk about what has changed at boeing since then. for to call it a door plug? for the sidewall? >> are going to call it that? the door plug? >> sawboquk x will be right back.

shares of berkshire where the best performances 2021. dale performed the s&p 500 for the year. they were of my 25.5% compared to the 23.3% for the s&p 500. it was a night straight positive year. the move came as leavitt halted the buyback program of berkshire had doubled the company's cash. data $325 billion warchest at the end of september, compared to $160 billion at the end of 2023. when we come back, a behind-the- scenes vitinha i was pulling onto the front pages.

lawyers are getting involved in a battle between blake lively and justin. we have that story, next. moore from whitoonasngn the boats we elect a house speaker. squawk box will be right back.

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's's theories of legal complaints from blake lively, and her costar in director, 14, has talked about reputation management and pr employment. blake lively says she was subject to sexual harassment onset, after voicing her concerns, she was a victim of a smear campaign. the original complaint was reported by the new york times, which justin baldoni sued.

every time i think i understand this story, there's more that gets dropped and reported. do you understand the background of what is going on behind the scenes? >> i would need notes as far as going back and forth. it has been a literal flurry of litigation. there has been interesting complaints from blake lively's team, the wind and interesting routes to get their narrative out. they went to a state agency where they filed an 80 page complaint was quite a narrative of what happened on the films that from her perspective, we got a counter perspective immediately, and new year's eve, we got the classic news dump.

we got the litigation from justin baldoni . it has been like watching a tennis match. in the opening, even for jaded hollywood insiders, the process has been a relevant revelatory as far as how modern celebrity jousting and reputation management, this was once considered something for gigantic corporations, not individuals. we are in a new era as this thing has shown us. >> that is what has struck me the most, the behind-the-scenes adjusting on this, the behind- the-scenes negotiations and tactics. he used to be, most hollywood stars would hire a publicist, they would try to plan things on page 6, that is how you would have brand management. by the

way, it is an important aspect of the business. people feel close to you because they think they know you, you to manage your reputation and your brand. what is taking place now is crazy from my understanding. to see the crisis management pr teams that are doing things on social media, it is a different world, and a different way to reach things, even if we don't know what happened in this case, the idea that you would have crisis management people planting things on social media, in hopes that that picks up and takes over and gets an organic run from something like that, it does change the way the entire industry is managed. for in old days, they would have finished the movie, going back, trust each other privately at cocktail parties and lunches in beverly hills, but not anymore. one thing people have keyed into his how much fans play a

role. the fandom, which is a force unto itself, but watching the hard-core fans, watching every bit. move all of you on social media? who unfolds to want social media? we know that social media is a giant force. it is changing everything. this is where you step back and think, wow, this is crazy. even to the point of, one of the reasons the movie did well, for sure, was the book. she also reflects a new trend of self-publishing. she has taken herself to incredible heights. the book was really popular. you had fandom around colleen huber that has opinions about this. everybody has a megaphone. right now, it is a deafening fight. one factor here, you

have a very frustrated hollywood studio saying, oh my god, the hardest thing is to get an original hit now we have two people that will likely never be in the same room together unless it is a courtroom. there is a lot to unpack here. >> that was my other question, the studio's reaction on it. at a time when the studios are facing debt from the parent company or how they will compete with new breeds like netflix and beyond, how does that change the dynamics, and the risks they will take? >> another factor is that something has changed dramatically from 10 to 20 years ago, one factor is that justin baldoni's company was producing this film and brought financing to the table and automatically, they have a lot of control.

so sony pictures distributed the movie but they didn't have as much control from the get go as they would have in a traditional way. 20 years ago, studios, the idea that outside finapsing would come in was very rare. 0 years agoes, very rare but now not so much. it really puts a spotlight on modern hollywood but you have extremely frustrated studio executives over there. >> cynthia, thank you for joining us to talk this through. i want to hear more about it and how it works out. but it is interesting to think about how dynamics have chaechged with new media.

tlets take a look at the futures once more. we continue to be in the green. s & p futures up 12 and nasdaq

up close to 75. let's get to domchu who has a look at the futures. >> good morning. let's start with shares of car vanna, down about 3.5% after closing down 2% yesterday. this comes after hindenburg research disclosed, saying the recent turn arnt is a mirage being propped up pie untable loans and manipulation. car vana says that the report is misleading and inaccurate. we are watching tesla shares rebounding after down yesterday. the ev giant reported its first yearly drop in deliveries for 2024 ever. those shares are riding a five session losing streak now. the moves in tesla are getting

attention today. block shares are up after raymond james up grades it to neutral rating. they are confident the seller's gross payment volume can sell into the digits this year. it is at $113, and up from 2.5%. for more and top analyst calls of the day, go to cnbc.com/pro for full access to the big analyst calls of the day and stories as well. block is on the move. i'll send it back to you. >> thank you, dom. >> if you had to bet on this, which way would you bet? >> oh, yeah. >> politics is difficult. mike johnson's fight to keep the speaker's gavel is coming up in the next few hours. emily wilkins is joining us now with more. how would you bet emily?

>> at this point, i would not be surprised if it is going to take more than one round. if two republicans decide to vote for someone other than johnson, we will be in for a battle for the speakership. we already have one, thomas massie. now so far johnson has prevented any other republicans in joining massie in saying they will publicly vote against him but there are a number of holdouts. the speaker of course met with half a dozen members iphis office. one was congressman ralph norman. he came out of the office and wouldn't say if he thought johnson would lock down the speakership today. but he was optimistic about the state of the talks and negotiations . listen to what he had to say. >> i'm happy the way it went. i think most people will tell you the same thing. are we there yet on everything?

