and "squawk box" begins right now. good morning, everybody. welcome to "squawk box" here on cnbc. we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. and so far there are some green arrows this morning. actually, pretty decent advances if you are watching the dow up 150 points. nasdaq is up 150 points. the s&p indicated up by 30. yesterday was an interesting session to watch. we were under quit a bit of pressure this time yesterday. this was as yields were trending higher and higher. we were looking at the 30-year trading above 5% for quite a while through the morning.

as yields pulled back down, you saw the s&p improve. it closed the day higher. nasdaq was still down, but if you are looking at treasury yields, the 30-year is below 5%. 4.96. ten-year at 4.78. you are talking about elevated rates continuing. the two-year at 438. >> bitcoin is up 5%. >> that's a big more for bitcoin. reversal. it was 91,000. >> i saw 97.5 earlier. >> all of these tech stocks moving in tandem with what you've seen with bitcoin. that's gone against what we watched with treasury yields. new overnight. israel and arab officials are finalizing the terms of the cease-fire deal that could be announced as soon as today. negotiations and donald trump's designated envoy, steve witkoff

are meeting why doha to finalize the deal. any deal would still need to be approved by the israel government. we will bring you updates about all this throughout the morning. joe. just in the last hour, britain's competition regulators says it is opening a formal anti-trust investigation into google's search and search advertising services. the agency would assess whether google has strategic market status, that's the term used, to give the regulator power to propose changes what it would be deemed anti-competitive behavior. also, the european commission is reassessing probes meta, apple and alphabet. the review to lead to a reduction in the range of investigations. all potential fines would be

paused. the trump administration is looking to intervene in overzealous regulations. >> those are big, important stories in the world of business and beyond when you watch what the big u.s. tech companies are asking the trump administration to do and what they might get as a result to have the trump administration standing up for their rights overseas and the potential cease-fire with israel and hamas. these are potential changes. >> it seems like it might not be a coincidence. >> probably not. early this morning, the justice department released special counsel jack smith's report on donald trump's attempts to overturn the 2020 election. smith saying prosecutors believed they had enough evidence to convict him if they had not been forced to drop the case after his re-election in november. smith dismissed the federal election interference case and one alleging trump unlawfully

obtained documents citing policy prohibiting the sitting president. president-elect trump called the release of the quote fake findings at 1:00 a.m. and deranged in his words. called smith a lame-brain prosecutor unable to get the case tried before the election. meantime, members of the president-elect trump team with tariffs with a gradual approach aimed at negotiating leverage. the report said the plan relies on executive authority under the international economic powers act. it would increase tariffs by 2% to 5% per month. the report says the proposal is in the early stages and not yet presented to trump. those working on the plan include scott bessent and kevin

hassert. >> that's kind of interesting, is it not? >> come up with a -- >> a foil? >> a negotiating technique. i think it also highlights there might be some inflation possibility. we'll see today. what comes today? >> ppi is today. >> producer price. >> producer prices. key components to the plan of the pce which is the favorite numbers. >> cpi. >> tomorrow we get cpi. the expectation for ppi today is that the deflationary indications might come to an end or you might see -- >> a lot of it is hurricanes, storms, weather. >> you have healthcare prices continuing to climb. >> there will be a way to say not to orry, but people will

still worry. chinese officials are weighing options of tiktok including the sale of the u.s. operations to elon musk. if can he afford it. according to multiple reports that beijing strongly prefers that tiktok remain under ownership of bytedance and contesting the impending ban to the supreme court, but government officials are considering contingency plans if the u.s. supreme court upholds the ban. it is not clear how much bytedance know s about the government discussions and involved. in a statement, the tiktok spokesperson tells cnbc, we can't be expected to comment on pure fiction. >> i made a lot of calls last night. i don't believe the folks at bytedance have been -- i don't think this has anything to do with them. i don't even believe necessarily

that the chinese officials who might have floated this, floated it all the way to the top of the government. i think there are people inside the chinese government who are thinking thinking, if this happens, do we do this? i don't think we are anywhere in a meaningful way or any kind of not negotiations going on. part of it is them to say we are not ing and they want to force the issue. now the issue has been forced. they are thinking to get past technically the inauguration and then they think there is an opportunity. interestingly -- >> i don't know that's the case though. >> -- interestingly, as we discussed, as my children will tell you, dad, the service will still work on the 21st and 22 nd. it will gradually decline. you have time.

the idea this whole thing comes to a screeching halt on the 19th. >> the thing that is an issue is if it works less and less, you're degrading the value of the property over time. >> no, no, when you say time. you have a couple of weeks. maybe a month to figure it out. my only point is it's still on the table in that way. the second question which i think is more meaningful this morning. to the extent they are going to sell the company, what do we think as americans about the idea that the chinese would be willing to sell it to elon musk? what do we think as americans that then elon musk is as close as he is to president trump. think about all this for a second. meaning, they are not prepared to sell this business to just about anybody else in the world. why would they be prepared to sell to elon musk? because he has an enormous business in china that they have influence over and they feel

they have leverage over. think about that in the context of somebody who has been described and i'm not saying this is a bad thing or a good thing. i'm saying this is what it is. people describe him as copresident of the united states. when people think about national security issues and think about leverage and influence. there's a lot of pieces -- >> you haven't really believed in any of the conspiracy theories of tiktok? kevin o'leary. is he going to get it? we need to hear back from the other sharks. barbara corcoran? who is the other guy? i can't say his name. >> none of those people on the list. >> he's schilling for private jets. >> robert herjovich. >> is cuban? >> he's not a shark anymore. there have been other serious

offers from the former treasury secretary of the united states. >> if you go back even farther, the idea of walmart wanting this business. >> amazon. >> those, to me, would be more realistic and make more sense. however, they make no sense if you are the chinese government. >> yeah. i don't know what kind of leverage the chinese government would have. by the way, it doesn't matter who the president of the united states. this was a law passed by congress. the supreme court can overturn congress. a new administration cannot. i don't know what kind of negotiating power there will be. this is a deal that was laid by congress and we had bradley tusk on this week who made interesting points about the supreme court upheld congress' decision and a lot of cases. he said to the chinese government, you might see them more willing to cut a deal because the chinese government doesn't want to lose out on billions in a sale that comes with this. >> i don't immediately see all

of the tin hat aspects of musk owning it. i look at the way he operated twitter. i think it's not great for legacy media. >> one issue you might have is concentration of media and new media. you would not see multiple networks. >> concentrated in users hands. >> the algorithm is controlled by whoever's running the company. you can set the algorithms up to be powerful. you would not see two networks owned by the same entity. it won't be allowed. >> it's all user generated content. >> would facebook be allowed to buy tiktok? >> um, facebook is -- >> i thought were you on facebook. >> i've never been on facebook. i've never been on instagram. instagram -- >> right now, you should be loving mark zuckerberg. >> you know i love him. >> that's my point. >> i think it's cool when he's on the surfboard.

i like his new hair style which matches his pollpolitics. his new one. andrew, you are worried about everything. the chinese -- i don't think trump's colluding with the russians. when we come back, let's take another look at the futures. dow futures indicated up by 160 points now. nasdaq up by 145. s&p futures up 30. we're looking at the higher open. we're also awaiting our first look at the first inflation data point of the week, the producer price index. we'll get those numbers at 8:30 east he were ern time. we will get strategy next. and don't miss our exit interview with s.e.c. chair gary gensler. "squawk box" will be right back.

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free for a year, plus a free 5g phone. come back, everybody. futures pointing to a higher open after yesterday's mixed session. joining us now about what to expect today is lauren goodwin at new york life investments.

thanks for coming in. >> thanks for having me. >> this is a big deal. ppi in less than two and a half hours. we get inflation data and the strong jobs number on friday, that has everybody thinking if this is a hot number, what does it mean for the fed? >> both ppi today and cpi tomorrow, the survey forecast is expecting .3% increase headline. lower for core. that is because energy prices are moving higher. i think that's about right from the expectation perspective. there are a couple of things i'm watching closely. the first is in the cpi prices tomorrow. one of the major contributors to the market narrative that underlining inflation might be okay. sticky to a little bit lower was the fact that ter prices have been moving lower. the second thing on both of these inflation prints has to do with policy uncertainty.

we see in business sentiment as well as consumer sentiment more and more folks becoming concerned that tariffs and other policy changes may increase inflation moving forward. that can't be known. it is in the market atmosphere meaning an upside to either of these prints is a down side to the market. >> if there is a hotter than expected number today, will people brush that off? if you say this is energy prices picking up or a nervous market already looking for reasons to be uh-oh, inflation is back? that is the reason over the past couple weeks. >> it is very much so. yields have been moving higher since december 6th and looking at that was the november jobs report showed that after some deceleration in payrolls over the few months prior, actually the economy was holding up pretty well. the labor market was holding up pretty well. that means the market and the

fed are much more focused on these inflation prints. for the market, what that means is good economic news that activity is pretty good and maybe inflation firming is bad news for the market. if we see an upside, even accounting for higher energy prices, i expect to prompt market volatility. >> every time we see treasury yields go up, we see tech stocks sell off and other stocks sell off as well. i guess there's a point where this is a concern about inflation and the national debt and deficit. then you get to a point where this looks like a pretty good deal with 5% in a ten-year and money actually chasing that as a safer place to hang out. >> that's right. that's historically the case. i would expect that to be the case this time around. in part, yields are out performing in other parts of the world. you see u.s. treasuries as a relatively safe asset with the higher yield. i expect as we inch closer to

5%, we would start to see institutional buyers come in and take advantage of the opportunity. look, even for retail investors, this provides a second opportunity to get into fixed income and capture the higher yields. the one point of caution on the street and agree with, you could see a brief moment over 5% if you see policy noise at the same time. as you mentioned, one of the reasons why yields have been moving higher is the concern of supply and demand for treasuries. if we get announcements of tax and spend, you could see yields surpass 5% briefly. >> when you are coming from new york life investments, i make an automatic assumption you will be a little more cautious about what you are telling people to do. you might stick more to treasuries or other sorts of places that maybe wouldn't have the same risk impact that the markets would. am i right to assume that or

wrong to assume that? >> yes and no. new york life investments invest on third party, not the principal. third-party money is closely guarded as well. when we think about the balance of treasury investments as opposed to risk yi assets, that's about the market. one conviction we held on the longer end is the duration on average. not our favorite place to take risks. that's because we expect high and more volatile yields to be a feature, not a fluke of the next several months >> a feature? >> absolutely. it is already been the case seeing the economic resilience as well as policy uncertainty we have in the market. so, that's an environment we're quite active in the market. if yields are moving higher, the economic back drop is good and the credit back drop is good.

