good morning, everybody, and welcome to squawk box right here on we're live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. let's see how things are shaping up. you're getting green arrows this morning. dow futures up 133 points, nasdaq up about 90. that comes after stocks fell in yesterday's session. the dow was down by 178 points, the s&p was down by 1.1%, the nasdaq down by 179%. that was driven by a 6% drop in nvidia shares and a nearly 8% drop for palantir. we will have more on those stocks in just a moment, but take a look at what's been happening with the treasury markets and the yields there. yield for the 10 year 4.68, 2

year 4.295. bitcoin 95,969. crude oil prices as well because while they had been picking up to about 73, they pulled back two days ago -- or yesterday and this morning they're closer to 75, 74.46, yesterday they were the highest since october 11th. natural gas prices continue to be volatile. they were off by 6.1% yesterday that comes after a gain of 9.5% on monday. we are watching quantum computing socks. sinking in extended trading that follows comments by nvidia's ceo jensen huang during an investor q&a call. he shared his outlook on the timeline for quantum computing advances. take a listen. >> you kind of said 15 years for very useful quantum computers.

that would probably be on the early side. if you said, you know, 30 it's probably on the late side but if you picked 20 i think -- i think a whole bunch of us would believe it. but what we're interested in is we want to help the industry get there as fast as possible. >> he also issued a warning to companies who are building, quote, general purpose computing. he said the era of coding by hand is over. he also said that every single data center is now going to be built differently with accelerated computing and machine learning capable machines. here is a look at the shares, though, right now of companies building a i data centers. you are looking at a couple things on the screen. no he is are not them -- well, actually, cisco, dell, hewlett packard, super micro you can see all of those -- call it up, dell mostly more than the others in a real way. shares of nvidia, let's show you where that stands right now, now at about $142. it comes after a 6.2% slide yesterday. product presentation was viewed as significant in the long term but lacking short term upside according to some analysts klug

stifle. take a look at shares of palantir, they fell as well about 8%, 7.8% yesterday. now down about 14% for the week. on monday night several funds from kathy woods arc investment management unloaded nearly 200,000 total shares of palantir as morgan stanley i wish uted an underweight target. they say success is more than implied. >> i mean, it was, i think, one of the best performers last year in the s&p 500 if you look at what happened with that stock, too. so maybe not surprising to see a pullback after a much longer upward march at least over the last couple months. >> that was a combination of all of the geopolitical issues in the country -- in the world, rather, then you add -- >> the election. >> -- trump on top and the election and i think there was a review that palantir would be a massive winner depending on how

you think the dod budget gets recalibrated. >> the one year up 313%. firefighters battling overnight against a wildfire that forced evacuations in the pacific palisades neighborhood in southern california. nearly 50,000 people have been ordered to evacuate and thousands more have been told to prepare to leave. strong winds fueled the spread carrying embers that ignited spot fires throughout the region. isolated wind gusts as strong as 100 miles per hour were expected to hit the mountains and foothills overnight. those winds are expected to remain high throughout early afternoon today. schools are shut across the l.a. metro area, nursing homes have been evacuated, you've probably seen the pictures of what's been happening with people trying to evacuate, trying to get out through one road, being forced to abandon their cars and bulldozers having to push through the cars to get them out of the way so first responders could get through. >> some shots from inside people's homes. >> i homes. i saw that, too.

>> people still in them. >> nice houses, too. >> with flames whipping up around. >> malibu. a lot of people at this point have been asked to -- to exit that entire area, which i know pretty well. you think of malibu, you think of the blue ocean, but there are beautiful canyons all -- beautiful golf courses. a lot of great real estate. kind of scary. president-elect trump held a wide-ranging news conference at mar-a-lago yesterday, among the highlights, trump slammed president biden's restrictions on offshore drilling. he promised to revoke the ordered on day one even if it requires going to court. trump reemphasized his desire to bring greenleft hand under u.s. control, he made the comments after his son met with representatives in greenland yesterday. trump also slammed former president jim cramer for selling the u.s. built panama canal to

panama. he said the canal was currently under discussion. when asked by a reporter if he could assure the world that he would not use military or economic coercion in his effort to bring greenland and the panama canal under u.s. control trump quickly said no. trump also said again he hoped to turn canada into an american state arguing the u.s. is paying far too much to its northern ally, said he would consider using economic force to bring the country under u.s. control. he later posted this image on truth social with the comment, oh, canada. outgoing canadian prime minister justin trudeau posted on x that there isn't a snowball's chance in hell that canada would become part of the u.s. elon musk responded, girl, you're not the governor of canada anymore. so it doesn't matter. >> the governor. >> what you say? >> governor of canada. that's what trump has been calling him for a while. governor of the state. the greenland thing --

>> what do you think is going on here for real? >> it's a bit of the trump doctrine. i'm not going to spend a lot of time worrying about it and thinking about t i like my hair. i want my hair to stay. i'm not going to set it on fire every day like so many people. >> what do you think seriously i guess? >> i take seriously that greenland is a really strategic piece of land that if we could -- we've done it many times in the past, it sounds ridiculous, crazy now, but cobalt, lithium, graphite, shipping areas, access to the arctic which we're trying to -- >> denmark claims control of it. >> i know they do and russia used to control alaska and -- >> alaska was -- but russia sold it to us. >> that's what we're talking about. i don't know. we'll see what happens. as i said, i'm not going to start wringing my hands. >> he said he might use military. >> he didn't say he would, he said he wouldn't rule it out. >> i don't know whether i believe it. as i said --

>> to me it's -- you know, it's this fire hose of information changing news that you're trying to figure out and evaluate what is real and what is not. what he takes serious, what's a negotiation. >> you don't know what he's trying to set himself up as -- things are going to change in terms of our standing in the world. you look at china and russia, you look at how they view taiwan, you look at -- i'm not saying there is going to be an invasion of ukraine or something like that, but in a more -- in a world that maybe people have perceived america as being weak, i think he's trying to at this point say things are -- you know -- >> i appreciate that -- >> there is a new sheriff in town. >> i appreciated the message he sent to hamas at the same time which was if you don't have some deal that's put in place to release these hostages by the time i'm here all hell is going to break loose. >> what does that mean? >> to me the bigger -- >> it means all hell will break loose which is just language. >> how do you -- >> what was the red line?

>> how do you say this is what we really care about. by the way, totally understand sending a message like that to hamas. why we would aggravate and irritate our northern partners who have been really good allies for a long time -- i just put them in different camps. that's what i'm trying to figure out. >> liesman says trade deficits don't matter with other countries. canada benefits greatly and we benefit also from natural resources. >> petroleum. >> i don't think that is -- i think that's sort of just -- you know, i think that's almost like tweaking, it's almost like -- >> i think so, too, but it's weird to have all of those things -- you just spin after you hear every one -- >> he is not president yet so none of it is -- >> i know, but he's going to be in 12 days. >> we will look back -- i mean, i lived through the first four years. >> yeah. >> i'm fine. i think everybody else -- everybody else was fine in the first four years. i'm not -- >> i have a different one for. >> you what's that? >> so during the press conference there's the whole conversation about facebook -- >> is this going to be a good

thing or another scary negative thing about trump? >> i don't know. >> okay. you go ahead. we didn't do much of this during the biden administration but go ahead, what are you worried about. >> i'm not worried about something. >> okay. >> it's a business question about what a business leader or business will think in reaction to this. so mark zuckerberg clearly takes the side of the president, changes this -- so many of the policies, personnel, adds dana white, all of this kind of stuff and suggests that he's doing this because he believes in this stuff and thinks it's genuine. he's saying -- right? we saw him -- right? he's saying it. >> right. >> by the way, there's been a question about whether we, meaning the public, are supposed to think that he's kissing the ring or bending the knee or whatever. then the president comes out and is asked is he doing this because of the threats that you have made to meta? and he said -- this is the president -- says, yeah,

probably. i wonder whether if you are sitting as a ceo in america and watching that, you're saying, he's not giving me credit for anything, or is he going to give him credit for that? that is actually a very interesting question. >> like i say -- >> i'm not worried about it. >> it's trump. >> i know, but this is -- >> free speech is one of the most important things that we have in the country and i want all companies to adhere to free speech and not sensor things that they don't like laptops and lab origins of viruses. anything negative on immigration can't be on facebook. all of these things were banned from facebook. if trump says i'm for free speech and i want all voices to be heard and then zuckerberg says, okay, right, i'm going to do what the president said -- >> that's not what he said to him. he said he would put him in jail at one point, i think. >> if you are violating key provisions of what, you know, we

believe in then these threats, even though they may be complete hyperbole -- >> but i guess your question is what does it mean for ceos and how they will behave. >> the question is there are a lot of people that have gone down to mar-a-lago and let's call it, they've kissed the ring, right, and are hoping they're kissing the ring and i think a lot of them believe themselves they're kissing the ring for the right reason, meaning they have changed their position or not or maybe we give them too much credit for that. i don't know. but then to have the president come out and say actually he's doing it under duress basically. >> the president wasn't reaching out and doing that on truth social and doing it unprompted, the reporter asked him the question and he answered honestly. >> what a concept. we haven't seen a lot of that. >> it is interesting because i think there is this calculus that takes place in many corporate leaders trying to figure out how to navigate because this is what they do, they navigate administrations here and around the globe and this is them trying to figure

out the callous of it. >> here is the presidency we are still under right now. so this is the kind of -- this is what we hear from the guy who is still in charge. you want to talk about a snowball's chance in hell. he didn't have a snowball's chance -- >> joe. >> he can barely put one foot in front of the other. i'm just saying. >> you got your guy. >> i am happy. but i just wish we had the same micromanaging of everything that was done for the past four years that was totally outrageous. i just wish we would have had the same introspective, skepticism and looking at -- from the mainstream media that we are now having for this new administration which isn't even in yet. they -- >> this guy wouldn't take a meeting with ceos in america and that was a problem. >> after he finally couldn't put two words together in a debate. it didn't happen until then. >> we've been complaining about that for four years on this show. >> oh, god.

biden got a free pass for four years. >> we don't need to revisit. >> well, now you don't want to revisit. some great press coverage for the four years of trump, othing for the four years of biden, just like a free pass on the most outrageous stuff, now we're going to be back to doing this every day. like i said i like my hair. i can't get through it again. when we come back we're going to get you ready for today's employment data and fed minutes. let's take a look at the futures right now. you can see up 123 points, nasdaq up 75 and the s&p up 17. u remember the first four years, right? >> sure.

