smartphones in china. it's january 16th, 2025 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 this morning, let's take a look at the u.s. equity futures. we had a big day yesterday with the markets seeing their best gains since november 6th. what day was the election? >> 5th. >> okay. since the day after the election. those are the biggest gains we saw. dow up 700 points yesterday. this morning, it's indicated up another 50. s&p was up sharply yesterday. it is indicated up another 20 points this morning. then you've got the nasdaq up

triple digit. up 103. if you check out what happened with the treasury markets, this came after better than anticipated news on consumer inflation. you do see treasury yields this morning below where they have been. 4.65 is the 10-year. the 2-year at 4.28. it was higher than yesterday's close. below what we have been watching in the recent weeks. also, bitcoin jump immediately sitting below 100,000 at $99,160. a setback in the israel-hamas cease-fire deal. prime minister netanyahu will now convene to not approval the deal. israel accusing hamas of reneging on the agreement in a bid to extort last-minute concessions. it is is demanding more details. they are committed to the

cease-fire agreement which was announced by the mediators. here's what was announced by the negotiators. israel and hamas would pause the war six weeks beginning on sunday. hamas would release hostages captured as part of the attacks on october 7th, 2023 israel would withdraw from the gaza strip and release prisoners. once the cease-fire starts, both sides were to talk to release the rest of the 98 hostages in gaza and governance in the region. of course, all of this in jeopardy all over again. we will talk a lot more about the peace process with dan senor, the foreign policy adviser during the george w. bush administration and been on the broadcast a number of times. pivotal moments. we had the opportunity. we, the country, had an

opportunity to get this going eight months ago. a very similar deal and was not taken. here we are again. maybe the circumstances are different. i thought they were. maybe they weren't. in the meantime, president biden delivering his farewell address from the oval office. he he highlighted achievements and warning with unchecked power of the presidency and disinformation and then this. >> today, an oligarch is taking shape in america of power and influence that threatens our democracy and our basic rights and freedoms and a fair shot for everyone to get ahead. >> president biden wishing the incoming trump administration success and thanked the american people. resident-elect trump's pick for treasury secretary is set to

sit in front of the committee at 10:30 a.m. eastern. according to his prepared remarks, bessent will double down on the view of the maintaining the u.s. dollar as the world's currency. he said it is critical to the health and humidity future of t economy. bessent will also tell lawmakers in his words, we must secure supply chains vulnerable to come come -- competitors. now to monday's inauguration of donald j. trump. a bloomberg report says apple's tim cook will attend and he will joined jeff bezos and mark

zuckerberg. >> the oligarchs. >> they will be there. >> it is like the maga 12 now. >> it is growing. the markets are closed on monday, but cnbc will have special coverage of the inauguration. we'll feature high profile guests to talk about the administration and your money. those include investor stanley druckenmiller and albert bourla. separately, microsoft ceo satya nadella dined with trump and vice president ce yesterday. they discussed a.i. and cybersecurity and including the microsoft pledge to invest $80 billion worldwide. no word on whether nadella will attend the inauguration, but microsoft was one the companies that contributed $1 million to the inauguration fund. >> my understanding he is not

attending. a bunch of people headed to davos and a unch headed to the inauguration and davos. he is on the straight to davos list. in the meantime, launching the new glenn rocket for the first time. the company conducting flight using ability boosters. the upper stage of the rocket successfully reaching orbit. it is the first time blue origin sent up its own rocket. previous flights used short tourism trips and it was a very spectacular moment. this is a huge, huge deal in the world of space and space race to see this go up in the air. i know it's been a long time coming for this company. and apple losing its crown as the biggest smartphone seller

in china. research firm canalus show iphones fell 17% in 2024. it included a 25% drop in the fourth quarter. that pushes apple now to third behind vivo and huawei. and dow's united health just reporting. coming in with earnings of $6.81 a share. that is 9 cents better than he can o -- expectations. that is below the estimate. united health is affirming the revenue guidance for the year. that stock is down 3% as the knee jerk reaction with the numbers. >> if you don't use the adjusted. you have to do the full year for 2025 adjusted and the fourth quarter because it was down in the fives.

>> $29.50 for the view for 2025. coming up, earnings and economic data on today's agenda. the squawk planner is next. we're coming right back. if your income dipped in 2024, don't overlook this tax break. earned income tax credit. the amount depends on income, filing status and whether or not you have children. it's a refundable credit. go to irs.gov to see if you qualify. for cnbc, i'm sharon epperson.

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on the planner today, earnings season will continue. we're just getting started, but today we get reports from bank of america, morgan stanley and pnc financial in the next 90 minutes or so. on the data front, key numbers are due at 8:30. including weekly jobless claims and retail sales and import and export prices. joining us now is michael. michael, you think they're screwing up probably. a misstep. maybe no cuts this year, but god forbid, the corporate sector is strong anyway and that's why

stocks continue to go up regardless of the fed. >> absolutely. joe, when we look at earnings, everything you pointed out so far, earnings have strong. you see that with the bank earnings out. taiwan semi. a lot of things are positively happening. i don't know if the fed needs to be involved. the bond market says the fed needs to say on the sidelines and i think they should. >> do you think the leadership changes at all? if it is all based on earnings, then i guess you need to either be in sectors or names that have good prospects in this environment. >> absolutely. we think we're in an environment where growth is going up, but also inflation is going up. it bodes well for the companies with good balance sheets. big tech is doing well. nasdaq earnings are up 20% year over year. broadly, the s&p is up. maybe if you look at small cap and you don't want to be there

because earnings are so lousy. stick with what's worked until it doesn't work. hopefully it broadens out to more than a handful of names. the sectors are driving growth. >> the small cap rotation that probably never happened. maybe a couple of times it looked like it was starting, but if rates aren't coming down, that's an area that probably will under erform. you don't think rates are coming down because you don't think inflation is going to 2%. >> no, i don't. i think the higher rates are not good for small caps. i was on the show a few months back and when inflation was 2.44, i was in a very small camp of people calling for it to go back to 3%. everybody was calling for it to go to 2%. i saw a lot of those same people yesterday saying 2.89 beat expectations. i'm not sure whose expectations it beat. certainly not there's. i think it is going back 3.5,

not quite 4. i don't think it's going back to 9. higher inflation and higher growth does mean stock sectors can do well. certainly it's not an area where small caps are doing well. >> i know you think the fed's not going to deliver what traders wanted. is it going to eventually have to take away the punch bowl and especially in the trump presidency? i can't imagine you see someone raise rates. >> i don't think you'll see that in 2025. theoretically, if the economy continues to do well and one of the things that came out in the last couple weeks is the small business study is 40-year highs confidence of what is coming out f. out. if we get an environment of deregulation, we could heat up an again. the fed is on the sidelines in 2025. the next move could be rates higher. i don't think that's right away.

that's a hopeful scenario the economy continues to do well and does so well we have to worry about growth getting too hot. >> so, where's the ten year in your world if inflation goes back to those numbers that you're talking about and, you know, the world survived at much higher yields on the ten-year and most of my life it's been higher when i was in the business. we were at 7, 8, 9% on the ten-year. are we headed well above where it is right now and that's going to be okay long term? >> i think it will be higher. ten-year and 30-year are up about 100 basis points since then. the bond market is looking at inflation coming back and growth is coming back. i don't think it is going too much higher. i think the thought was a lot of people in the market wanted rates to go lower to fuel kind

of the stock buying bingeof the poorly balanced budget sheets. you need a regime investing to work for that. do i think it goes higher? yeah. i don't think we will be back in the 1980s at 8, 9 r 10%. i think inflation is higher here. i don't know where it ends. directionally it's higher. we need to position where we have been the last six months. where does it look like for bonds? are you protected against rising inflation and rates? >> why is inflation going to sflies. >> lot of reasons. shelter hasn't come down much. shelter is double pre-covid. you see food prices run back up. all of my numbers, joe, modelling wise, have oil in the low 70s. right now, it is nearly 80. it accelerating more than people think. the housing is not coming down as people think.

i think it's sticky. i think it stays here. i don't think it's 9%. it is not the 2% and the fed that people in the market were talking about four months ago. it is probably a 4 number. >> it's in the system already. shelter. you didn't use the "t" word. tariffs. some of the new administration's proposals factor into why you think it's going higher? you think it's already built in? >> we run models for a year and realistically six months we're accurate on. in september, regardless of who won, we had inflation going up every month for six months. i still have it. none of trump's policies are in place. he isn't president yet. i think a lot of this stuff is in there. it has more to do with the economic cycle than who leads the country. a lot of stuff happened. natural disasters. california and the awful fires that have gone on there.

that is going to be inflationary. the hurricanes. these are the ad hoc things to put pressure on moving prices higher. it is regardless of who is leading the country, you will have inflation pressures and oil up close to $80 a barrel. that's not a good thing. >> do you take the fed at its word it is concerned about inflation and it keeps mentioning? i would do it if i were the fed. i would say, i don't know, these policies, these trump policies that we're looking at with tariffs and immigration and these things are going to happen. this is not going to be our fault. mission accomplished, but we're definitely -- they didn't say any of that as we were going to the inflation reduction chips act. they never warned ever the first time around it would be transitory. now it is covering their tuccis. >> it was wrong at 9% and transitory.

they are saying it is going 2%. they are looking for anything to grab on to. there will be pressure on the fed. trump and his group and treasury and fed fans. when they're wrong and inflation goes back up, i think you will see rhetoric between the two and maybe reach levels we haven't seen in a while. there will be pressure on the fed in terms of what you are doing and you are getting the direction wrong on inflation. you've done that a couple of times. you got it wrong a couple of years ago at 9% and told everybody it was transitory. >> michael, thank you. you are in punta? now you're in florida. you got a degree from there? an mba? is there no income tax? i've heard that. is that a myth? >> that's not a myth. that's actually why a lot of new yorkers are moving down here. yes. it's that. we get some hurricanes, but other than that, no taxes.