no, but we will continue. >> norman and the other hold out have concerns about the government spends and the growing national debt. they are expected to meet with johnson again and have another conversation this morning. remember that the dynamics are different than last time when you saw kevin mccarthy go 15 rounds as speaker. lawmakers are aware that if they do hold ups, it will delay the gop agenda and delaying the trump certification. and of course they want to get started on energy, border security legislation. plus they have to address the debt limit and how to fund the government. they don't have any time to waste. so to see it drag past today could wind up having impacts on what they are or aren't able to get done. >> we call it a cabookie dance, it's kind of weird. would the nays like to do it

once just to be on the record? >> it is a negotiation to see what they can get in terms of positions. >> yeah. it's a negotiation. if they think they can get some promises from johnson in terms of lowering government spending, being serious about lowering the debt and deficit, if they can have some sort of say in the process, that's something there were frustrations about. there are still frustrations under johnson where members feel they don't have a voice or a say. if you put johnson to a vote where he doesn't get enough votes and he has to go to round two and round three, you up the pressure and members could see that as positive for negotiations. of course it does depend on if members want to vote for someone else or if they want to vote present. the math changes. johnson can win if massie votes for someone else andanother

member votes present. so he could have enough to lock it down. a lot of members making calculations on what they want and what they will do when the spotlight turns on them today. we will go one by one and you will see how everyone votes. >> if i had to bet, i would bet that it takes fewer votes than it did for mccarthy last time around because you have added pressure from incoming president trump who has said he is supporting him and would be calling him directly if they don't vote for him. and second of all, you have to rest of the republican caucus who are supporting the house speaker who say look, we don't want to have deals cut like what happened last niem with kevin mccarthy. we don't want the special deals to be gotten or have it be as extreme as it had been to live within the rules afterwards. >> now that members have seen what it is like to go for 15 rounds and they see what it is like to not have a speaker for three weeks, i think there is

widespread consensus among republicans that that's not something they want to happen. they want to go into the congress with unity and the way not to do that is to have round after round speaker votes. >> all right, thanks emily. still to come this morning we will speak to one republican congressman still undecided, tim burchett of tennessee. . but first, will january set the tone for markets in 2025? we will explore that question and much more when squawk box returns.

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the first trading day of the year is in the books for how it measures up and what it indicates for the year ahead. we want to bring in sam stoval, strategist research. we have one week in the books but people say the first week of january is an indicator of what you can expects for the first month and then the whole year. why don't u bring us historical perspective?

>> the market was still up nearly 6%. it implies it may have a weaker overall 2025. i'm a bigger believer in january itself. as the year is popularized by the stock trade. tag that with an election year or the first day of a president's term in office and if the market was higher in that january, it was up by more than 18% on average and rose in rise more than 90% of the time, a pretty good indicator if we are off on the right foot. >> in terms of the target, you were looking for s & p 500 to close higher than it did. what was your target? >> my expectation was a 7%

appreciation in 2025. i still call myself a bull, i'm a bull with a lower case b because my thought is we have high single digit pricing. we are in a challenging environment from a historical perspective. so i still feel it will be a good year, just not a great one. >> what's the challenging part from a historical perspective? >> we are in the third year of a bull market and of the 11 bull markets since world war ii that celebrated their second birthday, average gain for all of them 12 months later was less than 3%. three of them fell into new bear markets and two more posted declines on average. we had a lot of volatility in these first year presidential terms. 90% of these first years had declined to 5% or more with the average being more than 17%. also, we have only had a one in

five likelihood of a third double digit gain after an initial decline. so 2022 is down. 2023, 2024 up by double digits. one in five chance that this year will be double digit as well. >> i guess another way to look at it is three peats happen only 20% of the time since world war ii. that's the period you have been watching since. >> that's correct. >> so i guess one thing we talk a lot about is the elevated valuations. you are looking at a forward pe of 22.8 times and that's a big premium to where we have been historically as well. >> it is a 20% premium over the last 10 years and it's about a 35% premium over the last 20 years.

so while it is not at the ultimate top. it's not at pinnacle in terms of pes, i don't think we will get pe expansion, but the market will be performing well possibly if we do get to near 13% gain in earnings. i think we will still need to have the fed provide us with a little bit of a tail wind. we are looking for two cuts in 2025. >> one piece of advice you are giving out is if you can't figure out what to do, maybe just set it and forget it. >> that's right. i sort of like to say if you don't like something, then you should own everything. that would be a push towards diversification. but at the same time a lot of people in the beginning of the year say should i buy last year's winners or losers. history says let your winners ride after an up year because

the top three sectors have outperformed the market 75% of the time in that following year and outpacing the market by an average of 300 basis points. so communication services, technology have been the best performers in 2024. >> all right, sam, thank you for joining us early in the year. laying this all out for us. it's great to see you. >> my pleasure, thanks. coming up, big money flowing into college football from bowls, playoffs, to nil deals. we will check out the financial playbook. and time now for aflac's trivia question. which territory was granted statehood on this date in 1959? >> i know, i know, i know. rela?nnd oh, that's in the future. the answer when squawk box returns. >> toronto. agh! cut! this gap! it's just too big. bring on the double! aflac!

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now the answer to today's aflac trivia question, which territory was granted statehood on this date in 1959? the answer, alaska. the land was purchased from

russia in 1867. the sugar bowl between georgia and notre dame kicked off after being delayed a day following the terror attack in new orleans. the fighting irish beat the bulldogs to advance in the playoffs. they will play penn state in the orange bowl on january 9. the bowl season is part of the revenue surge in sports. joining us is sports journalist editor. is this a success? some of the games were really bad, blowouts. >> they were but happy new year, good to see you. all in all, the 12 game inaugural playoffs has to be considered a success. they have four mar key teams in the finals. the games were not as competitive as leaders would like, i think they will make tweaks going forward but all in

all, very good inaugural season. >> there won't be a florida state, at least, right? would you rather have it this way where someone who maybe deserved a shot then you know and find out for sure when the rubber meets the road is better than having that question for fans, students, and everyone else? >> someone is not going to be happy at the end of the day. that's what the committee will go back and look at as far as the seeding of the teams and who gets in for the 12. this was a big gamble to extend the season, have a formal playoff, more access with 12 teams. i think that is a success. i think it is high interest in the regular season. i think they will make some changes but there have been some cons. the seeding hasn't been perfect. the games haven't been as competitive as i'm sure leaders would like. i'm sure that having the transfer portal open during the

playoffs is not something they want. i think the conference championships in december may be less meaningful than they were in the past. so they have things to work out but i'm sure they are happy with this final four. >> i wonder where we will be in five years. because we always thought of these as student athletes. is the student part of that missing in five years when you extend the season and have so many things going on? how can you possibly be a student doing this? >> it's a great question. we are seeing more and more the professionalization of college sports. we are seeing the athletes get millions of dollars in name, image and likeness payments, and more and more put on their plate in terms of on field obligations. i think the academic amateurism angle is something that is a very good question. people ask it all the time. i was at a conference recently at the sports business journal health and it was more about this has become a more professionalized environment and will continue to be so.