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on today's "squawk" planner jobs data in focus. we will get the adp private payroll report for december at 8:15 a.m. eastern. forecasters expect an increase in 136,000 private sector jobs, down from 146,000 in the prior month. weekly jobless claims were moved up to today due to tomorrow's market closure in moner of late president jimmy carter. this afternoon we will get minutes from the most recent fed meeting. on friday it's a jobs number.

this is like the latest i remember a jobs number being. what's friday? is that the 10th? >> let's see. 6, 7, 9, 10. yeah, 10. >> that's the 10th. >> yeah. >> we mentioned bitcoin briefly. that was -- that was a rout. i think it was 103, 102.5. >> that's tied to the fall in nvidia and all of these other -- >> yeah, i think that's what it was. i don't know why it was up at 102 over the weekend because it was down at 95 last week. >> momentum. >> well -- joining us now carol bemo. we go bemo, carol, i've got it down. jobs number shows what do you think? jobs number says what? i sound like wayne's world. jobs number says what on friday? >> i think the jobs number most

likely will show a continued softening at the edges as we've seen. you saw the job openings unexpectedly tick up a bit yesterday and we've licensed some of that at least anecdotally from talking to a lot of the companies that we bank for quite some time where especially in the white collar areas where you've seen some flattening of layers, you've seen some -- as people leave they are not necessarily rushing to replace those jobs. there has not been huge layoffs but at the margins you're seeing some weakness there. we do think that's one of the things the fed will keep an eye on. i think the more interesting thing for today will be parsing through some of those fed minutes from that meeting in december. >> carol, we're finding out that january -- and i always thought as january goes so goes the year, but january can be a tough month. december was not great after two years and so far it just looks

like people are very aware of how richly stocks are priced right now in terms of multiples. i don't know whether we're 22 or 23 and we're also aware of a lot of potential headwinds to the earning side of things. is it going to be a great year in your view? >> you know, the old admonition to as goes january so goes the rest of the year hasn't necessarily held every year when you actually dig into the numbers. so it's important to remember we did have a nice long run, but it's also important to dig underneath and look at the underlying economic fundamentals of what's going on. the expectations for aggregate earnings once we get through the fourth quarter reports is that they will probably be the strongest that they've been registering something like 11% or 12% growth, so the strongest they've been in fourish years, three or four years. you have that going on. we're also in the very early

stages, if you will, of remodeling the internet, remodeling technology, remodeling companies, rebuilding the way ur infrastructure works. it's not unusual when you are in a period like this these first couple weeks of january where we're coming off an extended period of vacation, if you will, over year-end, you're coming into a new year, we have a new administration coming in. technically in a couple of weeks, but informally, if you will, a lot of that action has obviously been going on, markets are reacting to short-term headlines and getting distracted by that as opposed to stepping back, focusing on those fundamentals and a lot of those trends remain very much in place, particularly when you look at private sector spending on manufacturing facilities, data center facilities, lots of things going on underneath the surface. >> so overall bottom line i look at that chart and so december and january look like they could be the start of maybe some

consolidation for lack of a better term. do you think that we could see a correction in the early part of this year or not? >> yeah, that would not at all be undue and when you look back it's very normal even in uptrending markets to have a 5% or 10% pull back. we had that little scare back in august where we pulled back but we have had a lot of very low volatility days in the last year or so. so that wouldn't be unexpected at all. and we do project that you will see a lot more volatility, particularly in the first half of the year. you will see a continuation, if not an acceleration, of what we've witnessed in the last couple weeks, which is lots of headlines, lots of negotiating stances thrown out there and there is a lot thrown out there and -- but figuring out what the priorities will be, what the sequencing will be, what can get done early versus what needs to get done later. so there will be a lot for markets to deal with in the

short run and that backing and filling would actually be very healthy because if earnings continue to come in the great part is we're entering earnings season so we will get a lot of chance to question company by company, industry by industry in terms of how they're prepping for, thinking about all of these things that are out there and hopefully that gives investors some encouragement for the back half of the year. >> okay. we've got to go. you're more worried about inflation or an economic slowdown? >> inflation. >> so possibly inflation not being gone for good. >> just that that's sticky but it also is important to remember that a fed that's staying somewhat higher for somewhat longer because growth is strong is in a better position than a fed that's having to respond to significant price pressures. so it's worth watching, particularly depending on how the tariff agreements come down and the tariffs are actually

implemented. >> okay. thanks, carol. carol schleif-bemo. when we come back the battle over u.s. steel playing out right here on cnbc with ceos sniping at each other. more on that story next. plus adp's chief economist is going to join us to break down today's pro da.ayllat that is coming at 8:15 eastern time. we will be right back. so, what's your glucose number right now? good thing you don't need to fingerstick. how's all that food affect your glucose? oh, the answers on your phone. what if you're heading low at night? [phone beeps] wow, it can alert you?! and you can even track your goals. manage your diabetes with confidence with dexcom g7. the most accurate cgm. ♪♪ learn more at dexcom.com

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ai startup anthropic in late stage talks to raise as much as $2 billion at a $60 billion valuation. cnbc has learned that the funding round is being led by

light speed ventures. anthropic is a creator of an ai chatbot called claude. there's questions about whether if openai ultimately is owned by microsoft, i don't even know if that's a thought that anthropic would land up in the hands of -- we talked to lina khan and i sort of thought she was hint that go maybe we would hear about their investigation inquiry into all of this stuff and/or maybe even a suit. >> that was weird. the idea -- you pointed out, what is it, 12 days now until -- >> as of yesterday she was counting -- it was eight business days. >> so really? i guess we will see. >> we will see. and then the question is would -- you know, does the next administration take up the case? interestingly the original google case brought by the trump administration and, you know, not her department but the doj continued that case. i don't know. i don't know. >> i guess it gets weird in the tech world because there are not

clear guidelines as to what each administration thinks. it doesn't fall into the old kind of camps of what you would think a republican versus a democrat would do. there is some crossover on some of these things and you pointed it out with j.d. vance. >> trump was a big -- originally pushed on the tiktok position and now, you know -- and then biden took that up and now it appears -- we will see what happens. >> we will see what happens. >> he has made comments obviously that he may not want to kill that product. a battle over the fate of u.s. steel played out on cnbc yesterday. the company's ceo david burritt appeared on "squawk on the street" and accused president biden of tainting the review process for nippon steel's proposed acquisition of u.s. steel. >> remarkable deal and that's what we're trying to do. we're trying to right the wrongs of this president and make sure that cfius is actually followed. the process has been corrupt.

you know it. i mean, let's face it. god knows that this process has been tainted from the very beginning and we need to fix it. >> burritt's point was that president biden in being so outspoken against this was telling basically the people on cfius to vote against it before they even saw any of this. burritt went on to call for president-elect trump to take a fresh look at the deal. it was pointed out to him repeatedly that incoming president trump was not in favor of this deal, either, and campaigned on that pretty heavily, but he said -- i think something along the lines -- i was listening to the interview -- he said something along the lines of president trump is a very smart man, i think i can appeal to him to make this realize this is really important. he would like to talk with him and talk that through. later in the day on "mad money" the ceo of cleveland-cliffs fired back. cleveland-cliffs was a rival bidder for u.s. steel and repeatedly cast doubt on the deal's prospects to investors. listen in. >> the statements coming from

the ceo of u.s. steel called the president of the united states corrupt. as an american i feel offended. this is just absurd. >> by the way, the u.s. steel ceo burritt had also claimed that cleveland-cliffs was behind some of this, too, and that they've been going after them for the issues on this, too. shares of u.s. steel are down about 15% since the deal was first announced in december of 2023. obviously a lot of questions still to play out if there would be a review of the cfius version -- vision on this, whether incoming president trump would change his mind on any of these things, whether there would be another bid from cleveland-cliffs, if not, and whether u.s. steel would consider any of these things. but obviously something that's being watched very closely and we will see where this goes. coming up, more activist investors putting ceos on notice. leslie picker has a look this morning at the activist playbook. we will show you that playbook

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>> good morning, everybody. welcome back to "squawk box." we're live at the nasdaq market site in times square and if you take a look at the futures right now, things are flat. we have seen a reversal of course here. we had been looking at futures up pretty significantly, triple digits for the dow before this and we have seen that flatten out and actually push back into negative territory. let's look at the decline in the futures just over the last half hour, you can see this coming down. it's been happening pretty steadily over the last three hours, but particularly just in the last half hour. no outsized decliners among the dow components, things down across the board with johnson & johnson down half a percentage point, apple, 3m, merck down 0.3 to 0.2%. we will continue to watch this. treasury yields as well,

actually, the 2 year pushed above 4.30. with. ti about the same place it was before, just below $# 5 a barrel. the 10 year is pushing a little higher, too. 10 year is at 4.697%. treasury yields are pushing a little higher. we are going to talk about the activist investor playbook and what is happening because more shareholder activists are putting ceos on notice. when a company becomes a target job security in the c suite goes out the window. leslie picker takes us inside the window. what's going on? >> andrew, so if you are a publicly-traded ceo and an activist takes a stake in your stock there is a higher likelihood that you are looking for a new job within a year and that's true even if the activist doesn't explicitly demand it. during 2024 14% of u.s. companies targeted by an activist saw their ceos depart within a year of the campaign's initiation according to new

data. that compares with an occurrence of about 9% in u.s. companies in the s&p 1500. examples includes jana partners, elliott, ancora although that ouster of the railroad ceo involved alleged misconduct. there are others like cvs, starbucks and paramount where a ceo change wasn't publicly demanded by the activist but it happened anyway. it may be a bit of a stretch to say there is a clear causality, activists tend to target names that are already facing their own operational issues and change at the top may be seen by the board as a way to refresh the whole situation. vert calls for management change are increasingly becoming part of activists objectives, happening at twice the rate of their historical average the lazar data shows. there are several outstanding campaigns with calls to overhaul the c suite including one at air products which yesterday said it

would announce a new ceo succession timeline by the end of the quarter, the plan they specified was in place before the two activists got involved. guys? >> you know, in terms of just how much more activism you think we're going to now see in this new era of -- i don't know if it's trumpism or something else. just now that there is a bigger opportunity for m&a activity, how much do you think that is going to weigh on all of this? >> yea, i think there is a big opportunity. by the way, last year was actually a record globally, but u.s. and north america specifically was essentially flat. so the big upside that a lot of people in the activism world talk about, andrew, as you noted is, m&a which did decline as a percentage of campaign objectives last year. i believe it was about a third and that was down from 38% the year prior. also not the best m&a environment. so any kind of churning of that capital markets flywheel we could see just presents another popular item on the playbook that activists can ask for which

is of course divestitures as well as companies that need to themselves, et cetera. definitely expect to see that more take place this year. >> okay. leslie picker, thank you. we will see. coming up, what should we make of president-elect trump's comments on taking control of greenland, the panama canal, canada? we will talk and get -- we're going to get axios' take. mark caputo is next. as we head to break here is a look at major currencies around the world. "squawk box" will rhtac beig bk.