>> okay. thank you. coming up, well known short seller hindenburg research is shutting down. we'll bring you fascinating details why after this. the mag seven stocks added $550 billion in market cap in yesterday's rally led by 8% jump in tesla. "squawk box" is coming right back in just a moment. (♪♪) 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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hindenburg research that gained notoriety with short bets is shutting down. intense and all encompassing nature of the work. some are the reports involved icahn and adani. its most recent report focused on carvana and roblox. if you read the story, it's fascinating piece in the journal. just about the emotional toll and stress that be a short seller has. >> always in a fight or preparing for a fight. >> you are always fighting. the truth is most things do go up, hopefully, over time. you are playing against not -- you are playing against the odds across the board. you can sort of feel the emotional toll that nate was discussing in that piece.

>> you can lose -- your losses are potentially infinite. >> potentially infinite. you go back and look at the best of them. >> chanos would come on and say i'm doing less badly. the market's always going up. the best you can do on a relative basis is perform a little better. the markets are usually going up. >> you have to be constantly spotting. you hit enron or david or lehman brothers. >> baldwin from the '80s. >> there's always people who hate the short sellers because they take out legitimate companies. they serve of a purpose when they are rooting out fraud like an enron situation. >> right. >> and psychologically, i still see it that way. someone can come on and say, wow, this company does this, this and this and i'm bullish long term. others go that's nice.

he's on cnbc. you come on and say this thing is ready to implode. it's like, he's talking down the stock. shareholders. it's weird. we never get beyond sort of that mentality against short sellers. >> it's increasingly a short list of people. andrew was one of the last men standing, if you will. he has the fcc and the government after him now. muddy waters. only a handful of folks that are really in this business. >> think if you have a huge position and you get a reddit board. no one argued that value of gamestop. you still got your ass handed to you if you were short.

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good morning. welcome back to "squawk box" here on the nasdaq market te in times square. nasdaq looking to open 114 points higher. target is just out with the business update. this company isn't due to officially release results until march, but i spoke with brian cornell, the ceo. he thought it was important to clear the airline on on the pee for the holiday months of november and december. total sales were up 2.8%. digital sales up 9%. compare that to what happened just back in the third quarter. the company had a pretty rough

third quarter. you see that stock dropped after the third quarter numbers. at that point, they were talking about comps up. 0.3% and store comps down 9%. the jump of under 3%. that compares to the third quarter. brian cornell thinks traffic is a very important indicator of the retailer with rolling out these results. also said discretionary categories apparel and toys saw meaningful sales acceleration. he told me he hinks they are stealing market share in the categories. i asked if those trends are continuing in january. the company is watching fires in south carolina and the storms. he said we will watch january carefully. i feel good about the way apparel is performing. i also asked him about walmart

which is taking share in a lot of different categories. his commentary on that, i feel really good how we match up against our peers. we are taking share in apparel and toys. won't comment what is happening in january because of the impact of fires and other situations going through this. if you are looking at some of the numbers, back to the holiday period, target realized record highs for the black friday and cyber monday deals. they are raising the same store projections compared to the flat sales. that is above the 0.2% growth. the company is raising sales guidance, it is just affirming the fourth quarter earnings guidance of 1.85 to 2.45. that compared to 2.15. that stock right now up 3.3%. in the meantime, electric vehicles and hybrids crossing a

major milestone in the u.s. i want to get over to phil lebeau with interesting data points for us. phil. >> andrew, it was not long ago when internal combustion vehicles were a large part of the market. last year, we did see in the united states for the first time internal internal combustion vehicles dropped for the year. u.s. a smidge under 80%. the real growth is hybrid electric vehicles. toyota shares sales of hybrids up 48%. they sold nearly 1 million hybrid vehicles last year. that's why as you look at the market share, toyota dominates that market. still sells 1 out of every 2 gas/election hybrid. hyundai and ford in there as

well as stellantis. in terms of the electric vehicle market, it did not grow as fast. up 7% for the year. as you look at shares of toyota, excuse me, tesla. its sales in the united states, 633,000 vehicles. it is not as many as they sold in china, but the china market has cooled off in past years. look at the market leaders with evs. tesla no longer has more than 50% market share in the united states. market share coming in at 48%. hyundai at 10%. gm has grown in third place ahead of ford. you see bmw. don't forget as you look at shares of tesla over the year. we will hear from elon musk, we assume we will hear from elon musk in a couple of weeks with the q4 results. bought ttom line guys, we see d

in the united states for evs. how much has that changed with the trump administration? maybe with the tax incentive of $7,500. if that goes away, clearly ev demand will be hit. it's not going to die, but it will be hit. gas/electric hybrids, we continue to see that growing. >> phil, i think it's fine. we can get to those numbers under 80. hybrids are internal combustion engines. i don't know why you don't include that in the i.c.e. category. >> joe, we go by pure. >> are they not driven by internal combustion engine? >> yes, they are, but they are -- joe, now you are getting into semantics. do you call plug-in vehicles electric vehicles? >> i call hybrids i.c.e. with

attachment that makes you feel good. you still need gas. >> joe, that's why they're called hybrids. i understand what you're saying. >> you want to go under 80. that's fine. >> it is under 80, joe. hybrids 12%. >> all right. when the gas stations are all gone and you pull your hybrid in there, let me know how that goes. >> that will be many, many, many years from now. >> i know that. try driving your hybrid without gasoline. if we stop drilling. you can go downhill or you can get one of becky's whoosh, whoosh. >> i have a hybrid. my toyota sienna is a hhybrid. it gets great gas mileage. >> the big windmill on the back?

>> that's in your head. >> you know what i'm saying, lebeau. i know you know. it's okay. 92. i.c.e. see ya'. >> good-bye. coming up, presented without comment. a setback and this is presented with a comment after this. setback in the israel-hamas cease-fire. we talk to dan senor. he has a lot of comments about t. . as we head to break, look at the major currencies. the dollar as well. that's on the list. we're coming right back after this. >> announcer: currency check is sponsored by interactive brokers. the best informed investors choose interactive brokers.

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welcome back to "squawk box." a setback in the cease-fire deal. netanyahu's cabinet will not approve the deal due to the issues with hamas. joining us right now on the set is dan senor. former advisor for the bush administration and podcast call me back and friend of the show. been on the show in some of the pivotal moments. where are we really? >> i think the deal is going to go through. >> despite whatever is being said right now? >> yes. i think the deal will go through and i think as soon as sunday we will start seeing israeli hostages returning to israel. three israeli women. there are hiccups in the deal as

in november of '23 with the big deal done. there were last-minute hiccups. the dispute seemed to be the first phase of the deal is a 42-day cease-fire. during that, 33 hostages are to be released. then, israel can commence negotiations of the second phase or the war could resume. one of the factions in the netanyahu government is arguing there is no phase two. at the end of phase one, we go back to war. obviously, israel has the option to do that, but the finance minister is saying we want to know you're going to do that. that's the first thing. the second hold up is israel will be releasing hundreds. 1,200 palestinian prisons as part of the deal. a chris razy part of the scenarr every hostage, you have ten palestinians being released. israel, according to the deal,

hamas presents a list of the prisoners they want out. israel has some veto over -- they get to pull a name out and replace with another one because some are so unacceptable. in 2011, the architect of october 7th was set to be released. they get to say no. hamas is saying no. you can't ex-ercise your veto. >> is this a good deal? >> no, it's not. doesn't mean israel shouldn't do it. here we are. we just passed the second thanksgiving. you think about the israeli prisoners in the geons of gaza. israel achieved it still has to

negotiate to get some women out, some children out, some dead bodies out in return for ten of palestinian prisoners. from a far east thinking, isn't this going to encourage terrorism in the future? isn't this just going to send a message the high price israel will pay to get their prisoners back. they can keep doing this more and more. that said, i'm supportive of the deal. the reason, andrew, is because israel and i have been skeptical of the negotiations in the past and i didn't think they would go anywhere and i understand some resistance within israel. the reason i'm supportive of this deal is because israel mill tear ali and geopolitically is in the best position it has been honestly. you go back to the war in 1967. if you look at what israel has done to hamas and iran, it has

fallen. israel is on the march in the region. israel will have to take some risks in doing the deal. taking the pressure off hamas. if you ever take a risk, do it now to get your people out when israel is operating from the position of strength. >> could israel say no to the deal? i heard two factions within netanyahu's government threatening to pull out. >> one faction is against it and he is threatening to pull out of the government. netanyahu's coalition has expanded. he had a 64-seat government. if one of the parties pulled out, it would sink the government. since then, his government expanded. he has 68 seats. that gives him leverage. one party pulls out, his government survives. both factions and parties pull out, the government falls. >> question.