>> so there is a leadership vacuum for how to handle it you point out. who's domain is it? who whose should it be? >> this is run by the college football playoff committee made up of the big conferences. ncaa doesn't rule or oversee this tournament. there is a leadership void. that is something that people are calling on, not just structure and set up but there has to be guard rails around name, image and likeness. there will be more and more interest with private equity getting involved. a lot of unanswered questions and difficult decisions to be made by the leaders in the space. >> nick saban, do you think he would do it after being overexposed by aflac and vrbo and come back and do that for

not as much money? >> it would be a step down but everyone is looking at nick who understands the space more than anyone. does he want to do it? i have no idea. i don't know his inclination to be interested in such a position. but college football coaches are under real challenges these days. they look at nick saban who has seen every challenge in the book and could find a way forward. but it is to be determined if the other leaders in the sports want an overlord or commissioner. >> a lot of stuff always happens, doesn't it? they didn't cover the national anthem or something? that was targeting, wasn't it? did they want texas to be in the game and not -- how did that happen? >> i love your questions because you are so unpredictable. i don't know what is going to come out. i do not know if that was targeting. a lot of asu fans felt they didn't get a fair shake. but i'm not going to claim they

won it, texas, in the semi finals. >> the was another thing i saw on social media, i'm not sure if it is true but someone put out something about obscure rules and arizona state. he said the attempt for the field goal where it hit the ground first and bounced, that it should have been a live ball and there shouldn't have been overtime. >> great thing about covering sports business, i just cover the business and not the on field product. but they were good games. >> so anyone who complained about this would go through an entire system, a committee, and it goes back to your point that there nodes to be somebody, an overlord in charge of deciding all of this and maybe bringing order to things. >> as soon as rutgers gets in there, you will be excited,

right? >> very good. >> i want december, january madness. i want 64 teams. >> he is on to something. it will expand. it will not be 64 but it will expand. squawk box will be right back. business. create a website. how? godaddy. coding... nah. but all that writing... nope. ai, done, built.

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new details on the attack on the treasury department, the hack attack. according to reports, chinese state sponsored hackers were able to access unclassified material stored on senior officials' computers including drafts and notes for policy

decisions, itineraries and some internal communications. the agency is still reportedly assessing what was taken but did note that hackers did not compromise the department's email system or classified systems. coming up sunday will mark the anniversary of the boeing door plug blowout on an alaska airlines flight. this all after a turbulent year for boeing, one of the worst dow components. see what it will take to get giant back on top. we will talk wh llnoitbiy lan when we return. the same as owning bitcoin directly? while bitcoin etfs might offer a familiar face, they lack the true ownership and flexibility of directly investing in bitcoin. with itrustcapital you can buy and sell real bitcoin 24/ 7 with the tax advantages of an ira. real bitcoin means no middleman, no restricted stock market hours. choose the path of direct bitcoin investment

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this sunday will mark one year since the door plug blowout on an alaska airlines flight. in that time, it has been a

rough year for boeing. phil lebeau is joining us now with more. >> boeing believes it is making progress when it comes to improving mafring processes and moving back to the level of production that it believes it should be at and everyone agrees it should be at if they can get everything fixed and in the right position. they are still in the process of improving the situation. remember a year ago when the door plug blowout took place, you saw manufacturing picking up in the 737 line with the max. you saw the production improving. boeing since then has had improvements put in place. it is now under the oversight of faa, much greater oversight. they are doing manufacture checks, part of the changes that have taken place in the last year. the other change, far lower production. some of this has been dramatically impacted because of the machinist strike in the

fall. look at how production has fallen over the last couple of years. it is at 318 through november. it is expected probably to get up into the 350, doesn't teclipse where it was in 2021. that's not what the street is focused on now. what the street is focused on is have the quality checks put in place when you go to 737 production. have they taken ahold? they have done a number of things that have changed and addressed employee concerns on production and cut down on the work that is not done in certain position as the plane is being manufactured. they will say we will come back and do that later on and that has long been a complaint of workers on the line saying that is your quality control. and as you look at shares of boeing, 2025's cash flow is expected to be negative. it is expected to come in at negative $3.4 billion and

another year with negative precash flow. it is towards the end of the year. production if it stays on track should swing positive in 2026. look at shares over the last five years, unbelievable. the number of changes that this company has gone through. remember when this was -- it would seem like in 2017, 2018, another big day for the dow, why? because boeing was off to the races. they report q4 results late january, that will be the chance to talk to kelly warburg and get his perspective on the changes, and his belief is that this company is making progress and moving in the right direction. but he has been very careful to say go slow but get it right. don't run and make more mistakes. go slow and get it right. and he believes that is gaining traction and will pay off as production increases this year. >> and the question is how much patience will wall street have

with any of this as well. >> yeah, actually. >> phil, stay there. we have more on boeing and the challenges ahead in 2025. for that we are joined by billy nolen, former acting faa administrator. and now in terms of progress, how would you rate what boeing has done today? >> let me start by saying phil did an excellent job of the overview. i think the point that boeing is doing what it has committed to the faa that it would do but the devil is in the details. that ability for kelly and his team to be able to sit down at any given moment and say where is our quality that we want it to be, you can see that in the numbers. you can see that in the metrics, that the executive team as well

as the board would look at. i think they are on their way. as the saying goes, you build trust and confidence in a lifetime and it can be lost in a moment. so getting back to that level that gives the faa and regulators around the world a sense of comfort that boeing is on the right track, that those risks that were being seen have been mitigated. and also you have a strong communication process in place. what you want to do is when you see something happen, those employees on the assembly lines in the field, whoever flies boeing airplanes, the ability to take all of the information and add it to the quality management system and continually ask the question how well are we doing and have a sense of confidence that we will get to where they need to be. >> and that branches out to

regulators i would assume with any questions they have on these issues and also with congress, and other political leaders, not just here in the united states but elsewhere as well. >> that is correct. sdurg my time as acting administrator, i was in front of the committee three times and house t and i twice. those sort of questions come up. i believe the team is moving and taking the required steps to return the confidence. you have a labor piece there. it is all about understanding what is happening. just a quick anecdote. i asked what kept alan joyce awake at night. and he said something is happening within the operation that everyone else doesn't know about. somebody knows about it butnot everyone.

