dancing again. only this time it. >> was. >> when he heard that congress might be able to enshrine his. >> wage cuts. >> without needing that filibuster proof 60 senate votes might might need less. it's thursday, march 6th, 2025 on squawk box begins right now. >> good morning. welcome to squawk box right here on cnbc. >> we are live at the nasdaq market site in times square. i'm andrew ross sorkin along with joe kernen. becky's off. but we got. >> a. >> lot going on. you and i have not seen. >> each other in. >> a little bit, so we got a lot to talk about. >> but we got. >> the blue thing. >> we got the blue shirts. we blue shirts, red ties. >> similar ties. >> similar ties. >> this is. >> is this blue or purple i can't tell. is it purple.

>> that's a purple. >> tie okay. it's purple. >> purple with. >> some lavender. >> take your i think you would wear this time. i would actually i think you would. that's not always the case. it's true. >> we have. >> issues about ties. >> yeah we do. and a lot of issues about issues about a lot of things. >> let's go over. where we. >> are on the market right now, because. >> we are. >> seeing some red arrows across the. >> board, unfortunately. >> don't like. >> to report the. >> dow right. >> now off. if it opened up right now. >> be opening. off or down. >> 475 points. >> you're looking at the nasdaq. it looks like it would open down 304 points. >> the s&p. >> 500 looks. >> like it would open down about 74 points. let's show you treasuries. all of this. >> of course on the back of just a lot of. anxiety about what's happening. >> right now with. >> the tariffs. >> and everything else. >> the ten year. >> note at. >> 4.3, the two year. now sitting under four. so we're at 3.988. >> and then take a look. >> at wti. crude oil. now trading. >> well below. >> $70 a barrel. >> so you're looking at.

>> wti crude sitting at 6625. >> yeah the. >> ten year was all the way down to like 4.1. so that's come back. >> a little i've got some issues. >> i have some issues. >> and i don't know why you don't. >> just say what you mean. >> and mean what you say. the whole. fentanyl sort of thing. it's a red herring. >> especially for canada. >> it's not. it's i saw. >> your interview with mr. lutnick where you asked the question. >> but do you know that? why not. talk about milk? 270%, cheese 245%. tariffs. >> butter 200. >> why not just say this is why not do the reciprocal thing with that. why why it's. >> almost an. >> excuse to pick. >> on i don't know the automakers or and then the 200 billion. no one can figure out what he means by that, that there's a 200 billion shortfall. it's not that's not even what the trade imbalance is. i don't even know what that number is right at this point. i'm sorry to hit you with all this

anti-administration just right out of the box. you want. >> me to push. >> back starting immediately or what? >> that would be weird if you push back on on. >> me saying i don't like. >> some of this stuff. >> do you want to do that? that's the beauty of. >> you never know, because we never agree on anything. >> no. >> no, no. >> i think you're right. i don't know what. >> look. >> i don't the thing that i can't figure out. about this is, given what just happened with. >> the autos. meaning pushing that. >> out, it just continue to extend this situation from a negotiating standpoint. >> at what. point do you. >> company if the goal is to bring. >> manufacturing and everything. >> somehow back to america? >> most of the ceos. >> that i've been talking. >> to. >> this week say. >> this. >> would have to go on for. like two years. >> before you'd actually. >> make the decision. >> to do it. >> and we. >> but the question is, is it politically palatable. >> for anybody. >> to do this for two years? and maybe that is the right thing. maybe on the other side there's a rainbow, i don't know. >> and i can it's cheaper to make things other places. so but i. >> can understand how. we should. >> we should to have. americans with. >> these great jobs.

>> i can. >> understand that maybe things. cost a little more, but people aren't going to, like, just get comfortable with that. >> idea that things. >> might be a little more expensive. >> as far as canada, i think. >> we take some responsibility. >> for being. >> having so many drug addicts in this country. i mean, i'm. >> not blaming it on. >> them and but but 40 pounds. of fentanyl versus 22,000 pounds coming up through mexico, i don't know. how do you get to do they need to get to zero in canada. maybe there's more. maybe that's maybe that's all. you know, i don't know enough about it. >> maybe that's. >> all we were able to seize at the border. maybe there's a lot more coming in. but it just seems to me. and i saw navarro on again yesterday. and they're just going to hammer that stick to that, hammer it so that they can keep them on. and here's. where i'll get you. it reminds me of the democrats and the way. they they will say something again. >> and again. >> and again that they know is

not true. and it doesn't matter because it becomes a talking point. both. and i don't like it. i wish one, i wish neither party would do it to get their own, you know. >> the. >> means justified. but they. >> they got. >> i was practicing marvell. we won't do it. we'll do it later. i was practicing saying it right. because it wasn't marvel. but we. >> had. >> a story coming up. but we talked to you. how did we talk? too long at six in the morning. >> let's talk about the automakers, though. >> because this is, of course. the central. >> issue, at. >> least at the moment. president trump granting now automakers a one. >> month reprieve from the new. >> 25% tariffs. >> that were. >> imposed on canada and mexico. >> shares of ford. >> gm, stellantis all ending the day on wall street much higher. >> in statements. >> the three companies thanking trump for his support. at a news briefing, the white house press secretary saying that trump was. open to providing. >> additional exemptions from tariffs, though reports. >> say canadian prime minister justin trudeau. >> is unwilling to lift canada's retaliatory tariffs. unless the u.s. rescinds. >> all of its new levies. now late yesterday, the agriculture secretary, brooke. >> rollins, told bloomberg.

>> the president is considering tariff exemptions. >> for some. >> agricultural products from canada and mexico. >> so all of a sudden we're starting to see the. >> carve outs. >> system, right? >> you know, if you do this, you do that. >> and this was what. >> we all thought. >> you know, when apple announced. >> that it. >> was going spend $500 billion in the us, you could imagine that they're going to hope that there's some kind of carve out for them later. >> we're going to. >> talk a lot more about. >> this very. >> topic because it is, in fact moving the markets. >> this. >> morning. >> tariffs, the economy, everything else. guess who is going to be here. the treasury secretary scott bessant. and he's going to. >> join us. >> in an interview at 7 a.m. eastern time. tomorrow to discuss all of this and more. >> squawk. >> squawk style. i think he's gonna be sitting right there with the same place where he. sat prior to actually. >> getting the. >> appointment for treasury secretary. and. you know, the. >> great thing. >> about scott is that he manages money and knows he knows the market implications of all this stuff. so peanut butter, 295% canada tariffs. >> you know, then you got things

like lumber 20%. >> shoes. the reciprocal. >> tariff stuff i kind of get behind. >> you can. >> get behind that argument. >> can kind of get behind that. >> it's like. >> you know, get doing it to us. what do you want? what do you want from us? we're not patsies, president. well, we are sometimes president trump weighing in on the debate over government funding. in a post on a social media network, the president voiced support for a continuing resolution resolution to fund operations through september, saying conservatives will love this bill because it sets up to cut taxes and spending in reconciliation, all while effectively freezing spending. this year, without congressional action. the government will run out of money next week. >> remains to. >> be seen. if democrats will help republicans avoid that fate. but with what i saw the other night, i wouldn't count on much help. >> i wouldn't count. >> on much help either. you know, there's times. when i don't feel. like verbally saying to. >> you. >> a sign or bring one of those little things, really? >> are you. >> going to. >> have ones. >> with different sayings?