the politics here. we have a new president coming on board literally next week. >> yeah. >> how much credit or blame you give to biden? how much credit or blame you give to trump? is this a bad deal? >> a deal they should do. >> a deal that is worthy. how should we think about it? >> two things. i want to say quickly. don't under estimate hundreds of hundreds of israelis have been killed since october 7th. israel is fighting a seven-front war. it has to keep sending young men and women to fight these fronts they're on and letting families know that yes, we are universal. your loved ones are on the front lines, but we will do everything possible to get them back if they are taken hostage. a very important message. biden, i give him credit for time to time for israel

post-october 7th. i think he stymied many of the negotiations because of the pressure he would publicly put on israel because of the message to hamas leadership. the pressure is mounting on israel. why do we need to negotiate. trump coming in and sending a message he was unan pollpologety system athetic to israel. you do not want to catch his wrath. >> israel's back. >> and he loathes, truly loathes israel's enemies. he was ready. the fact he left it vague, i think -- i spoke to a number of people in the middle east. everyone felt on edge trump coming in. one israeli friend said to me, the night at the bar, he is showing up and doing something crazy. we don't want to test it.

i heard it from hostage families. >> the less light between israel and -- >> yes and also the willingness and unpredictability we don't know what he will do and set the deadline all hell breaks through on january 20th put people on edge. i spoke to the biden folks. there was a whole good cop-bad cop going on. >> pull the rug out from israel. you never knew when it would happen. >> the distance when the u.s. would do that encouraged hamas not to negotiate. you heard it from biden himself and the biden people. trump playing this bad cop role was extremely important. we talk about dysfunctional and polarized our politics are, the last few months, i have seen it closely. who would have thought the biden teams and trump teams working together like this is

impressive. >> dan senor, thank you. we have breaking news. we have bank of america results out with the numbers. leslie picker has the numbers. >> becky, bank of america reporting beats on the top and bottom line for 2025 with expectation in gains. the profitability metric for loan making. the firm is expecting 14.5 billion to 14.6 billion in q1 and rise sequentially to 15.5 billion to 15.7 billion by the fourth quarter next year. the high end of the range implies 8% growth from the recent q4. the nii growth at b of a is growing at the deposit base and average loans higher in the quarter as well. i believe that's largely in the commercial space. plus, they have fixed rate assets maturing and they are able to invest in higher yielding areas.

the higher market rates causing the unrealized losses on b of a's balance sheet, although the firm doesn't have intention of selling and marking losses. the non interest right, boa with investment banking generating $1.7 billion. sales and trading up higher in the quarter for record revenue for the division. net charge offs which are bad loans remained stable over $1.5 billion for the last few quarters. guys, you can see shares up more than 2% in pre-market trading. >> that's right. up over 2.5% right now. we'll continue to keep an eye on that. leslie, thank you very much. a programming note. i'll speak to brian moynihan at 2:45 p.m. on "power lunch"

today. "squawk box" will be right back.

coming up, more bank earnings ahead. call the misses and the kids because bank of america rising after it beat estimates on the top and bottom lines and we get quarterly results from morgan stanley in t nt heexhour. later, georgia governor brian kemp will join us. "squawk box" will be right back. thhy pnc bank strives to be boring with your money. the pragmatic, calculated kind of boring. (vo) weight loss is changing. for so long, i felt stuck on repeat.

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energy prices moving higher to start the year that has pushed the s&p energy up 8% in the last couple weeks. joining us with more on the energy outlook for 2025 is samantha dart head of goldman sachs research. samantha, the prices closed above $80 a barrel. that's the first time that's happened since august. what's pushing prices higher? >> yeah,winter that has been co than average. this is supporting the demand to the extent. we had inventory drawing particularly in the u.s. all through q4. then on top of that, of course, we had the announcement of the latest round of u.s. sanctions on russian oil. the market is repositioning toward these tighter risks in

the balance. you know, we've been trading in this 70 to $85 per barrel brent range. we think we're going to stay in the range for sure, but when we look at the risks to the prices in the near term, we do see these risks skew to the upside especially because the sank sups been a big issue, but we're also talking about this with the backdrop of a potential cease-fire in the middle east. and you would think that that would at least offer some geopolitical de-risking that comes along with this. is that not the case when you look to ukraine and russia and the sanctions that are taking place there? >> i think because these geopolitical risks haven't really disrupted supply over the past couple of careers, as we unwind them, we don't get that much relief price wise, right? so you end up with this direct focus of the market on supply, and it's when we talk about

sanctions and the potential of that, really removing supply from the market, that gets the biggest reaction. the cease-fire, if it goes forward doesn't change the supply, demand balance, it really doesn't. and especially in the context of a weaker iran based on the developments of the past several month i think the risks that had market had been associating with iran supply and this particular conflict had them being very high to begin with. >> you know the demand picture is also one people watch very closely. there had been some concerns about the global economy. the u.s. economy looks to be doing very well, and i think when you look at demand, i think what you wrote is that you're seeing some enormous demand coming especially from some of the emerging markets, too. >> yeah, demand continues to be driven by emerging markets, you're absolutely right. we see just under a million barrels a day of growth next year. the thing is that we also see growth in supply close to those

levels. on net we have a small surplus expected for the next 12 months, which we think keeps oil on average in this range that we talked about, our average price forecast for brent for this year is $76 a barrel. >> we're also talking all the time about a.i. and the huge demand for additional a.i., the need that that creates for new data centers to be built. how does that impact the longer term demand push for energy? >> the potential is enormous, right? so our equity research teams have done great work highlighting how just in the u.s. as an example we could have a 20% increase in total power demand in the u.s. between '23 and 2030. it's not that much time, about 7 years for a pretty sizable increase in power demand. so when we look from a commodity standpoint, we think we're going

to need all the fuels we can get, all the technologies in terms of generation capacity, both in renewables and especially in natural gas. >> samantha, thank you. it is just about 7:00 a.m., 7:02 to be exact on the east coast. you're watching "squawk box" on cnbc with joe sorken and joe kernen and becky quick. the biden administration looking at ways to keep tiktok available has to ban the schedule to go into effect to go into effect on sunday. nbc news reports if the white house moves ahead the issue would be deferred to president-elect trump who would be inaugurated on monday. "the washington post" saying trump is ready to intervene to keep operational order for tiktok, including the lowing the app to remain active for existing users but without future updates. "the new york times" reporting this morning the ceo of tiktok invited to the inauguration itself. so what does that say about where things really stand?

meantime, the department of transportation suing southwest airlines and fining frontier over clonically declayed flights. an investigation finding southwest operated two flights that had persistent delays over a five-month period in 2022 that resulted in 180 disres for passengers. southwest saying it's disappointed the government is focusing on flights from more than two years ago. president-elect trump's pick scott bessette set to testify. he's expected to succeed janet yellen. let's check the futures. the dow is to be up. don is going to talk about united health care, i'm sure. it's down about $19 premarket. it wasn't 100, it was 60 or 70 points. >> the nasdaq was the only one up triple digits. >> it was up.

and now after united health care, you had 19 whatever the multiplier is. let's get to dom chu for a look at this morning's premarket movers. >> i will address all of those. we'll kick things off on the earnings side but do it with bofa first. after posting earnings and revenues on the first quarter. the bank also see fee growth with investment banking fees up 4% over a year over year basis and issued strong gapes and net interest income for 2025. those expectations in the first quarter coming around 14.5 to $14.6 billion and sequentially growing to about 15.5 to $15.7 billion so that's helping bofa shares. and united health the stock down a percent or so after reporting miss for quarterly sales boosted

by strengthen in its health services unit, the company affirmed its earnings and guidance for the full year. at $22 per loss per share you're talking about 140, 150 points off the dow there. so watch what's happening with that. jp morgan is naming draftkings, las vegas sands, and penn entertainment as stocks this year. draftkings is down slightly despite morgan saying that the u.s. in its most attractive stock for growth within gaming is that particular one. analysts are also noting draftkings revenue growth profile and ability to leverage its scale also played up for that. so draftkings, las vegas sands and penn entertainment in focusturning. for that and other key calls of the day head over to cnbc.com/pro. subscribers get all the details there. united health down about $22, about 140 points off the dow. >> 140 points, that all adds up.

thanks, dom. >> you got it. when we come back republican governor's association chair and governor of georgia brian kemp will join us. we'll ask him about working with the incoming trump administration and his economic agenda for the peach state. also we'll talk markets and bring in morgan stanley results when we return. that stock is up over 50% over the last one-year period. "squawk box" will be right back.

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get xfinity streamsaver with netflix, apple tv+, and peacock included, for only $15 a month. let's talk markets. it has been a big week for the markets after the inflation data. now a number on the bank earnings with jp morgan but all

different banks. joining us right now senior investment strategist at edward jones. good morning to you. the banks, it's a blowout. it's a blowout on the banks. do you want to own the banks right now? >> we think financials are interesting here. keep in mind they're a domestically minded sector. we're not going to see any impact from any tariff related news. they're leveraging an economy moving higher, and, yes, they will benefit from not only the better labor market we saw last week but the better inflation data as well. we think it's a good environment for banks, deregulation another factor on the horizon as well. >> and you don't think they've gone too far already? i mean are they priced to perfection? >> you know, we think a lot of the parts of the market that still have room to run are those nonmega-cap tech. yes, financials have moved but from a valuation perspective certainly not to even near historical levels, and so i think there is scope for valuation expansion and certainly scope for earnings growth in that sector as well. >> on the growth stuff, the magnificent seven or whatever

you want to call it, he would call it the maga 7. >> maga 7 now. i think they're all onboard. >> what -- are you buying? are you selling? are you standing pat? >> i think the standing patent holding we want to make sure -- we talked about the theme for the last two years you've got to own that mag 7 if you want your portfolio to perform nearly as well as the broader market. you've got to own the mag 7 but make sure you own the value cyclical parts of the market if you want your wort folio to hold up. diversification we think remains in control over the next 12 to 18 months. >> what would you buy just broadly speaking? >> for a broad investor we think u.s. large cap and midcap makes a lot of sense here. we think that broadening of market leadership theme makes a lot of sense here. if you're owning the tech a.i. make sure you're complementing that with financials,

industrials, maybe even parts of health care. we remain neutral and slightly underweight. we also say in the bond market there's opportunities developing especially as yields move higher here, extending duration makes a lot of sense here, too. >> what wouldn't you touch? >> well, we remain underweight international for now. we think the u.s. international story continues to play out. we're seeing that not only with the mag 7 and the productivity drivers housed here in the u.s., but we think international is still lower down growth, inflation scares, central banks still catching up. >> thank you guys. coming up next georgia, governor brian kemp is our special guest. and later president-elect trump's pick for treasury secretary set to face some tough questions. i think he's like 99% on market

i think confirmation hearing speak to the senate finance committee member george concernen who i was watching yesterday. i know a lot more about the senators, it's unbelievable. "squawk box" will be right back. >> time now for today's aflac trivia question. o was the last person to walk on the moon? the answer when "squawk box" returns. 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. you do look like me. mhmm!