meantime, president-elect trump renewing his call to gain u.s. control of greenland, also the panama canal, maybe even

canada. yesterday he declined to rule out using military and economic coercion to achieve those goals. joining us right now with more on all of this mark caputo, a senior politics reporter for axios. good morning to you. we were debating a little bit of this earlier in the broadcast, mark, and i think we're all trying to figure out how much of this we're supposed to take seriously, how much we're supposed to take as sort of trump doctrine, negotiating posture of sorts. how do you view it? >> one of the things that was said in 2016 is not to take trump or that his voters didn't always take trump literally, they took him figuratively. i think by now we had 12, 13 years of this we should realize it's both. you have to take him literally, you have to take him figuratively, you have to take him seriously and sometimes you have to take him unseriously. so the short answer to your question is i don't know, i don't think any of us knows. the likelihood that we're going to acquire greenland when we have trillions in debt and a huge budget deficit is pretty slim considering thewill

probably need to do something about taking over new territory. but nevertheless, trump wants to do this in some way, shape or form and unlike administrations and campaigns past, donald trump has a staff and structure around him that says, well, if donald trump says it, then we will try to make it happen. >> how much is it worth? i wonder what the blue book is. and you remember -- >> i have no idea. >> if it's not that much money, i disagree that the budget deficit wouldn't allow it. it certainly allows us to spend a lot of money on other things, like help for ukraine, help for other places. >> sure. >> we spent -- i don't know what we spent on alaska, but it was -- it was called a folly at the time, i think -- do you remember what it was? it was in the millions. i don't each any it was in the billions when it happened. one of the great purchases, obviously, of all time. greenland, if it could be

done -- if you could -- you know, we talk about coercion, make them an offer they can't refuse. what does that mean exactly? >> that's a good question. well, in the case of seward, buying squa, czarist russia wanted to sell it. in the case of greenland they don't want to. >> $7 million. >> i will take two, right? >> exactly. >> but in the it's not just whether we can afford it or not, it's whether congress thinks we can afford it or not. there are narrow margins in congress. it's just difficult to see. that doesn't mean that donald trump isn't serious about it or, you know, grading on a donald trump curve whether he's seriously musing about it, but we should take it seriously and once he began talking about this again -- remember he discussed this in 2018 and 2019. people need to take him seriously about it. >> marc, let's walk through the various component parts of what was said. so there is the greenland piece which it sounds like if he could purchase it, he would.

the question is if he couldn't purchase it or couldn't afford to or something like that, would he use military force to somehow get it? that's one piece. then there's the panama canal and then there's canada as the 51st state in the united states. what do you think is even realistic there? and let's even talk about the political implications of all of this, which is to say the way canada, for example, or even the folks in panama right now are reacting to all of this. >> they're -- i live in miami. my county commissioner, kevin cabrera is about to be the ambassador for the united states to panama and so he's going to have his hands full. i do think that out of the three scenarios you laid out here trump is most concerned about panama. not only because of china's presence as a global power trade super power, but also because of the darion gap, the only land

bridge connecting south america with central and north america, therefore. that has been a major migrant through way. so donald trump who is concerned about trade, china and immigration, is looking at panama and is very concerned about it. i think out of the three we've discussed here that is the most likely for him to devote more time, policy and resources toward. >> what about the canada piece, though? because they are our neighbor, they have been an ally, a great ally, and there are now concerns -- you read the papers in canada, turn on the tvs there, i was reading -- or seeing some video that was coming across on social media and they're -- you know, it sounds like they're apoplectic about what's happening. >> i imagine they are. canada for its entire history has lived in fear of its barbaric brother to the south, you united states, invading it and taking it over. it opted not to become part of the united states even though a

number of our early founding fathers and our early presidents wanted it to. the conservative leader of panama -- or better said of canada whose last name is french so i therefore can't pronounce it because i, too, am one of these barbarians he has even discounted it. this one is harder to see out of all of them. the greenland piece is hard to see, the panama is less hard to see out of all three. >> you were talking about the people around him wanting him to accomplish these things. there was a sense in 2016 there were people around him who didn't want to help him accomplish things that he talked about. >> correct. >> they were almost blocking or preventing certain things or slow walking things. how different is that today and how should we think about that? >> i wrote in axios on monday that his incoming chief of staff was his campaign co-manager susie wiles stuck with him through thick and thin. she has the understanding of letting trump be trump and

trying to execute on his vision and hiring people who are loyal to him, loyal to his mission and believe in getting things done for him and not undermining him. that's why, for instance, we haven't seen what we would have seen in the past, which would have been anonymous staff leaks saying, oh, my god, this guy is crazy. there's no way we're going to do that. not hearing that anymore. that's one of the reasons that we have to take the greenland, the canada and panama pieces more seriously is because his staff does. >> marc, i want to thank you for joining us this morning. we will see what happens. in the meantime i'm sure we will talk a lot about it. thanks. coming up, the state of alaska is suing the biden administration over oil drilling leases. details after the break. later, more on the comments by nvidia's jensen huang that are dragging down quantum computing stocks right now. we will be right back.

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state of alaska has sued the biden administration for what it calls violations of a congressional directive to allow oil and gas development in a portion of the arctic national wildlife refuge. the lawsuit concerns leases for 400,000 acres of land set to the auctioned to oil and gas drillers this month. alaska says the leases come with restrictions that make it impossible or impractical to drill on the land. as a result alaska says it expects to receive just a fraction of the $1.3 billion the cbo estimated it would get in direct lease-related revenue from energy development there. when we come back, shares of nvidia are rebounding after yesterday's 6% drop. we're going to dig into the comments by ceo jensen huang

with morgan stanley's semiconductor analyst. isat is next. th morning that stock is up by about 1.1%. we 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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in the best way that they can. our mission is just to help them do that. if you kind of said 15 years for very useful quantum computers, that would -- that would probably be on the early side. if you said, you know, 30 it's probably on the late side, but if you picked 20 i think -- i think a whole bunch of us would believe it. but what we're interested in is we want to help the industry get there as fast as possible. that was nvidia ceo jensen huang with his outlook on the quantum computing timeline. shares of nvidia rebounding slightly this morning after sliding more than 6% yesterday. by the way, what he said about

quantum computing managed to take out a lot of those quantum computing stocks, some of the smaller ones like ion q, quantum computing, rigetti. joining us is joe moore. i want to get your take on this. i've been heading a lot of stuff. i mean, after jensen huang made his comments the night before last we actually saw shares a little higher in the morning. maybe not by a lot, but it certainly wasn't giving back the pullback we saw later in the day. there were a lot of the tech stocks and other big high flyers that pulled back, though, after we got stronger than expected jobs numbers, just in terms of what the bls had in terms of jobs openings, those jolts numbers. that had people suspect that go maybe the fed is going to be to be more reluctant to cut rates anytime soon and that caused all of these big high flyers to pullback. do you think the pullback in nvidia shares yesterday was more

related to what jensen huang did or didn't say or more related to the overall idea of watching the federal reserve and seeing how the economy is doing? >> i mean, i think both of those play a role. ces is a tradeshow around consumer and automotive. there is important information i came out around those markets. this is 85% of the revenue. the maven expectations of people wanted to hear more about that. we have some of those issues. overall, this is still a company in a strong product cycle. data center was not the focus, it is investor focused. it is a combination of the market issues that you talked about as well as some expectations around the tradeshow. there was nothing negative to take away.

>> one of these in terms of the data center that the street would really like to hear? another revenue is expected for the year to come in at $113 billion, ramping up of north of $200 billion for the fiscal year that does end in january 2027. what people want to hear? >> expectations are high. we are two months into the blackwell cycle and the new products they started shipping. today we would get any color on incremental blackwell products was probably not going to happen. this was not the forum for that anyway. from a product standpoint, we know everything that we need to know. from a revenue standpoint, you are facing a bit of a transition. you have blackwell demand that is very good. you heard the comments from jensen huang about the level of blackwell demand being insane. he did not repeat those comments. the issue you are dealing with is blackwell demand is strong.

it is supply constrained. hopper, the legacy product is the largest portion of the data center business. they will have a couple of quarters here where there is meaningful upside. the real upside is in the back half of the year when you get that full-blown blackwell ramp. people would like to hear that. i think they did hear that in some sense. they are trying to avoid the really strong statements about blackwell, because it is not the main driver of the quarter. that is the combination of blackwell at hopper. i am optimistic about how this plays out. i do see the upside being stronger in the second half of the year. for with the stock that has done so well, triple last year, how much is priced in? where are you telling people is a price target were people should feel comfortable? to this is less about the phenomenon that the stock has been in more on valuing a growth company on his growth

prospects. the stock trades at 29 times the estimate for 2026. that would be high if there were any deceleration of the business. i don't think there is, even through the transitional challenges. administer the issues, you are beating the numbers and they are likely to move higher. i still think the stock is reasonably valued with good growth prospects here and beyond. the data points that are important are the strength in the blackwell demand. i think it will take a while to catch up with that. is 7:03 on the east coast. you are watching squawk box. we have a lot of big stories this morning. delta air lines will start leaking the dust program with uber.

they can earn one mile per dollar and two miles on premium ones like premium black and three dollars on reserve trips. open a ico, sam altman is denying sexual abuse allegations made by his sister. his came yesterday. this is about a lawsuit claiming her brother abuser regularly between 1997 and 2006. she previously made public accusations against her brother. in a post tommy says the claims are utterly untrue. his mother and brothers also say that the allegations are false. the whole situation is a very sad story. california governor declares a state of emergency has powerful winds in the los angeles area with both wildfires. 30,000 residents have been forced to evacuate as the palisades continues to grow. that is some scary video. that

is a real situation that a whole bunch of people are living with right now. we're checking out futures this morning. we've been looking at what has been going on early on. there seems to be selling that goes on later in the sessions. we are seeing that event already. let's get to the premarket movers. what is going on? we start with the quantum computing stocks that you talked about a little bit. this is falling sharply after the latest comments at ces saying that the useful quantum computers are likely still decades away. that red-hot sector was soaring in recent months amid excitement on the technology's potential, especially following breakthroughs on the willow chip. the rest, these names were small to micro-limit companies

a year ago. things to hundreds of percent gains, or 1000% gains, the names are over $1 billion in market value. they are now sharply lower. now going to palantir , many stocks were sold. palantir was a big winner of over 300%. momentum is fizzling a bit to start in 2025. palantir is down 2.5%. aunt nova nordisk, the pharma giant is up. the selloff following more disappointing data on the weight loss drugs is overdone incense benefit from higher demand near term. he did bounce back after a 19% drop over the last 12 months. never more on that and other top analysts was the day, go to

www.cnbc.com for full analysis. we have big news in palantir, now back to you guys. we did mention a few of those already. thank you. we have a lot more analysis there. when we come back, republican kevin hern will talk to us about the new policy. squawk box will be right back.