>> just two sides. >> just two. >> sides. >> two sides. and i'm going to go. >> back and forth i agree, disagree basically. no. >> i don't agree. >> it's just oh. >> on most things with. >> you i. >> think i. >> just need maybe i maybe i go like. >> we agree on. >> some stuff. we do. no we do, we do. >> meantime elon musk meeting privately with gop lawmakers on doj's cost cutting efforts. the tesla ceo held gatherings separately with republican senators and house members, part of. >> nearly two the two. >> hour senate meeting focusing. >> on the presidential. >> process known. >> as rescission package. the white house could potentially send one to congress to. >> codify doj's spending cuts. >> within out meeting. >> without needing. >> i should explain the 60. >> votes in the upper chamber. multiple senators. >> telling nbc news that musk was surprised. >> to learn. >> there was a viable legislative path to. >> making doge cuts permanent. senator lindsey graham telling. reporters that musk pumped his fist. >> and danced when he. >> heard. >> the news. >> the decision, just for me, is a little too close to recession, to the words, you know, and we

are. >> see that he's. >> he's talking about recession a lot now, talking. >> about recession. he has been removing p cards. these are purchase cards. these are credit cards that that are in the government. hundreds of thousands of credit cards that apparently have been, you know, that people have in the government. >> i didn't see that and. >> that they're like. thousands of these things that they're just turning, turning. >> the cards. >> off because they aren't sure that the cards are actually attached to other people. and, you know, sometimes a credit card, as you know, could have like a subscription or something on it. look, this stuff. >> yeah. >> as long as they're not turning off the. >> wrong, that's. >> what i'm actually happy somebody is doing. right. >> and the criticism. >> that comes from. >> from what. >> he's doing, some things that. >> that they're turning off or have turned off, they realize, holy crap, probably don't want to turn off this nuclear. you know, whatever it was, we've seen some things rescinded quickly. it's not perfect. it's not perfect. maybe that's the way to do it. turn it off and see what happens, right? probably not the best way. but

coming up we're going to talk markets on another volatile. morning for the futures i guess volatile. means down because it hasn't moved much. >> not much volatility. >> just straight down. things are shaping up right now. you can see the s&p closed sorkin 4.9% down. yep. for the for from the highs. so we're still with all that we've heard i mean we're we have seen 10% corrections. but this one would be something that would be talked about obviously because of all the all the things that that people say are causing it. as we head to break, here's a stat from ryan dietrich from the carson group. the s&p 500 has seen a move of at least 1% for five straight sessions. when that's happened since 1990, looking at one year returns. >> for. >> the s&p average 16.1%, he says volatility is the toll that we pay to invest. kind of like congestion pricing. i guess you're watching squawk box and

cnbc. >> this cnbc program is >> this cnbc program is sponsored i can't believe you corporate types are still at it. just stop calling each other rock stars. and using workday to put finance and h.r. on one platform. tim, you are a rock star. using responsible ai doesn't make you a rock star. it kinda does. you are not rock stars. (clears throat) okay. most of you are not rock stars. oooh. data driven insights, and large language models. oh, that's so rock roll. it is, right. he gets it. yeah. >> economy. >> perhaps they. >> need to call it something else.

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>> and make official. >> start your will. >> at trust and wilcom now and make it count. >> shares of marvell technology. tumbling earnings and revenue were above estimates. guidance was slightly above wall street expectations. so a little bit hard to figure. >> with 16% decline. >> marvell is the latest ai

chip. >> company to. >> be punished after posting better than expected results, but failing to beat in what would be called a blockbuster quarter so obviously not good enough. shares of chip maker broadcom fell shortly after marvell's report. this company is set to report after the closing bell tonight. >> meantime alibaba. now surging in hong kong and the us premarket. >> the chinese e-commerce giant unveiling a. new ai model it claims performs just as well as deep seek while requiring just a fraction. >> this is the most important. >> part of. the same data. >> so alibaba has been now. >> on a tear this. >> year. gaining more. >> than. >> $130 billion. >> in market cap. but the creation of this particular model really gets the whole efficiency idea and raises, i think, all sorts of new questions again about, are we going to need all these chips? we don't need all these chips. are we going to need all these data centers? are we need all the energy? these are the questions. >> yeah. futures. >> this is one.

>> of those mornings. and it's been you know we've. had some good. >> mornings and bad more bad than good. >> megan horneman. >> chief investment officer at vernon's capital advisors, joins us. is this is this signaling some problems, megan, or is it i. >> mean. >> we were we haven't. >> had a 10%. >> correction in a long time. we've got. some pretty rich multiples. we've got a couple of back to back years that obviously you're not going. >> to have. >> every year. so would you. >> call this. >> a sign of impending trouble, or maybe something that could be seen as almost healthy? >> i think it. >> could be seen. >> as almost healthy. >> and i still think there might be some room to go in certain areas of the equity market. but when you look at why this is happening, it's really not a big surprise. i mean, trump campaigned on, you know, disrupting different parts of whether it's businesses or government. and we've seen that happen. i think what's surprising investors is. >> the speed. >> at which there's certain things happening, whether it's been just six weeks and all of the things the campaign promises

that he's been trying to fulfill, and also the speed at which economic data is softening, i think most economists had expected weakness this year. but you have a fed now looking for a -3%, almost for gdp for the first quarter. so you're looking at economic data weakened quite a bit. i think it's more of a valuation i guess you could say correction or reset. you mentioned valuations coming into this year were very high, especially in u.s. large cap, both growth and value. these things are just having to now reset with the expectation that the political turmoil will continue. volatility is here to stay. interest rates are still a risk to the market and that we're starting to see earnings get revised lower as as we see economic growth come lower as well. >> and some of the highest flying parts of the market and with the highest beta. >> like the. >> nasdaq are we're close to a 10%. correction the other night. >> i know.

>> you saw it. >> the address. >> to congress. >> and you know, the joint session. president trump did not mention equities. but you heard him mention i don't know if you heard him mention bonds. he said we've had a big beautiful drop in interest rates. so they're noticing that. and that's something i know he he likes higher stock prices but he likes lower interest rates a lot. and you know stubbornly mortgage rates have stayed high even though the fed cut. so that is welcome isn't it. and it can be it can help. inflation if rates come down in certain you know you take your pick credit cards whatever you want, whatever you want to talk about. it's a good thing when rates come down. >> yeah. and rates most recently have come down. but keep in mind that long end of the curve is something that's very difficult to control from the fed. and obviously the white house. and that long end of the curve is what's going to dictate mortgage rates. this is the and these are the parts of the curve that are

impacted by inflation. so i know that the administration wants lower interest rates. but it's really difficult to get that if we still have lingering inflation pressures. and we're seeing that. take a look at the ism services index. yesterday it was a better on the on the headline. it was a better report. but people are not talking about some of those underlying components like prices paid. that's still over a 60 level. that's not telling me that inflation is coming down the way that it needs to be for the fed to be able to come in and even think about cutting interest rates again. >> the on asking. >> a political question. so oh boy, here. >> we go. no. buckle up. >> buckle up. >> it's a good one. bring it on. let's see. >> i think. >> the inflation. you know. >> was still in the pipeline. i think biden killed all the chickens. >> so i don't. >> even i don't even blame the eggs on on trump. but the jobs numbers that we see tomorrow or the gdp number i've heard that this is biden's job number

tomorrow. i'm not convinced it's biden's job number. you could you could see employers. pulling in their horns based on all of this uncertainty. and this could be, i don't know, half and half or this could you could i know you're going to see it blamed on trump if the job numbers are bad. >> of course. but i don't think this is biden. we can't say this is biden because as you mentioned, companies yeah, we companies will start pulling back on hiring. i don't think that we can look at any of these employment numbers in the first quarter of this year and really blame them on trump or biden. i mean, this is a business decision. and even coming into. >> that, yeah, it's andrew's fault. >> so but megan, i and maybe this is the wrong indicator. you know, i was looking the other day at. >> mergers and acquisitions. >> activity in the month. >> of january. >> so the president obviously gets becomes the president in january. but we know that he's the president in november. given all the animal spirits and everything else. you think a deregulatory things going on,

you would have imagined there'd be a lot more mergers and acquisitions activity. it is down 30%, the lowest level since 2015. what do you make of that? >> yeah, i mean, keep in mind the beginning of this year we were looking at bonds selling off as well. so if you have interest the interest rate environment and then you have less certainty around what the federal reserve can do, a lot of that also has to go off of what's the interest rate environment from from an a m&a perspective. and it's just clearly there's clear uncertainty. we also saw that in, you know the small business sentiment. we've seen that for several months now. so i think that has a lot to do with why you may be seeing some lower m&a activity. and again, that animal spirits that came right after the november election, part of it had to do with optimism around trump and how he would be from a regulatory standpoint. absolutely. but also, i think it was just that there was no uncertainty around the results of that election. and coming into the election. i think there was some there was some talk. we

may not have a clear winner that it wouldn't be, you know, a landslide. and this was, you know, pretty much a landslide. so that was, that was taken off the table. that's why i think you got that animal spirits and equities. we've seen this before. equities can be very overvalued and we don't know when that will. you know that valuation correction will just come in. and that's what i think we're seeing now. so that's going to put companies on on a little uneasy as well. so that doesn't surprise me. >> then i was going to we don't have time. but these you know tariffs if it doesn't last forever that really could be higher prices but not inflation. this could actually be transitory. so because you're you're marking up prices because of some you know exogenous event like a tariff. because we've had people come on and say that inflation is caused by printing too much money. so this could be the type of transitory inflation that the fed was thinking we had the first time around when it really was printing too much money. but if prices go up, they could come. they wouldn't necessarily stay higher once you

take the tariffs off. so i'm not sure it really is permanent inflation in the system unless it's permanent tariffs i guess. then it there's so much to think about. that's why we're that's why the market's down 400 points a day megan. right. thanks for your time this morning. and you have a final thought or. >> no it just yeah from the tariff perspective you're right. if this is a one time tariff that may not impact inflation over the long run. but we haven't figured out the other inflation stuff that we were dealing with before. yeah. before tariffs were even a factor. >> right. it's still a problem. all right. thank you. >> see you. see you megan. >> thank you. when we come back a social app that video gamers depend on could be next in line for an ipo. we'll bring you details on that story after the break. plus, political pollster frank luntz, he's going to share some brand new insights from voters on president trump's fiery address to congress this week and what it all means and where we're all going. stay tuned. you don't want to miss tuned. you don't want to miss that. in just a moment. squaw