and now the answer to today's aflac trivia question. who was the last person to walk on the moon? the answer -- eugene cernan. cernan was the commander of the final apollo mission which launched 1972. >> that's 53 years. last week georgia governor brian kemp and other republican governors met with president-elect trump to discuss a number of federal policies, immigration and energy. the governor joins us now. governor kemp does. he's also now chair of the republican governor's association. and welcome, governor, it's good to see you. you probably -- you didn't see a lot of the hearings, i guess.

you still doing stuff down there in georgia? you running the state? probably can't sit around watching tv all day. >> no, i have not been watching too much tv. it's our first week of the legislative session. we've been very busy. had my state of the state today, so we've got a lot going on. it's not such a busy week for the legislators, but it certainly is for me. but we're doing a lot in the great state of georgia. >> the nominee for treasury secretary is going to be in front of congress at 1030 a.m. he's from south carolina the low country, so that's not -- that's not a whole lot different than some parts of georgia, just north -- i guess, north east of where you are most of the time. he said some interesting things. this is one thing that scott bessent said. president trump was the first president in modern times of the need to recognize a need in

trade policy and stand up for workers. do you think tariffs are the way to do that, governor? >> i can tell you this. if you think back to when president trump first got elected, he was the one really right on china, he was the one i think got elected because he was fighting for the american worker. i think that's also the reason he got re-elected, and i think the talk of extending the tax cuts that him and the congress did, that's the exact same thing we're doing in georgia right now. and you look at what the treasury secretary that's been nominated and the economic policies they have, it's the same thing that's been driving gdp growth in the south really from texilous the way through georgia to south carolina where gdp growth now outpaces the north east. these policies the states have and what the trump administration has done in the past and i think will do in the future is going to serve the country well. what that looks like, joe, in regards to tariffs, i don't know. but i think from the republican governor's perspective and from

president-elect trump's perspective cutting taxes is the way to go. i'm excited today that we're going to be announcing a 20-point basis cut to our state income tax, corporate and personal on top of the largest state tax cut in history that we did two years ago. we accelerated the rate down 10 basis points last year, so we're continuing to cut taxes. we're also going to give a billion dollars back to the taxpayers in a rebate to help them offset the 40-year high inflation that we saw under the biden administration. >> what would it take to almost mimic what florida did? i can't even imagine the inflow to georgia if there is zero income. so how do they do it in florida? and how could you ever actually get there in georgia? i know there's been some talk about that in the past. >> well, i think you've got it look at the whole tax environment. you guys i believe it was did a study a couple years ago that

showed state and local taxes combined in the southeast, and tennessee i think was number one. we were tied for second with south carolina. i believe florida was fourth. so they're getting property taxes and a high sales tax and other things where in georgia we don't have a tax on groceries. so every time somebody goes to the grocery store, they're not paying sales taxes. our farmers are not paying sales tax when they buy inputs and kwimts, which makes our number one industry in our state very competitive. large manufacturers don't pay sales tax on energy. georgia, as you know, with two nuclear reactors has plenty of energy. that's why we've been able to get large manufacturers like hyundai and other things, it's really the competition we have especially with a state like florida that's incredible because you have a lot of migrating people going down there, high wealth people going down there and retirees. we're a different state. we're competing more on the economic front with states like north carolina and tennessee. >> we know that georgia has two

democratic senators for -- maybe it's not weird, but i think about it as, i don't know, they're at least purple and red at times. i guess is it a swing state now? are you going to run against ossoff eventually do you think, governor? >> well, you're throwing a lot out there, joe. >> you don't like those kind of questions because you'd have to really -- i'm putting you up for it. i'm nominating you to do this. >> i know. i want to answer those questions, there's just a lot of them. i mean, thankfully we righted the ship. we should not have two democratic senators in georgia. as you know i won my re-election campaign against stacey abrams by almost 7.5 points, and georgia went for president trump this year as it should have. we are a slightly red state, i'd say generic ballot we're a 52-48 state. we're not purple, we're not blue. we had good candidates raise

enough money and have good on the ground operations, we can win. and that's what we did in 2022 really with every state candidate on the ballot other than our u.s. senate candidate that had issues that we just couldn't overcome. but we did that again in 2024. so if you look at the last two general election cycles for a governor's race and president trump's re-election, we had beat the democrats, and that's what we're going to continue to do. and we're going to continue to do that by focusing on policies that georgians are talking about and americans are talking about at the kitchen table. and that is cuing taxes. we're going to do that again. that is making sure that we have safe communities, helping partner with president trump to secure the border, making sure that we're supporting our standing in the world and have less regulation and a great business environment to which we've been named the number one state in the country for business for 11 years in a row now by area development magazine, and we're very high in the cnbc rankings as well, and

so we're in a competition down here in the southeast to make sure we're keeping our business environment and a great place to live, work, and raise your family. >> a.i.'s pretty amazing. trying to -- it doesn't say here you're running officially. >> a.i. doesn't say that? >> no. certainly sounds like it, though. strong potential candidate, 2026, and it basically says -- i'm just going to read between the lines. it basically says you should. >> well, look, joe -- >> i'm kidding. >> i've got my day job. we've got legislative session started. we've got state of the state today. i'm going to be announcing this big tax cut and focusing on port reform and other things that will continue to help our business environment be good. i always believe in politics if you just do a good job where you are, the people will take care of the rest. >> speaking of tax cuts, let's talk of extending the ones -- it

is expensive. it's trillions of dollars to extend them, and you've got the tips and all this other stuff. how can the -- how can the trump administration or the country itself, how can we afford to enact all those things without making, you know, the debt levels even worse in this country? >> well, i think what's good is that discussion is going to be going on with republicans and speaker johnson and thune and johnson having the discussions about extending the tax cuts, which i think is good. economic policy is good for our economy. but they also have to have, you know, a real serious look at our fiscal conditions right now, our debt and deficits in the united states, and i think there's a lot of republicans that are very concerned about that. so they've got to make the federal government do like the states do. start moving -- i know they can't do this in one year, but start moving toward figuring out

a way to have a growth economy but make your government more efficient, stop spending where you can, and just sending the signals year after year after year that you're getting your fiscal house in order and also have a growing economy. and i don't know of anybody that would be better to do that than president donald trump and the leaders he has in washington right now. so i'm very confident these will not be easy negotiations, but it'll be a good debate they're having, and i think it'll get us in a good place. >> do you think two years from now, governor, we were talking about in this case the senate, but if history is any guidance a lot of times it's tough for the incumbents to hold onto both houses in the mid-terms. do you think -- would that be in the back of your mind for republicans, or would you just man the torpedos and just go full force? >> i think that's why a.i. is saying i'm not planning on doing

anything right now because i'm focused on being the chair of the republican governor's association. we know how tough the mid-term's going to be. we're going to be working with president trump, speaker johnson, and leader thune to make sure that we have good candidates. but the best thing we can do to have a good mid-terms is have good political operations, raise a lot of money, get great candidates to run for governor, u.s. senate, or for the congress that will support the agenda that the american people want. but i'm in the camp of they need early wins up in d.c. you know, tackling the border, strengthening our military, and continuing to focus on tax cuts, i mean that is a winner for the american people. and if they can get those things done whether it takes a year to do that or a year and a half, i think that will set us up for a good mid-term, whether you're running for governor, u.s. senate, or u.s. congress. and that's exactly what i'm going to stay engaged in helping do and be a part of the team. >> okay. remember i don't remember georgia tech or a bull dog?

which -- i don't know if i've asked you that before. neither one is -- >> yeah, go dogs. we got the game in atlanta monday night. unfortunately, georgia is not there this year. >> can't win every year. >> it's going to be a great environment. >> you can't win every year, that's right. all right, governor, it's good to have you on. thank you. and a programming note. markets closed monday, but cnbc's going to be bringing you special coverage of the inauguration of donald trump. special guests include investing legends stanley, albert, walter isaacson, and david rubenstein. coverage begins monday at 8:00 a.m. eastern time. "squawk box" right back after this.