we are vesting public and private. we are sticking shorter duration. >> what do you think of stocks? >> equity valuations are high, but that doesn't tell us anything about market timing. so, we're really more than anything looking at earnings quality. my expectation for the next six months let's say if the equity market moves higher from here, it has to broaden. we have to see more participation. it is our expectation we will see that broadening if we don't see multiples expand. that is not necessarily for selling off the ure you have, but new money diversifying into dividend paying stocks dominating the market. >> i like your volatility in yields as a feature, not a fluke. the tech bro way of looking at some of the things. a feature, not a bug. lauren, thank you for coming in today. >> thanks for having me. coming up, starbucks is

rolling back its open-door policy. >> i couldn't believe it is still here ither. i remember posting stuff before covid about the bathrooms. i took pictures pre-covid and posted them. i couldn't believe this policy still existed. >> details about this after the break. later, we will talk more of president-elect trump's tariffs plans with greg ip from the wall street journal. "squawk box" is coming back. put more money in your 401(k) this year. make a catch up contribution of $7,500 if you are 50 or older and super size with a catch up contribution up to $11,250. for bci'shonppsocn, m ar eern.

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starbucks is rolling out changes to the caves in north america aiming at change the experience for guests and staff. the company reversing what has been seven-year old policy to allow people to linger or use the bathroom regardless of whether they were purchasing something. you know, you can imagine what was going on. new code of conduct signs say caves and patios and restrooms are for customers, those accompanying them and employees. it almost became a place to clean up and use the facilities. >> that was part of the issue. >> people taking off their clothes and showering in the sink and shooting up. it's just -- nobody --

>> they wanted to be an open and welcoming place. the cafe was a place to get coffee and stay around and works for the day. clearly, when you send out the message it is open to all and use it anytime you want. we have seen the naked guy in the star bucks across the street here >> naked guy this morning outside. at least he was naked long enough to do whatever he had to do. downstairs. yeah. we have a bathroom at the entrance. unfortunately, it's not actually a bathroom. a little alcove. >> thanks on the sharing. update on the story we told you about early this morning. the ft reported hat european regulators were reassessing probes into meta and apple and alphabet. the companies asked the incoming straumz to trump administration to intervene. a spokesperson said no review is taking place, but they are

having meetings to allocate resources on those cases and they said the enforcement work is not impacted by the u.s. administration, but they did say there may be a political reality that's put pressure on the technical work if they take away some of the staffing and issues. take a look at those stocks. they are all up moderately this morning along with the averages. in the meantime, when we come back, earnings season starts tomorrow. earnings from the big banks. leslie picker will join us. at 8:00 a.m., don't miss our exit interview with s.e.c. chair gary gensler. as we head to break, a look at yesterday's s&p 500 winners and losers. >> announcer: executive edge is sponsored by at&t business. next level moments need the next level network. at&t has a new guarantee. because most things in business

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

we're in the green. dow futures up 140. the nasdaq indicated up by 15. this comes as treasury yields pulled back from where we are. meantime, earnings season kicking off with banks leading the way. we hear from jpmorgan and wells fargo and citigroup on tomorrow's tomorrow tomorrow's calendar. leslie picker joins us with more. >> reporter: good morning, andrew. bank stocks from the post election glow with the prospect sent the sector soaring and gravity has taken hold the sector, looser capital requirements and buybacks remain a question. goldman sachs estimates $185 billion in excess capital, some could be returned to shareholders. over the last year plus, banks

have been hoarding capital despite the stronger economy economy. under the new administration and the turnover in the fed role, it is highly likely the new rules will be far less onus. as a result, goldman says the industry could repurchase 4.5% of the market cap in 2025. estimates are banks would have $90 billion in capital if basel had 90%. jpmorgan and pnc have the highest capacity. any buyback relations will be key as banks as jpmorgan and citigroup and wells fargo kickoff the earnings season tomorrow. guys. >> leslie, if you were to look at one of the banks s there anybody you are particularly interested in that is a bellwether for the rest at this

point? >> reporter: well, i think just on the regulatory front there are a couple of banks that have a lot of question marks as it pertains to their relationships with regulators right now. wells fargo remains one of them, of course, 2025 is the year that reportedly had been likely that that asset cap gets lifted. citigroup as well. there were conversations on its analyst call last quarter that led to hiccups in the stock price. more of tonation of executives of asset cap that caused the price to fall last earnings. there was no real data on that or details, but more of an intonation caused that hiccup. i think the relationships with the regulators with those two firms will be particularly important. >> leslie picker, good to see you. you will have a busy day tomorrow.

thank you. coming up, what to expect from day one of the trump administration. evercore's sara bianchi will join us with policy. you can get the best of "squawk pod" with uryo favorite podcast app and listen anytime. we're coming right back.

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big policy changes ahead as president-elect trump well take office. our next guest says to expect over 100 0 00 executive ordersy one. joining us with the policy outlook on washington is sara bianchi. mostly involving deregulation

and what areas do you think, sara? >> well, i think we're going to see a lot of deregulatory actions on energy and the environment. there's a whole slew of items that president biden put through that really have, you know, trump will signal right away he will get rid of. also, financials with deregulation and all agencies to give them a slew of ideas and get doge going and pushback. of course, with trump, nothing is ever simple. we also do expect a number of signals are tariffs that we believe will start conversations with china, eu, mexico, canada and beyond. >> there are reports that it's going to be slow with the tariffs and ramping up as

negotiations continue. i think you acknowledge that, but you don't want people to get too excited about, you know, the tariffs not being a problem. you think it might be slow. for people who don't think there are any tariffs are going to be sorely disappointed? >> i think that's right. we've seen a lot of leaks out of the trump transition. we even seen the president-elect comment on truth social pushing back on one of the stories last week. a lot of trial balloons and discussions. i think what they're trying to do is figure out how to balance a really strong commitment to tariffs with an acknowledgment that they are inflationary and they are something the markets are nervous about. we're seeing higher yields. we're seeing a jittery bond market. how can they get all this done? last week perhaps it was target to a few less sectors.

now the conversation is maybe phase it in. it is all part of the same idea. we do expect this administration to give more tariffs and all the executive actions. they have to calibrate carefully given this is a president, as we know, watches the markets quite closely. >> it is hard to massage the stock market. obviously, no one is really good at it. he doesn't own it yet. so, you can almost in the back of your mind see this is the time, maybe, to not be quite as concerned about inflationary expectations. the minute january 20th comes, that's when the rubber meets the road and he will be judged. he cares about things like that, the president-elect. >> absolutely. last time he started at the thrust of his first term, economic policy was tax cut and including the corporate cut that the markets really liked.

this time, the things that are coming early are tariffs, albeit maybe phased in and immigration. now this time maybe the market is now focused on deficits and extending his tax cuts and adding a few new ones to boot is a tough -- is a tough economic mix for the markets. i think it is a more difficult dance than he has seen before. >> in the s.a.l.t., it's a mess that everybody's talking about now. the people are in their corners even in the republican party. democrats are involved, too. in the blue states. i don't know how that comes out. the whole idea that the reason you had to get -- you can't get rid of the whole cap. you might be able to raise the cap because it would cost so much money. they are used for pay fors. is there any way to get out of it at this point? >> i think that's exactly the

challenge. raising the caps to what some of the members are talking about is several hundred billion dollars. already extending just what was in the tax cuts the first time was $5 trillion and a few other ideas from the campaign. some want to see more on the corporate side. the s.a.l.t. one is one of the trickier ones he has to deal with. last week's conversation they seemed pretty far apart. they have time. remember, these are narrow house majorities. he needs every vote. we will get something done, but boy, it will be a needle threading exercise. >> and reconciliation. if only the dream of $2 trillion could be realized without any pain for doge and use the $2 trillion on the other stuff. get rid of the s.a.l.t. cap and

do it all and break even and sail in the futures with higher stock prices and 4% gdp. that might not happen, sarah. >> it sounds good. the problem with getting $2 trillion out of doge out of a $7 trillion -- >> impossible. >> hard to do that without social security, interest payments or medicare. look, the doge is an important exercise. it's long due. i don't think they will get the numbers they are talking about or anywhere close fortunately. >> right. it would free up a lot. what do you think? they go up a little on s.a.l.t.? how much could they do? >> i guess right now some of the members want $100,000 and we're at 10. they have to split in the middle. it's expensive. maybe a bit closer to where trump is and than the members are. they will need -- this is why

they had a fight over should we do one bill or two bill? we might everyone to get this across the finish line. >> we're talking about s.a.l.t. like it's done. it was something that was put in place by the republicans when they passed the taxes back in 2017. >> it was a pay for. deduction we had. goes all the way back. >> you talk about a done deal, sarah, that there will be something done on salt? it's expensive if you do ten grand. >> we can't congestion pricing because we already spent the money. it's frustrating. the deficit blows out. i don't know. frustrating. >> they have to do something. there's a lot of members who care.them. without giving a little bit here. you guys are pointing out the

math is challenging. the numbers don't work yet. >> right. >> i don't see any magic yet. i'll keep looking. >> the wealthy where everybody in new york and new jersey had their taxes go up 30%. >> california. >> yeah. 30% increase in taxes for the fat cats. all right, sarah, thank you. see you later. >> city released numbers from the first week. traffic is down 8%. i think they said it was 44,000 fewer cars came into midtown. down to 539,000. it is working on the congestion part. the question ing congestion pricing. it will not impact revenue or economy because people are still coming in on mass transit. i don't know when we get the revenue numbers from the city t

anecdotally, but also based on the numbers in the first week. when we come back, we get you ready for the inflation data. the producer price index for december is due at 8:30 a.m. eastern time.quick check on bit. it's up 4% this morning. yesterday, we were looking at the 91,000 andhae. cng "squawk box" will be right back.

honeywell international is poised to proceed with a breakup by the elliott investment. the company is planning to split

into two publicly traded companies. one focused on automation and the other focused on aerospace and defense. the company could announce the plans in the next earnings release which is due in early february. that report says plans could change and the final details would need to be approved by the board. that stock is up 9.1% over the last year, but it's hard to not think back to the days of the potential ge merger of the companies. big getting bigger and bigger. at this point, whittling things down. when we come back, survey data from the anti-defamation league on the anti-semitic views. "squawk box" will be back after this.