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deals right when you need them. car gurus. download the app today. february jobs report the first full report under the new administration. will employment remain resilient? what the data could signal for the fed employment numbers and analysis. squawk box tomorrow, 8:30 a.m. eastern on cnbc. >> welcome back to squawk box. social app discord. now holding talks with investment bankers recently as it considers a possible ipo later. >> this year. >> that's according to. >> the new york times. >> discord provides, of course, that popular messaging service used by. >> video gamers. >> and some other groups. >> as well. >> it grew in popularity. >> a lot. >> during the pandemic. we've had the ceo. >> on a couple of times now. >> it's valued at. >> $15 billion in 2021. >> and reportedly held acquisition talks. >> at one point with microsoft. >> though no deal then. ever materialized. so we're going to keep our eyes. >> on that. story this year. >> and corps. we've corps. >> we've remember that name another ipa candidate, the provider of computing capacity

to tech companies like meta and microsoft, filed earlier this week to go public. now, the financial times is reporting that microsoft has abandoned some of its commitments to core. we've over delivery issues and missed deadlines. microsoft is corwin's biggest customer, accounting for 62% of its revenue last year in ipo materials. earlier this filed earlier this week, we've warned that any negative changes in demand for microsoft microsoft would adversely affect its business and future prospects. so stay tuned on how you can do the ipo with without clearing some of that. >> yeah. >> you got to. coming up details on that potential us sovereign wealth fund that president trump has floated, a former star wall street banker reportedly has been tapped to lead the effort. and then later. stay tuned for our special interview with pennsylvania republican senator dave mccormick as we head to break. here's a look at

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rangers.com. >> or stop by. >> granger for the ones. >> who get it done. >> good morning. >> welcome back to. >> squawk box right here on cnbc. on a thursday morning. we are live at the nasdaq market site in. >> times square. >> let's tell you about where the markets stand right now i hate to say it down. dow jones looks like it would open down about 420. >> points right about now. >> that's been moving. around all morning. nasdaq looking to open down about 275 270 points right about now the s&p 500 looking to open off now also 65 points. here's a look. >> at the biggest. >> laggards in. >> the. >> nasdaq 100 right now mostly chip stocks. but mongodb on that list after its full year. guidance falling short of estimates. you're seeing that stock off almost 20% this morning. marvell off 16%. you're looking at micron down a lot.

it's not not nearly as bad but nonetheless off 4%. microchip tech technologies off about 3.5%. joe, do you. >> see the dax. >> you know, our team alerted us. i know we've got i'm. >> going to. >> read this. you've got people we do overseas. >> it says here we're watching the german markets. and in fact we have been now alerted more or less. yes. so in fact, it's true. we are now watching the german markets because we do have a team because the dax get this recorded its best session since november of 2022, up 1.4%, and it's trading at a record high. so we're all kind of we're learning along with with viewers. it's trading at a record high as investors bet on stronger growth prospects and significantly higher spending on infrastructure and defense. a new report this morning says germany's lower house could start debate at the next on the new debt brake agreement. that

could be as early as next thursday. this morning, shares of the european defense sector are paring some of the gains, but you can imagine after some of the comments about stepping up defense spending that they did, they were doing well earlier this week. that's the that's the age old question. do we pretend we know everything all the time? >> because no, we don't. >> you know, the people were watching on tv half the time. we know they don't know diddly. most of the time we know more than most. but we shouldn't pretend we know everything. should we know? >> we admit when we don't know. >> okay. do we learn? do we equally admit what we don't know? do you think? i think i admit more that. >> you think you admit. >> more i think i admit more that i don't know than you do. admit that you don't know. >> i don't know diddly. >> okay, so we've we've agreed on this. neither one of us do. why is anyone watching? that's a separate question. >> coming up, political strategist and pollster frank luntz going talking to american voters following president trump's congressional speech

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>> jim and. >> jeff in the morning gives you a diversification of your portfolio. >> the return on investment for the club pays for itself. >> jim cramer is the. >> benefit you. >> get that you can't. >> get anywhere else. >> he has a unique. ability to know the market, explain. it to people. it's a great value. >> get invested. join the club today. go to cnbc.com. join jim. >> welcome back to squawk box. right now we're going to talk about president trump's messaging in his first six weeks in office. we got a pretty good distillation of it all. i think we. got to see most of it on tuesday night in various forms. when president trump addressed congress, our. >> next. >> guest spoke to voters after that speech to try to get their biggest takeaways. joining us right now is pollster and political strategist frank luntz. frank, it's great to see you this morning. a lot of folks obviously watched the speech. for some it was fabulous. for others, it was polarizing. for others, still, it was something else entirely. what was the biggest takeaway from what you

learned from those who saw it, that you pulled what. >> was exceptional? >> and we. >> talked to. >> the right group of people. these are individuals who voted. >> for trump once and. >> rejected him. >> at least once. >> so they're the. >> definition of swing voters. they didn't mind that the speech. >> was incredibly long. >> in fact. >> they enjoyed it. they didn't mind that the president. >> focused too much. they felt on. >> joe biden and on. >> the past. >> whereas they wanted to hear more about the future. they did not like the democrats holding up paddles and yelling and all. >> that performance. >> that i had been. >> critical of. >> republicans when they did it to joe biden. well, they didn't like the democrats doing it to donald trump. they believe that this is a serious. speech and it should be taken seriously. and as. >> you see. >> people standing up in the background. >> they don't. want performance. >> art, they want policy. the overall agenda. i want to be clear about this. what trump is president. >> trump is trying to do. >> has significant support, and it continues. what they're critical of is the way that he

communicates it. they don't want a rally. they don't want. 2024 back again. they want a different president. now that he's elected, they want him to perform on issues and policy, not on politics. >> frank, yesterday you spoke with more than a dozen voters across the country. i want to show some some video from this, if we could, so people can see what's going on. my understanding was an even split between those who voted for trump and former vice president harris in the election. and here's what they said about the influence, interestingly, of elon musk. >> what we're seeing. >> is really smoke. >> and mirrors. >> we don't. >> really know. how effective it. >> will be. >> but we do. >> know that he is. >> an effective businessman. >> i think. >> he's one. >> of the smartest people in the world. >> but what makes you successful. >> in the private sector does not mean. >> that you. >> can go in and clean out the government. i think. >> really, i think. >> everybody agrees. >> that there's a lot. >> of waste in the. >> government.

>> but we. >> need all hands. >> on deck. >> tiffany from texas. >> thank you, is. a great business man. >> however. >> it reminds. >> me of a. >> kid walking in a room and just snatching stuff off. >> of a table. >> the way he's doing with the government. >> frank popularity of elon musk and all of this. and to the extent that his popularity is either higher or lower than president trump's, does it rub off either way? >> well. >> i wouldn't. >> use the word popularity. >> i would use the word. >> credibility because his. >> popularity has fallen significantly over the last few years. there was a time when he was the. >> most popular business. >> person in the whole country. but as far as. >> credibility. >> he. >> is regarded as. >> being smart, regarded as being insightful. what they're questioning is does. >> he. >> have too much power, and is he enjoying too much of. the slash and burn? now, make no mistake, americans are. >> fed up. >> with waste, fraud, abuse, and particularly corruption in

government. and they like the i'm sorry. they like the process. it's the tone that they don't like. it should be done out of regret, out of recognizing these are real people with real lives, real families, and they're losing thei jobs. no waste. but do it with a scalpel rather than a sledgehammer. >> thank you. always want to tone things down. you want people to be more civil and everything. and i know you said they want policy from trump. they don't want the scorched earth. and we saw a lot of that the other night. >> it's just. >> i think that you look at the response from democrats for this first six weeks or. whatever it is, it he's almost it's almost like he's not going to turn the other cheek. and you've seen chris murphy, you've seen. >> the paddles. >> you saw the guy shaking the cane. he's he's introduced articles of impeachment like 12