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welcome back to "squawk box." take a look at the futures this morning on a thursday morning. the futures right now off on the dow, at least off by 53 points. the nasdaq, though, looking a bit higher, about 80 points higher and the s&p round up

around 12 points. we have an earnings alert. earnings up $1.07 a share beat estimates by 2 cents. revenue came in line with expectations and that stock off about 2.75%. we'll continue digging into these numbers to see what we anticipate here. but most of the banks have been beating expectations on this. it's the case here, but i will continue to see what's going on with u.s. bank corp. take a look at shares of semiconductors right now. the largest chip maker is rising after the blockbuster fueled by what you would imagine a.i. demand. fourth quarter earning up year over year, net profit up 50% year over year. noting u.s.-china restrictions had a minimal impact and chip makers also rising on the back of that report. you're looking at just about everybody moving higher.

asml holdings up about 5%. quantum computing stocks rising again after soaring in yesterday's session. the move coming after microsoft declared earlier in the week that 2025 is their year to become quantum ready. investors are showing interest now and a note from vanda which is tracking retail purchases over the past five days shows three of the top ten -- top 11 stocks in this case were quantum stocks. still to come this morning, we'll get reaction to united health care. those results dragging down the dow overall. you can see younited health care, those shares are down about 3%, a decline of more than $16. we're also watching shares of target this morning after the retailer provided a holiday sales update for the november to december periods. total sales in the holiday period increased by 2.8% over the prior year. digital sales up by about 9%.

guest traffic up by about 3%. i think another important metric probably the comps. comps up by 2%. that's compared with comps up 0.3% in the third quarter where store comps were down by 3%. in gains and discretionary, too, things like apparel and toys. i spoke with the target cia, and he said i feel good about the fact that it was driven by traffic growth. traffic is an important indicator of the health of the retailer. he wouldn't say whether the sales trend would continue in january, but he did say i feel good about the pay apparel is performing. that stock is mongvi higher this morning on that news. "squawk box" will be right back.

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beautiful shot of the skyline of new york right now. morgan stanley results just hitting the wires. want to get straight over to leslie picker who joins us with those numbers. >> stock reacting positively to this one as well, and it's pretty clear why. there are beats up across the

board for morgan stanley. a top line beat and a bottom line beat coming in for revenue for the quarter $16.2 billion compared to analyst estimates of $15 billion. and eps was 222 per share and analysts were expecting $1.70 per share. there are three main lines of businesses each beating expectations as well. institutional securities, which houses investment banking and sales and trading well above analyst expectations coming in at $7.3 billion. investment banking fees were up 25% on higher completed mna and follow on transactions within equity underwriting. fixed income trading up 25%, and equities -- their equities division up 51% in the quarter. global wealth management also beating expectations. $7.5 billion generated in that division, and that, of course, is now higher than institutional securities. and investment management also

beating street expectations by about half a billion dollars. so solid report across the board for morgan stanley, those shares up about 1.% in premarket trading, guys. >> okay, leslie, thank you for that. joining us right now to talk a little bit more about the bank earnings we've been getting this way is mccray sykes, portfolio manager. mccray, these have been pretty strong numbers across the board. what's happening? >> certainly on the investment banking side it's a continuation of the trends last year and also some excitement post trump election. and mna just to start the year i think was mentioned about $100 billion, so we're off to a good start as well. >> net interest income is the other story here. it looks like we're at a bit of an inflection point. >> that's right. for some companies like jp morgan the inflection point is going to come later 2025, we saw

a good report from bac, and they're repricing a lot of their books so $9 billion in securities, so that's a continuous tail wind over the next couple of years as they do that in terms of moving out securities at $1.50. >> yeah, that were at much lower rates that you can now put into higher returns. >> right, exactly. so some of the legacy securities they had bought during the earlier -- or lower interest rate days, they're now rotating into rate yields above 4.25, so that's a 1.5% spread, and with those securities it's pretty impactful going forward. >> what of that has not been priced into the stocks already? because we've seen a big round with the financials. do you think they're fairly priced or is there more room to run? what has the street not figured out potentially. >> in terms of big movement we had some yesterday, cpi part of that as well. >> inflation was weaker than expected meaning maybe the fed's

not going to be in a rush to change rates. >> exactly. and so, you know, if you look to the responses they're up 2 to 3% on their own and with cpi we got quite a surge after that. it'll still be determined by the macro component. if you look over the next three years, the setup for higher rea rates. this mna boom that should come should be helpful for banking, and then the operating leverage in a.i. contribution in terms of managing kaus these are all great tail winds for the first time in many years and credit for the consumer in good shape as well. plus the pro-growth government puts it all in good shape for fundamental growth drivers. you have to be careful with valuation, obviously, but certainly different idiosyncratic components and getting better in terms of operations. >> jp morgan and wells fargo are

two stocks that we're within the top ten holdings in the fund? >> that's correct. >> are you looking to add to those holdings, or what do you do at this point? >> we're certainly comfortable with holding them. if the market gives us a chance, we'll be adding to them for sure. jp morgan has been a winner for a long time, and wells fargo is still getting back to the premium status it used to have. >> what other stocks would you potentially add, any of them? >> i think bac is interesting here. again, they're underperforming in terms of their yield, 1.17 and you can see that evolution as they reprice their whole book, and they're just doing well in terms of banking, wealth management, asset and all their fees. i think that's a great story as well. >> thanks for coming in. programming note. this afternoon on power lunch don't miss bank of america's ceo brian moynihan. coming up next united health reporting results. we're going to discuss the future of health care and the

public outcry about insurance denials. we'll do that next. check out some other names in the sector down after that report earlier this morning. you're seeing almost -- not all of them, but all of them the worse 2.5, and cvs 2% down. "squawk box" will be right back.

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dow component united health reporting earnings of $6.81 a share beating estimates by 9 cents, revenue of $1.8 bill slightly below estimates. company affirmed its revenue guidance for the full year, but the stock is sharply lower because of the revenue miss. let's bring in lance wilks bernstein, a senior equity analyst. in your work is this the first

revenue miss in four years, lance? >> it is the first time united has missed on revenues. i'd say i think the stock reaction is probably more related to the medical loss ratio. the membership and the like were pretty in line for united, though. >> 85.5. and people that are trying to do this at home, that's like an inverse profit ratio, so i guess people would like 80%. i don't know that would take to get to 80%, but it was 83.2 in 2023 and 85.5 now, which is weird because of all the recent news with united health care. so higher costs in medicare with older individuals on some of the government-backed medicare plans is why -- the profit margins basically went down. and we think of them as denying everyone's coverage, or at least that's what we hear, that

narrative, you know, following the events of the last month, that we don't need to go into. but i mean it almost sounds as if they'd like to wring more costs out of their results. >> yeah, it's a really interesting time because i think the narrative out there that claims denials are so high is part of probably a long-term issue in the industry where programs and, you know, just like your health insurance have these high deductible plans. consumers are stuck seeing both prior authorizations so seeing the inner workings of insurance and have a lot more out-of-pocket experience with deductibles and things like that. i'd say united is at the forefront of trying to address that with their value-based care, and that really tries to take that pressure off the consumer and have doctors steer you through the system and have

them get you to the right place as opposed to you as the consumer having to decide do i want to go to this place or that place for an mri. >> lance, can i ask, i mean the narrative has been that united health has the highest denial rate in the industry. you cover the industry. is that true? >> no, i don't think so. i know that a certain article certainly put that forth, but when you look at other sources of data, the state of connecticut has a transparent set of data across lots of different products. you've seen kaiser family foundation do it. it's middle of it road in terms of percentage of prior authorizations that are denied, the percentage of claims that are denied. in general i think everyone would agree all those things are probably too high because they are a source of customer satisfaction. but, you know, for like prior authorization analysis, for example, that might be high single digits. typically medical necessity and

things like that, which is what i think consumers would really be upset about, those are like half a percent, 1% sort of numbers. normally these are administrative issues causing denials of claims or denials of prior authorization. >> lance, i think you're hitting on a very interesting issue. so you're suggesting it's not -- the number is small for absolutely necessary issues. i assume we're talking about people who are in the emergency room where something terrible has happened. >> right, long-term cancer treatments. >> but the question is about the advanced stuff. that's -- that's the hard part. and i think actually even the context of cancer treatments and the like, often time these things do require advance approvals, and all of a sudden that's actually not just from an emotional standpoint but from a health standpoint the real question. >> i completely agree. i think when you look in the industry there's a recognition that the evolution of health insurance really kind of evolved

to let's get consumer skin in the game, let's get consumers responsible for all these things. and consumers especially it they're in advanced cancer treatments and things like that, that's not the moment probably the least informed person in the system between a doctor, hospital, and insurance company should have to have all the responsibility for choosing, you know, the most efficient sort of care. i think other approaches, which are emerging like value-based care, i know there are approaches called gold carting where you select positions really useful in the system and sending people to the right places, you just waive prior authorizations for those groups. i think approaches like that are going to have to come. united health care in their interrupted investor day was starting to talk about gold carding for prior authorizations. >> what does that mean? what does value based care mean? what does gold carding mean?