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welcome back to squawk box. welcome back to marcus. we are looking at her chief investment strategist. good morning. we have been wanting this uniquely strange situation. quantum computing in the context of nvidia, and other a.i. darlings, and the bitcoin risk on or rest off ramp. >> it has been a struggle. it makes sense. when you look at investor positioning, they are at an impasse. you have the same percentage of bulls versus bears. there are two factors battling it out right now. on the one hand, you have a positive story of artificial intelligence that is carrying itself into 2025. yet the story of solid earnings we expect for the quarter. that has been taken into context of what we could get from the fed and the new trump administration. that is creating some volatility. given that set up and the markets have not removed enough

risk just yet, that is what we had to go through. let's go through this battle. >> that is a euphemism for go down? >> that's right. >> we have seen a bit of that at the end of last year. we saw the markets pulled back 2% or 3%. we saw hedge funds at shorts. we saw systematic investors going through a wave of selling and some private clients may have done that as well. i don't think we have seen enough of that. we are not at oversold levels. we might have a share of new one-month flows of the s&p that is higher than normal, but i don't think we have seen enough. i can say, this is the time to jump into the market. we have to be patient in january and have the actors battling out. on the days we have policy -induced uncertainty, like yesterday, you look at the things to buy. maybe not quantum computers. >> what do you looked buy?

to make the first big theme is artificial intelligence. it is carrying itself into 2025. the last 2 years have been about semi conductors. this year has to be about a.i. software and modernization. it also to be about a.i. power. is not just a number of headlines talking about data centers and how much they consume. and you need a times the electricity to run and a.i. center, it is a real trend. the trump administration will support this as well. for that would be the additional investment in data centers. outlook to a.i. software and a.i. power themes. broadly, i would look to alternatives. one thing we talked about in the outlook as if you expect this to be the year of broader outcomes and higher volatility in the public markets, that's why you may want to have that he's in your portfolio of the private markets where you have

typically higher risk adjusted returns and less volatility with more insulation. >> is is the vintage? are you going to look back, in the alternative world where you are playing private markets, the reason there is a volatility is because you don't get to see the volatility. for you to see the marks on a quarterly basis. it's for sure, but five to 7 years from now, do you look back and say well, this was a great time to get in? >> i think that is one of those years. 2021 was clearly not that here. if you sent in a private equity or venture capital, you did so at high valuations. we don't have that anymore. were not at the same rock- bottom evaluations that we saw in 2022 and 2023. if you look at private equity, they are trained below. it is a decent point to step in. for investors that have an allocation for private equity or they can purchase a second during the middle-market buyout

, with they can benefit from, the pickup in activity that we do expect. modernizations and exits. i do expect solid returns for private equity. >> thank you for coming in. next, republican policy. the committee chair, congressman kevin hern will join us to discuss is the economic agenda. we will look at tariffs. and we look at speaker jump bush to pass the partyline bill , a big, beautiful bill, that is what the president-elect is going up. some people think you need at least two. we have the online sports betting stocks, are they a good bet for investors in 2025? we look at the sector and what it could mean for your portfolio. we are coming right back. what is the name of the world's largest cruise ship? we have the answer when squawk box returns.

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speaker mike johnson is looking to pass a reconciliation package through congress by april. join us on the gop game plan and present electrons agenda is house republican policy committee chair, kevin hern. congressman, it is good to see you. will be one or two at this point? what is your best guess? >> what is the issue today, we have been given the gift of the opportunity to be in this place to pass a reconciliation bill and do things like extend the tax cuts, and secure the southern border, get energy dominance back where was 4 years ago. we have not been given as a gift of time. we need to get these tax cuts extended by the end of the year for every single business will see a rise in causes money comes blowing back to washington, d.c. if you look back, the fastest way to get that done in the house is one

bill as trump says, one big beautiful bill so we get everybody's interest taken care of as we move forward. >> that would include a debt limit increase, as well as $2.5 trillion in net cuts to spending. is that possible? for we believe so. we have more spending cuts aligned up than that. that seems to be the middle of the road or on the low end. it ranges from 2 trillion to 5 trillion. we are looking at releasing lands to be drilled on, permitting processes that are really important, and these are things that are impactful. a lot of the money that you saw the biden administration, or saw them spend on illegal immigration, was president trump order policies, that would slow down or stop. a lot of spending cuts that we could pull in to offset the cost of extending the tax cuts.

as for we go through the same process where someone decides on what is a budget reconciliation, i remember the democrats loved this pv uses a lot recently. if someone has to decide what can go in there, right? for they do. the budget reconciliation process was part of the 1974 budget control act. it was a failsafe if you cannot come through the budget and the authorizations and appropriations to hit september 30 each year. they gave another avenue. it requires very narrow language. as being impactful to the budget. that is is in a process, c.d.o.t. to have the 60 vote rule on the filibuster. the commentary in the senate will control what gets into the reconciliation framework. and the house, the ways and means and tax quality subcommittee is that on will be working make sure that the tax

cuts fit into the reconciliation process, along with energy and commerce, and 10 other committees. >> can you guarantee the parliamentarian will let all of the border security provisions in there as well? >> not all, because we looked at hr 2 that the house and did pass back in march 2023, overwhelmingly, in a very narrow margin, we had a three vote margin, now we have about two. we are getting accustomed to working with the 99% approval ratings to get a bill passed. there are things in there that are not impactful to the budget, they are more policy. you cannot pass policy in a budget reconciliation process. went to strip out those ideas that were in there with the bills that it pass to the senate to make sure we get only things in there that will have a budget impact. for if it was two bills, something to be in the second bill? then you would need 60?

how would you do that? you can do that? >> if you have the second reconciliation bill, it might be something, things you might have to look at the did not get into the first bill. you find a way to present it to the parliamentarian where they might accept it. that's why so important to get one bill done early and start working on that and try to get it done by memorial day. this is a lot of work, as is of the opening, we are not given the gift of time. all tax cuts expire on december 31 of this year. every single american and small business will see a small tax increase if we don't get it done. it is important. this should be a bipartisan process. the democrats should all people have tax increases. we are working hard. we will see what happens. for where will the corporate scope? is there some of for that? to go to next year? is it possible to do that?

>> is it possible to go from 21 to 15 on the corporate tax rate just for domestic producers? is that would be in there? >> we want to look at it, that is an additional campaign conversation that the president had, just like no tax on tips and no tax on social security. those are things we had to figure out if they can fit n. we will do that as we get the legislation moving forward to going to the reconciliation package and see what fits in there, and how we square. cbo committee on taxation look at those. those are important as we move forward. we are working passionately to do as much as we possibly can on president trump's campaign promises. for in terms of pay for some of you know if there is any agreement or areas you think you can get agreement on pay force to make up for the givebacks and taxes?

how do we do that in a balanced fashion? >> we saw some of that is in hr 1 last year. the republican house did pass that, the number one priority, which was energy dominance. that is something that president trump work on. we heard president trump across all the campaign trail city went to across america, talking about the way we would fix our way out of this going forward, using minerals under our feet, oil and gas, and other mining opportunities that we have. looking at how we can release those, we are very dependent on the congo for cobalt and china for processing that cobalt, and other rare minerals. if we don't use the balance sheet in the united states, we will be consistently dependent on china, which is not a good place to be when you have two superpowers competing for world dominance. did you have any realistic expectation that something could be added to the bill, including buying greenland or perhaps buying the panama canal

, or buying canada or merging with canada? >> i am not sure yet, we are all going down to mar-a-lago over the next three or four days to share different opinions and thoughts on some of the things that have been discussed. for what are yours? for allah to look at this and see what the pportunities are. i was recently in panama. it is strategic to the movement of products from the east to the west without having to go around south america. it is very concerning, some of the tolls that are being charged to ships. you go south of the northern triangle, the influence of china in south america and central america is incredible. taiwan is pushed down. for all intensive purposes, america has been pushed out. if you look at 2000, we were the dominant trading partner in south america. today, it is china. the president does know this. you want to make sure that we don't get in circle, whether in

greenland in canada, or the lucknow, to ensure we have national security. one of the things that we have the most important role doing congress is to protect this great nation. for officials in ontario are suggesting that maybe canada should by alaska and minnesota. what you think of that? >> good luck. the look on canada buying anything out of america. president trump is more popular in canada than trudeau. i think that was the writing on the wall of trudeau's socialist agenda. president trump will push, as we all know. he is a businessman. he was at the boundaries and have everybody think twice before they do something that might be radical, as was suggested by the folks in canada. for alaska? what are they offering for minnesota? >> i don't know. it's to make me an offer, i'm getting home i like the vikings. congressman, kevin hern, thank

you. anything can be talked about at this point, as we now know. you make some good points, it is a real world out there, isn't it? there is china, there are things happening that need to be taken seriously. i don't know, i guess nothing should really be off the table when it comes right down to protecting the u.s. i appreciate it. thank you for your time. when we come back, the outlook for sports betting companies in 2025. are they a good bet for investors? we are looking at whether you should hold them or pulled them, next. >> we talk bird flu risks with the respiratory virus spreading in china and vaccines. in china and vaccines. squawk box will be right back. i'm thinking company wide power nap.