times already. he had to be escorted out. and i think a little bit of that frustration showed up with with trump when he said, there's nothing i could discover a cure for the worst disease in the world, and you'd still sit on your hands. so and you've asked, i remember the last time i think i had seen about four years of just acrimony, and then once republicans got in, he told me, we got to be nice again. all of a sudden it's like, oh, now, you know, you allowed it to go on from the other side for 3 or 4 years. now you're asking for civility when you know, you see what i'm saying. why should trump at this point? not not, you know, when he's treated one way, why not? why ask him to turn the other cheek? >> i understand that, and you're correct. >> by the. >> way. the viewers really dislike. they saw this. performance art. >> they saw it as. >> as a. >> bad form. >> of opposition. and they've been asking the democrats now since the beginning of this administration, what is your

alternative? as critical as i am of trump's communication, the democrats are much worse that for them there is no policy. there is only opposition. obviously, i reach out to both parties in conversation and doing my job, and i hear nothing from the democratic party and communicating a coherent agenda and communicating a coherent message. and in fact, what they decided to do with those paddles, what they decided to do with congressman greene, was absolutely abhorrent to voters. what the public is looking for right now, they believe that trump's agenda is correct. they want a legal immigration to stop. they want accountability in washington. they want safe streets, safe neighborhoods. they agree with what he's doing, and they disagree with the democrats. in where they stand. all they're asking for is look

forward, not look backward. >> frank, what i want to know, though, is on the economic message and the question that i have about the tariffs, the uncertainty that the tariffs or even the possibility of tariffs create, depending on where you think we really are, what's going on in the stock market, how the american public, how his voters feel about what's happening. you know, for a long time during the first term that he was in office, he used the stock market as a barometer of his own success by default. if you looked at where the stock market is today, you wouldn't use that, as i imagine he wouldn't use it as a barometer. you don't hear him talking about it to the extent that there's going to be economic pain, even if it's temporary. and obviously, you talked about musk earlier. he talked about the possibility of temporary hardship with the hope that there's, you know, as i say, a rainbow on the other side. and maybe there is. will the american public wait for the rainbow? and how much time does he have to do these things? if, in fact, the markets and the

economy are challenged in between? >> let me be clear. >> voters do not use the stock market as the measuring tool. they use the price of milk. >> the. >> price of bread. >> the price of gas, the price. >> of eggs. and they are concerned. >> that that. >> tariffs, in fact, the argument that had been made by the harris. campaign in october that tariffs were a tax increase, voters now see this. trump voters and democrats. but what they're asking for is and i'll use the expression of a focus group participant, an eye for an eye, which is if other countries are doing it to us, they want us to do it to them. >> even if it hurts them. >> they want fairness. >> and in fact, that's the word that i. >> but frank, the question is, will they pay for fairness because there's a cost to fairness. fairness is not free. in fact, it's a tax on us. so the question is when the cost of goods goes up, will they say, you know what, i'm i'm thrilled

to pay more for milk because guess what? those canadians, they were going to stick it to them. no. >> they're not thrilled. i want to be clear about this. they're not thrilled that prices have not come down. and that is their single greatest criticism of the president so far. but it's unfair. he's been president for, what, six weeks? give it time. give it six months. give it give it two years. the judgment date is november of 2026. if prices have come down by the midterm election, they will give him credit for it. >> what about unemployment, though, frank? i think there's an expectation even already that we may have a fall in employment on friday when we get that number and how that is going to play politically. i mean, we were talking frank, interestingly, just about the month of january in terms of mergers and acquisitions. i use that because it's oddly a sort of interesting barometer of confidence in the boardroom. right. so ceos do deals when they have confidence and for

better or worse, their confidence. weirdly, given all of the animal spirits and conversation about a deregulatory agenda was at the lowest point it's been since 2015, in january. what does that say about what's happening? so let me. >> be candid. >> voters aren't talking about jobs. i can't actually answer that question because it wasn't the top issue or the second issue, the third issue, or even the fifth issue. you're raising something that i don't know because voters aren't talking about it right now. to them, the economy is all about affordability, not inflation, affordability. can i afford the house? can i afford it in particular the car? and that's going to be the key component of tariffs. what does it do to auto purchases? will people still be able to replace their transportation? andrew, what's been interesting about this interview is that the focus of wall street is different than the focus of main street, and that's something that people

need to pay attention to. what's happening in the boardrooms is not what people are looking. >> frank. what i'm going to make an argument to you that that i think you may disagree with. and i'm not saying the market always knows more than, than than main street, if you will. but oftentimes the market is ahead of where the economy is. and so if the economy starts to move where the market is, i think americans are actually going to start to pay. they may not pay attention to the market, but they'll pay attention to the underlying economics. >> that's fair. but i also want to emphasize that there is a difference between mom and pop stores. there's a difference between main street and small businesses and family businesses than there is with corporate america. and what you're pointing to right now is that there's this break, there's this division between them. and i'm suggesting to those who are watching that you need to pay attention to your consumers. you need to pay attention to those things that are small rather than just the shareholders,

because in the end, it's this small individual. >> family i'm saying to you is that i'm saying to you, if walmart thinks that they're seeing softness in their customer and then actually either lower prices or has to make moves, the small business, it's going to impact them, you know, multiple, multiple a multiple because they don't they actually can't spread out the pain across a larger business. that's why this idea that they're somehow that main street is somehow completely disconnected from wall street doesn't seem to make sense to me. >> because you're looking at the long term and they're looking at today, next week and next month. you're looking at people who are seeing the entire economy. and i'm listening to people whose entire economy is based on when they visit the gas station and when they visit the. >> what i'm saying is that that gas station is going to feel it in three months. i'm sorry to say. okay, i'm sure you'll be doing the poll in three months and we'll talk about it. yes. >> we'll need. >> to. >> have this conversation again. thank you. >> okay. thank you. >> thank you. energy prices are going down. they're going down.

there's a softness. correct. yeah, but they're going to be feeling at the gas station in a good way. >> well, the feeling at the gas station, the good way with the small business that owns the gas station is going to feel it the hard way. >> exactly. coming up inside this morning's chip selloff and key questions for the sector, with tariffs and demand in focu. and what we heard from president trump the other night about the chips act. dan, we're going to speak to the author of the book chip war. stay tuned. you're watching squawk box on cnbc. >> my clients. >> deserve someone. >> who understands their. >> world. >> someone who listens. >> who has their best financial interests at the center of every decision. >> our business. >> is built around being responsive to our client's ever changing. >> needs as an advisor. >> as their are. >> a. >> custody services provider. i see my. >> client's success. >> as my. >> own because when they grow. >> we grow with them. >> for over. >> 25 years, we've been committed to arias. >> and that's why i chose

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2024 of over 200 million supporting both military programs and commercial aviation backlog, is up 41%. >> to. >> over a quarter of. a billion. >> air industries. >> group i. >> welcome back to squawk box macy's out with quarterly results i want to tell you about him. earnings coming in at $1.80 a share. it's better than the 153 that analysts had expected. >> meanwhile sales coming. >> in at 7.77 billion. now that number slightly below estimates comparable store sales falling 1.1% during the quarter. that's also below expectations of down 0.2%. and for the full year, macy's seeing net sales and earnings coming in below expectations. despite all of that, at least for now, you're looking at that stock on the move higher about 3% higher. so we're going to keep our eyes on that stock this morning. >> and the chip sector is today reacting to the latest results from marvell technology. earnings and revenue beat estimates. but the numbers

weren't good enough to impress investors. the stock is getting slammed. sector is not doing very well but the market obviously overall is weak. joining us now, chris miller, a professor at the tufts fletcher school and the author of chip war the fight for the world's most critical technology. how'd you like if i started asking you questions about technical support levels? and where's marvell going from here, and what kind of earnings growth are you looking for? that's not why you're here. i don't think, chris, but but as someone that studies the entire industry, do you think anything is changed just in the last couple of months about how positive the trends are for most of the group because of ai, is anything changed or this is the way markets move? >> look, i. >> think the. >> ai trajectory. >> is still. >> very positive. but the policy. >> outlook, the macro uncertainty, the. trade uncertainty that's going to inevitably hang over semiconductor companies.