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welcome back to "squawk box." our next guest has data out and that says anti-jewish sentiment is higher than the last decade. joining us is national director jonathan greenblatt. let's talk about the results. they show half of all adults, let's put the math on the screen, two-thirds hold anti-semitic believe s. >> the number was 1.1 billion. the idea the number has doubled in the last decade is dramatic and quite alarming. if you dig down a little bit, andrew, there's more worrying stuff in there. for example, adults under the age of 35 have a higher prevalence of anti-semitic attitudes than the older

generation. >> say that again? >> younger people have more anti-semitic attitudes. we are seeing this hardened in millennials and gen z. >> i don't want to lead the witness. what do you ascrib e that to? >> social media has scrambled people's brains. we surveyed over 103 countries and nearly 60,000 interviews. what we find is the al jazerra effect. across cell phones and tv screens. united states came out at 9%. >> that is misleading. >> west bank, gaza, 94%.

>> it's a surprising number, but then when you look at the reaction around the world to all these things. >> let me give you something. in western europe, with a number of violent anti-semitic acts, that is a region with only 17% on average. >> up from 9%. >> sure. look at places like sweden, canada, norway. they have 9%, 8%. >> where is the 50? where does it get skewed? >> it gets skewed in the middle east which is 76%. it gets skewed in sub sahara africa. >> if we are talking about the west. what would that number look like? >> what we concluded at adl, this will not surprise where joe was going a minute ago. you have a handful of vocal, violent minority who is terrorizing, if you will, not the silent majority, but

silenced majority. on college campuses screaming at students or in amsterdam, it's a small group of emboldened. >> not there should be a competition for what religion or race is more -- >> i don't want to win that competition. >> no. my question to you is if you were to look at racism, if you will, against races or other religions, how does this compare? >> well, this is the most extensive poll of anti-semitic views in the world. we didn't look at anti-asian sentiment. it may be of interest to do that. we know in the united states, jews are the most targeted minority based on the small numbers. we think all prejudice is bad, but the upsurge of anti-semitic

sentiment and con con flation. thinking you can beat up jews in public life is problematic. >> you laid out the numbers. the question is what's the solution? >> here's got news. 57%, again, in aggregate, a pro and governments should do something about it. look, i'm optimistic about the trump administration, they're going to take some strong action. we're getting signals from mar-a-lago that's going to happen. that's a good thing no matter how you vote. >> when you say strong action. >> yeah what is? >> it looks like we may be getting closer to some kind of -- i don't know, resolution a settlement, cease-fire, something, you know n israel and palestine. maybe. i don't know. i don't know if you think -- >> god willing the hostages will come home. god willing they'll be back. we want that, absolutely. >> so how much does that change this dynamic or does it at all? >> well, look, i just got back from spending a week in israel. i can tell you that deteshs --

the israeli government feels like deterrence has been reestablished. what happened in gaza with sinwar and daf, what happened with hezbollah, in lebanon to hezbollah, the pagers, the walkie talkies feel like deterrence has been reestablished. that's a good thing. that doesn't change the fact that here at home governments need to act and i'm optimistic. maybe it will be the department of justice, department of education, trump administration will stand strong. >> to cut federal dollars to universities that allow these things to happen? >> i think we need stronger action against universities which don't seem to enforce consequences. i think we need to see stronger cases against people like if you're not a u.s. citizen and you violate the law, there needs to be action. >> you saw the article that anything on the nuclear facilities has been pushed back, but there was rare collaboration between the outgoing administration and incoming administration sharing everything that all the nascent

plans. that's a huge wild card for what might have if -- if the trump administration gives the go ahead to israel -- >> islamic republic is the single largest exporter of anti-semitism in the world. you want to know the interesting things. look at the iranian people, iran was the country the middle east with the lowest index of anti-semitism. by far. iranian people are amazing. it's the islamic government which is totalitarian vil force. >> game changer? >> so they say. >> like a western -- so they say. that's right. >> jonathan, thank you. >> thank you, guys. it is now just a little after 7:00 a.m. 7:02 to be exact right here on the east coast. you're watching "squawk box" right here on cnbc. i'm andrew ross sorkin along with joe kernen and becky quick. the chinese government reported will considering a plan for elon musk to acquire tiktok's u.s. business. that's going to multiple reports. contingency plan, one of -- we

should really caution here, folks. it's one of several options being floated inside of china that's possibly being explored as the u.s. supreme court decides whether to uphold the january 19th ban. tiktok spokesperson calling the reports pure fiction and it does not appear there have been meaningful conversations between chinese officials and bytedance about this. s.e.c. charging two robinhood broker deals with security violations. two related dealers violated more than 10 separate security law provisions related to their brokerage operation, including failing to report suspicious trading in a timely manner. we'll get to talk about all this and so much more. we got a big exit interview with s.e.c. chair gary gensler will happen at 8:00 a.m. eastern time this morning. turning to california, fire crews this morning, they are bracing for more hurricane-force winds. that could set back some of the

recent progress made in containing the on going fires. the palisades fire, the largest blaze, 14% contained. eaton fire is 33% contained. today some 13 million people remain under red flag warnings as the human and economic tolls continue to climb. we'll have a live update from the area in just a few minutes. and the tragedy unfortunately continuing. in the meantime, take a look at the futures. right now dow futures indicated up by 125 points. s&p futures up by 23. the nasdaq indicated by just over 110. dom chew has a look at what's moving in the premarket this morning. hey, dom. >> good morning, becky, joe, andrew. let's kick things off with something else on the rise, crypto prices broadly. bitcoin is rebounding back above the 96,000 mark after dipping below the 90,000 mark in yesterday's session, by the way, the lowest price since november. crypto currencies declined last week after stronger than expected jobs numbers and spiked

bond yields, put pressure on risk assets overall. bitcoin still well off $108,000 all time high. also by the way, it's boosting some other crypto-related stocks. check on micro strategy, ethereum more broadly you can see stronger gains. the entire crypto sphere is moving higher. moving over to a couple of analyst notes -- kind of note, salesforce is up about maybe a percent or so after bank of america named the stock a top pick for this year. the firm said that 2025 software's time to shine, noting there are selective on small cap stocks but bullish on the software sector particularly on the second half of the year. b of a says they are leading the front office ai play. salesforce shares up 1%. amazon is up .5%. after wells fargo raised the stock price 212 bucks. the firm is expecting solid

fourth quarter results and improved first quarter. analysts note thag think the company is well positioned to benefit from a healthy e-commerce backdrop and capitalize on e-commerce business. subscribers get full access to all the detail and analysis behind those calls. i'll send things back over to you guys. >> dom, thank you. we will see you in just a little later this morning. coming up, investors bracing for two key inflation reports this week. we've got today's producer price index. tomorrow's consumer price index. take a look at the expectations straight ahead. plus, firefighters in california making progress amid the calmer winds. but the winds are expected to pick up again this morning. creating a critical situation again in los angeles. the latest from the area straight ahead. "squawk box" coming right back. ♪

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welcome back to "squawk box." take a look at futures right now. i want to show you what's on the screen. we have some green finally for a morning that often recently at least has been a little bit red i hate to say. dow up 100 points. nasdaq looking to open 77 points higher. s&p 17 points higher. bitcoin has been up, what did we say, 3, 4% this morning. >> 4%. >> which is meaningful in terms of risk on/risk off kind of situation in this environment. want to talk a lot more about the markets right now. we are joined by -- i apologize. i always butcher -- chief investment officer at goldman sachs. her outlook for 2025 is titled

"keep on trucking." so the risk-on situation is on. the question is will we really keep on trucking? >> so there are two messages from keep on trucking, one is the u.s. truck ahead. so we've had this u.s. preeminence view now since the global financial crisis when everybody was saying decline of the u.s., rise of china. we've took a very strong stand against that. and so the keep on trucking image with the u.s. ahead of everybody else by far. >> by far. >> and the gap is actually widening. it's really incredible. nobody is going to catch up. the idea that these other countries are going to catch up to the u.s. is just not going to happen. the math just doesn't work because the u.s. is starting from such a high base every year. whether it's gdp, whether it's gdp per capita, whether it's labor productivity. so that's one message from keep on trucking. >> what's the other? >> stay invested fully. >> fully. >> we have recommendation also since the global financial crisis. here is an amazing statistic.

if you had $100 million invested in the s&p 500 -- >> if you just happen to have 100 million invested. why don't you do it with $100,000 or $10,000. >> it could be -- the reason we like 100 is because everything is 100%. divide it by 10, multiply it by 10, any number. you would have $1.2 billion. if you invested in non-u.s. developed markets you would have less than half. emerging markets, a third. china, not even a quarter. so, stay invested, stay with the u.s. i know it's exciting to try to chase the hot dog and move money around. specially for u.s. investors. stay invested. don't try to trade it. don't have to pay taxes. >> are you of the view by the way over the next two decades that we'll see the same -- this is a long-term production, that the same kind of growth we had post 2008? >> in terms of --