this is the challenge for organizations be it boeing, air bus, airlines. making sure you have good information and you are across the risk, strong mitigation plans and strategies in place. and then you are effectively measuring yourself on a daily basis. because you are trying to rev back up to a level of demand that you need and you have investment going into the factory. time will tell. this is not a two week or one quarter journey that boeing is on. >> billy, it's phil, how are you today? >> very good, sir. >> i got a question for you regarding the faa. you know them intimately from your time there. mike whittaker, most people would say he has done an adimable, more than adimable job in terms of saying we need to hold their feet to the fire, boeing's feet to the fire and put the processes in place. he is leaving once the trump

administration comes in. i have talked to a few former faa executives and they have expressed concerns that the faa may not get the level of funding and attention that it should get in order to continue to make the changes to be put in place at boeing. do you have any concerns of that happening during the trump administration? >> no, i have had good conversations with senator cruz, with this team. i have had good conversations with congressman greg, rick larson on house dni. i think there is a sense in congress, after all, mike whittaker was confirmed unanimously from the votes given there and that was a strong vote of confidence not only in him as a leader but also in the faa. president trump has proven himself to be someone who loves aviation. i expect he wants to see a strong vibrant aviation industry

. it is in the u.s. national interest to have a strong boeing that is building quality products and sold around the world. so i think what we will see, my expectation with the incoming administration is the faa will get the level of support it needs. remember phil, you and i have talked about this a lot. there are still a lot of aging systems in place. you need the level of funding and commitment from the congress to make sure the faa can do the things they are expected to do and maintain that level of safety that the public has come rightfully to expect. >> that's the truth. i'm sorry, becky, just a quick follow up, you and i both know this. things that should have happened over the last 5 to 10 years when it comes to faa oversight, it has been like pulling teeth. you know that. that's how washington operates. that's a fair criticism that it

doesn't always do what it should do. but relative to where we should be in terms of technology and so forth, there are more than a few people that said we as a country could do better. >> you can always. and i would say you can never rest on your record. i have said that during my time of sitting in the chair of administrator. i'm a big monica whittaker fan. i expect trump to put a capable team in place. but team aside, you still have to have the resources. the national air space system, we are flying 45 to 55,000 flights a day, a million plus drones flying around, half in commercial operation. that continues to grow as the industry continues to grow and rebound, evenmore. you just want an faa that can maintain the public who looks to the agency as that entity within

the government that has their best interest at heart. that is making sure that every time they get on an airplane, the billion that fly, that's a big number of folks getting on airplanes in the united states. you got to make sure you are safe and you need the resources and funding to make it happen. >> but let's talk a little about the dronesia brought up. there are huge questions on what they are and whether they should be in the air and the rules around those things. do you think we are safe with the drones that are allowed and what happened about a year ago? what are your concerns? >> we are safe, not only as a nation. this is one of the beautiful things about the united states. our air space system is second to none. we have the faa allowing more authority so a drone can operate at night. if you look at the million of

drones, about half of that is commercial operation. this is the ability to get needed drugs and medication and other types of commercial deliveries. the faa is approving what they call beyond visual line of sight. that has unlocked a level of e-commerse that wasn't there before, that you can now have those deliveries by drone. >> but we don't have rules that make sure we know what every drone in the air is at any point intime. we had a congressman join us on set to complain about that. why wasn't that set up before this was allowed? >> they work under the guidance of congress in terms of what the authorities are. they don't make rules on the fly. when you want to go, i will tell you every week i was at the faai had a secret briefing and that still goes on. i'm confident that the national

air system is safe. because it is safe, we don't stop there. we have to be assessing as we get more entrance into the market that we are doing everything possible to protect and protect the air space. >> billy nolen, would love to have you back to continue the conversation on dones but we have run out of time. thanks to you and phil lebeau. >> thank you. tesla's deliveries for the fourth quarter disappointed investors and the stock slid. what's next for the ev maker and the stock after a strong 2024. squawk box will be right back.

coming up, congress gets back to work, well they call it work. the first order of business will be a vote for speaker and mike johnson needs all of the help and votes he can get to keep the job. we will talk to republican

congressman, one who is still undecided, congressman tim burchett of tennessee is going to join us next on squawk box. this is our future, ma. godaddy airo. creates a logo, website, even social posts... in minutes! -how? -a.i. (impressed) ay i like it! who wants to come see the future?! get your business online in minutes with godaddy airo

mike johnson facing a vote

later today to determine if he will remain the speaker of the house. and with only a thin republican majority every vote counts. joining us now is republican congressman tim burchett who is still undecided on how he will vote later today. congressman, good to see you. you say you will talk to mike, raise some concerns. at this point you are still undecided. i guess, are there things the speaker could tell you to get you to?

>> spending bills that everyone just goes down to read the page 45 where they have a little interest going or they have lobbyists or girlfriend works for an operation that is getting funding and then they vote for it. that's why we are $36 trillion in debt. doge said they would go after $2 trillion. well, we run up a trillion dollars every 100 days in debt. we better get really serious about that. i'm worried about the communist chinese and the border but the number one threat in this country is debt. we will be a third world country. people in east tennessee where i represent, they are spending