>> because they're so. >> trade dependent. and so if you see consumers starting to pull back in consumer electronics, if you see trade uncertainty calling into question investment and trade flows, that is going to inevitably impact semiconductors. and i think. >> that's part of what we're. >> seeing right now. >> there's some crosscurrents too, because obviously we're we're fearful of china long term or i don't know whether fearful is the right, right word, but we want to take steps to maybe counter some of their moves. so we don't want to give them everything. we have all of our technology because they steal it anyway. so that's probably a negative. but then you have something like tsmc with that big investment, you've got other manufacturers, you know, announcing some big plans here. net net is that are things moving forward in a good way for the united states or backward for the chip sector here? >> i think the tsmc announcement

was obviously. a major. step forward. >> a huge. >> expansion of that company's manufacturing plants in the us, although we don't really know the details yet from them. >> about what time. >> horizon that investment. will be made over. but i think. >> there are. >> also some potentially worrisome signs. i mentioned the trade uncertainty, which. >> the. >> sector certainly. >> worried about. >> there are. >> a lot. >> of discussion about semiconductor specific tariffs from washington, which if implemented, depending on how they're implemented, that could have a major impact. and there's. >> also discussion. >> about pulling back some of the chips act funding. >> which benefited certain companies. >> and they've made manufacturing decisions around that. and if that is pulled back, that will certainly impact their manufacturing plans as well. and i think what the industry wants is, is more clarity and certainty around the policymaking environment. and that's what they they're not getting right now. >> the you heard the president talk about the chips act and none too favorably. the other night. there was some bipartisan

support for it. but then, you know, we have seen i mean, i wouldn't summarize the entire act with what happened with intel, but it is difficult for the government to pick winners and losers. and, you know, more often than not, i mean, it's nice to get, you know, some public private partnerships in, in an important industry. but it has it been a great success. do you think we should look at it and say, wow, that was actually good legislation coming out of washington? >> you know, i think it's ironic. >> to. >> hear president trump criticize the act because. >> it was his administration that set it in motion to being passed. and if you look at tsmc's investments in arizona, which began. >> under his. >> first term. >> they would not have. >> happened in the absence of the tax credits and the incentives that the chips act provided. so certainly intel is not a success. story right. >> now, but tsmc. >> is, and i think you can point to other examples of investments

that definitely would not have been made in the absence of those. tax credits and incentives. and right now in congress, there's a decision should you extend the tax credits that make manufacturing in the. us more competitive for semiconductors and other semiconductor supply chain activities? >> and if those. >> aren't extended, i think you. >> should expect a. >> reduction in investment. relative to what we've seen in the last couple of years. >> hey, chris, we've seen apple obviously make a big announcement $500 billion announcement. you also saw it from stargate. do you think that there's going to be carve outs there for companies like that in terms of the other businesses that they have, where they're where they're importing goods? you know. >> i think that's. >> that's possible. i think when you start. >> thinking about. >> what are those carve outs? >> look out. they get mind bogglingly expensive. there are tens of thousands of components in an invidious server, for example, that might be assembled in a new plant that's being built in texas. even if the chips are made domestically, many of the other components are not. and so just the complexity

of the supply chains makes devising a tariff policy around carve outs very, very difficult, which is why. the industry is hoping there won't be any changes. >> at all, because. >> they've been structured around the assumption that you can move goods back and forth across borders. without this type of tariff uncertainty. >> okay, chris, it's great to see you this morning. thank you for your your smart intelligence and analysis of everything. >> wasn't too bad for you. no, he's in boston, but he's not at one of the. you know what i mean? tufts is right. you're not in the people's republic of cambridge. >> don't poor math yourself, mr. mit. >> yeah, right. i like colorado. >> colorado, boulder better. >> fit in a little better. i think out there. >> it is just past 7 a.m. it's actually 704 already this morning you're watching squawk box on cnbc. i'm andrew ross sorkin along with joe kernen. and becky is off today. we've got a lot of bunch a bunch of big stories though. and we got the markets in the red this

morning. we'll talk about what's going on here. president trump granting u.s. automakers a one month reprieve from the new 25% tariffs imposed on canada and mexico. gm, ford and stellantis thanking trump for his support. the white house saying the administration is open to providing additional exemptions from those tariffs. that sort of what led to my question about the chips piece of this, which is, are we going to see lots of carves out all over the place? president trump, meanwhile, expected to issue an executive order. this could come as soon as today aimed at dismantling the department of education. the wall street journal reporting a draft of that order, directing secretary linda mcmahon to take all necessary steps to facilitate the closure of the department based on, quote, maximum extent appropriate and permitted by law. and then there's this popular messaging app, discord, holding talks with investment bankers recently as it considers a possible ipo this year. that's according to a new york times report. company valued at $15 billion back in 2021 reportedly had held acquisition talks at one point

with microsoft, though no deal ever materialized. take a look at futures. we're looking at the dow now off about 360 points. that's a little bit better than where we were just about an hour ago. nasdaq down 258 points. the s&p 500 looking to open down about 60 points and want to get straight over to our good friend dom chu, who's looking at some of this morning's biggest pre-market movers. dom, what's going on? >> all right. >> so good morning andrew. good morning joe. we're going to start things off with shares. of liquor giant brown-forman giving back some gains this morning as some canadian provinces begin removing american liquor products from their store shelves in response to president. >> trump's tariffs. >> the jack daniel's maker is reaffirming its annual forecast and its earnings call. but the ceo there is warning of uncertainty specifically, and called that worse than a tariff, noting potential impact on sales. morgan stanley analysts are also downgrading that stock this morning to an underweight from an equal weight rating, in part on soft spirits demand and potential tariff risks. so brown-forman shares off by about 1.75%. then there are shares of

victoria's secret under pressure this morning, to the tune of 2.75%. its fourth quarter earnings and revenue topped expectations, but the retailer did guide revenue lower for the current quarter, below estimates as consumer pressures continue to weigh on sales. so victoria's secret down 2.75%. and we're going to end with an interesting story here. shares of microsoft. they're moving lower this morning to the tune of 1.25% up, partly because partly the financial times is reporting the tech giant has withdrawn some of its commitments to cloud computing provider core weave ahead of its big ipo. they're citing delivery issues and missed deadlines for the move. now, core weave provides microsoft with computing capacity for big things like data centers, which microsoft uses to scale up its ai models. now, a core weave spokesperson has denied that report, telling cnbc, quote, we pride ourselves in our client partnerships and there have been no contract

cancellations or walking away from commitments. any claim to the contrary is false and misleading. but of course, andrew, this is a big deal because that ipo could be at a valuation of $35 billion. and of course core weave is backed by artificial intelligence giant nvidia. i'll send things back over to you okay. >> yeah. what to make of that. that's pretty pretty strong denial. but very direct denial. >> yes a direct denial. >> but where there's smoke i don't wear that. who knows? new data out from experian on auto loans. i don't like credit agencies, so i don't know. it's some bad experiences. i think. you know what i'm saying. you can't get it once it's on there. it doesn't matter how it happened. they don't care. you know, never mind. what's going on, phil? >> yeah. >> let's let me let me go through the data here, because this is a good snapshot. yes, it's fourth quarter data, but it's a snapshot of where the american consumer is heading at

the end of 2024. let me set the table first in terms of the amount borrowed, monthly payments, how things changed in the fourth quarter year over year. again, this is of course, q4 of 23 average monthly amount borrowed. that's close to a record high, an increase of more than $1,000. look at the average monthly payment that is also close to a record high at $742. now for the troubling part of this story, which comes down to delinquencies or people who are not making their payments either, basically, they're not making payments on a regular basis, 60 day delinquencies. and what we're showing you here is average transaction prices, which, by the way, at more than $48,000, that's what you and i are paying at a dealership on average, almost at a record high, according to experian, 60 day auto auto loan delinquencies at an all time high of 0.99% of all open loans that they were checking in the fourth quarter. 30 day auto delinquencies also close to a record high highest

since the recession in 2008 and 2009, at 3.17%. if there's any good news in the auto industry when it comes to people taking out auto loans, it's the fact that interest rates have come down. they're lower than they were in the third quarter and previous to that, but they're still elevated considering where they've been in recent years. there you see the new rate average 6.35% used at 11.62%. take a look at the auto dealership stocks. the average new incentive rate now is 3502. that's what on average you will get in terms of either rebate discount in some fashion that is likely to come down if the auto tariffs go into effect and stay in place starting in april, because the automakers will be able to adjust some of their production, but they're not going to do everything that they're going to want to do. and so you'll see a combination of things happening, including

likely the lowering of incentives, as well as perhaps increased prices, and automakers and auto suppliers having to eat it higher or lower margins because they will have to eat the cost that is going to be passed along through those tariffs. >> all right. how many are there phil. there's experian there's. trends. there's like three of them. >> yeah there's 3 or 4. >> different ones. >> we've been using this experian data. they've been doing this on a quarterly basis, you know, for almost as long as, almost as long as i can remember reporting. >> i just remember, you know, you're not even allowed to look up your credit score. oh, he's looking at, you know, that gives you something negative, right? i mean, those guys are good for you. >> you're making me want to check your credit report. >> you're going to get your money. >> in there that you don't want me to see. >> it's late. i'm a day late. i'm good for it. all right, you're going to get your money, but no. oh, no, that's. oh, terrible. oh, you know, i don't even want to know. thanks, phil. see you later. how's yours? do

you know, have you checked lately? what about yours? do you know yours? >> i don't know. >> you don't. you don't know yours. oh, you're like a 900 probably. you know, knowing you're right. mind your p's and q's. >> i don't know, i don't know. >> who takes care of all that. you don't, do you? >> i don't know the people, the team. >> i have a team. the team. sometimes the team might not be exactly on time. >> coming up, elon musk meeting with house republicans to discuss the work of doge. house majority whip congressman tom emmer is going to talk to us about that meeting, and he joins us with the latest. you don't want to miss it. and a programing note for something else you don't want to miss. this is going to happen tomorrow morning. and it's a big one. treasury secretary scott bessent at the table right here at the nasdaq with us 7 a.m. eastern time. all the questions you have, we will be asking and we will be getting answers. >> stay tuned. >> and more. squawk box, this is cnbc. >> questions you don't have.