>> meaning, if you look at -- you were just giving performance since 2008, i assume. >> trough 2009, yes. >> so let's say the last 15 years call it. >> yes. >> just to make it even numbers. >> yes. >> do you think over the next 15 years that somebody invested in the market will have the same kind of performance they did in the last 15 years? >> excellent question and definitely not. so, annualized since that time the returns are 17% a year. >> wow. >> we're definitely not going to replicate those kind of numbers. now this is from the trough of march of '09. still, when you look at the annualized numbers -- >> what do you think the numbers are going to look like? what will it look like over the next year? >> that's very interesting. >> may not be easier to figure out. may be easier to say what it will be in five years. >> so we have a base case of 8%. and when i was here last time i think joe gave me a hard time about why do you have different

probabilities, but we think investing -- >> depends on which client you're talking to. good information to the really wealthy clients. 7 to 8% is just the long-term average. that's not tough to come up with, right? >> you actually said the same thing last year, too and gave me a hard time. but actually in an environment where the market is up 17% since the trough in 2022, people can say, how can you have another incremental return, and that is driven by strong view on earnings. so, last year q4, q4 if we got around 11%, our base cases were going to have earnings growth around 10. you have your dividends, bit of multiple contraction and base case of 18 but good case of mid teens. >> another example, a way we might have growth like that if is you have another drop off like that. say prices come down significantly. something that none of us are anticipating that really crashes the market in some way, shape or form. that's how you get to be outsized growth if you start at the trough again, right? >> yes, yes. but the question is what is the

likelihood? what's the probability of a bad case? so there so many geopolitical risks that some could easily create a downdraft. it's very important that clients expect a bit of a drown draft. the probability of a 5% downdraft, we recently had is 10% pretty much. probability of a 10% downdraft is 80%. we always encourage clients to have a well-structured portfolio so they can with stand the downside. >> what is the visibility for what earnings would be five years from now, ten years from now? take into account geopolitical events and turmoil and trade changes and ai. can we make an assumption about what the compound growth rate for earnings would be for the next ten years? i don't think you can come close, can you? >> we have an incredible graph in the report that shows the trend of earnings since world war ii. so clearly there are events that happen like the pandemic, like the global financial crisis,

european sovereign debt crisis and you're going to get dips, but the growth in earnings in u.s. companies has been unbelievably steady in the long run. so around 6.5%. >> 6.5. could ai put it at 8%? >> definitely not. >> long-term like 6 or 7%, like the stock market. >> at best we think that ai could increase gdp by .3, .4%. our colleagues in global investment research expect that. and the expectation is u.s. will benefit the most from ai relative to all other countries and sooner. but the idea that it's going to totally change u.s. labor productivity by that much to change earnings is not possible. >> how much did the internet add? more or less than ai? >> i would think when people talk about a-i versus the internet, you can't have ai without the internet. the idea that ai is as strong as -- >> it's informative. >> 20 years.

took a very long time. >> it was a quantum leap. >> yes. in everything. and nobody could imagine tall things that -- >> i can't believe that a-i could be more powerful, is that possible? >> no, not at all in our view. >> okay. >> thank you so much for coming in this morning. >> only thing more powerful will be bitcoin. i know you think it's gambling. that's why said that to you. >> i know how you feel about it. wasn't going to go there. not giving you a hard time. >> it's entertainment. >> it's not a hard time. >> no, no. you can do that. i was expecting that. i come in expecting that. >> you have to be able to field any questions. >> we're still on. >> stay with us. don't go anywhere. >> we're still on. >> now it's fine. >> you can respond any way you want. we're still live. >> that was great. >> i did say it's entertainment. >> right, exactly. up next -- yeah, we don't try to prevent that. it would actually help with businesses. any way. coming up next the latest from the front lines of the los

angeles wild fire. winds are expected to be in the 50 to 70 miles per hour gust range today. a live report is next. making the case for 20% tariffs. greg's latest piece focussed on president-elect tick's for the counsel of economic chair. steve muran says the u.s. could be better off with the higher tariff rates. greg will join us to discuss. time now for today's aflac trivia question. who is the first president to travel on official business by airplane? the answer when "squawk box" returns. woah! i can't do it! agh! cut! this gap! it's just too big. bring on the double! aflac! after my hospital stay, aflac helped close the gap by paying me cash for expenses health insurance didn't cover. nothing covers gaps better than the aflac duck. aflaaaaac! aflac. get help with expenses health insurance doesn't cover. find an agent, get a quote at aflac.com.

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>> announcer: and now the answer to today's aflac trivia question. who was the first president to travel on official business by airplane? the answer, franklin d. roosevelt. he flew in a boeing 314 flying boat dubbed the dixie clipper to a world war ii strategy meeting with winston churchill. ♪ fire crews in the los angeles area are bracing for what are expected to be more very strong winds, gusts that could get up to 50, 70 miles an hour that could set back any recent progress made in

containing the on going wild fire there -- wild fire. contessa brewer joins us with more. >> hey, joe. yeah, in fact, a new fire sparked overnight in ventura county. and it looks like firefighters got a handle on that. it was fairly small, maybe 50 acres or so. but, yeah, the red flag warnings for wind remain. four lawsuits have been filed against southern california and edson over the eaton fire, though no cause has been established. and then at thousands of addresses, like this one, this is what is going to greet those residents when they're allowed to return. l.a.'s mayor issued orders to expedite the permitting process in rebuilding, removing all the debris from each and every burned out homesite, of course, will be a gargantuan task, especially considering it's hazardous materials. so governor gavin newsom issued an executive order to expedite the state requirements for

debris removal. that's one challenge. another this is supposed to be the rainy season. the area had a tiny fraction of the rain that is normal. any serious water could create a real potential for mud slides along the burned out area. governor also ordered state agencies to craft a plan to address that threat. meanwhile, damage estimates are soaring. wells fargo predicts ensured losses could reach $30 billion. accuweather raised its prediction of economic losses to a high end range of 275 billion. such a big gap in part attributable to the widespread problem of property owners being underinsured or not insured at all. if they bought coverage through the fair plan, also an update there, that's the last resort insurer for the state. they said yesterday, we don't know how much we're facing in claims. we don't know if we'll have to go to assess other insurers to cover the backstop and only pay

out on claims when we have cash in hand. it does not have a lot of cash in hand. today's most acute threat, though, of course, as you mentioned at the top, that very fierce santa ana wind. we'll keep our eye on that. for right now in this part of the pacific palisades, it's pretty calm. >> contessa, the winds are unbelievable. and they're shocking. 50 to 70 is shocking, as far as gusts. but i think last week there were gusts up to 100. i think it was 2011 or '12 gusts recorded up to 165 miles an ur. believe it or not back 14, 15 years ago. is 50 to 70 bad enough to rekindle this whole situation? and is it possible that the fire department or whomever is ready

this time around? didn't appear that, you know, that there was enough water last week. >> i mean, there are questions about the hydrants and the water pressure. i talked to some container crews the guys who drive those big water trucks yesterday. and they were up at a place where they could refill the water trucks. and then the water trucks go and reposition in the hillsides around the palisades fire. so that they're there in case hot spots reignite. i got to tell you, you know, there is still some fuel left to burn. when we were driving left up through there, you could see charred places and places that were untouched. so the threat is not gone entirely. part of the problem with the wind, too, is that there were these cross currents that were driving the winds downhill. normally you might imagine that flames are moving up the mountain and they move -- it moves more slowly downhill and the cross currents were driving those flames downhill, which

created, you know, some of the really quick-e ing fire situation that we saw last week. but the warnings are going out now. it may be different parts of the los angeles metro area now under the most threat from these santa ana winds. but, now there are lots more resources prepositioned throughout the area. >> okay. hope for the best, contessa, but thank you. definitely early. we appreciate you -- appreciate your work there. we'll see you soon. when we come back, a big week for financial stocks. wells fargo, goldman sachs, blackrock, jp morgan and citi group all reporting groups tomorrow. we'll see you a preview from the sector and talk expectations in just a bit. to reflect on what's been ay busy three years in that position. what's next to come in the next

administration? "squawk box" will be rightac bk.

♪ all right. now an update on a story that we told you about earlier this

morning. the ft reported that european regulators were reassessing probes into apple, meta and alphabet and could reduce the range of investigations. those companies have asked the incoming trump administration to intervene. in the last hour, the eu responded to that report. a spokesperson says that no review is taking place, but they are having meetings to allocate resources on those cases. they said enforcement work is not impacted by the u.s. administration, but they said there may be a political reality that puts pressure on the technical work. meantime, barry diller's iac says its board approved the spinoff of home improvement marketplace of angi's list. expect it to close in the second quarter this year. angi was founded in 1995 as angi's list went public back in 2011. merged with home adviser creating a new public company that market cap currently about $850 million. now part of that spinoff, iac

ceo joey levin will leave that role and become executive chairman of angi. this is interesting, after his departure, iac will operate without a ceo. it's very rare where you read a prez release and will not have a ceo. they will report to barely diller. this is not a new phenomenon for ia-c. they have done this before. the former ceo who was running the company before joey did it ended up going with match.com. and for a couple years there was no ceo. it's a very interesting model because what they've effectively done is created a holding company, somewhat akin to what berkshire has done in some ways where they have lots of multiple ceos who are actually running the operating businesses. >> right. >> but then they actually -- unlike berkshire, their whole mantra is buy a business, fix it, buy other things to add it

to and the best ones spin out. so it's almost a private equity. >> right. >> sort of vehicle. and in this moment, at least for some transition period until probably they buy the next big business, they will be ceo-less. of course barry is at the top. >> that works when you have barry diller at the top. and all of those ceos of the other businesses, those people running the businesses, i'm sure have a direct line to barry most of the time any way. and want his -- it's got to take somebody who's completely energized and organized and wants to be hands on in involvement in all of that stuff. coming up next, president-elect trump's pick for counsel of economic adviser's chair -- shouldn't say going to, he's thinking higher tariffs and weakened dollar could help the global economic imbalance. we'll speak to "wall street journal's" greg ip about it and what it means after the break.