$600 to $800 a month to survive. that's not living very luxuriously. you see that all over the country. in some areas, it is thousands more. it is reckless spending we are doing. we just can't keep going off that cliff. those are the things i'm concerned about. i have expressed those to speaker johnson. he has been forthright. he gets back to me so quick. i have never seen anyone in leadership at any level that has ever gotten back to me that fast. >> he gets back to you but what can he say? how can he allay your concerns? he has been speaker for a while. with a lot of the arguments front and center and then you saw a mrunt or two ago that a couple of people called it like a pork pot that he put forward. it doesn't seem like there has been any change in behavior at all. >> sure, the first bill was 1554

pages. the second bill, everyone was championing actually had removed the limits and there was more spending in the second bill but just 150 pages. i didn't vote for it. it had $5 billion for submarines, $100 million for the coast guard. we just passed a national defense authorization just two weeksprior that had over $6 billion new dollars after they failed the seventh or eight audit, the pentagon. so we reward them with billions more dollars. those are the things we have to see changed. a lot of it will be administratively. i expect the trump administration will address some of these. those are concerns of mine. i feel like he will address those things. i think part of the problem too is you are 435 numbers. you know the numbers, we are split and it's razor thin. republican members in new york

that joe biden won by 15 points. so he has to protect them. and then we have members like myself who are conservative, just not angry about it. we have to look at where we are going to vote too. it is threading the needle. mike is in a tough position. anyone in that position, outside of being a single mom, i can't think of any tougher job in this country than being speaker of the house because you have all of the egos. you know it. you have lived this life long time, you have seen it. everyone thinks they will be the next emperor or czar o of some group and then get called on by the president to negotiate a deal with north korea or something. and then the new members coming, and making sure they are taken care of. it is a tough job. with the thin majority, honestly a good flu season or bad flu season and we are out of the majority. it is a lot of things to take

into consideration. i will be praying about it and make my decision. >> so you don't know what to expect? >> no, i think it will be close. you have members of the freedom caucus who are very close. i think chip roy would like to be chairman of the committee. and then you liberal members of the party that don't want that. without razor thin majority, what can he do? i have stated, with a one- person rule that you can call the speaker up to throw him out. i would suggest, make chip roy that. but does not work out, and a member decides he does not like the speaker to bring it up. right now, i think we need to move ahead.

as for congressman, thanks. you don't look french. he is from east tennessee. for my uncle is buried in france. he died there when my father was fighting the japanese. for i will not forget. thank you, congressman. as for thank you for having me on. it is an honor. it is 8:00 families toes and you are watching squawk box. andrew is off today. among the top stories, reports say that president biden has decided to block nippon's takeover bid for u.s. steel. official word should come as soon as today. the deal is faced opposition from politicians and the steelworkers union. president-elect donald trump has

vowed to block the deal. the fbi says it is confident that the man that drove a truck into a crowd of partygoers in new orleans and killed 14 people was not aided by anyone else. the bourbon street reopening to light grads as authorities hunt for clues about the 42-year-old army veteran. he was fatally shot by police after the crash on early wednesday morning. south koreans impeach president fortson attempt after a six-hour set up. the security service have been blocking investigators from entering the presidential residence. they are weighing charges of rebellion against south korea's president after a short-lived declaration of martial law last month. the future since morning turned higher. you see the dow

futures are indicated by 125 points. s&p futures are by 17.5. in terms of treasuries, we are looking at the yields at elevated levels. right now, the 10 year is sitting at 4.43. for more information on this, let's get to mike, standing by. we had strong futures yesterday morning. that did not pan out for the sessions. did have a rally attempt, more stocks were up and down. the treasury yields have been out 4.5% since then. we do have some sticky conditions. here is what the s&p 500 looks like.

56 he was a close. for those keeping track, it would take a strong day today to get us over the top. this is not dictate what happens in the next year or the next month, but more muted return thousand been the historical role. we are spending a lot of time in this zone, representing the october highs and the gap on the day after the election day, november 6. we are testing that area. weather proves to be a vase or not, this is your 5800, we are holding in the zone. the equal weighted version. this has been negative. a lot of these are cyclical. we have more lows than highs. it is going back further to august and september.

it is still moving higher. we are above them. the market looks oversold. you have the makings for some kind of relief bounced. we are getting through this start of the airflow. we have some cyclical bellwether groups. these are both very strong for a long time. they are moving in sync for a long time. you see the big pop after the election looking up bank regulations. and in december, they both deflated. the banks seem to have a clear sight toward some improved fundamentals. industrials have had some give back. maybe bond yields will strain the real economy. or the higher dollar will have

an impact on earnings for global businesses. it might be better for companies to manufacturer here, but maybe not those manufactured globally. >> banks are free of all of those concerns. >> mike, thank you, it is good to see them. now we are looking at the markets. we have shannon, the cio at and be private wealth and a cnbc contributor. i did not get overly excited with your comments. get good macro themes like government spending and deregulation and industrial policy. you think the s&p 500 could struggle a little bit? it is great to be here this morning. we have the potential for a death at the j curve through

the back half of the year. from a policy perspective, you think what will happen first, we get this overhang of executive actions and the issue of tariffs, with china or mexico and canada as a relates to the u.s. mca. as far as the tailwind, it has a loosening of regulation. that will manifest in the back half of the year. that's why you see in the markets struggling in 2025. we know the near term overhead, questions of the speaker shots, this is front end loaded. this is more of a short-term timeframe. in the second half of the air, we think the stronger tailwinds

will push us for the positive markets that we anticipate could carry us into the second half of the year. >> you say the industrials have been weaker. do you like mega tech or industrials? do you think it will be a rotation? >> yes, honestly we have had this view for much of the year. there is a vulnerability in evaluations. there is no room for disappointment. as you know, earnings have been pretty strong. we are not necessarily saying earnings will be weaker than the broader market. they will be at higher levels. we think there are opportunities as the broadening out continues.

there will be areas like industrial second benefit. even with under the surface, there has been some meaningful selling in certain parts of the market. there could be opportunities in an area like industrials were we are seeing strong performances. there can be a pick up in the second half of the year. we have been in a manufacturing session. we need to see the sector picking up. we need to see that reassuring theme manifest in activity, rather than just rhetoric. what is your biggest concern? the slowing economy or a sticky bit of inflation for the bigger concern is sticky inflation. is not due to the fact. they have telegraphed the plan. they want to bring rates lower. as you seem, the yield curve is not reacting to what the fed is doing. they are reacting to the

potential for sticky inflation on the overhang from some action, whether tariffs or immigration, or general stickiness from a consumer perspective. that is what yields are reacting to. with enough hair yields don't necessarily equate to fundamental weakness for equity, they do take away the tailwinds that were anticipated in the back half of 2024 and into 2025. looking at bond market volatility, we see what it does to the equity market. that is where we are looking at the debt sustainability and concerns about inflation. what happens in the bond market into 2025?