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priorities and how officials should respond to pushback in their districts. joining us now with insight from the meeting. house majority whip tom emmert and majority whip congressman, you don't call someone like a whip, do you? whip emmer? we just it's congressman. is that what we go with? we do leaders go ahead. >> everybody around here. >> joe calls me either whip. >> or something that i can't repeat on this. >> really i'm going to do whip

then. because if you're they love, they love when i call. >> is that. >> what it is? >> they love? when they call people leader, they love. oh, a leader, this leader, hoyer. they love when you call it leader. i'm just going to call you congressman so you. >> can call me whatever. >> you want. >> joe. >> yeah. you just just call me for dinner. i saw a an article the other day. it was so disingenuous, congressman. it was somewhere where they said, oh, the pushback. these guys were really hearing it. these were. and i looked at it. it was all democrats that were crashing the local congressional meeting. but you're not going to see that. they're going to say, oh my god, even, you know, all of his constituents are are angry about doge. i still think there's a what's the public opinion on on doge right now, would you say, congressman, just as a guess? well. >> i would say anecdotally, based on what i'm hearing back from my district, it's about a 70, 75% excited and happy that this is actually happening. they've been waiting for it for

a. >> long time. >> and you're right. you've got these activists. many of them are paid activists. they represent different groups that have been making their money. >> off. >> the government for decades, and they don't. >> want to. >> see. >> this happen. >> so they're. >> literally trying to create some opposition that just doesn't exist. >> and i. >> would i would go. back to the president's speech the other night, which. >> they wanted to pan. >> they wanted to be negative about it. i think depending on which poll. >> you were. >> looking at, 68 to 76% of americans thought that was great. that's exactly. >> what they want to hear. >> he made promises, joe, and he is delivering on those promises. and the americans have voted for him. 77 million americans are really happy about it there. >> there's a couple. >> of. >> side issues to talk about this supreme court, roberts and coney barrett. and if you read the dissent from the four conservatives, they're like,

this is a district court judge. you're going to let a district court judge have the decision to ship $2 billion off. that will never going to get back. how does how does that make sense? was that a setback for these efforts, do you think congressman. >> no i'm. and by. >> the way. guy the full disclosure i have not read the opinion yet. that is very important so that i understand exactly. what the what the analysis was. but i'm going to tell you, it could be a setback for the supreme court. they have to start recognizing. this separation. >> of powers, which they seem. >> to do in every other area. again, this 1st may have a legal basis, but like you say, i. >> haven't read it yet and. >> i haven't read the dissent. i don't think it's a setback at all. i think it is actually what the. public wants to see. and i just, i think we got to be very careful because it's the rule of law. >> that. >> matters. but it's the application as well. >> and for. far too long, i think. >> the, the electorate, a big group that are supporting for

trump, believes. that some. >> of our. >> our judges on the bench are. more pseudo legislators, which is not what they're supposed to be. >> do you. >> see do you see any. >> evidence that that there could be some negative consequences? probably. you would not like the way i characterize it with a shoot first, ask questions later. i mean, some of this, it's almost like we don't know if what we're cutting is going to have a bad effect until we try it and then we hear about the bad effect. is, is it worth it to do it that way, to go headlong into it without thinking about the consequences? that's the criticism that you hear from the other side as well. >> of course. >> you do. and i. >> mean. >> i get it. elon musk made a point to our members last night that they're not going to be batting 1,000% on everything. and he made a very direct request that if you have specific issues with constituents, get in touch. with

him directly. let him know. literally, this has to happen. i would argue, joe, the american public has been waiting for this for 30 years. and if you're not going to go after the waste, fraud and abuse in government, if you're not going to try and reform it so that it gets back to serving the people instead of ruling over them, you're going to have to do some of this. and then it's up to us, the legislators working with our constituents at. home when there is that instance where something good got caught up with all this bad. and i would blame the people, by the way, that turned our federal government into their personal atm. >> for their political. >> agenda, for putting all the good stuff at risk too. but it'll be up to us to. >> work with. >> elon musk and doge, but more importantly, with the white house, to let them know that this one is important. this serves the mission. >> of. >> our federal government. and you, you went a little too far with whatever it is, and then we'll see where. >> it goes. majority whip one of the big questions, i think, that the american public may have

they may not have it yet, but i think that they're going to have you may disagree with me is whatever you think the short at minimum, the short term pain of these tariffs ultimately turns into as it relates to jobs, as it relates to additional costs for goods and the like. and just what when you talk to your own constituents, how they feel about that, how long you think that they will be willing to put up with it. assuming you believe, as i, i, i would like to think and i know the president thinks that there's a rainbow on the other side, but to get there might be more challenging than than some people want. >> andrew, i. >> would. >> never disagree with you, but i will say on this one, i the president, i don't think it's the rainbow on the other side. the president is actually fighting for the american people. it's a simple message. if the message is if you want to do business with us, then you need to treat our producers. you need to treat our imports the way we treat yours. it's as simple.

>> as that. >> we will treat. >> you as you treat us. >> and i understand that. i'm just saying the cost of them treating us the way we treat them, oddly enough, could be higher, meaning the american public may ultimately have to actually pay more for that rather than less. >> andrew, i'm not disputing that there may be some short term disruption that's going to result in some negative impacts, no question. but this is the point. and if you think if you or others think that this is going to somehow. reduce the president's popularity, think again. he has campaigned on this. he made a point to the american people. they don't care about you. we want free trade, but we want it to be fair. and he is trying to make it fair. so i got a governor at home who's totally incompetent, who's saying that trump doesn't care about the farmers? well, i got news for him. what trump is trying to do is make sure that our dairy industry has full and free access to the canadian market, just like we give the

canadians full and free access to fair access to the us markets in the in the short term, could that cause some disruption and problems? yes, in the long term, it's the best thing you could do for the greatest producers on the face of the planet right here in the united states of america. >> whatever. you're from minnesota. i just don't understand it. is that the same state as tim, tim walz and ken martin and al franken? where'd you come from? how did it? i don't even think minnesota. minnesota didn't even vote for reagan. that's the only state. i mean, are you like, do you do you are you usually in you go around incognito or are you okay there. you got you got some republicans around. >> you'd be surprised. >> you'd be surprised. our our. >> governor who should be done. i mean, he embarrassed us and. himself on the national stage with that failed presidential run. our governor won reelection just barely. >> the fact. >> of the matter is, he only won 13 counties out of out of 87.

>> he lost the 74. he lost. >> he got 37% of the vote, joe. so it's much closer than people think. and our 13 county. >> that's all i. >> got. to say. >> that's all i got to say to you, tom. al franken i mean, it. >> has me laughing. >> i'm only kidding, i love minnesota, i love the vikings. love, love the state, love all the lakes. love you. thank you. good. good to have you on this morning mr. whip. >> appreciate you guys okay. >> thank you. great to see you. coming up retail giant walmart may be considering moving its legal headquarters from delaware. we're gonna have a lot more on a story that is roiling the world of corporate governance and the state, and what they may want to do about it. elon musk obviously already left. we're hearing about meta and others wanting to leave. as we head to a break. check out the s&p winners and losers this morning. squawk box returning in just a moment.