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back to squawk box. draft kings is named one of the best ideas for 2025. it is outperforming a $62 price margin. they believe they will reduce

promotional expenses and improving topline growth, and launching in new states this year. the meantime, gamblers have plenty to bet on now with the bowl games in the nfl playoffs, and you have pro and college basketball. the odds may be against some of the gambling stocks in 2025. that is because so many of the winners are definitely the winners. >> the good thing is that the nfl regular season is over. it was rough for the sports books. the best for customer since online sports betting launched, bested 2 years with the highest rate of favorites winning in 20 years. the parent company issued a warning, they do it just a heads up $430 million on gross gaming revenue. that in turn, lowers assessment for the whole year. jeffries points out that it reduced the net gaming margin

to 6.6%, which is the lowest in 2 years. flutter saw their shares rise 50%. this is the overall earnings thesis remains the same. all the sports books are dealing with the same nfl outcomes. trafficking shares are up 12% over 12 months. newcomer fanatic, is making headway against the espn bet. and those shares reflect that with the pressure on the digital business overshadowing the real performance in regional casinos. rough street interactive has a bigger market than pen. shares through 285%, and mostly it is the business opportunities in latin america. in macau, there are high hopes that china's stimulus will drive visitors to the casinos. gaming revenues are off the pre- pandemic levels by 23%. mgm, when resorts and las vegas ended in the red for the year.

of that group, deutsche bank takes lbs for the undemanding valuation has potential to grow market share. that is because a slew of top- notch swedes are coming online after major investment of capex. by the way, las vegas, steady eddie, and room supplies, rooms are high and onventions are solid. they do predict low single- digit growth for the strip, which would benefit the wynn resorts, mgm, and caesars. on the one thing, one game, the lions versus the 49ers on december 30, it cost fanduel $74 million. >> typically, the house is always the winner, they typically figure out what the line is supposed to be and they are good at it. what has happened? >> just luck. even the house loses. the house always wins if you

keep playing. if you walk away a winner, the house loses. that's way it works out roulette and blackjack. that is the way it works for the sports books. what happened was, if you have nine different touchdown scores, and they are all favorites, everybody has bet the favorite, not only did they win, but you have the parlays that are paying off for the customer and not the sports book. parlays are one reason why the sports books started toward this. >> maybe even the losers get lucky sometimes. >> except when you have a net gaming margin of 6.6%. >> you know what happened last time? as for you're not getting pretty personal. >> nobody played over the weekend. did you see the denver broncos? you know they had to lose for the bengals to get in. >> and? >> they played the chiefs. you and the chiefs record is? 14 1. you know the score was

when the chiefs put in a high school players? they lost 34-0, don't worry, it's fine, they saved every one of their players for the playoffs. the bengals are not going. it was not a game. all of the games were not worth watching. for i do feel your pain. i was at the jets game. >> miami had to lose for the bengals and the jets came through. they took it seriously. as for aaron rodgers had is a 500 touchdown pass. i did not bet on it. i just watched it. >> i cannot believe it took the jets. as for your just mad that the bengals are not in? >> the ges we amerhorrible to watch. >> normally delete would do something about that. in places where products are made, bringing insights from professionals who understand industrials, the sectors they supply, and the trends driving the industry forward.

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latest, the doctor says while

the bidens last-minute $306 million package to find bird flu is welcome news, there is much more to be done when president-elect trump takes office. joining is now the fda commissioner. he is also a pfizer board member and a cnbc contributor. scott, let's talk this through. we talk you and last week, you said you were not that concerned about bird flu becoming a huge threat for humans. has that changed at all? is your take changed since we heard of the first human that died of bird flu? >> that has not changed. this is a low probability risk. it could be a high impact event, and the thing we want to take steps to mitigate. there are things we can do and could have been doing, going boards reduce the risk that this could spread into humans. we need to be testing more on farms to turn over the cases and isolate cows that become infected and chicken flocks as well. we need to do more to help farmers protect dairy workers be providing swabs to dairy

workers so they can diagnose themselves. the thing you worry about is people becoming co-infected with this virus and seasonal influenza. you get the combination of the viruses, that would enable the virus to spread more easily. that's what happened in 2009. that was the combination between the swine flu and seasonal influenza. to happen in a pig and then it became a pandemic strain. want to mitigate the risks. you want to do more on the therapeutic side. we did stockpile tamiflu, but not the whole range of antivirals that could be effective. if you look in the journal medicine in the case reports two weeks ago, one patient became very sick in louisiana canada. the strength became resistant to tamiflu as virus continue to progress in those two patients. you want to have multiple antivirals. we have not done that. there is a lot we could be

doing to mitigate the risk that we have not done. or we have done a late in the process. >> why do you think that is? for there was a tug-of-war between human health regulators, public health regulators, cdc, and other health agencies and agricultural officials that felt this would burn out on the farms. they did not want to take steps that would be costly and burdensome to the farmers. this is very structural. this happens all the time between human health and animal health regulators. i had challenges getting my inspectors on produce farms for example we had outbreaks of e. coli are response. they were reluctant to let federal regulators on the farms to isolate what fields were contaminated. you see the ension play out all the time. there really was a presumption among the animal health officials that this would burn its way through the dairy herd

and eventually be extinguished. that has not happened. it has become endemic. we are seeing it in migratory birds. the two patient became very sick, the one in canada and the one in louisiana have the strain that was in migratory birds. i am speculating here, but it is likely because they got sick by inhaling dry feces from the birds. so far, the infections on the dairy farms have been conjunctivitis. it is not getting into the lower airways. >> do you think that the state and local officials and the animal control officials have changed their mind about the concern level here? if they don't, is there anything that will get done? >> there are indications that they have changed their mind that the state level. we see states doing aggressive testing of dairy cattle. we have also seen the implementation in the last month, in december, a full testing of milk at the federal

level. animal health officials recognized they needed to take aggressive steps on the farms. the other thing we could be doing is increasing the compensation for affected dairy farms. the farmers not be bearing the brunt of doing the right thing. they are on the front lines. they should not bear the economic rent -- bronx of calling animals and testing for workers. when you have absentees because workers are sick from this, the farms should be compensated so they have an incentive to turn over the cases. for sure. as for it seems like a lot of people are sick everywhere. there are many viruses going around. anything to be concerned about? is this just the time of year for the holidays when things are cold outside? is it any different than what we would see on a normal basis? >> i don't think there's anything different as far as what is spreading the proportion of what is is

spreading. in past years, we have seen a lower incidence of the normal seasonal viruses, in part because covid crowded it out. that has been changing the last couple of years. this could be the first year that we see the normal incidence of flu and rsp and mycoplasma. you have covid on top of it. that could be part of what people are experiencing. now you get back to normal levels of the ordinary viruses. now we have a new virus that gives flulike symptoms to people. it feels like there is a higher burden than what they're normally was historically, partly because it is. >> am i right to think that even if i am not feeling well, don't go to my doctor's office or the e.r. , i don't go to a healthcare provider, because i can pick up something worse? >> most doctors offices, good offices separate the sick patients from those that might

not have an infection. they will do testing before you come into the office. i would not worry about getting infected in a healthcare facility. i would avoid going to the e.r. unless you have to primary care physicians do a good job to mitigate spread within the office. for i cut my finger, and i did not go in to see if i needed stitches. to just go to the emergency room, in general, it's a process. for they do cluster the patients and put them into exam rooms. >> it is a long ordeal. >> with bird flu, what was the flu where the kids had nothing else to play with, so used to toss chicken heads around? was that bird flu? >> was about the virus? what was that? i thought we got human transmission from kids throwing the heads of the chickens?

for i thinking of rodent. and >> you remember that? >> i don't remember that anecdote, no. for how long it has bird flu been on the worry list? 20 years? >> is been on the list for a long time. the strain that is circulating is a new strain. it looks less pathogenic than the historical strain that we remember from 20 years ago. it has evolved over the years. this one is a new train. >> okay, i will look this up. next time i will remind you of what happened. it was in a place where they did not have normal stuff. >> i will look it up. >> thank you. >> i don't know, maybe for pickle bal -honey... -but the gains are pumping! l.dad, is mo it a "finanprobaby not balance right. we have a report from the palisades wildfire. we will bring that to you with the situation that is happening now. we will be back with more, after this. -of milk.

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's squawk. firefighters are very rare that force evacuation of 49,000 in southern california. we have a correspondent in the middle of it all. good morning. >> reporter: good morning. we are next to the palisades fire pacific palisades along the pacific coast highway and sunset boulevard. if anyone was the area, even though it looks rather dark behind me, we are in the heart of los angeles. as we look here, as we zoom in on the ridge line, you're looking across the acific coast highway. the top of the ridge, you see the orange glow. there is a condo building that the lame seven ripping through as the winds have been blowing this intense fire. it has burned roughly 3000 acres, potentially more. firefighters have not been able to get this fire under any kind of containment.

they are unsure how big it is, because they cannot get helicopters or airplanes up in conditions like this. it is virtually impossible for them to battle a fire like this. on the ridge line, but this other condo building, you see these once beautiful homes in pacific palisades that are burning. dozens of homes and structures in this area have burned. it will be difficult for firefighters to give us a concrete answer about how extensive the damages until after the sun rises and the winds die down. right now, we are in the heart, hopefully the height of the worst of the winds with 30 to 50 mile-per-hour sustained winds. one of our meteorologists confirmed a wind gusts overnight of over 135 miles per hour. that is a category 4 hurricane strength wind gust. you can see when picking up now. it picks up the embers from the fires and will blow it hundreds of yards away and start an entirely new fire. when we talk about this palisades fire, is not one contained fire, it is a bunch

of little fires burning in the same direction. firefighters are spreading out, doing what they can in difficult or nearly impossible conditions. >> output asked by the wind is. what is the expectation for the winds later today and tomorrow? how long do you think that wind issue will continue? there is no rain in the forecast. >> reporter: no, the wind is will stay pretty strong year for the next few hours, certainly through the day today. they are hoping they will die down a bit tomorrow. it will take them some time, several days to get these fires under control. you did mention, it is very dry. it's been a month since we have had significant rainfall in southern california. this should be when we get rain consistently. we should have about four inches of rain during the wet, rainy season, we have had less than 0.2 of an inch. we have drought conditions and it is incredibly dry. now you add the hurricane force

wind gusts, is a recipe for disaster. that is what we are seeing here in los angeles. >> we want to thank you. stay safe and thank you for your reporting. i am sure we will talk again. unfortunately, not because i don't want to talk you, but i think the story will continue. squawk box will be back after this. freeze in your tracks? (♪♪) or, let curiosity light the way. at t. rowe price, we're asking smart questions about opportunities like clean water. and how clean water advances can help transform our tomorrows. better questions. better outcomes. t. rowe price

the tik tok ban is said to take effect on january 19 unless the supreme court takes action. joining us for the legal proceedings going on until the deadline is the seo consulting firm kristof and company. she has worked on the hill for john mccain and in silicon valley for google, uber, and salesforce. thank you for joining us. what is likely to happen in the next couple of weeks in your view? >> what will happen, in my view is the supreme court's will uphold the ban. it is a well-written law. the first amendment arguments are totally failed. they have no real reason not to of been. president trump has weighed in with amicus brief asking them to delay. i think it goes forward on january 19. >> what would that mean at that point? >> we don't know if exactly

what it will look like for users. it means that the app stores can no longer let people download it. apple and google. you will select tik tok on your phone, whether or not it will work is to be seen. it is up to tik tok with what they do with user data. you will have a worse and worse product experience. you will not be able to upgrade it. it could just go dark, we don't know. >> this happens, you go one month after that, and it is okay again, can humpty dumpty go back together again? >> it could be paused by the president after he is inaugurated. there is a provision for a 90 day pause. if he says, listen, they're looking to the soft, he could put a pause on it. this report is the highest court of the land. to undo this, they would need a new law from congress. >> i think you would do that, right?