the news that we were expecting from the biden administration's out. megan joins us with more on that. good morning. good morning. we learned from the white house of president biden is officially blocking the proposed merger between nippon steel and u.s. steel. that $14 billion takeover that we have been talking about for more than a year. by his likeness on national security grounds along with the new statement out on this. i will read you part of it. he says he is taking action to block this because it is a solemn responsibility as president to ensure that now, and look into the future, america has a strong and domestically owned and operated steel industry that can continue to power our national sources of strength at home and abroad. this is after the committee on foreign investment came out the recommendation to the president last week. it was not much of a recommendation at all. a show they were split on this. we know then the administration, officials one is to go through.

some did not. the opposition was led by the office of the u.s. trade representative saying this would not be good for labor. the union was strongly against us. it became very politicized. what happens next, we don't know. we know that nippon says they will pursue all options available to them in trying to find a way to make sure that the deal moves forward. there is not really an appeals process to the national security review process. there is something they that they could do on procedural grounds. we would have to do that looks like. this will likely continue to bed into the trump administration. we know the president elect has been against this deal. we know that both companies will continue trying to push us forward to find a way through. at this point, we do not expect that president-elect trump would change his mind. we know that president biden is officially blocking the deal. the united states stock is down. there've been a lot of

questions on if they are told to go to the drawing board, whether or not they would find a buyer willing to pay for the entire company, instead of just pieces. for that is a huge argument in favor of the deal. this is way of saving u.s. steel and not letting it be taken over by a japanese me. they said we don't want japanese owned steel, with one american owned steel. proponents say this is one way that i can survive. back to the drawing board, i am sure we will hear more about this, depending on what happens to the stock moving forward. if they don't get the nippon buyer, there is not an obvious next step. they will talk to the union saying, part of the argument so far has been to the union, saying if you want to keep your job, we probably need this. now it to see who will come in and buy it.

when we come back, we will speak with the top tesla analyst to see what to watch for the company as they reveal that they didn't miss fourth- quarter expectations. another video you don't want to miss, walter isaacson offers perspective on the resiliency of new orleans after the truck attack that killed 14 people. stay tuned, squawk box will be stay tuned, squawk box will be right back (♪♪) (♪♪) what took you so long? i'm sorry, there was a long line at the thai place. you get the sauce i like? of course! 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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shares of tesla are leading lower on the first of 2025. the stock thought the company reported fourth-quarter delivery numbers that were below what industry was expecting. shares of tesla fallen 15% of the all-time high in mid- december. joining us now for more on the company and the stock is the oppenheimer research analyst, colin rush. down 15% from the all-time high , but there was a big move over the last two months from the election.

looking at the proximity to donald trump. this is a potential upside for the stock. how do you measure this? let's start with the deliveries yesterday and whether that news was as big a disappointment as is being pretrade. for with the narrative happening and the reality of what is going on fundamentally. there is a bit of a disconnect. the narrative is around a.i. and the company executing on his autonomous program here and elon musk's ability to adjust regulations to support tesla's approach to automation. we look at the car market and what is happening with the company and where it is plateauing. it is in need of a refresh on the models. we are looking at revenue and lower margins. there is another cut coming for

tesla numbers as me look at the lower market. as we look at the numbers, the move higher after the election was about autonomy and the impact that elon musk can have on commercialization of autonomous technology. it will take some time. there is some reality built into the stock. it is not an easy or quick process. we will see that digesting over the last couple of months. for the stocks are up more han 50% since trump was elected. by your tone, sounds like you don't think that is warranted, or you need to see more before you buy into it? >> we have real challenges around tesla's autonomous program. the company has been an innovator and a disruptor in a

variety of markets from materials to batteries to redesigning vehicles. we are struggling in terms of getting more support of the company around the execution on the autonomous program. we think there is a fundamental challenge they have working with the camera only system. they need to integrate another set of sensors with imaging radar. we need to go through the rental sensor suite. we look at the complexity of the a.i. systems that are required to deliver on the promise promise. we do see that tesla is behind the competitors. we are looking at the development of the chinese competitors. that is a challenge for these guys. they have disrupted the markets. we are seeing them lose the cost advantages.

they are lagging behind competitors on that a visa. we are perplexed that they are getting credit for the market when they are clearly behind. we have been very bullish in the past. we are not seeing it at up to supporting evaluation. >> your price target is higher than where it is now. >> got on the price target. for oh, okay. i am reading incorrect information. >> if you look at the evaluation, they are extended. we believe they will extend

into the modest, technical levels. as we look at it now, it has been driven by politics in the narrative. they need to deliver your. it looks like it will be a challenging environment. >> what is the best thing that tesla could get from a regulatory perspective? do you think the time he is spending with the trump administration is detrimental to the stock? for one thing that is interesting to watch artisan site projects and how effective they have been as far as supporting tesla's development. that effort seems to be helping from a regulatory perspective but hurting from a brand perspective. in europe, this could help and hurt sales. see no moderation in the u.s. as far as brand and customer

loyalty and enthusiasm. if he can push through a framework for testing autonomous vehicles, that would be a big help for tesla and everybody else. we are looking at what sort of tech specs are required there. from the state level, things are extremely high, and for good reason. tesla is not approaching that quickly. we can lower the standard around safety, that would be help. the competitive landscape is intense. there are three or four competitors that run ahead of him so far. coming up, former fed reserve governor is in.

we are looking at the stress test. you do not want to miss this interview. stay tuned. squawk box will be right back. you make it through security so fast, ♪♪ the agents applaud. your travel itineraries are so well written, they're on the best seller list. and you have access to lounges that don't officially exist. that's why you rent with national, where you can skip the counter and choose any vehicle on the emerald aisle. because travel isn't a competition. except that it is. and you're winning.

nasdaq look like it would open 90 points here. s&p futures are up close to 20. u.s. surgeon general has a new advisory on the direct link between alcohol consumption and increase cancer risk. the department of health and human services was alcohol consumption is the third leading preventable cause of

cancer in the u.s. following tobacco and obesity. this alcohol heightens the risk of seven types of cancer, including throat cancer, liver cancer, and breast cancer in women. is that while scientific evidence has been growing over the past few decades, fewer than half of americans recognize it as a cancer risk factor. the advisory includes options to include updating health warning labels on prominent beverage makers. >> i remember when smoking was targeted by the american cancer society. i'll get my stickers like kiss me, i don't smoke. younger people stopped smoking. now we see younger people that are not drinking to the same levels. as for a lot of people don't drink. nobody smokes.