because my unffrmed perspective value based means you're not going to charge me a lot but you're not going to give me a lot. gold carding means you're going to automatically authorize because i'm going to pay you up front. >> for gold carding what it really means is if you find groups of physicians that are, you know, sending people appropriately, and when there are prior authorizations, those prior authorizations are being approved. you know, things are getting appealed, they're being approved. then you say, okay, these are good actors, let's exclude them from these restrictions in the system. so you're trying to reduce the restrictions with an effort like that. for value based care the idea is if i've got a back issue, i go in to see my doctor. he sends me across the street for an mri at the hospital because it's quick and in a fee for service medicine he needs to get to next appointment. that's how he gets paid. i'm the person realized it's

january in the deductible phase, i'm the person going to be paying for all this, how much does all this cost? on the other hand, with value based care, if you're sending all that data to the doctor on his keyboard or his tablet he types in i'll send him for an mri, it'll pop up here's the cost of the mri across the street at the hospital, here's where lance lives, here's an mri that costs $2,000. the pay off for that is the savings down stream and the expensive stuff that canr steer someone through the system better, those savings then goes through the doctor. they go to the payer, the consumer, they go to the value-based care company. and so that's kind of the model associated with that. >> it does not sound simple. >> yeah. yeah, it makes it harder for the doctors, simpler for the

consumer. >> i don't know. it seems it doesn't make anything more clear to me. he's getting the information, i'm not. >> well, we're getting the information -- there certainly are consumers and approaches where you would potentially be provided with all the information, and to date those things haven't proven it be that effective because just like with consumers taking their meds or, you know, trying to do weight loss and other things like that, this typically isn't a time when consumers are the most effective in making those decisions. doctors do this all the time. >> lance, you ought to get into a.i. because the convergence -- we're on a collision course of a horrific situation. you've got an re cutting edge health care that's expensive, going to be available that everyone's going to want. you're got a perception right now that the health insurers are a bunch of profit mongers that

don't give a damn about their clients. you've got elizabeth warren saying people can only be pushed so far, you've got that rhetoric, and you've 85 on the medical loss ratio. it's already what they'd like to put to wring more out of it. it's a hit -- what do you think? maybe you stop covering this? you can't be long these stocks, are you? >> well, actually, i am long these stocks in unh. i think there's two big things you want to look at here. it clearly is a lot of public uproar about this right now, and that will continue with the model, but you're really coming off and utologicalization coming back after covid and the exception is going to be 23, 24. and capacities have resumed and back to normal in hospitals and pricing has been impacted in

medicare and medicaid over the last two years. as you're rolling that forward you're going to see i think more appropriate benefits levels, more appropriate pricing. so you're really kind of coming out of the cycle in a noncyclical industry. so that's a positive. i do think a.i. is, though, a very significant disrupter to this industry. >> you're making your move. good idea. >> hey, lance, i've got one final question for you. we often blame the health care complex. how much do you blame the employers? because the truth is these companies that we're talking about are denying these claims oftentimes -- oftentimes -- almost all the time on behalf of the employers who oftentimes are effectively self-insured. >> yeah, i think that's exactly right. the industry went through this back in like 2008 where back then they were not used to the politics. they would implement anything that an employer or anybody else wanted, and then they realized

they were getting all the backlash. and i think this is a similar point. most business -- you know, 80% of the business for united elements, et cetera in the employer side is self-insured, so they're really administering things for employers. they just need to set the criteria. this is the only thing we'll administer. if it doesn't hit this standard so we're not the bad guy here in denying everything, then we won't do it. and similarly, the bulk of their business nowadays is for the government -- you know, is effectively self-insured even though there's a pass through in rates for full risk each year, you know, it's really on behalf ofthese companies get over half of their revenues. >> okay. all right, lance, thanks for all that. we're watching. >> it's a very interesting point because people don't blame their employer for this. they don't. and maybe they should. >> yeah. >> if, in fact, you think they're not paying out.

>> saying yes. all gh "ua b" lle rit,sqwkoxwi b right back.

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it is 8:00 on the east coast and you are watching squawk box. among today's top stories, president-elect trump is picked to lead the treasury department, scott is said to testify at his confirmation hearing this morning in front of the senate finance committee. he has been a strong supporter of trump's plans and we will be watching at 10:30 a.m. eastern time. target is out with a business update raising its sales growth forecast 1.5% and that compares with targets previous expectation of flat comps for the fourth quarter but target only affirming its fourth-quarter often forecast. i spoke with the ceo, brian cornell, he thought it was important to clear the air before the holiday performance. that is why they are putting out december sales. this follows the third quarter report after which the stock was down 21%. this morning, shares are off by more than half of a percentage point.

blue origin launching its 30 story racket for the first time early this morning. the new glenn rocket meets plans now to the wildfires in l.a., processing thousands of claims while residents are eager to return. we have more from the palisades fire command center. contessa? >> reporter: yes, warnings are subsiding in the areas of concern are much smaller. emergency evacuation orders are lifted. though, the hardest hit areas of the fire damage are still locked down to residents and visitors. in the meantime, state leaders are tackling reports of price gouging where rents are concerned and a time when tens of thousands of people have to find accommodations to replace the burned homes. los angeles tenants union began

crowdsourcing a database for what it is calling gouging. california state law prohibits price hikes of more than 10% during an emergency and the l ada just warned that violators will be criminally prosecuted and he says, publicly shamed. zillow told me it has activated internal systems to flag these potential violations and remove price increases that exceed the emergency threshold. the company says more than 2% of properties here have been flattened but that would be hundreds of listings. the department of justice also set up a task force with federal and local law enforcement to crack down on financial crimes of looting, burglary, arson and an update from state farm which insures more properties than any other company. it told me it has paused the notification process on homeowner on renewals in the area affected by the fires.

the homeowner policies that were on the books on january 7th will have an option to renew state farm for another policy term. it is unclear to me how monumental that decision is because the state insurance commission last week had ordered a moratorium on nonrenewal telling insurance companies they were not permitted to tell these affected properties that they would no longer have insurance so it may just be that this is state farm announcing it is following the instructions from the insurance commissioner. andrew? the futures this morning down for the dow jones. we had been in positive territory when we started the show about two hours ago but when we got a report from united health that really dragged things down and now off by 116 points. the nasdaq is still indicated a only by 37 points.

let's go over to don chu.>> we are going to kick things off with shares of apple up just about maybe .25% despite research showing smart phone shipments in china plunged by 25% in the final quarter of 2024 . annual shipments from china fell by more than 29%. the technology giant was dethroned as the smart phone seller with local rivals to cover some of the other top spots. with regard to a couple of bank earnings reports, morgan stanley shares of just about 1% after the fourth top quarter earnings on fixed income trading revenues. investment activity also rebounded fueled alone by recent advisory and capitol markets activity. assets under management and wealth management also came up

to $7.9 trillion helped along by market returns and new inflows. that was keep focus on morgan stanley business and bank of america is up .5% after posting earnings and revenue in the fourth quarter. the bank also saw a strong fee growth of 40% year-over-year. gains in net interest income of 2025, expectations in the first quarter coming in 14.5 to $14.6 billion and growing sequentially to roughly 15.5 billion dollars by the fourth quarter so shares moving around but just up a flat quarter percent. a programming note for you, i will be speaking with the ceo, at 2:45 eastern time today on power lunch, an exclusive conversation that you don't want to miss. let's talk about the stock market and the market coming since the day after election. the stocks jumped cooler than

expected. funds global head of technical strategy and you are fairly constructive, i think, mark. but you're one concern is breath and we talked about perhaps interest rates either stay where they are or at least not coming down which is not great for the small cap so i don't think you -- there is no relief in sight for you. >> thank you, joe. it did get hit very hard starting last fall. we saw declines in healthcare just in the last month, we saw a really seven sectors lost more than 4% so the percentage of stocks right now above their 50 day moving average is down about 25% so it has been a very hard hit market in the last month. the one saving grace is that technology to its credit came back and actually helped the indices remain afloat so long-term trends actually

remain in good shape. it is more near-term breadth deterioration as well as i think sentiment has gotten abnormally pessimistic regarding the potential plans for, you know, the president- elect's policies which many of those we don't even understand the extent to which that could be inflationary and there's a lot of -->> -- what becomes law or accidental but still it becomes -- it seems, you are saying look, the indices were holding up even though you lift up the hood, what is going on is not great and you look at the details. you still like 66 .50 for the s& p, though? >> that is still my urine target and i do think that will be hit. interest rates are going up and i think some of them have to do with longer-term treasury supply and the incoming treasury secretary's plans on finding some of the debt and

longer treasuries -- so these things -- we saw yesterday by the cpi data that that was not necessarily inflationary. so the reasons why treasury have been spiking don't necessarily have to do with what the common narrative is. my view is that rates will begin to start to roll over in the months to come and that should be bullish given the recent correlation. treasuries and equities have been moving almost in unison so i think that is going to continue for the time being. all equity investors need to be concentrating on what is going on with yields, or so the velocity of yields. if they were to speak about 5%, that would be a short-term concern for the market but we have not seen substantial trend damage to think that any of our upside targets that we set last month will be derailed. >> we had a guest on just today that said, almost said things that were in direct opposition, expecting inflation either to

stay sticky and where it is or move even higher, potentially. and for interest rates to stay where they are and possibly move higher. you think the other situation happens? >> i think things are little bit over baked with the regards to yields having pressed up. >> and inflation, you said it is in the rearview mirror for the fed? >> i think that is absolutely correct. we look at the factors that make up inflation in regards to shelter, car prices. >> what about energy? >> i think the incoming administration's plans are to ramp up production by at least over the 3 million barrels a day and that will be something that causes crude oil to likely fall to 30, potentially 40, that is my target. i am underweight energy for the year and i don't think that is a big deal.

i think it will cause further inflationary pressure and china, they are entering a time when it could be a very deflationary time not unlike japan was in the 90s. there interest rates are down 300 basis points below so they are going to need a lot of stimulus to help the economy recover. those are factors that will offset any potential terrorist being and inflationary in my view.>> okay, mark. thank you. both people cannot be right. >> that makes an interesting market. when we come back, the ceo of venture capitol firm general catalyst will talk to us about a i and healthcare. also, the deepening relationship between silicon valley and washington dc as president trump gets ready to take office. you're watching squawk box and this is cnbc.