he is ready to annex canada, this does not seem like much of a stretch. >> make a point, he has been busy with other things like the gulf of mexico. also, immigration, tariffs, and now they talk about pardons this cannot be the top of the priority list. he could hit pause as if he could get a legislative solution or negotiate something. you want to talk directly with the chairman to do that. he is indicating that he wants to do that. he has 14 million followers on tik tok. >> he doesn't like it because it helped. baron trump told him, you have to do tik tok. >> he has all of that bitcoin ftx money.

>> he's got all that bitcoin money. ftfc. i forgot already. >> ftx. >> yeah, that's what. too many letters. is it -- are they stealing everything that there is to know about our youth in this country, and using it to subvert the future of the united states or not? that's what i don't understand. that was the whole idea. it hasn't been happening. and if so, then it doesn't matter whether it helped win an election. it's an insidious thing that probably shouldn't be around. which is it? >> well one thing that we don't know is what is happening in those national security briefings. so when the law was passed, a number of law enforcement agents were skeptical. they said i'm supporting this law. president trump has seen those briefings. we have not seen them. it is certainly true that the ccp has shown they are interested in, and active in

manipulating public discord in the united states. now the american public seems to shrug this off. 170million people don't mind having a surveillance device in their pocket, it seems, but they haven't seen all the evidence. we haven't seen it, members of congress have, both president biden and trump have seen that information. >> nicky is it possible that all the phones are sending information to the drones? >> it is possible that they are violating terms of service from the app stores and collecting things on all of our phones. anyone in washington, where i'm based who works in national security does not touch tiktok. they believe that it could scrape information. i think most teenagers don't care. >> right. they don't have a whole lot. i don't know what china's going to get from looking at what teens talk about. not a whole lot. if they do look at it, they probably say, we don't have to do anything. u.s. is going to happen anyway. go ahead. >> one last thing is president trump has said over and over is one of his big concerns is this

is a boone to instagram. mark zuckerberg is the biggest beneficiary of this ban. there's a reason we're seeing him on bended knee this week. i think there's a reason for him for the ban to go forward. >> trump doesn't know what to do. now he likes zuckerberg. it's interesting. the enemy of my enemy analysis on all of these things,niki. thank you. it is 8:00 a.m. on the east coast and you're watching "squawk box" here on cnbc. i'm becky cook. the futures at least at this point, we've been down from where we started. when we started we were up 120, 130 points for the dow.

now that's off by 25 points. we do have some breaking news for you. some headlines from fed governor christopher waller. he says multiple times that further interest rate cuts will be appropriate this year if the economic outlook evolves as he expects. waller says the extent and base of cuts will depend on inflation and labor market strength. he says nothing suggests that the labor market will weaken in the coming months. he also says he believes monetary policy is still restrictive in most cases. with president-elect trump vowing more tariffs on countries around the world, waller says that he does not expect the tariffs will have a significant or persistent impact on inflation, but he says the fed will need to see policies before determining their affects. >> and at the new york stock exchange this morning. good morning to you. >> maybe the market firmed up

just a little bit, but it has been pretty unsettled. the last couple of days, you had morning rallies. then breath got negative later in the day. here you see this sort of range that's developed over the past couple of months. multiple times the market has found a little bit of a lull in this range right in the gap that was created in the post election rally. it popped high right above 5800. we've visited that area, 5500 a couple of times. the market is a little oversold coming into the week, really, the average stock had a rough december. we haven't been able to make much of that. take a look at the nasdaq 100. that's kind of mag 7 weighted. this is a three month chart. you see they were going up in sync right until thanksgiving then the average stock has really faltered since then. yesterday was tough on the

nasdaq too, so a little bit of convergence there too. semis versus software. yesterday you did see some of the weakness in semis. but mostly it's been again about coming together. this is the software etf. that's the equal weighted semiconductor etf. both of them kind of working below their highs. it's an interesting dynamic, because people took shelter once nvidia got stuck for a while and the majority of semis did falter. right now, it looks like trying to make the case that the semis trade didn't get revived. didn't get much out of that, related to that stock, guys. >> do you remember the last time we saw the ten year above 7.4%? >> so april was the high around these levels. we did touch 5%, remember this cycle. so when you've gotten to --

people are saying 4 3/4 might be the threshold. if you look at yields relative to inflation and the rest of it, in theory, you should be having buyer find value in treasuries here. but obviously, whether it's supply, whether it's unexpected policy moves and what the implications are, that's why i say the waller comments imply that at least he believes neutral rate of interest is still well below where the feds fund rate is. >> mike, if enough ceo's go down there, and start bending the knee, like zuckerberg, is it going to be the maga 7? have you thought about that adding a letter? >> i haven't thought specifically about that, but those stocks are trading in that direction. if you just look at -- >> some will never be. is netflix one? >> not really. >> what are the mag 7?

>> the mag 7 is apple, microsoft, nvidia, tesla, alphabet. >> jensen huang was asked if he had been to mare mar-a-lago he said no. he just needed an invitation. >> it's a total maga stock. it's a maga company. >> can you believe it's that easy to change the acronym to keep up with the times? i think that's hilarious. can i get credit for this, like the new normal? >> he is going to be on. he did coin the new normal. >> all right, santoli, sorry to cut you off too. i just couldn't help thinking about that. tim cook too. apple is a mag 7. >> what about microsoft? >> microsoft, i don't think is. >> don't know. >> we don't have to talk about

this specifically, joe. russell 2,000 is off 6% from its high in late november. joining us now. it's your least favorite, i think now. you prefer mid-caps and even large caps relative to small caps now. what changed? >> i think yes, that's right. we do like mid-caps over both small and mega-caps into this year. the problem with small caps right now is that for one, the profits recovery that everyone expected last year, that's still a hope rather than any evidence we're seeing. going into last year, everyone expected by this quarter profit growth would be double-digits for small caps. that has been completely pushed out in a year and revisions are

still negative. we'd like to see better evidence that the small cap recovery is actually going to happen and small caps would have more risks on tariffs, immigration reform. mid-caps look better at this point. with multiple rates getting priced out of the market, refinancing risk has emerged for small caps. we think mid-caps are the better area and being selected within that space makes sense. >> would that throw in the question, the broadening of the rally that we needed, because it was so concentrated in what we were just talking about? we were all assuming that it was going to spread out and all the soldiers were going to join the generals in advancing. this throws a wrench in the works. >> we do still think the markets going to broaden out. if you look at the profits backdrop, within the s & p 500, we are seeing that slowing of profits growth, which is continued to be expected to

occur for the mag 7, relative to the other 493 picking up. with do like the equal weighted index over the cap. on that profit story as well as positioning and other trends. mid-caps over omega look better. but i still think down the cap spectrum there is more risk there. we aren't seeing that pick up happen yet. >> but overall, you think that we will see multiples stay where they are, and maybe earnings go can up in what would be an average to good year. is that as good as it gets, or does deregulation give us a better backdrop or a worse backdrop if inflation stays sticky and the economy slows? what are we looking at overall for macro? >> we're looking at 13% earnings growth. 10% returns for the market.

i think this is an area where last year we did see a multiple expansion year. this year, we think it will be about demand coming back. we are expecting a manufacturing recovery. the backdrop for small caps obviously, if interest rates remain elevated, the risks there, given the leverage profiles are more elevated. so we do like cyclicals, we do think it's a year where you'll want to be more selective, then it's a macro over micro year, given all the themes, given post election policy can impact certain pockets of the market. so you know, it will be a year to be selective, and there's a lot of opportunities, you know, even in the small and mid cap. tilting up toward mid over small. >> we've got some data in a couple of minutes. jill carrie hall. the global head of small caps

and mid caps among other things too. coming up, we do have that breaking jobs number. december employment numbers. that's next. you're watching "squawk box" here on cnbc.

welcome back to "squawk box." take a look at the futures now, we are in the red. s & p 500 looking to open down about 10. i'll show you the treasuries. ten year note at 4.7. the two year at 4.2. we with do it. job numbers officially out. adp reporting a slower pace in hiring in december. the service provider sector is doing a lot of the heavy lifting in these numbers which come ahead of friday's jobs report, where the consensus is 155,000. that's the number to beat on friday. education, health services, and

leisure and hospitality were the strongest sectors. manufacturing lost jobs for the third month in a row. year over year pay growth for those who stayed in their jobs slowing to 4.6%. that's the slowest pace of gains since july of 2021. for those who moved jobs, pay growth was roughly in line with last month. that's at 7.1%. for more on the adp data, i want to bring in neil richardson, ad p's chief economist, who has been keeping these numbers secret. what do you think? how should we actually think about this? the market is doing a little bit better actually on the back of this. but that may be a bad news is good news situation. >> it's hard to know when you incorporate the fed. from our perspective, what we've seen all year is very stable hiring. we saw a pick up in october. this december report definitely represents a down shift from what we saw earlier in the

quarter. but it's still a solid number. pockets of weakness are something to watch. manufacturing shed jobs for three consecutive months. that's concerning. this is a sector that could benefit from a rate cut. what's doing the heavy lifting in services is no longer leisure and hospitality. we think that game is over. it's really healthcare. healthcare is not cyclical. it's tied to, i think, demographic hiring. so you take these two, the good sector and the service sector. service is being driven by the democrat demographics. manufacture i think very much focuses on the short term. >> if you were sitting here in three months though, from now, based on these trends, what do you see happening? because i think that's what we're really trying to understand. >> you know, first of all, i think when you really want to know what's going on in the labor market, you have to shift from jobs to wages. because wages are going to tell the story of what the fed will do next.