>> time now for today's aflac trivia question. in 1953, the rocket chemical company developed what chemical, which took 40 attempts to perfect the took 40 attempts to perfect the answer. when squawk box prime, it's me. i mean, you. wake up, come on man! you gotta tell employers to take another look at all the benefits they're offering. everybody wants to build the best team and offering aflac can help attract and retain that top talent. you know we like that top talent. and listen, i mean you gotta listen. aflac gives employees cash to help with unexpected medical bills. it's prime time to add aflac. request a call today at aflac.com/prime ♪ ("born to be wild" by steppenwolf) ♪ ♪ get your motor runnin'! ♪ (car horns blare) come on! ♪ head out on the highway! ♪ crowd: hey! hey! hey! b-12. bingo! (buttons snap)

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market. squawk box tomorrow, 6 a.m. eastern on cnbc. and now the answer to today's aflac trivia question. in 1953, the rocket chemical company developed what chemical, which took 40 attempts to perfect the answer. wd 40, which stands for water displacement, 40th formula. >> that was a pretty shot, by the way, of lower manhattan, i don't know, i didn't know we had a good camera there in brooklyn. meantime, walmart considering moving its legal home from delaware. it's according to a new report from semafor. the retail giant would follow elon musk, who left the state for texas last year. musk and now mark zuckerberg also reportedly considering a similar move,

potentially with meta. joining us right now on more of this story, liz hoffman, who broke it, semaphores business and finance editor. liz, it's great to see you this morning. this could be a biggie. i mean, meta is already a biggie. tesla is a biggie. and really, i think the question at this point is what you think the state legislator in delaware wants to do about it or not. >> they really. >> want to keep their companies. >> i mean. >> you know. >> as. >> important as delaware. >> is to. >> the corporate community. >> the corporate community is really important. >> to delaware. >> it's a huge. >> part of the state budget. >> it really. >> drives the economy. >> down there. and so they. >> are pretty. >> dramatically. >> you know, like a. >> lot of. >> sort of. institutions we've seen kind of. >> bending to the will of. >> of the maga contingent. >> so the question that i have actually is right now, there's a view that delaware is more shareholder friendly than management friendly, i think, is that that's the working assumption. is there a point at which shareholders will fight back? >> we haven't seen it yet. and look.

>> ultimately i think walmart. >> is not going to leave. >> but but. >> i think. >> you know, the companies. >> that. >> have left. so far. >> are company controlled companies. >> and you know, really the. technical thing that delaware is doing is. >> giving controllers. >> a lot of control and kind. >> of wiping out a lot of. >> say that minority investors in. >> those companies have. >> you can argue that if you buy into. >> tesla. >> you either really like elon. >> musk or. >> you should know what you're. >> getting in elon musk. >> you know, if we see a blue. >> chip company that is not controlled again, walmart is controlled by the walton family effectively. >> it's also. >> like some of these other. companies spent a lot of time and money. >> as a. >> defendant in delaware courts. >> and so, you know, it. >> doesn't. >> seem insane to me. again, i think they'll. >> ultimately stay, but. >> but i. >> don't know. >> liz, why do you say they're going to stay? >> i mean. >> my reporting. >> suggests that they. >> are probably. >> in fact, not going to go. >> but, you know. >> we're coming up on proxy. >> season where. >> companies are going to have their. >> shareholder meetings or annual meetings. >> and i got. >> my bet. >> is that you'll see a. >> couple of these on the

ballot. the real question. >> is, you know, is this just a bunch of tech. >> bros having a temper tantrum. >> or is it really. >> going to give, perhaps. >> air cover to companies that, you. >> know, to your point, for. >> a long. time have kind of grumbled about what they perceive. >> as sort of two shareholder friendly. >> jurisdiction, these quote unquote activist judges. right? >> that's the. >> kind of maga throughline here. >> it's not particularly that delaware is. >> like a liberal bastion. >> it's that. >> there are kind of. >> you know, existing norms that elon musk and. company do not like. and, liz. >> do you do you see the judiciary being removed? i mean, part of this issue is that there are judges on that panel that clearly are are much more shareholder friendly. and so the only way you would ultimately be able to do this, i would assume, is to actually remove some of these judges. >> i don't. >> see that. >> look, this pendulum is. >> actually swung back and forth over the years. you know, the last time, you know, that there was a real handwringing in delaware was.

>> ten years ago, and it. >> was kind of in the other. >> direction, for what it's worth. >> and so. >> you know. >> i do think that this is a state that that. >> does. >> genuinely try hard to strike a balance. >> and knows that all. >> the. >> stakeholders are. invested in. >> there being. >> some kind of. of precedent and predictability. >> but again. >> this is like the new world. we're living. >> in, all these norms. people say they want predictability. >> and a couple of really powerful people. >> don't like the status quo, and they kind of upend it. >> hey, liz, i want to thank you. it's a fascinating story, and i imagine it's not going away anytime soon. >> thanks for. having me. >> coming up, starbucks continuing its turnaround plan, this time with a tough love message to corporate employees. message to corporate employees. the latest on that next squawk (♪♪) car, this isn't the way home. that's right james, it isn't. car, where are we going? we're here. (♪♪)

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a smart? >> find an advisor at smart asset com. >> welcome back to squawk box this morning. starbucks is ceo now delivering some tough messages to employees as the coffee chain working on that turnaround plan. according to the wall street journal. company ceo brian niccol telling workers at a company forum earlier this week that corporate leaders need to be more accountable for financial and operational improvements, and that starbucks needs to think carefully about new initiatives as cafes and do a better job of listening to customer complaints. last month,

starbucks announced it would be cutting 1100 corporate positions. now, niccol will hold his first starbucks shareholder meeting. that's going to happen next week, so we're going to keep our eyes on that. shares are up more than 20% since he came aboard as ceo last september, but he's still got a lot of i don't want to say wood to chop, but he's working on it. >> he does? yeah. check out the shares of jd dotcom if you would. the chinese e-commerce giant reporting better than expected revenue. deep discounts apparently encourage customers to spend, and the company saw double digit growth in some key metrics, including active users shopping frequency. the ceo said they're optimistic about 2025 as consumption sentiment picks up. >> coming up, the impact of doge, we're going to take a look at what to expect from tomorrow's jobs report. and when government layoffs could start to show up in the numbers and the futures, they are sharply

lower this morning. let's show you where things stand. you're looking at some red on the screen, by the way. take a look at this. because we've got some of the biggest decliners in the nasdaq mongodb getting hit about 18.5% on the back of a weaker than expected earnings guidance. and the chip stocks as well. you're looking at marvell technologies off about 18% as well. we're coming right back. >> repair clinic came to american eagle.com with a pressing need for digital expertise to serve our expanding parts and software business. americaneagle.com optimized our website, turning our proprietary data, content and diagnostics. >> into a powerful. >> platform that reaches more diyers, pros, and enterprise clients than ever before. if you're looking for an agency who can solve your complex digital challenges, contact americaneagle.com today. >> question why would the former

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our senior economics reporter, steve liesman, joins us now with more on how much doge could be in tomorrow's jobs report. what do you think, steve? >> it's a. >> tricky story here. but first, let me tell you, andrew announced layoffs in february, surging by 245% to the highest level since the pandemic. with the trump administration's efforts to reduce the federal workforce playing not the only but the biggest part in that the outplacement firm challenger gray christmas, they're saying that announced february layoffs not actual layers, but announcements rose to 172,000, up from just 49,000 in january. it's the highest monthly number since july 2020, the worst february since 2009. it was a mix of layoffs from the government and the private sector, including government at 63,000 announced that includes federal workers and private government contractors. retail 45,000 hit by cold weather as we know, and tech 22,000 with hp,

meta and workday among the tech giants we know that announced february layoffs, the doge impact was the top reason cited for job cuts, followed by market and economic conditions and then bankruptcy. the bulk of government job cuts are likely to do show up in tomorrow's jobs report. workers won't be counted as unemployed until their severance runs out. but remember, roughly 30,000 federal workers. they leave their jobs monthly in a normal month. so the hiring freeze announced by president trump on day one of his presidency, that could mean vacated jobs won't be filled. that could create some negative numbers that could drag down the headline number even as soon as tomorrow. now, evercore isi, in a research piece, suggests total job losses from doge could be as low as 50 if the government eventually gets back to hiring, or as high as 666 660,000. in a worst case scenario created by what it calls doge policy

uncertainty, they wrote, doge related uncertainty over contracts and grants could have an additional paralyzing effect on hiring and employers exposed to those funding sources or in need of regulatory approvals from agencies that are themselves paralyzed by doge review. now, most forecasters that i'm reading are settling on some kind of midpoint here between total job losses of 250 to 350,000. that's federal job losses, or roughly 20 to 30,000 a month. that would be a noticeable number. but the ultimate economic impact depends on whether the private sector finds jobs for those workers, andrew, and can make up for those job losses. >> steve. so how many workers are we talking about in terms of who could be affected by the layoffs? >> well, it's pretty extensive, andrew. for example, there are 3 million federal government workers we don't know. we heard from, for example, veterans affairs was one place that was mentioned where they could have it talking about the irs, local

government employment is 15 million. most of those are educational workers. we don't know how the department of education changes planned by the trump administration will change that. 5 million state workers. and then, according to evercore isi, there are maybe 4 to 5 million workers out there in the overall economy whose jobs are somehow touched by or otherwise affected by federal government contractors. some of those are in defense. there could be cuts there. some of those are non-defense. there's all kinds of ways the federal government is in the economy. and so it's really hard even to figure out what the universe is. but there may be as many as 20 to 25 million jobs that in some way could be affected by this. obviously, they're not all going away, but when we know those plans as they come through, and i think this idea of what evercore calls d.o.j. policy uncertainty is something that could keep people from hiring until things are more clear.