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stephen miran who suggests the u.s. economy would be better off with higher tariffs in some cases as high as 50%. greg joins us right now to talk about this. greg, this is a paper that stephen wrote that really kicked off a lot of talk not just in washington but in business circles, too, this idea that higher tariffs could be good for the economy. that's counter to what most economists would tell you when you sit down. this is a paper he wrote before he was tapped in december to come into this trump administration on this. walk through a little bit about the optimized tariff policy, what that is, and how he came to some of these thoughts. >> sure. well, as you know, most economists support free trade and think tariffs are bad. they support them in narrow circumstances for like national security, but what steve is saying is a little unusual. in and of themselves tariffs in some circumstances could be a good thing. it's actually not crazy. this is grounded in orthodox

theory that goes back well over 100 years but requires certain conditions to be true. you have to be a big enough buyer of a product that you can more or less impose the price on your trading partner. let's say you're importing a product and put on a tariff of $10. your partner lowers their price by $10 so your consumers don't pay anymore and you get this tariff wind fall to give rise to the notion of the optimal tariff. now obviously this is music to trump's ears because trump has been hearing from economists all the time americans will pay the tariffs, not the foreigner. here is a guy who comes along and says actually maybe the foreigners will pay the tariffs. you can understand why the message steve is circulating resonated with the trump administration and why it positioned him well to be an interesting voice on decision making on things like tariffs. >> i want to point out something that you put into your argument. miran's ph.d. advisers one is david cutler, a harvard economist who also served in the clinton administration.

these aren't crack pot theories that steve miran is doing this in well-based fact-determined and esearch that really goes through all of these thing. this is not just saying what the incoming president wants to hear. these are things that he has thoroughly researched. however, he also points out in his own paper that there's a high risk that these tariffs won't work the way he thinks too. this is theory at this point. and we're waiting to see how it gets put into action. how diz it work last time, eight years ago, during the trump administration? >> well, sure. let's touch on a few of the ways this could go wrong. first of all, it only works if your -- if the prices from tariffs are not passed through to your consumers. but there was a lot of research done in 2018 to suggest, yes, in fact, tariffs were passed through to your consumers. the other thing, is if your partners -- trading partners retaliate against you, your exporters suffer and then you do not end up better off. finally, if you don't actually see your import prices rise,

which is what this theory requires, then there's no protection because your consumers have no incentive to switch o domestically made products. the whole idea protecting manufacturers with tear rifs sort of falls apart. and i think what's important here, becky, is that miran understands all these drawbacks. and he sort of like draws more complex picture about how tariffs or the threat or perhaps a negotiation to lower the dollar would be part of a much bigger almost geopolitical grand bargain where the u.s. says to the world, hey, we have been carrying the load economically and militarily for decades here. we're paying for it with a trade deficit and loss manufacturing. it's time for you to carry your share of the weight. if you don't, we'll hit you with tariffs. we want you to do something about this. this is what makes this argument about steve so interesting, way to take trump's predisposition

to do tariffs fitting into the way to do burden sharing with our allies. >> and i think the unspoken part of that is also the threat that if you try and retaliate against us, we are no longer going to defend you the way we have in the past whether that's nato or any other sort of defense that's built up. so it takes economic warfare and raises it to this level of what happens on the defense side of things, too. so it's pretty complex. a huge chess board. might work. >> it might work. i'm ng to touch on this for a second. there's a lot of reasons why this might not work. china, china will not say you are not going to defend us any way. why would we see that as a threat. more over, if trump repeated will threatened partners and allies, they're probably thinking the defense guarantee doesn't matter any way. we heard him in the campaign say that putin could have his way with countries that don't spend

enough money. he signed this u.s./mexico/canada trade agreement in 2018 and already talking about violating it by raising tariffs. i think there's legitimate question on the part of our trading partners, would an agreement with trump actually stand for anything? if it doesn't give him what he wants, will he just go back to threatening us with tariffs and with drawing a defense guarantee. and then you're in a world really, becky, the whole idea of western solidarity starts to come into fundamental doubt. >> just going back to how this worked eight years ago. jen niffen, someone we talk to a lot, a pretty experienced retail hand who has been doing this a long time and had high-level positions in lots of companies. he pointed out that the tariffs, at least in some instances did not get put on to consumers in america because you had factories in places like china that were very worried about losing the u.s. consumer. there was nowhere they could go

so they agreed to eat some of those higher tariffs just to keep the business and keep the factories running. maybe it's effective to a certain level. maybe you don't take it if you're actually losing e ing mo. if you can continue your business, i think of it almost like a company like walmart can squeeze its suppliers to a certain extent, where are you going to go if you're not selling to walmart. the u.s. does have some leverage from that perspective? >> yes, it does. there's a lot of debate about how much of that actually happened in 2018. there is some evidence that importers ate the tariffs in their margin. some evidence that china lowered its currency allowed him to maintain some pressing power and not have to raise the dollar prices the exports on the u.s. as much. i think that will be a lot harder to do if it's a 20 or 60% tariff as trump talked about. harder for other countries -- for companies like walmart to move to a different supplier if every country including mexico is being hit with tariffs. and finally there's a point i

was making earlier, if you don't actually see prices in the u.s. rise, there's no protection. the trade deficit will stay as large as it was before and isn't that what trump is trying to get rid of? >> good questions. let me add one more report, bloomberg this morning reporting that members of the incoming trump economic team have been discussing a slow ramp-up of these tariffs, maybe going month by month, maybe not dropping 20% or higher on 50% on but slowly ramping things up in part because of concerns about the inflationary impact. >> there's a lot of stuff being talked about. it's a big -- it's a big tent around trump. scott besent having his confirmation hearing to be secretary treasury has talked about forward guidance which exactly that, the united states would raise tear ariffs every m in an attempt to pressure china or others to come to the table.

howard lutnick said he would not raise tariffs on things we don't actually make in the united states. so, avocados from mexico, we don't make that many avocados here. there's quite a few different ways those tariffs could be implemented. becky, every one has a downside. trump wants to pay for tariffs to pay for tax cuts. the more exceptions, the less money to pay for tax cuts. >> a lot of moving pieces. we're going to hear more about it in the days and weeks to come. but greg, thank you for this conversation. we appreciate it. >> thank you for having me. southwest airlines is pausing corporate hiring and promotions, suspending most of its summer internships and calling off some employee team building events that date all the way back to the 1980s part of an effort to cut costs and improve margins. ceo bob jordan informing staff of the decisions yesterday in a note that was seen by cnbc.

spokesman -- spokeswoman, in fact, for the airline confirmed those changes. coming up, we're going to talk bank earnings and then outgoing chair -- s.e.c. chair garyener wl gsliljoin us. "squawk box" will be right back. car, this isn't the way home. that's right james, it isn't. car, where are we going? we're here. (♪♪) surprise!!! the future isn't scary. not investing in it is. car, were you in on this? nothing gets by you james. 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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welcome back to "squawk box." the futures this morning have been in the reen all morning long. you got the dow futures up by over 120 points. s&p futures now up by close to 20. and the nasdaq indicated up by just over 75. we have paired some of the gains we saw a little earlier this morning. and we do have some big data coming up. you'll be looking for the ppi numbers, our first look at inflation numbers this week. and that's going to be coming in about 45 minutes time. >> okay. coming up, earnings season kicking into high gear tomorrow with a number of banks reporting. we get a whole bunch of them actually. preview straight ahead. s.e.c. chair gary gensler will join us to reflect back on his job as wall street's top enforcement officer and what wall street can expect from the next administration.

we've got the big exit interview this morning. you don't want to miss it. "squawk box" coming right back.

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tomorrow jp morgan, wells fargo, goldman sachs and citi report. joining us with a preview is jason goldberg. barclays, which is a bank, senior equity analyst, is it possible for you to study yourself? you know, there are philosophical questions, can't, and go doubt it, that it's not possible really. philosophically to do this. should we trust you n this, jason? >> you can trust me. >> we can trust you. you have a top ten list. something is going to be seen in all these banks. there are some macro influences. are there not? such as -- >> absolutely. certainly in the fourth quarter you did see a pickup -- further pickup in investment banking activity. could actually be a positive. loan growth still subdued. maybe somewhat of a negative. you are starting to benefit from lowing funding cuts as the fed reduces costs. that's a potential benefit.

expenses seasonally higher that's a head wind and credit quality remains to be pretty stable. >> so with the banks that we just talked about and over the next week we'll get a lot of them. how do they differentiate with those things that you were just talking about? who benefits? who is not ready? who is set up properly? >> yeah, the largest banks certainly benefit from the pickup in capital markets activity. strong trading quarter relative to a year ago. >> favorites there? >> buys for the bigger banks, jp morgan, bank of america, citi group, morgan stanley should all, we think, stand out. one of the big take aways from the fourth quarter the outlook for 2025. and there, you know, new administration coming in, a lot of hope that their pro growth agenda leads to a pickup in loan activity as well as a continued increase in ipo and m & a

activity. >> do you go into the regionals or smaller banks? there is a lot of positive sentiment regarding the new administration. >> yeah. certainly with the regionals a little more exposed to loan growth. maybe that's more on the calm. i think you have seen corporates are reluctant to borrow giving costs are elevated and waiting to see what these economic policies look like. one of the themes you expect a pickup in regional m & a. looking out we would expect it to halve again. we'll see what form that takes. but i think once bank regulation policy becomes more clearer, you could certainly see a pick-up in activity which should benefit some of the regionals. >> since the fed cut mortgage rates, they've gone up. there's an article here, global bond yields are surging all around the world, including here. how does that factor into 2025? >> yeah. so, you know, kind of puts and

takes. banks do have kind of a lot of low-yielding securities rolling off the balance sheets they put on three, four years ago now they can replace at higher yields. the fed cutting rates you have seen deposit costs come down a little bit. on the flip side, you should see kind of -- you won't see a pick-up on mortgage rate finance activity. unrealized losses which plagued the banks in 2023 have increased during the fourth quarter and should weigh on book value. >> in charge-offs or credit quality or consumer, what -- how about that? this is not great for consumers. >> credit metrics over the last several years have been relatively stable. you saw long losses rise after the period of low normal losses. last three quarters seen a fair amount of stability. still historically low. so the consumer some stress on the lower end but the consumer they have a job they tend to pay back their bills. >> so will goldman -- is that the best in terms of, i don't

know, loop ship investment banks? is citi having any progress in what is a multi-year turn around? just go into individual, wells fargo -- >> yeah. with respect to citi group, clearly a multi-year turn around effort. although in the third quarter they made significant progress. all five of their business lines had year to year revenue growth. all saw expense growth. we feel like a lot of initiatives they undertake selling off, underperforming regions and restructuring the entire organization are finally starting to take hold. and at the same time, they do have some of these tail winds of improved capital markets activity, potential for lighter regulatory touch. so we do think they can be a beneficiary as you think about 2025. >> morgan stanley i don't think we mentioned. still, quite a job -- gorman is gone, obviously. or at least chairman moving over.