what we saw was a step down in wage growth, particularly for job sayers. 4.6%. that's a very slow pace of job growth -- i mean, excuse me, wage growth. but not slow enough to be consistent with a 2% inflation target. so that means one of two things. either wage growth has to come down significantly over the next three months for the fed to feel comfortable cutting rates, or we're going to get into the situation where the fed has to pause and wait for the labor market to come along with this rate cut. >> did you hear christopher waller's comments this morning that he's going to be giving a speech a little later today? i was a little surprised that he still seems to be leaving the door open to several more rate cuts this year. >> given the uncertainty on the policy front, i think leaving the door open is a wise move for the federal reserve. honestly, they've been leaving the door open being data dependent is basically saying i'm opening the doors and the windows and seeing if there's a

next data point. >> although it feels like the market has been expecting these rate cuts and they've been trying to maybe talk themself out of a position where they are expected to cut it every rate meeting. this seems like it was a swing back in the other direction. >> six months ago, i think the foregone conclusion was that the fed would move like the fed has in the past, which is moderately and consistently, every single meeting was a rate cut. they've channeled that. that might not be the case. there may be pauses on the way. this has been a bumpy deceleration in wage growth. i believe it will be a bumpy deceleration in the interest rate as well. >> bumpy, because the data has been bumpy too. >> absolutely. we've seen pockets of strength and pockets of weakness. we saw a big surge in hiring in september. that really put a pause on what the fed was going to do next in my mind. now we're seeing a down shift in job growth and i think that will also, you know, feed into the fed's calculations. >> i'm just looking at the

market reaction right now. this is a bad news is good news story? >> it's not going up. it's not doing anything. >> it's a little better than what it was. marginally. now it's actually gotten worse again. so do we say this is a goldilocks number, because this is just what everybody was expecting? >> it is somewhat goldilocks. the word of 2024 is a stable jobs market. meaning sticky inflation. i don't think stability holds in 2025. i think we're going to see a disruption in the jobs market. i'm looking at manufacturing. i'm looking at financial activities which slowed significantly in our report. professional business services is lackluster. so where is going to be the growth? i don't hang my hat on healthcare, driving the labor market. >> inflation is sticky. it's not great. the backdrop does not look great. >> and that goes back to the worker. if you have sticky inflation, then real wage growth is

precarious. and what we're seeing with hourly workers, which is the majority of the working population, paid hourly, that stickiness leads to some industries not paying above inflation over the course of the year, and that's going to be a challenge when it comes to consumer spending and growth. >> thank you for joining us this morning. we'll see what happens. >> thanks for having me. when we come back, we do have news on an therapy an an therapeutic. stay tuned, you're watching "squawk box" and this is cnbc.

the a.i. frenzy spilling into 2025. just getting started. we have some deal news about anthropic, and kate mooney joins us now from the west coast. kate, good morning.

super morning to you. >> so i'm told anthropic with a $60 billion funding. it's a $2 billion financing being led by lightspeed. these numbers could shift. especially private markets. it's now one of the most valuable a.i. companies out there. anthropic was started by openai founders, so it's backed as well by amazon, which invested roughly $8 billion so far into the startup. an anthropic spokesperson did decline to comment. but it does mark the latest deal in what's been nonstop funding for these a.i. companies. it's another signal for demand. we talk about openai, data bricks. that is expected to continue this year. these a.i. companies are really capital intensive. they require a lot of computing power, for example, so raising

money has been a necessary competitive edge, especially if these smaller a.i. firms are going to want to compete with tech giants, think google and apple, for example. >> we were talking about this earlier and you're the expert. so we're looking now at a new moniker. that is the maga 7. and we don't know how many there are. these are people like zuckerberg that have gone to mar-a-lago, kissed the ring, so we're going to make a new list. how many -- >> that's a good acronym. amazon. yeah, it kind of includes all the tech giants. >> well, not all of them. >> you have jeff bezos. bezos is spending some time there. yeah, i like that. it could also work for some of the a.i. players. because even if they haven't been to mar-a-lago, they're the ones leading in a.i., or at

least competing. >> tesla. think about it. tesla is totally maga. think about it. come up with a list. that's your cnbc maga 7. up next, i wouldn't hold your breath for the cnbc list there. new jobless claims data. "squawk box" will be right back. arrggghh! ahhhh! [crashing sounds] we had everything we needed. is the internet out? don't worry, we have at&t internet back-up. the next level network for small business. ♪♪ i sold a pillow!

all right, welcome back, everybody. we are just seconds away from initial jobless claims data. we've been watching the futures ahead of that. dow futures were up by more than 120 points when we started the show at 6:00 a.m. now we've come back to about the flat line. treasury yields have been moving higher. the ten year was sitting at 4.71%. that's the first time we've been above that level in a very long time. so we've been watching, trying to figure out what to make of all of this. rick has been standing by. the numbers please. >> and these numbers are low on initial jobless claims. 201,000. 201,000. this is about 14, 15,000 less than expected. currently, it's 10,000 less than our last look at 211,000 unless there's a late-coming

revision. but it does underscore that the new year's day holiday may have had an effect. now if we look at continuing claims, it is now the 31st consecutive week above 1.8 million. in the rear-view mirror, 1,834,000. this is also most likely affected by some holiday issues. so some might be waiting to get a better gps. when you take a step back, they're still on the low side. consider we haven't been over 250,000 on initial claims since the first week in october, of course of last year. you're right. we've traded a bit above 470 in a ten year, and we're getting very close to 5% in the 30 year. 22billion of those 30 years, by the way, becky, will be auctioned off on a reopening at 1:30 p.m. eastern. we want to pay attention. yesterday, with interest rates rising, that was not viewed as a concession on the ten year.

it didn't make the demand spur higher, because investors thought, wow, this is a blowoff top. rates are going to come down. it's exactly the opposite. there's a lasting effect here. what's most notable is in term premium and yield curves. right now, we're trading over 42 basis points on the 2s to 10s. i've been talking about this spread for a year. every trader in the government sector i know has been looking for a steepening curve, adding term premium expanding. these are traiting you want to pay attention to on the long end as the traits continue to firm. you can make a case adp was less than expected. but we've kind of been there, done that. you can make a case that job rates were aggressive, but quits might have moderated that. watch y the market reacts to these data points. 1 market's pretty smart. >> explain that to me a little

more. we were above 4.7%. we got these numbers. the earlier numbers. adp took it up to, i don't know, i think it was 472 or something. now we're back just above 470. we watch these moves very closely because they're telling us what? traders are thinking what? >> well, i think, you know, look at a two year right now. two year settled yesterday's cash market of 429. we're at 427. okay, not a big deal. it's down two basis points. as we sit right now at 470 in a ten year, you're up a basis point. doesn't sound like a big deal. but that relationship continues to be pointing the yield curve and investors in the same direction. the steepening curve applies that we're going to continue to see pressure on long rates. even though the fed might be talking about data or talking about being cautious, or if the year develops as they think this may happen, they're doing the same thing investors are

doing. they're looking at the market and scratching their heads. even in easy mode, the market is going to take care of business, by letting long rates breathe like a fine wine. unless the balance sheet is still very launch, i think they probably won't, i think this dynamic's going to last until we get a better handle on how the incoming administration policy is going to effect markets. >> rick, if you have your choice, greenland, panama, or canada? >> in terms of where to live? >> or all of the above? >> i don't know. i'll tell you, personally, i think i'd rather go for mexico as a new addition, before any of the others, personally. but that's just me. >> did you have to say that? that's going to be next. really? then we wouldn't need a wall. >> and then an unnamed free

agent. yeah. >> and what about canada? we go for canada, then no, we couldn't give them minnesota. i don't know. this is like a game of risk almost at this point, isn't it? >> yeah, no, i'm not sure about the whole canadian thing. i don't know. i think our relationship with canada is at a point where i think leave well enough alone, especially considering the political winds changing. i think it's going to be self- adjusting. i think from an opportunity standpoint, i think mexico and the u.s., i think they're good together. that's just my feeling. >> that's an interesting take on things. there's a lot of cobalt and graphite and lithium and shipping and entry to the arctic, the energy-rich arctic, and you know else wants the arctic? we know who wants it. two other places. russia and china. >> here's the other issue. i don't look at it only from a

mineral strategic standpoint, because the truth be known, even though we don't get the truth often, there's plenty of those same minerals in the u.s., if we were only allowed to explore and extract them. >> then there's also the question of what the people in greenland want. >> i don't know, greenland's too cold for my taste. >> i heard greenland is ice and iceland's green. alaska's not for sale. we can talk minnesota. >> you're willing to trade minnesota for alaska or the panama canal? >> minnesota, as far as politics, they're perfect for canada. perfect. perfect. they don't have to change a thing. move right in there. >> rick, thank you. >> oh, yeah, drew. it's going to be a good year, andrew, trust me. it's going to be a good year. >> i need you here though.