>> they do smoke pot. that is a ittle weird. walter isaacson, i don't know, he will weigh in, forcefully, he has been a long time native of new orleans. he will have interesting things to say from someone that has, i don't think i have even been to new orleans. >> i have been there. he was in the french quarter just hours before this happened. >> he has to be shaken by this. he will join us with his thoughts. stay with us. you are watching squawk box on cnbc.

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's's's's's's delivery numbers out from the tv makers., rivian is in line with the guidance of delivering between 52 vehicles for all 2024.

dan 12,727 vehicles. rivian reduces his first total production, this comes in line with the reduced guidance. 49,476. they note that supply-chain issues that they experienced in the third order constriction production and those of been resolved. they will report their fourth- quarter earnings on february 20. thank you for that report. bourbon street reopens in new orleans last night with the heavy police presence. the city was left reeling after a truck attack that killed 14 people. authorities say that the driver of the truck, army veteran, shamsud din jabbar, was inspired by the islamic state militant group. he was fatally shot by police. the fbi says they are confidence that he was not aided by anyone

else in that attack. joining us now to offer perspective on the resiliency of new orleans is our contributor and mere pressure, walter isaacson. he is an advisory partner. he is the author of elon musk. walter, first of all, i am so very sorry for what happened in your city. we are sitting back, shocked by all that has happened. >> you look at the list of people killed. you read the air stories. this happens all over. it is really horrific. >> things are reopening today. i am wondering what the mood in the city is at this point. as for the sugar bowl was played yesterday. the word resilience is not the first adjective you want to have in life, but itnot the last adjective either.

new orleans is a resilient city. i spent new year's eve, as i for 3 years, with about 25 friends at antoine's restaurant right off of bourbon street, near where it happened. the french quarter was very well protected. these things can happen. i will say this, i will be at and once i share with the same set of friends. we are not going to let this shut us down. >> as you about with disasters that have struck in the past. as for 20 years ago we had katrina. that is when we really did have rallied together as a city. this is something slightly different. this is a national and international type events. these are people that just happened and they are crazy. they just happen. we must think there must be a solution to every problem. these things are so different

and random. whether it is a guy shooting the head of the united health club, or the national shooting, or the oklahoma bombing, snap. these are the risks we have in this world. >> coming in quick succession with a follow-up attack in las vegas, have people wondering about national security questions and what we could be facing in 2025. you point out that this is something we have seen time and time again. there's a lot of uncertainty in the world. we have questions about safety and security and wars taking place. you have the perspective of somebody that has led to this for a long time. how are you feeling now? look at it historically, starting in the 1890s, yet the anarchist violence in europe or the united states. in the 1960s, you also had. now we have these random, politicized, and ideological things. we made the mistake when

something happens, whether it is the attempted assassination of donald trump, and everybody is looking to see what ideology the person had. with the truck driver on bourbon street, everybody is waiting to see, what was the flag. was it a palestinian flag? was it an isis lack? was it a try black? that is the way to look at it. these are people that just go horrifically nuts. we had to find ways to protect ourselves. for that is the one area of criticism that new rleans has received. that was for the city having of those steel barriers. for i cannot believe that. i was there. there were barriers and barriers. right at the foot of canal street, there were two dollars. he went on the sidewalk. there was a big police cruiser

blocking the street. if they have been up, it would not have helped anything. you can't prevent if somebody is going to drive on the sidewalk and around. there was a big police cruiser there. the police acted instantly. they were all there. if somebody is going to drive a truck somewhere, unless you are going to put chain-link fences, and big iron bars on everything, people will find a way to get up on sidewalks. we cannot guard against everything. >> technology can make it tougher to protect ourselves, with autonomous driving vehicles or drones in the skies. we feel safer. as for i am worried about rounds. they can be the real problem anywhere. look, i did mention 1890s. that's one out for it novell

creates dynamite. we always have new technology. we have technologies that protect us, whether it is pelletier and video cameras, and we have technology that radicalize his eyes, and allows nut cases to read up about isis and getting involved in some ideology, but all of these are pretty low-tech. these are people with automatic rifles shooting things up, or pickup trucks with explosives. i don't think there is an easy solution. >> i'm glad you bring that historical perspective with you. i wonder what has appened in the past to calm things down. whether was the 1890s to the

1960s, what happens on the broader level that brings calm after the periods of uprising? >> great question. there are periods of uprising, like 1848 or 1968. there are many causes of it. as certain point, the fever breaks. i hope that will happen in the united states, and around the world. you have a calmer period. i had to say it, even in a less politically polarized period, you will still have people like the oklahoma city bomber, which was not polarizing, that just go nuts and do really bad things. >> when was munich? how many times you need to see this movie. yeah radical islamic extremism.

it was not a trump flag was an isis fly. nobody thought it was a troubled flag. if you have college campuses, after october 7, flooded with students saying the most horrific things. you have people laughing and applauding when somebody gets shot in the back, father, with a wife and two kids, for whatever reason. i don't know if it is social media, the people need to get it together. i don't think how i can see how this was back. as for isis as a horrible, violent ideology. united healthcare shooter. you can search all over social media at everything he does. it was not simply because politics was polarized. sometimes people just snap. for we don't want terrorists able to come through the southern border, and we don't know where they are. we don't want that.

in this case, that is not what happened. do you feel totally say that, right now we know who everyone is in the country that came through the border? what do we hear, there are 100 people on the terrorist watchlist, and we don't know where they are. >> mbeki was right when she asked, how did these things happen? one of the things that has happened over the last 15 to 20 years, is the wave of, whether in europe or germany, or the united states, a wave of immigrants, asylum-seekers, and sometimes, once you get above 50% to the 20% mark, of those that come across and are not yet part of our society. that can cause great polarization. as you said, if you don't have safe borders, you will have problems, even though that was not the case in the las vegas

cyber truck attack, or the bourbon street attack. for just letting a small fire in the subway and fanning the flames and chortling? >> you know what, joe? as you know, i am in new york quite often and onset with you. i take the subway in new york. we will all be resilient. we can say, we can all say how horrible these things are, but we have to go on with our lives. i will not quit taking the subway in new york. for could be safer. for i could be safer. by the way, alcohol, there are many things that could be safer in this world. we don't throw up our hands. we work hard to make things more safe. on the other hand, we don't stop going to times square to