that's going to continue? wells fargo making progress? >> the big banks as a whole i think have made a lot progress over the years. tech pick took over the start of last year and kind of continued where james gorman left off continuing to grow the capital markets businesses as well as the math management and investment management units. and wells has done we think a good job. still have that asset cap from the fed that every year you say this is the year it's going to come off. we think it will be 2025. they made a lot of progress there, but we'll see. >> happy days are here again for -- regulation? >> certainly from a regulatory standpoint after i think we have gotten worse and worse and worse every year since the financial crisis. if you think about a lot of the new regulators potentially coming in, they have all talked about taking a more pragmatic approach, wholistic approach to regulating capital, which i think allows the banks to more effectively, you know, be credit facilitators and just manage their balance sheets. >> okay.

called the incompleteness theory in mathematics shows a system cannot actually prove its own consistency or look at itself. it's hard for individuals to look at themselves. don't you think? introspect. >> i try all the time. >> do you? >> and it hurts, but i do. >> and you write down improvements things like that? >> i look at myself in the mirror. no, i don't. >> yeah. that's going to be -- jason, you weren't expecting to talk about cant. jason, thank you. good to have you on. >> always a pleasure. >> i think it's can't. >> i'm pretty sure it's can't. >> you're not going to get me to say otherwise. it is just before 8:00 a.m. on the east coast. and you are watching "squawk box" right here on cnbc. i'm becky quick. along with joe kernen. >> i'm here. >> and andrew ross sorkin. >> thinking about introspection now. >> thinking about all kinds of

words and how to say them carefully. >> hey now. among today's top stories, dangerous winds are expected to build in southern california. keeping fire risks front and center for los angeles. the national weather service says that things will be particularly dangerous today with wind gusts of up to 65 miles an hour now expected. the pacific palisades fire in los angeles stands at 14% contained while the eaton fire in the northern part of the city is at 33% contained. meantime, there are indications that a fight could be brewing over disaster aid. house speaker mike johnson telling reporters he thinks assistance for california should have some strings attached. but democrats have warned against that idea of conditioning aid. and president biden will sign an executive order today aimed at accelerating america's ai build-out. the plan calls for the department's of defense and energy to lease federal sites where private sector companies

can build an ai infrastructure. this follows a proposal yesterday from the outgoing administration on a framework for exporting ai chips. but that move prompted criticism from the semiconductor industry. ♪ let's talk >> joining us right now is as easy chair, gary gensler, in his exit interview, gary, thank you so much for joining us and thank you for talking with us throughout your time in office. there is about 100 questions that i have on my list but i want to start with one that i

think actually may be in a way the hardest and i think it is a political question but also philosophical question which is, when you look back at the work that you did over the last four years and you also look at this election, specifically this election and you look at the number of folks in the crypto world who ultimately turned out, not just turned out for president-elect trump, but turned out for president-elect trump with money, with dollars, a huge amount of money that went into effectively his campaign as to some degree a rebuke of what was happening with your efforts to block some of the things that they were doing. i'm so curious how you personally think about that today. >> first, andrew, joe, becky, so good to be with you. thank you for inviting me. look, i believe deeply in our

great democracy, i think this election, though as you point out, there was money raised from the crypto field, i don't think that is what this election was about. this field, the crypto field, a highly speculative field has not been compliant with various loss, whether it is any money laundering loss, sanctions loss or in our case, security. bitcoin is not security but is 10 or 15,000 other tokens, the investing public has been hurt over the many years, my predecessor, jay clayton who has served on the trump administration, brought about 80 cases, we are a law enforcement agency, that is what we continue to do to protect the investing public so they get the disclosure,

protect against fraud and manipulation and there has been too much of that in this field and then of course to address complex conflicts when you have these crypto exchanges not only as operating as exchanges but trading against the customers and on and on. >> gary, i think the question is, some critics have said that the s.e.c. has pursued a policy that has been focused more on litigation, if you will, or rules by litigation than actual law that perhaps there should have been a greater effort put on creating real laws, not just guidelines which then created this litigation. i'm looking, by the way, at what took place in the last 48 hours from this court as relates to the coin base case where they are asking the s.e.c., effectively you to explain yourself as it relates to some of the things that are

being done and by the way, the judge in the case said to the s.e.c., it should not give yet another poor explanation in an already long line, i know it is a hard question but i think the public is trying to understand the way you thought about it this far. >> i thought about it, that we have laws, congress has passed those laws, of course they can change that but, a sector of this field, crypto, the investing public is investing based on projects and these things without prejudging any one of them, many of them are under the security laws and in that field is a lot of noncompliance. andrew, in most of what you talk about on any given day, you talk about the fundamentals of the stock or the bonds or the markets, the mixed fundamentals and momentum's are sentiment and this crypto field

seems to trade mostly on sentiment and much less on fundamentals but if the fundamentals are there, then make the proper disclosures under the securities laws, that is the basic bargain. >> glad to have you coming on today, chair gary gensler , just thinking about an overriding question about bitcoin and what we have seen for the past four years under your tenure and i can only come up with two scenarios and neither one of them are great, the first one is that under your leadership, it was really dragged kicking and screaming into where we are today and is a far cry from where we were four years ago, you have to admitted with etf and adoption by so many different firms. it's almost like there were so many obstacles, it may very hard for what could be a transformative, new asset or industry, so that is on the one hand, or on the other hand, it should have been very closely

scrutinized and at $95,000, if this is ephemeral and built on air and a beanie baby, there's going to be an absolute bloodbath. so either you stood in the way of a totally new industry or you were unable to prevent a huge bubble from forming which is going to end very badly. and neither one is going to be much of a legacy to look back on. >> joe, i know from our conversations in the past, you view it going very differently than these. >> it was hard though, under your regime, it was very difficult for anything good to happen for bitcoin . >> joe, for the first few months of the job, we had bitcoin traded, based on funds of futures, but you recall when i was coming into this role, the game stop events, and that

market is so much more critical to you and the american public than crypto, the $60 trillion equity markets and we have put in fundamental reforms, not only shortening the settlement cycle where you get your money in one day rather than two day if you are an everyday investor but actually, the markets will be more efficient. and the second most important market, the u.s. treasury market that had jitters for so long, $28 trillion market and fundamental important reforms, we addressed ourselves to corporate governance that an insider no longer can file a plan on a monday the same time they have insider information and sell their stock on a tuesday, they will have to wait three months. so i'm very proud of the record and this focus that you've had on crypto, i understand, it sells newspapers and so forth, but the capital market at $100

trillion, i'm very proud of that record. >> let me go to a different topic, another topic that has frankly become quite controversial which is both climate rules which are now in litigation, that you put forward, and there were efforts early on, i think effectively you were abandoned, or you tell me, around e sg rules, boosting for diversity for example, there was some workforce management issues and other things, and the whole country or world seems to have shifted in some way, you may not agree with the way it has shifted but again, i wonder how you think about this election, what you think has happened even in this country, almost every single day there is another fortune 500 company coming out with announcements that they are abandoning di programs and esg

programs, they are abandoning a lot of the things that were talked about by this administration and the s.e.c. as far as rules and other things they were trying to put forward. >> andrew, i'm neutral to just about all that you said, we are not a climate regulator and we are not a workforce regulator, we are a security regulator, but when i came into the role, we found that of the top 1000 companies listed on the exchange, a majority were making disclosures about their climate risks and investors were telling us that they found those disclosures inconsistent but material to their investment decisions. so we grounded in materiality, we went out and we heard the public, we got tens of thousands of comments, lots of investors who wanted this information to be more consistent and just based on material information, and i've been consistent since my

inauguration that we would ground in what is just material for investors, as you might recall the back-and-forth. yes, some advocates wanted more but we are just a securities regulator and i believe that we rightly just address private ranking. >> even if we can stipulate that it was for disclosure purposes, i'm curious on a very personal level, now that you are taking off, what you make of this reversal as it relates to esg and di and some of these other things that have become almost a staple of corporate america over the last four, five, six, seven years it was developing. >> well, i know in just managing the s.e.c.'s 5000 people, we benefit from recruiting and giving opportunities to the diverse

population we have in america, 330 million people regardless of gender, race, or background, or orientation. that helps our agency. but in terms of securities regulator, really investors have to decide what is relevant, we do not put forward , under my leadership, we did not put forward any disclosure rules around workforce or diversity. we did come in and do something around climate because that's the markets we are already having those disclosures. what i do think is the markets will figure out, the investors will figure out whether the climate disclosure is relevant and material to their investment decisions. >> but it was material a couple years ago and it is not now? i don't understand the materiality of it, if some investors decide that, it's just very gray.

>> becky, you are right that things can change, 20 or 30 years ago, companies did not make disclosures about cyber risk, they did make disclosures around climate risk, i came into the role and found many, many investors wanted and demanded that type of disclosure. so we took those two projects up. what might be the case, five or 15 years from now could shift as well and i think our great agency is just about bringing some consistency, and truthfulness, that people don't like. think about artificial intelligence right now, many companies are puffing themselves up and promoting that, it is important that they not, call it a.i. wash, that they are truthful and what they say. >> earlier, just so i understand completely, what you think is going to happen, or what you are thinking is

evolving, it almost sounded like he wanted to separate bitcoin from the rest of the industry and i'm wondering if you are warming to the idea of at least bitcoin , and again, that i said you either stood in the way of extraordinary industry or utterly unable to prevent a massive bubble. what do you think the future holds? do you have a feeling on which it is? do you think bitcoin has inherent value , or do you feel that when we look back on it 10 or 15 years from now, it is going to be something from the 18th century with tulips? >> joe, it's hard to predict. like you, because i know you think negatively on many of these odd coins, you joe, but in terms of bitcoin, we at the s.e.c. has never said it is a

security, it is -- >> i think you know, you have to have some kind of feeling. you have read the books. >> yeah, i think bitcoin is a highly speculative , volatile asset, but with 7 billion people around the globe, 7 billion people want to trade it, just like we have gold for 10,000 years, we have bitcoin , it might be something else in the future as well. these other thousands of projects need to show their use case and show that they actually have fundamentals underlying them or they won't persist, joe. and that is where the public,

that is why the public needs disclosure. >> you love it, you don't like those other coins. >> i have never owned any of these and i have been consistent for seven or eight years on this. >> okay, well now you can because you won't be the chairman. okay, one of the other new features of the market, or any market is this idea of prediction markets, yesterday, he has brought onto his business as an adviser, donald trump jr., i'm curious what you think of prediction markets and i'm very curious specifically what you think of his decision to hire the son of the president-elect. >> i have no views on who somebody hires but, capital markets themselves, 100 truly dull and -- $100 trillion markets, they are about predicting future cash flows, predicting future opportunities for businesses that you have on the air, so they are all in a