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welcome back to the squawk

box. silicon valley and washington dc glowing growing closer just in time to discussions about america's competitiveness and future. hemant taneia joins us now . a.i. and healthcare, a big announcement, this week. welcome. earlier this week, his firm and amazon web services, in partnership under which general catalyst photo companies using als to ruled out a.i. tools for healthcare systems and we welcome you and we want to talk about that and so much more. before we get there, because we keep talking about washington dc's inauguration that is happening on monday, i am curious about what you think is about to happen as it relates to the convergence of this new administration and big tech. >> good morning and thank you for having me. look, i think the mainstream

adoption technology is driving industry transformation now and transformation inevitably acquire technology policy and capitol to operate so i think this relationship and what i would say sort of unprecedented level of collaboration around technology and policy is going to happen and big tech is getting more and more sophisticated about dealing with dc. frankly, our innovation system is also realizing we are actively engaging with the policymakers. >> and you have developed a global policy institute. what is that aimed at doing? >> so we created the institute to work with regulators, working with them and all of the key markets of investing dc, brussels, delhi and the goal has been to work with them around designing policy for driving. these two big themes

that drive innovation, resilience which is all of the nations are thinking of making core industries resilient. these are defense, industry, healthcare and manufacturing and the second adoption a.i. so every country is thinking about being self-sufficient in these areas and that requires technology and policymakers together. >> how much of this is a maturation. this is just a signal of where silicon valley is and it is imported in the economy, today, relative to maybe the way that banks would have lobbied and spent a lot of time in washington post financial crisis maybe before the financial crisis, you can look back at all of the defense companies, how much do we think of it like that versus -- and right now, there is lots of maybe skeptics or cynics who say, oh my goodness, look at what has happened.

all of big tech is going to washington to kiss the ring or bend the knee. >> when i think about technology, i think about innovation and adoption. adoption perspective, technology is going mainstream. this is becoming more and more industry but at the same time, you do have the supply train where it is very unclear how technology will be used for this next level of transformation and to that end, it is also very new. so i think you are dealing with and in some ways, as the option gets accelerated and everybody is essentially digitizing all of the parts of the economy, it is becoming mature at the got this curveball where everything will change and from that perspective, there's a lot new around and you have to be careful about how you design policy around that. >> healthcare, i know that is a big focus of years and a.i..

what are you saying right now and how quickly do you think that will dose is that the single industry that you think will have the biggest transformation in the next five years? >> it is one of the fastest. which would be counterintuitive if you think it is regulated and this would go into slower industries to move and adopt especially because it is one of those to adopt but the need in the industry is so significant especially after covid that a lot of the work we are doing which we call health insurance proactive accessible care, the drive technology so what we have seen through some of the companies that have either created or invested like a adot and others is that the health systems are rapidly highlighting and adopting a.i. in all parts including clinical a.i.'s and tools to take the burden off of clinicians, teams. and it also includes a lot of administrative functions and how they integrate with a.i.

. >> we have been talking about bending the cost curve for decades and we have not managed to do it. is this the moment that that happens or does it not happen? every time we talk about new technology, we say the technology is the thing that will be in the curve but do you think there is something else that play? >> i am very confident that the next five to seven years will see a clear blueprint for how we can continue the cost structure of our healthcare economy. we don't have a choice. and if you think about the fact that the way we process payment healthcare, automated with a.i., we have a company called hippocratic a.i. that just launched a successful and is rolling out too many health systems given a nurse that is fully automated, empathetic and very effective in taking care of the patient on the phone. but you start having these

types of capabilities, you open up assistance that can be invested in the communities in the way that is much more -- >> how are those products being priced? and the reason i ask is what i think happens often times with technology is, you say to yourself, okay, the human costs x and we will call it $100 an hour so we have an ar product or some form of technology and he good is that we can undercut them but we are only going to charge $95. it is not like to charge $5.00. >> this is a very important point and this is the reason why the product did not get past because technology captured most of it. i think this time around, a lot of the models are saying that creating this notion of healthcare abundance so if you could actually reduce the cost of a nurse on the phone using a.i. by 90% and sort of that cost

probably $90 an hour and would cost nine dollars an hour and overtime might be $.90 per hour, how would you actually make the systems more profitable? make healthcare more profitable and also start to think about healthcare abundance. if those nurses are effective over the phone, how do you take care of your elderly patients remotely in a much more effective way and much more abundant way so i do think that by bringing the cost rapidly down with a.i. which is possible, we can actually rethink the care models themselves and keep the populations a lot healthier. >> and here is the policy question. if you are the government, and for a lot of this, what kind of incentives to would be to put in place to push that cost curve because as i just mentioned, i think part of the issue is if you are providing one of these services and you say a human costs $100 but i get the government to pay me $95

because they are going to be very happy at $95, what do you do about that? >> this is a very important question and i think incentive design is what we come down to and i think what we have to focus on is design solutions in the way that the trend nation system is taking care of patients that are sick with great at the, very expensive to actually putting in incentives that keep the patient healthier so how does innovation move us in that direction? where is the government thinking of denying incentive structures? >> thank you for the conversation. it is an important one and a long one and i hope you have the opportunity to continue it. thank you. coming up, breaking jobless claims and sales data and senator john cornyn, president- elect trump's pick for treasury secretary will appear before the committee this morning. stay tuned to squat box. we will be right back.

all right, up next, we do have some breaking economic data. one more day of data from the street and we will get the numbers in the market reaction when squawk box comes back.

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we are just seconds away from breaking economic data. jobless claims, december retail sales and much more. we have deceptively turned lower . it is now down triple digits. the s&p is up by three. rick santelli is standing by in chicago. the numbers. there is a lot so buckle up and be patient. on initial claims, we are now past the holiday season. 217,000? that is about six or 7000 more than expected. the rearview mirror goes 201 to 203,000. continuing claims, 1.39 million. 159,000. let's go to retail sales. the headline number of 6/10.

disappointment up for tents and in the rearview mirror, still up 7/10 and that was the second- best number of the year. now if we are looking at ex- autos, ex-autos remains up .04%. very solid reading. auto and gas, up .03% and another solid reading. up .07%, the highest reading since june of 2024 when it was up .9 and that was one of the highest readings of the year. excuse me, we are actually 1.3 percent up for december. now, let's go to philly fed, the january number. we are expecting down five 2 down seven. oh, wow! 44.3%. you really have to go on the machine to find a higher number. as a matter of fact, 44.4% in april of 2021 so this is way up

and that is a solid number on manufacturing. okay! export and import prices for the month of december. import prices, up 1/10 and down 1/10. if you take a petroleum, up four tents and those are month over month. if you look at year-over-year basis, expect 2.1% and it comes out 2.2% last month. so the division up 1.4%. export prices on a month over month basis, it is up .03% and that is warmer than expected. if you look at export prices on a month over month basis, as i pointed out and if we look at export prices and a year-over- year basis, 1.8%. that is a bit warm and we have to go back a bit to find a higher number, all the way back to january of 2023. so we want to pay attention to

these prices because the next administration, there is a good chance that we will see some triggering on the balance based on tariffs. how much they come, what countries they cover and i know that whether it is the fed or the analysts and economists, everyone is trying to get a gps on that but none of those are going to be correct and we really don't have any idea how that may turn out or when it may begin. interest rates are largely unchanged after that leap data so here we sit in a tenure, up three basis points. if you are looking at a two-minute year, up two basis points and we are hovering close to 40 and a two cents spread. we did have a big drop in yield yesterday or probably due to data. i know that everybody was talking about how wonderful the data was, i thought it was on the warm side for all inflation data that has come out thus far

that what you want to pay attention to especially is whether or not we get above this 469 or 470 area because that is where the slide slid down yesterday. should we get back, we might feel some of that void to 4.76 or 4.78. the treasury is looking for yields to potentially go up a bit but do not dismiss the fact that we touched on an everyday basis some very key levels, 5%, for example, in a 30 year and these are huge psychological areas so we want to monitor how it behaves over the next couple of friday closes especially as we are heading into supply over the next couple of weeks. back to you. >> i am in all, nobody does it better and that was four minutes where you got tons of information, and lasted all, told us what was happening and what it meant for the markets and you're simply the best at what you do. thank you. >> thank you very much.

>> can you give me a summary of what matters? that is all i need. i did not hear a lot. what is my take away? >> you should've been watching all of that yesterday. >> inflation. >> that is not what we are thinking. >> that is what i mean, that is why he is so good at this. he walked away knowing more about positioning and less about numbers. >> lisa says you are biased about inflation, rick. >> i said something really nice . >> i am being honest about it! i really think there's a lot of inflation gauges out there, truly. these are 3% handles! the goal was 2% and we are over 1% away from a year-over-year basis from cpi. these are big mrs.. we used to talk about 9% and i believe our guest yesterday that followed me used the term "glacial"

movement going down and i welcome that description because it is very accurate. >> you better hold on to your seat because our next guest doesn't necessarily think that. rick, thank you. nathan sheets is here. join us with an eighth -- nathan sheets. we will talk about these numbers but i think one of the more interesting things that jumps out to me is that you are expect the fed is going to cut 125 basis points this year out of rates and that is counterintuitive to what a lot of people are expecting at this point. i am looking at the city which now expects zero cuts from the fed so why don't you lay out how and why you see that happening.>> gaines, expected. i think the key here is that we are expecting a soft landing in the united states economy. consumer, we see a savings rate

of around 4%. on the low side, and we think that the consumer is ultimately going to just and as the consumer adjusts, that is going to we can demand in the economy and we will see some softening. clearly, i don't think we saw it in the numbers, today. i think there is still a solid labor market and retail sales continue to float solid but, you know, it strikes us as sustainable. the consumer is going to re-trend this offer housing market, weaker manufacturing sector will all be in play and given today's data, we still see that aways down the road. >> that is what i was going to say, may before you anticipate any additional cuts because the data just doesn't support it

right now. what makes you think that that is going to happen? what makes you think that the economy erodes from here? what are the signs? >> i think and i alluded to this, one key sector we are watching very closely is the housing market. and with 10 year treasury yields in the neighborhood of where we are at the moment, the mortgage rates are just choking off activity in the mortgage market and in housing. and that is a big part of the economy. secondly, we think the consumers are stressed particularly in the bottom half of the income distribution. we are seeing ongoing stresses and also some stresses amongst some of the smaller firms in the economy.