go on your show. we don't stop going to and once on new year's eve. that is who we are. for ten year, i am joking around with walter. i don't know what goes on on the college campuses, one guy said something, he's teaching a course. did you see that yesterday? the same guy that was celebrating october 7, is now teaching a course. we have ten year, walter, join me on the right a little bit. just move a little bit this way, can you do that? for your talk about with college campuses in the northeast? it has been very radicalizing. 10 years of the world's greatest system. [ indiscernible - multiple speakers ] >> these are communist and

socialist. then they get ten year. for joe, come down and help teach my class. is a really good students. this country will be fine with the next generation, even if all of your complaints have some validity. >> kids are going to liberty university. my daughter went to penn state and it is a cesspool. for i am not here to defend the ivy league schools. they do a lot for this country as well. walter, i want to thank you for being with us and for your perspective. for we have to live with some risk. we have to realize how horrific these things are. we cannot stop going to times square or to antoine's for new year's eve. we will be a resilient city here. there are people that care passionately about this city, and love it. it will be fine.

>> walter, it is a city and thank you very much. dan tarullo will join us, talking about the bas nk suing over the annual stress test. squawk box will be right back. others: ichi, ni, san, shi... (1,2,3,4 . . ) others: ichi, ni, san, shi... (1,2,3,4 . . ) (♪♪) (♪♪) you were made to chase your passions. we were made to put them in a package.

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business groups and big bangs and alesha ray suing the federal reserve over the annual stress test. these are the exercises that were put in place after the local financial crisis. the test how banks could veer in a hypothetical range of adverse scenarios. mappings of business groups allege that the stress test violates the law. they're calling for the feds make the internal models public, and provide more details on the imaginary crisis scenarios. joining us now is someone who helped to craft the rules, former fed governor, nvidia.

following the global financial crisis, is it possible that we overshot? is it exactly as it should be right now? do they have a point on any of this >> there are two questions, one is the stress test and one is the regulatory structure in general. there is a good bit of room for trying to rationalize all the regulations that were put in, on stress testing specifically, i thought they were good legal arguments as the fed said in the press release shortly before christmas, as they put it allegedly, the legal environment is changing by which they mean, greater hostility and the judiciary toward regulation. i think that is what is pushing them to indicate that they will make substantial changes.

>> there are other things being proposed, mike wants something starts, if there are signs of trouble, can't do the stress test? >> here is the thing, it has been set up so the annual stress tests is the capital requirements of the biggest banks. that's why the banks go after it. if you do it the fed indicates a will do and what the banks want them to do, if you put out the model completely beforehand, if you put out the scenarios beforehand, and as the banks, would you like us to change the scenarios, then it is not much of a test. it is not serving the purpose of trying to see how banks would fare in unexpected, but plausible situations. my sense is, the best thing for

everyone to do is to decouple stress testing from capital requirements and just have the capital requirements. they should be higher than they are now. use stress testing to try to diagnose things at the beginning of a period of stress , and use of the purpose for which it was originally developed. that sounds like what is coming, right? now, i don't think that is what is coming. the fed indicated that they are prepared to do most of what the banks said they would like. i assume the reasons that they filed a lawsuit on christmas eve was in order to keep the pressure on the fed and to keep leverage. if we end up with something that we call a stress test, where the models are out for

comment and the scenarios are out for comments and everybody knows and bangs can adjust balance sheets beforehand, it is not a test anymore. let's go to a different system which is simpler and saves resources that the banks and the fed. i personally would try to put together the risk based ratios, and the stress test. try to rationalize the whole thing and come out with a sensible level of capital to keep the biggest banks safe and sound. >> i was thinking that the status quo would not be there. as for you are right about that. >> i don't know what to think of that. >> we learn things and time goes by. oftentimes we have to relearn them. maybe there is a way to do it without completely losing everything up. you did have some comments.

just get rid of the dot plots. as for yes, i will sweep that way for the new year mode. on the dot plots, there is an issue and has been for a while. yet the nonvoters that are still counted. it is not giving an accurate picture of the intention of the people that will be voting. number two, it is individuals putting anything in. there is no collected efforts to say what you think will happen? at three, as you point out on your program, it is not a good predictor, not just of where the economy is going, but it is not a good predictor of where the fmo c will go. for me, the last straw was the december dot plots. apparently, some members were assuming certain policy proposals that president-elect trump suggested will be implemented.

they were making predictions based on those. others were not. if you can even have a common set of assumptions, then really, is it really serving any valuable purpose right now? i watched jan powell at a press conference. the whole guy had to manage the fact that she had an independent dot plots. not everyone was making the same assumptions and their projections. thank you, nvidia. we will have you back. you are throwing everything out. [ laughter ]i like it. good resolutions. we will see you later. when we come back, we will wrap up a big week in the markets as we make our way toward the opening bell on wall street. we will be right back.

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carvana shares, you can see, down about $8 pre-market. they fell 2% yesterday after short seller hindenberg research called the turn around a mirage

and it's propped up by unstable loans and accounting manipulation. carvana called the report misleading and inaccurate. let's get a final check on the markets on this second trading day of the year. it is basically still a holiday week. you have a lot of people away or last week. next week will owe fficially ba to business. the markets are open. you see dow futures are indicated up in the pre-market by 115 points. s&p futures indicated up 15 and the nasdaq up by two. yesterday, we had stronger gains and that did not hold out until the end of the trading session yesterday. we will see how things fare on the second trading day of the year. the treasury market shows the yields are below where they closed yesterday, but still at the elevated levels we have been watching since we last heard from the federal reserve. ten-year at 4.54. two-year at 4.23.

oil prices this morning are hovering actually moved up from where they were yesterday at this time. $74.33 is wti. ice brent is $76 a barrel. that does it for us today. we will see you back here next week. ight now it is time for "squawk on the street." good friday morning. welcome to "squawk on the street." i'm sara eisen. carl and david have the morning off. we had a losing streak and end of the year and beginning of the year. let's see if it changes. dow futures up 22. s&p up 16. nasdaq up 67. we started higher yesterday. faded all the way into the close. we will see if it holds today. our road map starts with direction after the a december pullback. one strategist is warning of a correction ahead.