sense about prediction markets and that's why i'm so proud about what we did, some of the reforms we put in place to have better disclosure, yes, on only that which is material to investors so they can make their own judgments about the future, that is in essence a prediction market. >> treasuries, settlements on treasuries, there has been a little bit of a debate about what has happened obviously this fall about the what the timeline is going to look like in the future after you are out of this office. what is your take? >> well, our u.s. treasury market is the base of our capital market so i'm very proud of what we did, working with janet yellen and jerome powell and the bipartisan reforms we put in place to build greater resiliency, lower the risk of our u.s. treasury market, while also promoting more competition. so there's forward momentum, there's still things to be

implement it over the next 18 months but i know this, our $28 trillion treasure market is congruent in four years, it is going to grow 25%, so we need these reforms to make sure the markets work smoothly and taxpayers can have the confidence their government can borrow in liquid markets that the international community trust. >> gary, what do you think the biggest risk in the market is today? >> look, i think we have a presidential transition and democracy has spoken but there is policy uncertainty, there always are around these transitions, some of those policies will be sorted out over time but, there's policy uncertainties for sure. i have spoken over these last

four years, there's also pockets of capital markets that have a lot of leverage, a lot of borrowing and low margin and that is usually in this sort of space between the commercial tax providing leverage to the macro hedge funds, and lastly, i do think that artificial intelligence is transformative, already effective productivity, in a positive way, but there are still risks on the horizon. >> how much do you thing about shadow banking system in the loan market which in many ways has moved away from the traditional banks. there's a connection to the traditional banks. >> i think capital markets are competitive and they are deep, that is what we have promoted at the s.e.c., so therefore the large, private fund market, whether it is private equity, venture, i think that has been

a feature, not a bug of our capital markets and we benefit as americans to have large, robust, non-bank provisions from capital. >> okay, before we let you go, the final question, and i want you to think about the answer, if you could do it again and you could do anything differently, given all of the things that we just talked about, what would it be? >> so you don't want me to just say come on your show more often, right? >> we can do that, we would love to have you back. now you will be untethered, completely. >> look, i would say this, joe and becky, andrew and listeners, it is a great privilege to serve, i think we put in fundamental important reforms with three quarters of our capital market, the stock market and the treasury market measure 90 trillion total, we put in place key reforms and

corporate governance that insiders can't sell their stock in a day but we need to wait 90 days, but also with regards that they have to give back compensation that they might have for erroneous profits. i think we settled a really tough thing with china so i'm really proud of what we did but we are human, we are not going to get it all right. >> there has got to be something on the list that you say you know what, i wouldn't have done that, that is the one in retrospect, no? >> i would have loved to get these treasury market reforms finalized and certainly with the courts, and this is important to your viewers, the courts are shifting dramatically and i would have definitely wanted to be able to anticipate all the shifts so that we could do things that were survived or challenged a little better.

>> gary, thank you for engaging with us over the last our years, we hope to engage with you a lot more, unplugged, if you will, over the next four. congratulations on your four years in the role. we will see you very soon, thank you. squawk box is coming right back after this.

>> welcome back to squawk box, take a look at the futures right now, we have some green on the screen right now, the s&p 500 looking to open about 6 1/2 points higher. >> still to come, december producer prices are on the way, that is coming up in about six minutes, we are looking at inflation when it comes to prices, stay tuned, you are watching squawk box and this is cnbc.

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>> coming up, december producer price inflation, it is coming right up, squawk box will be right back. s. at&t, it's super-fast! you locked us out?! and when thrown a curveball... arrggghh! ahhhh! [crashing sounds] we had everything we needed. is the internet out? don't worry, we have at&t internet back-up. the next level network for small business. ♪♪ i sold a pillow! -honey... -but the gains are pumping! dad, is mommy a "finance bro?" she switched careers to make money for your weddings. oooh the asian market is blowing up! hey who wants shots, huh?!

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>> we are just seconds away from december producer price inflation, we've got a little bit of time before we get to rick, there are the futures right now, they have moderated a little and it all could change in about eight seconds, rick is standing by at the cme with the numbers. >> yes, the home sale side of inflation, expecting to headline the number, up two tenths, much lower than expected, it equals where we were in september, to find a lower number you are going to july of last year where it was unchanged. food and energy also on the cool side, unchanged, the number is closer to up three tents, unchanged, you have to go back to july of last year again. now if we look at food energy

and trade, up one tenths, you have to go back quite a ways, equal to november of last year, september of last year but to find a lower number, you have to go back to may of 23. take a step back, we are going to do the year-over-year numbers, year-over-year headline or final demand expected up close to 3.8, it comes in at 3.5, and 3.5 in this case, it follows 3% and it is definitely, 3.3 is a little bit warmer than the rearview mirror even though it is less than expectations, 3.5, i'm going back to february of last year. when it was 4.7 point we've had many lower numbers since, if you look at ex food, energy,

less than expected, again, higher in the rearview mirror. to find it higher, you are going back to february of 2023. finally, food and trade, up 3.3, this is the only number of the year that is sequentially lower than our last look, going back to april of 24 to find a lower number, 3.2. so year-over-year is a bit problematic, very nice gains on the month over month which is definitely reflected in yield props, we are now at 4.75, that is down three on the session and when we were at the highs and actually right now should we close here, once again, back to halloween of 2023. the dollar index yesterday touched over 110 briefly, we will have to monitor its

weakness based on the numbers we see, pushing the interest rates down. and there has been a last- minute revision and maybe there will be more trickling in but the ex food and energy, year- over-year, upgraded at 3.5. preopening equity certainly did love this and it goes a long way to explain one of the issues, of course higher interest rate. joe, back to you. >> yes, big move in that arena, too. steve liesman is joining us now, after friday, it scares people to see, if the economy is too hot, if you can get a number like this. my question is, we thought that some of the weather or hurricane could have made the number hotter than what people were thinking, so could this even be better than the 0.2,

and half as hot as we thought? >> yeah, it could be, and i want to amend what you were saying and see if we agree with it, we want lots of jobs and low inflation, that is what we want, this is a big deal, joe. and what it does, it shows some of the things that got people freaked out last month and i will mention a couple of items, eggs were up 55% i want to say, fresh fruits and vegetables were up 33%. and that is, that actually fell 14%. we had a lot of one offs, but the big story might be the trade services which to your point, up 7%, now they are down 0.1. this is going to help, i don't know if it tells us anything about tomorrow necessarily although the foodstuff does follow pretty well from ppi to

the cpi, but what it does do is combined of the ppi and the cpi, is going to make people feel better about the pce, i'm sorry to have to use all these acronyms, but i'm talking about wholesale prices, consumer prices bleeding into the feds preferred indication indicator, and the market does not have good inflation is for quite a while now, this is something that is helpful and shows you it is not all one direction but there is still a ways to go, we have to get the cpi tomorrow and the big story is going to be this year when we get the january, february numbers, when we get those one time price increases that really drove things up last year and caused the fed to stall or to wait until cutting rates until later in the year, maybe this puts some rate cuts back on the table, the market was very

skeptical going into this number. i don't know what you want to call it, 28, 30 basis points for the full year, we will see if that second cut comes back at something the market is betting. >> steve, this is obviously, i don't know, we go back and forth in terms of, oh, my god, and then oh, this is great. how many basis points, i mean, the two year immediately dropped. >> we had it down four or five i think, i will give you a fresh quote here really quick. >> could we be clutching tomorrow with the cpi, or no way ? >> i don't know if rick is still around or if you have time for discussion on this, but here's the deal, we have not seen the tips market or the inflation expectations be a big part of this yield increase.

rick is skeptical of that, my respect for his skepticism because for example, if we had a big decline in inflation, this is more a growth story, a fiscal deficit story and supply story, in terms of how you disaggregate the number. the tips market, rick has his skepticism about that, and i respect that but from just a simple mathematical point of view, we can back out inflation expectations and we don't see that, you see that only about 20% or 30% of the increase in the bond yield. it is not necessarily an inflation story inside these bond yields. >> if we would have seen a very hot ppi, most likely you would have said, well it is ppi, it isn't as significant as the pce or tomorrow's cpi. so i think the cooler month over month numbers are important but tomorrow's number

really is the key and once again, it seems as though everybody wants to demote inflation as one of the drivers for interest rates. i really don't understand why. these are real numbers, they have 3.3, 3.5, 3.3, they are on the warm side. and one thing nobody ever brings up is the rollover, how much paper we are rolling over for basically an atmosphere of zero interest rate, to where we are now. all of these are affecting the market in a very large way and of course policy uncertainty, basically a week from now we will have more information in that camp. >> i will just quickly respond, i respect your feel for the market and i think that is the big part, i'm just taking a mathematical equation which says tips are up by 20 basis points since december and the 10 year is up by 60 or 65 basis points. and i come up with 40 points

term premium, 20 points is deflation, end of story. >> i understand that, i have just never seen tips leading me down the promise trail ever, on inflation. >> okay, that is unlike you, steve, not to say anything? >> they shut me up. >> seven years israel security but hardly anybody pays attention to it. >> but, when someone throws that much shade at someone, i would just expect the other person to want to defend themselves. >> just stirring the pot. >> everybody's microphone is cut off, maybe another time. >> joining us now, especially

in the rise in bond yields we have seen in recent days, we have the head of u.s. equity and quantitative strategy, and first of all, this number is the most important number of today, could tomorrow's cpi number change everything? >> i definitely think it could, i think, i'm surprised by the softness in this number to be honest, i thought there would be maybe a mini restocking cycle, if companies are worried about tariffs, they might actually pull forward a lot of buying so i am surprised by this softer number. look, i think we are in an environment where there is a risk that inflation comes back and i agree with the idea that tips don't really tell you much about the future, tips are one of the worst indicators of actual inflation, they tell you what just happened rather than what is about to happen. so i think we are in a murky