yes, exactly. and even smaller than that. it made me think of firms with 100 employees or less which are very dependent on banks and the banks just have not been lending and we don't think are likely to. and finally, we have seen long- standing weakness in the manufacturing sector are largely reflecting strengthening the dollar and with next week's inauguration, we are not expecting any region in the dollar anytime soon so you put that together and i think there is a lengthy downside rest that we need to worry about. >> i realized that you said states numbers don't play into this, 44.3 and rick said those were the best numbers when it comes to that manufacturing gauge. you think that manufacturing is not going to do well in the united states even if the new administration comes in and does things like lower tax

rates if they are manufacturing in the united dates?>> there certainly are economic incentives that could be put into place that would be beneficial and help support manufacturing. and my sense is that that is unlikely to happen to forestall some of these adverse dynamics that we are expected to occur but certainly, if finds ways to rapidly simulate the lagging manufacturing center, that would be constructive and could lead to further outcomes. by the same token, if trump is being aggressive, we are also likely going to need to talk about tariffs and tariffs multiplicity in fact but one of those is that it makes important of which the manufacturing is

very reliant. it makes them more costly and can be challenging for the manufacturer. >> and i realize you are the chief economist and not market strategist but the city's market strategists take your view of the economy into account when they are trying to figure out where stocks are heading this year because if the economy really does weekend, it sounds like a much more scenario not to cut rates anymore. >> absolutely. they have taken it into account but let's say it is the dynamic process. they don't take the economic foecessaly chapter and verse the way that we, the way that we articulate it. but i think if you look carefully at the analyses of our city equity strategist, they are very much thinking about, well, suppose the economy continues to remain, what is the outlook look like but similarly, if the economy

softens, and in that instance, you know, s&p's are certainly possible. >> okay, nathan, thank you for talking this through with us. we appreciate it and we will see you soon. the texas republican senator, john cornyn, will join us from the confirmation hearing this morning. also, what is expected later and i will be reporting live from the world economic forum next week. we've got a huge, massive lineup including the ceos of bank of america, j.p. morgan, microsoft, cisco, plus ceos of uber, goldman sachs, morgan stanley, coca-cola and salesforce. coverage starts tuesday morning at 6:00 eastern time.

you don't want to miss any of it.

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welcome back. president- elect trump sitting before the senate finance committee this morning to begin his confirmation process. now, john cornyn of texas, a member of that finance committee and you will be asking a number of questions. what is at the top of your list, sir? >> taxes, tariffs and trade i think are the three sort of general categories but there is so much to talk about. we have been coming off of a 40 year high inflation rate. my hope is that the government will quit overstimulating the economy by throwing additional gasoline on the fire through

some of the efficiency efforts, some of the budget resolution and reconciliation processes we will be going through but some of those are top of mind. >> among the proposed cabinet members, i imagine the sales through, how quickly do you think this will happen? >> i think it will be pretty quick. i don't see a lot of controversy and there is certainly no question about nullification. there will be some foot dragging as there usually is and denying the president his cabinet on a timely basis. we are determined to do everything we can to make that difficult so the president can get his team on board as soon as possible. i think we owe him and the american people who elected him , we can get his team on board as quickly as possible. >> there has been a lot of conflicting reporting. obviously, the president has talked quite openly about implementing big tariffs and reports recently suggest that

some of the folks around him are looking at ways to gradually put tariffs on so that there is an opportunity to negotiate and whatnot. how do you plan to dig into that and how much can you hold somebody like that to their word insofar as they may have one idea and the president may have another? >> the president is going to be the one to make the decision and his cabinet will advise him and i am sure he will be hearing from members of congress including people like me. tariffs can be very useful and his surgical sort of operation and certainly, president trump is to be commended for raising the flag on some of the unfair trade practices that we have seen around the world. a lot of us have come to believe in free and fair trade is sort of a given but unfortunately, a

lot of our trading partners don't play by the rules, most notably, china. particularly, i think we will see some more strategic use and tariffs but i expect this to be a subject of a lot of conversations because they can raise costs on consumers and risk some inflationary pressure so a lot of discussion about that. the resident will want to negotiate the deal. >> senator, how concerned are you about the comments made earlier in the campaign about this idea of trying to install a shadow venture to effectively neuter the effectiveness of j powell in this role without necessarily removing him? >> i just don't know how that would happen. the feds got the occlusive right to deal with monetary policy. we pretty much ignored the fiscal policy which is the responsibility of congress and i expect us to attend to that

shortly but i would not think a whole lot of that. there will be people with different opinions as there always are and i think we should listen to all of those but ultimately, it will be the feds responsibility and i think the feds should remain. >> the reason why i am asking, what do you think about scott in the context that he was the one who made those comments and therefore to raise the specter and questions about the independence of the fed? obviously and i interviewed jay powell about this a couple of months ago, the chair of the fed and the head of the treasury department typically have breakfast or lunch at least once a month if not every week. they have to not only get along, they have to work almost hand and glove together to some degree so it is an interesting dynamic in which you have the person that you're going to be talking to today having made these comments earlier. >> all right, well, you know,

people make comments for all sorts of reasons and when they are out of office and when they get into office and they have that responsibility, i think it is to temper their conduct when they realized the gravity and the impact of their decision. so i don't expect any sort of radical change. i do expect the conversation to occur and the debate on the fed which we have always have and will always have. >> senator, and unrelated question but it is in the mix in terms of business and what is happening over the next little over 72 hours to the inauguration and even sunday which is the day that tiktok is supposed to be shuttered, if you will, by law, a law that i believe you voted in favor of. the company has been declared a national security threat. there is a report this morning from the new york times that the ceo of tiktok has been invited to sit on the dais at the

inauguration on monday. the ceo of the company that has been described as, declared as and a law has been put into place because it is a national security threat will be sitting on the days behind the president at the inauguration. what is going on here? >> well, i mean, there's going to be a lot of people on the platform where the president is being sworn in that are not necessarily big trump supporters . >> forget about trump supporters, you voted because you believe that this company is a national security threat, i believe. and the president to his running that company, the national security threat company is being invited by the president of the united states to sit there so we are all trying to understand what is happening. is there a negotiation happening? is it something else? and i'm curious about someone who voted against having this

company operated because you thought it was a danger to americans, what you think about this? >> i am agnostic on who owns tiktok except for the fact that i do think ownership by the chinese communist party in effect, the government of china, is a national security threat, a spot on your phone, basically. but i expect there to be some negotiation. we passed the law and signed into law the supreme court will review it and president trump has allowed time to allow further negotiations but i would expect that result not in the status quote but in the divestment of tiktok ownership by the chinese company, bytedance, which will address the basic concern. >> but the law that was put into place by congress and signed into law by the biden administration cannot be undone by executive order, right?>> no, it cannot. >> senator, i want to thank you.

you have a fascinating day ahead of you and a fascinating several weeks, months if not years. we look forward to our continuing conversations. thank you. when we come back, we have a wrap up of this morning's big bank earnings and another reminder as we are heading into break, don't miss our exclusive interview with bank of america ceo. again, that is on power lunch coming up back to:45. on another note, markets are closed on monday but cnbc will bring you a special coverage of the donald trump including the investment legend, advisors ceo, walter isaacson and david rubenstein. coverage begins monday morning at 8:00 a.m., eastern time. we will be right back.

to leslie with an update on this morning's bank results, the big ones. leslie, good morning. >> that's right. after yesterday's blog post reports that pulled the whole sector higher, bank of america is seeing a more modest performance, this morning.

morgan stanley up 2.2% at this time. bank of america and morgan stanley estimates largely to higher numbers, investment, trading within management based on 44% higher revenue while morgan stanley generated 25% more. logan stanley saw a huge boost in its equities division up 51% in the quarter. and i just got off the phone with morgan stanley's cfo who told me that a key driver within the equities division came from clients re-risking their portfolios which increases their prime brokerage balances and that there has been a meaningful shift in terms of equity activity. rate cuts earnings growth and sentiment, she says the firm has the highest pipeline from the advisory side over the last several years. later this afternoon, we will drill into some of these trends with others for an inclusive interview from the firms had orders.

city reported earnings yesterday and that stock soared. >> they did all right. there are some other earnings to talk about. we will mention those right now . let's get a final check on the markets and in reference to united healthcare, futures, we will take a look at those with the dow jones down 126 points but in large part due to united healthcare which is a dow component and at this point, it is 5.19 down from 5:43. that is simple multiplication and you can do the math and understand why the dow jones is down so don't read too much into that. the others are trading higher. you heard rick santelli, the counterargument to the last inflationary report we saw this week, ppi and the cpi but there are some underlying signs that

maybe inflation is not put to bed for good although we do see the tenure is at lower yields than we saw before those inflationary numbers that came out and also, a pretty firm bid after the cooler inflation numbers meeting the fed the fed more dovish. got four seconds. make sure you join us tomorrow. "squawk on the street" is next. ♪ good thursday morning. welcome to "squawk on the street." stocks look to add to wednesday's gains, the best day since just after the election, even with some weakness on the dow thanks to unh. steady bond yields in the wake of steady economic data. morgan stanley and bank of america both with some