>> i get tired. i get tired. i've got wimpy little shoulders. i need help. >> all right, for more on the data right now, the market's rising rates, fed policy, what to do with all of this, we want to bring in mohammed el-erian. what do you think of the data? what do you think of the feds reaction and what we're seeing in treasury right now? >> first on the data, consistently, it has been somewhat stronger and somewhat hotter than expected, and that's been a consistent theme. overall, i'm not worried about the hotter side, because it's only hotter relative to an inflation target that's out- dated. inflation expectations are stable. and i'm really happy about the stronger side. yields, they simply reflect the stronger and hotter economy, but they also affect issuance, and i think that we're going to see yields in the 4 3/4, 5% on

average for this coming year. pending what we hear from the new administration. and the fed, well, the fed has got to pivot away from this excessive data dependency, and take a strategic view, and rather than fuel volatility, try to reduce volatility. and there's too issues the fed has to navigate right now, one is monetary policy and two is the political landscape. whatever we hear from the fed, we have to remember they're navigating two different things. not just one. >> go ahead. >> i was going to say, but on the political landscape piece, it's going to be after whatever happens. it's not going to be in advance of. >> so they don't want to be blamed for mortgage rates going to 7.5, 8%. they don't want to be blamed for that. so we will hear comments that are more doveish than expected, because i suspect they are really worried that they're

going to become a political target. >> who is to blame for mortgage rates going past 7%? >> it's a combination of things. it's a combination of the hotter inflation. it's a combination of the fact that we continue to out-perform the rest of the world, and it's a combination of something that everybody is waking up to. the bond vigilantes are waking up to, which are fiscals out of control. >> that is my question. is 2025 the year that the bond market really looks in at the deficits we've been running for a long time and says no more. >> i don't think it says no more, i think it takes it much more seriously. if you were sitting in the u k, you would be much more worried. you have a 30 year -- the memory of the liz trust moment when suddenly your pension system -- so i think we worry

less than the rest of the world, but yes, markets have woken up to the fact that deficits and debt are on a trajectory that shows no sign of changing at all. >> will washington recognize that and try to do anything about it? >> i think it's going to take time. we are lucky that we are the cleanest dirty shirt. so we are still exceptional in advanced countries. imagine, becky, where yields would be had we not attracted 500 billion into the fixed income market, including from the rest of the world. yields would be way up above 5%. but we're lucky that our economic exceptionalism is attracting money into this country. >> you started by saying that an outdated view of inflation is really the problem here. that the feds' 2% target is outdated. just move the goal posts and you'll fix everything. >> first of all, i don't think we're going to move the goal

post. they are going to tolerate that inflation is slightly charger. it would be in a 2.5 to 3%. it would be in a range 2.5 to 3. inflation expectations are stable. we don't have an inflation problem. we have an inflation issue relative to a 2% target. you heard previously, this notion of sticking inflation, that's actually stable inflation. that doesn't disrupt the underlying economy in any fundamental way. >> are you arguing for them to cut rates even as inflation is hotter than they'd been hoping for? >> my worry is the opposite. if they really believe in 2% inflation, they would hike rates. >> so this is an argument against them hiking rates. >> correct. so if they really believed it, what i think we're going to hear is yes, we are aiming for 2% inflation, but down the road, and we're going to tolerate, we may get one cut this year, but we should not want them to be dead set on 2%.

because if they're dead set on 2% the rates are going un. >> do you up. >> what would happen in the markets if either there are no cuts or they raised cuts? >> i think we can live with no cuts. i think we've adjusted dramatically. from a year ago, we were expecting 6 to 8 cut. now we're expecting 1 to 2. the market has all the way back to july. this economy remains robust. >> we got the headlines from waller's speech today about what he's going to be talking about. i have to say, i was a little surprised it was more doveish than i had anticipated. because they've worked so hard to try and get to the point where the market is not expecting them to cut rates at every meeting. this sounded more doveish. and raised more questions about this. i don't know what you thought about his comments. >> i was as surprised as you were. i do know, if i'm sitting in the fed right now, i have to

navigate two landscapes. monetary policy and politics. >> there's a lot of people that are nodding with you, because we can deflate our way out of some of the step, but the difference between 2% and 3% compounded pour the dollar is devastating. for you to just blow it off is a little weird. there's a reason they want 2%. anyone can move goal posts. that's 5% higher than 2%. >> do you know where 2% comes from? >> 3%, it would make all of us feel awful in ten years. >> 2% comes from the bank of new zealand in the '90. it's an arbitrary number. >> 5 is an arbitrary number, if you want to deflate 36 trillion, let's go to 10 hen. >> i don't want to pull the rug from under u.s. economic exceptionalism. >> you're starting to at 3%. >> i think we are investing in the economies of tomorrow in the growth drivers of tomorrow.

>> the government? >> no, the private sector, everything else. if you push this economy -- >> the private sector is not what causes inflation. >> joe, if you push this economy into recession, you would not just lose current standard of living, you lose future standard of living. 2.5 to 3 is what i said. you immediately went to 3. as long as inflation expectations are stable, you can navigate. >> better buy some bitcoin, mohamed. >> he did. >> not enough. >> none of us did. damn. >> what do you think of the michael barr situation? >> so i think that is a -- that is someone taking one for the fed. i think he stepped down to protect the fed to again help navigate this political landscape. >> because you think if he hadn't, he might be challenged,

therefore the entire independence of the fed gets challenged. >> correct. correct. >> all right, it's a lot to think about. mohamed, it's great to see you here on set. >> thanks for having me. coming up, facebook's former chief privacy officer joins us on the move to get rid of fact checkers. stay tuned, you're watching "squawk box" and this is cnbc.

welcome back to "squawk box." meta platforms announcing it's going to end third party fact checking, and moving to user generated systems, similar to the notes community program on x. some meta employees took to the in house employees and expressed their criticism. one worker said it appeared meta was sending a message that facts no longer matter and conflating that with a victory for free speech. joining us right now, chris kelly, facebook's former chief

privacy officer. he's the founder of kelly investments. let's just start with the basics. what did you think when you first heard this announcement? >> in many ways, it's a return to a free speech tradition that we in many ways tried to respect, even as we did more content moderation in the early days of facebook. cleaning up the ability to communicate and being able to easily present one's views was a critical part of the network from the beginning. and in some ways mark feels we've gotten away from that. >> where do you stand on this issue? i think there's a question, has mark's mind evolved, or was this always where mark's head sort of us, and maybe some of the people around him and i'm thinking of the others that pushed him in another direction. what's this sort of genuine view of this?

>> i think you have to create a space? that allows people to communicate effectively. that requires some ability to push back. in the american free speech tradition that is usually with more free speech, and not in taking, you know, too much down. we always, we never wanted to be the arbiters of truth. that's always a hard position to be in. you know, but you have to make sure that, you know, your community doesn't decline into a sesspool of accusations back and forth all the time, and of the presentation of misinformation either. the a.i. tools that facebook has deployed, and meta has deployed over time on all of its networks still operate here and there will be addressing of child sexual abuse material, of illegal content, things like that. >> chris, a huge part of the decisions in the past, i would say were business decisions. business decisions based on at

least a view, maybe wrongly, but a view that advertisers wanted this kind of control over the platform. or at least people were telling mark zuckerberg that. the question now is whether advertisers will stick with the platform. very interestingly, i would argue to you that x now is obviously a much broader platform today to the extent that it's more free speech oriented, but it hasn't necessarily worked as an advertising platform. >> i do think the advertisers are going to continue to express their opinions, and they're not going to want to have their brand advertising in particular appear next to offensive material. i think that will continue to be a piece of pressure on the company just as it is on x and every other platform. so i don't think that this will actually end up making a massive difference in your day- to-day experience on facebook. >> so you don't think it changes. do you think the experience on

x has changed? >> i do think it has. and we'll see if that works for advertisers vertime. i think there's some encouraging indications that, you know, there's some adaptation that's going on. the community feature is excellent, and it's been implemented very well. >> there's an interesting moment yesterday during the press conference. on one side, you saw mark zuckerberg taking to facebook and instagram, announcing all of this. making, i hope a genuine argument, but then of course, and saying that he was doing it in part because politically the country has moved. and then three hours later, you have trump being asked whether he's ffectively doing this genuinely or whether he's doing this because of the threats that have come from trump, and he says yeah, probably. it's probably because he's

doing it under duress. >> i did see that. but i do think, having been there in the initial discussions, we always wanted to adhere to the american free speech tradition, which is more speech is the answer to difficult speech. it was meant -- facebook was meant to be a place for discourse, and the deemphasis of political content and the ability to express yourself is something that i think that there's some regrets around the way that that was implemented, particularly in the post-covid period. >> how do you think this changes the regulatory story for meta? there's a whole bunch of state -- well i don't know what you think of the attorney generals, but there's a whole bunch of regulatory issues that are around meta right now. and the question is whether you think they disappear? >> i certainly don't think they disappear. i think there's going to continue to be a bunch of discussions. and i think the company has tried to act responsibly around addressing some of the worries

about harm and self-harm material that's presented online. some of the controls they've tried to introduce, particularly on instagram and teen accounts and things like that. this has always been an incredible difficult problem. you're dealing with expression which is a messy, messy thing. sometimes people are expressing themselves in ways that are hurtful to themselves or to others, and you have to figure out a way to guide a discussion so that it's civilized and the people get a lot of value from it. that's the key. one of the key things that they're trying to return to. >> chris, andrew and i were having a discussion yesterday. i was thinking about it at home, with andrew saying you thought maybe section whatever it is, 230, that you should get rid of it, and said i think i was saying that about andrew, about like protections for like

teens that are getting like naked photos shared. they should be liable. i don't think i ever meant it for, for like the free flow of like news, or information, or things. is there a way to separate it out? it seems like you'd have to do it in a way where certain stuff you are liable for. but airing news that may or may not -- you can't know when you're airing something laptop, for example, the lab-origin of a virus. you can't know at the time -- >> that means that you can have people to come after you saying did you have malicious intent?. >> but the bullying part, all the horrible stuff that happens on social media to kids, they have to take responsibility for that. but those are separate issues aren't they? free speech versus actual

nefarious intent to harm people? >> one of the most interesting things about the section 230 debate that people have often neglected, it actually allows you to take action against harmful material online effectively. you have effectively a safe harbor to address those pieces of clearly illegal content like child sexual abuse material and some of the revenge porn things online, and it's company can take action on it. and it actually is encouraged to do so, by the protections of section 230. >> i feel it would be much stronger if 230 didn't exist, there would be much more pressure on companies to ensure they're going after them. not just encouraged to do it, but you're in trouble if you

don't. >> i still think you're in trouble if you don't. there's certainly a lot of regulatory psse, en reurveunder a section 230 regime. >> chris come on back. there's so much more to talk about with this. >> absolutely, thanks for having me. >> when we come back, we're going to check on the futures and get you ready for the trading day ahead.

we have weaker than expected jobless claims and adp in terms of hiring. we saw futures bounce around quite a bit. we are ending up with the dow indicated up by 30 points. as of the futures are up by 6. nasdaq is up by 23. risotto treasury yields headed out. we will talk about it through the rest of the day. join us back here tomorrow. now it is time for walk on the street. good wednesday morning. with the new york stock exchange. we have a steady pre-open ahead of the holiday for president carter's state funeral. we have a 10 year heads hitting 4.73. the vet governor seeing more cuts. we have unprecedented wildfire