territory, we took ll fed cuts off the table, the idea is we are not going to see any cuts this year, our economists are basically of the opinion that we don't get to the numbers that we need to see in terms of our star, in terms of actual inflationary measures coming down to levels that the fed would be comfortable with. i think we could see a bit of a reflation cycle in the first half of this year. look, december, that just happened, what about the future? i think where we are right now as an environment where you've got a lot of reasons to think that unit volume sales and demand picks up again, one is this restocking cycle based on pulling forward demand, two, you've got an administration in place that is basically much more likely to dial back the galatians which i think will actually increase rates to the upside. historically what we have seen is that regulation has been a big driver of productivity or

deregulation has been a big driver of productivity gains and productivity gains are correlated with higher, not lower interest rates. when i look at this, we are in a complicated setup, it is not a foregone conclusion that the fed is going to continue to cut from here. >> you look at this as temporary relief at best, what would it take for you to think okay, maybe inflation isn't starting to heat up? >> i mean, retail sales has been strong, holiday demand according to our credit card data was actually quite healthy, so i think the consumer was spending pretty aggressively last year. i think cpi holding up higher and ppi dropping is great for corporate margins if you think about it. we used to have this indicator called the corporate misery indicator. we still have it, and basically engages the spread between prices, pricing power and input

costs. and that drop in ppi and a steady cpi would be good for margins because it means the companies are able to price but to the actual input costs are going down. i think this would be a better scenario for margins than for the consumer. i think that the onsumer is in a tenuous position because right now, we are at a point where wage growth is positive, that is great for consumption, that is great for feeling like you can spend more at the grocery store, you can spend more on stuff if you are making money, but i don't know if it actually feels that way and it really depends on where you sit, if you are sitting in new york, it doesn't feel like wages are going up and prices are going down. in fact it feels the opposite. i think the consumer is in a tenuous position, we need to see how they navigate this.

>> so we watched the s&p futures jump on this, putting us back about 5900 at the open. for the end of the year, your price target is 6666 point >> yes, that is my easy to remember number, and i think we are going to see a good year for stocks, not a great year, but not bad, but i do think the idea that the market is going to climb higher because interest rates are contained is not necessarily the case. >> so interest rates are going higher in the market is going to climb despite that because of positive influences and corporate margins are going to be maintained. >> exactly, and we are also in an environment where deregulation, productivity, those are the stories we should be focusing on rather than just what the fed is going to do over the next three or six months. i think the fed is relevant but, maybe too focused on this environment where we have seen margins hold up remarkably well

despite the fact that we have seen rampant inflation volatility, i think that is a testament to the fact that companies are spending on productivity, they are getting more efficient, our analysts are seeing that trend continue, maybe a.i. helps, maybe it doesn't, but this trend is in place and that is what we need to be more bullish about rather than just our the 10 year yields going to hit 10% or 5%. why is 5% of the magic number? >> 5%, that looks like a much more attractive place to put your money, maybe it becomes a counter place for you to put your money. >> and you know what i would say to that, becky, i think they are already there. when you look at allocations for stocks versus bonds, stock allocations are not at those feverish levels that you would think it is time to get out.

based on our indicator, allocations to stocks are around 56%, 57% on average. not super high. back in 2000, they were at 70%. >> which is why every time you get a 5% pullback, you're not going to stick -- and by the way, we watched that this morning. >> exactly, that is exactly right, great point, and i think that is the environment we are in, long bond rates are probably going to move higher but i don't think we should freak out about that from an equity investor's perspective, rates can move higher because of growth, productivity, all sorts of good things and they can move higher because of disorderly shocks to the rates curve, as long as it is a gradual incline which is what we have seen so far, it can be okay. but i would watch the consumer

because i think inflation is getting tricky and harder to navigate, the good news is, we have an administration in place that is going to lower the cost of oil and gas and heat and that will be a good salvation. >> thank you. >> we have some breaking news to bring you, from j.p. morgan, the company's chief operating officer, daniel pinto operating -- and i think he is going to be retiring, he will continue to serve as the advice chair but a very important role and i should say that daniel pinto effectively was running the bank, jennifer piepszak has been named the c.o.o. of the company, as a potential successor, j.p. morgan set to report earnings tomorrow morning so we may hear more about this tomorrow but of

course, jennifer piepszak , has been speculated about, but daniel pinto played a pivotal role inside the bank and was literally running the bank when jamie had his heart trouble. leslie picker is joining us now to walk through what this all means. >> hey andrew, it is important to emphasize pinto and his role, he has been a key operator, he has been with the bank for about four decades and gave about two years notice for a timing -- retiring. jamie diamond, essentially his own words, if something catastrophic or emergency would have happened, pinto would have been ready to fly in on day

one, as for who takes over for diamond, that timeline is still less than five years, as diamond mentioned last year, probably 4 1/2 years away, so we can't necessarily read too much into this for 2026, the end of 26 is when diamond will step down, however i'm told that by jennifer piepszak stepping into this new role at the time, in charge of operations and president and c.o.o., essentially, and i'm told this is her choice, takes her out of that succession candidate pool. so the question is, who remains as the potential successor to diamond? and i'm told we should be thinking about the ceos of the businesses, you mentioned a few of them, of course the consumer side of things and the commercial bank, and the cohead

of the investment bank, they will be considered the three succession candidates going forward. and i agree with you, i think you will get a little bit more on all of this tomorrow when they report their earnings. >> just interesting point of interest, when jamie was interviewed on cbs this morning over the weekend, he made a reference to i think, at one point he was planning to stay, not forever, but maybe forever, but also in reference to wanting to remain on the board and potentially the chairman for some time, so when you think about what this succession plan might look like, it may not be some other companies where the ceo and chairman says goodbye, but perhaps jamie diamond is a part of this organization for a very long time and that maybe

changes the dynamic amount how a succession plan would rollout. >> yes, so this is kind of the case study with morgan stanley, james forman just stepped down as chairman at the start of this year or late last year, and allowed him to step into both of those roles and that was seen as a pretty seamless transition in terms of leadership, so if they do follow that model, i don't know if it is a year that he stays as chairman or longer than that, but in the banking world, it is hailed as a good way to diffuse succession planning. >> leslie picker, thank you for jumping on the phone with us and for bringing us that news and a little bit of the inside baseball of what it all means. >> the annual j.p. morgan healthcare conference is underway in san francisco,

angelica peebles is there and joins us with a special guest, good morning angelica. >> good morning joe, that is right, we are here with novartis ceo, thank you so much for joining us this morning, voss, you have three drug patents you are managing this year. >> when you look at it, we had 10 major readouts and filings and those lunches are really now taking off, that is going to give us the power to really grow through these patent clips, we expect solid growth this year, top and bottom line but when you look at the midterm guidance, we took into account these cabinets, we expected to grow 5% plus over five years and get up to 40 margins, and it is really the pipeline on the back of that innovation. >> one of the first drugs that medicare negotiated the prices of, it isn't that material, but

what can you tell us about what that process was like, negotiating with medicare and what you expect going forward from the i.r.a. and how it will impact you? >> it was an educational process, in the end it doesn't have as big of an impact on us, but for me more important, it really highlights how we have to get the i.r.a. fixed, and one of the big policy priorities is the industry this year, getting the nine years, to 13 years, small molecule and biologics both at 13 years before we have any of these price saving negotiations or discussions. if anything, this really shows that if we let this continue, we are going to have a huge impact on innovation for small molecule drugs. >> everybody talks about the i.r.a. and how it could impact their drug development, but what changes are you making already, given this penalty, what pointed changes are you looking

at? >> you are always looking at the long run sales potential and the ability to generate attractive returns and anytime we have a medicine that is primarily for the elderly and a small molecule drug, we have to de-prioritize it, it is simply too hard in nine years to be able to generate the payback, the immense investments we put into these medicines. and if you take certain areas like neurological disease and many types of cancer, this has a chilling effect on the whole discovery of the drug ecosystem. that is why now is a great year for us to get this fixed so we can hopefully keep that innovation going into the future. >> have you had the chance to talk with your new administration yet and to share your concerns with trump himself? >> not with trump himself, but we've had the opportunity to start educating new members, as well as the house and senate, and i have seen really strong

understanding and support for fixing the i.r.a., we just have to find the right policy moment, the right bill, may be the right reconciliation package would be a great opportunity. but this is an important year to get this fixed. >> one thing the incoming president talks about is the price of drugs and other companies, based in switzerland, how do you view that issue and is there anything the administration can do or you as a company can do to make prices more equal? >> we are certainly attuned to this, we are the largest by sales, so we are very aware of the disparity, and really what we need to do is make countries, particularly in europe start to pay their fair share for these medicines. we think the u.s. has the right model that rewards innovation, rewards the biotech ecosystem that you see here in san francisco this week and we need to get europe to pay his fair share. >> that is all the time we have for today, but thank you for joining us. vas narasimhan , for novartis.

joe , back over to you. >> don't miss the ceo of bridge bio, and we have more from the life healthcare conference.

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welcome back to squawk. the u.s. consumer financial protection bureau suing capital one financial accusing it of illegally avoiding paying more than $2 billion in interest to consumers who held the flagship high interest savings account

with the complaint saying capital one promised account holders that it provided one of the nation's best interest rates but then they froze the rate at a low-level even as interest rates were rising nationwide. one of the last cases effectively being brought of this version of the administration's cfpb. we will see what happens to the future of cfpb under president trump. let's get a final check on the markets after that producer price number that was tamer than had been anticipated. you saw the dow futures jump up to about 250 points above fair value. and they have given back those games because the market realizes we still have to get through cpi tomorrow and we will see what those numbers slow as well. s & p futures are up by about 25. nasdaq inbdicated up about 23. we have been up all morning, gave back some of the gains and derubbled the gains and now we are where we started about 3 hours ago. when it comes to 10 year, yield

of 4.78, 2 year is at 4.37 and 30 your is just below 5% at 4.98. bitcoin has been higher this morning, up to about $96,000 hast we checked and still at there, 96, 279. that does it for us today but join us back here tomorrow. we will get the cpi component of inflation data with the number. right now it is time for squawk on the street. >> good tuesday morning, welcome to squawk on the street i'm carl quintanilla and cramer is in san francisco at jp morgan's annual healthcare conference. futures are adding to monday's gains as there is relief on pdi unchanged on core ahead of c prgs i tomorrow. yields are dropping modestly. the road map