>> well, steve, we're talking about, as you're putting in the context of doge uncertainty, i would ask what you think of tariff uncertainty. you know, i was talking to a real estate executive the other day who was saying that they're not building they're actually not doing construction because they're waiting to find out what's going to happen with the tariffs because of some of the some of some of the supplies and other things that would be coming in and what the costs are ultimately going to be. and because of that policy uncertainty. >> yeah, that's a separate area of uncertainty. and it sounds like that example came almost directly. by the way, there was a mention of something like that in the fed's beige book, which mentioned tariffs 49 times and had a lot of issues of uncertainty, talked about consumers not buying because of tariff uncertainty, businesses not investing because of tariff uncertainty. look, i don't know how to say this, andrew, but it doesn't appear as if assuming that the president has good

intentions and good ideas with his tariff policy, it doesn't appear as if it's being implemented in a way that is minimizing uncertainty and perhaps minimizing the economic impact in a way that would be not something you this stuff could show up. andrew, in the numbers. if we do have this hole back in investment from ceos because of the uncertainty. so it's something to watch. and then maybe down the road they get the deregulation and the tax cuts. that helps. but right now. >> it's uncertainty. >> and i know they're. >> playing us out. from the tariffs. >> we talked to steve. we talked to frank luntz earlier. and he made the argument. and also by the way, tom emmer who said that the american public effectively voted for free market, the sort of the idea of free trade, wanting to get back to some kind of parity with some of these countries that have tariffs on us and that the american public is going to be willing to pay the price for that, at least in a temporary way. as somebody who has done the done the work on

this, do you think that that's true politically? >> i don't know how much pain we're going to have is a question. i'm amazed, andrew, at how much the american public seems to be aware of this tariff issue. as a person who's pulled for like 20 years on this stuff, you ask some economic questions. people have no idea what's going on. they're aware of this tariff issue. we'll see what happens if prices go up and how people feel about it then. >> right. >> and think if the media were to start covering the tariffs coming up, i mean, then god knows what might happen. coming up, a closer look at us ukraine relations and what it means for broader relationships with other european countries. john fort is european countries. john fort is here to you know what's brilliant? boring. think about it. boring makes vacations happen, early retirements possible, and startups start up. that's why pnc bank strives to be boring with your money. the pragmatic, calculated kind of boring.

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don't see a lot of words with three f with you. ukrainian president zelensky, the s&p 500 has seesawed since. and now that european leaders are talking about forging a military and economic future more independent from us influence, will trump's rift with europe hurt us markets? john ford is here to weigh in. hey, john. >> hey, joe. yeah, absolutely. trump's rift with europe will hurt our markets. i know it's tempting to look at the us ukraine relationship as a matter of the us dumping money into another no win war. but unlike past conflicts like afghanistan, this one goes to the heart of our relationships with some crucial allies. now remember when russia invaded ukraine in 2014, it first seemed like an influence struggle between moscow and a former territory. but as russia's mindset became clear, our european allies recognized its expansionist ambitions as a threat to their economies and security. president trump added fuel to

this fire this week in his address to congress, where he declared that the us would take control of greenland one way or the other. even though greenland is a self-governing territory of denmark. some in europe see trump's expansionist ambitions as a threat to their economies and security. and think about free market capitalism is it works best when trade barriers are low and money flows where it's used most efficiently. the less europe trusts america to support security concerns about russia and respect sovereign boundaries, the harder it's going to be for american companies to do business there and stock prices will suffer. joe. >> yes, i've thought about this a lot because i wish we didn't have to spend any of our productivity on like, things like nukes that can never be used, right? it seems like. >> the john lennon song. just imagine. imagine how great the economic benefit would be to. >> spend so much money and time and effort on these, the most sophisticated things in the world that can never be just by definition you don't want to ever use. is the president right about this being a chance to end

the fighting? if he is right to end the fighting in ukraine, wouldn't that be good for economies in europe? >> well. >> joe. >> on the other hand, president trump's rift with europe will look like a bold stand in retrospect and will help u.s. markets. now, first, it will be good because it's forcing europe to pay for its own security priorities. germany's incoming chancellor this week announced a plan that would allow debt to fund around ■k71 trillion in defense and infrastructure spending above current levels. regardless of how you feel about the war, it's extraordinary that it took trump closing america's wallet to ukraine for europe's largest economy to apply for its own credit card. second, trump's reciprocal tariffs will force a rethink of european trade barriers that have been stacked against america for too long. the same kinds of policies that had america funding a european war because germany preferred not to take on much debt. well, they got the european union putting a 10% tariff on our cars, while we have a 2.5% on theirs. that's uncomfortable to say, but america's economic relationship with europe has been in an unhealthy autopilot

for decades and needs a reset to get to a better place. stocks might stumble in the months it takes for the u.s. and europe to set better boundaries, but once that happens, the most nimble and innovative companies will win. joe. >> all right. john. it's such a i mean, the emotions run high and it is i'm amazed at the polarization even on a subject like this. >> or there's so much polarization on so many subjects. >> weird. just weird to see. the one time the dems clapped the other night was for a continuation of the iraq war. i thought that was very strange. >> ukraine war. >> ukraine? yeah, i'm sorry. >> but point taken. iraq? >> yeah. >> point. ukraine. yeah, right. i thought that was weird. why? and just before you leave, it's not that uncommon for three f's, right? fluffy, fluffy. >> fluffy. >> face off. >> did you google this? >> no. >> because you're looking at your screen with three f's. >> the producer. >> did okay.

>> they work with me. that's great. the insanity which which sometimes sort of enables me. >> sorkin i know that. i'm aware of that. >> you should talk to them. because who am i to say no? >> when is it the producers keeping this going? they're each feeding you. just. >> it does give me plausible deniability to. but kerfuffle is a good one. i think you're going to use that. >> yes. okay, john. thank you. it might be in the newsletter. >> we got to run, folks. check out the newsletter squawk box coming right back after this. >> liftoff. >> your business needs to hire someone now. so in addition to managing your business, you have to go. >> through. >> hundreds of resumes and hope for the best. or you can go and get the best. introducing paychex recruiting copilot. it uses ai to help find potential candidates from millions of profiles, whether they're looking for a job or not. then it helps you get in touch and

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for 20. crypto has been rebounding but still well below some of its best levels we've seen in the last couple of months. i think 91,000 this morning. i don't know what looking at there, but crypto this morning i think 91,000 for bitcoin. let's get to dom chu with a look at this morning pre-market movers dom what's going on. >> all right so joe andrew we're going to start off with shares of alibaba which are surging overseas and seeing its new york listed shares moving ahead on the wall street open as well up by about 2%. the chinese e-commerce and web services giant unveiling a new open source artificial intelligence model that it says rivals deep, seeks performance while using a fraction of its data requirements. so those announcements there, alibaba shares up 2%. meanwhile, shares of brown-forman giving up some of its post-earnings momentum here as morgan stanley downgrades the stock to an underweight from a prior equal weight rating on tariff risks and softening spirits demand. the jack daniel's spirits maker also seeing uncertainty as some canadian provinces start to pull u.s. alcohol off shelves in

response to president trump's tariffs, noting a potential impact on sales. so brown-forman shares off about 2.5%. shares of macy's falling as tariffs and consumer pressures weigh on the firm's full year outlook. revenue and comparable store sales also missed estimates, but profit beat expectations as the firm continues to ramp up its turnaround strategy. so macy's shares off by nearly 4%. and we'll end on retail as well with shares of burlington the bargain retailer, jumping this morning by two to just about 12.5% after a beat on both the profit and revenue side of things, which overshadowed some uncertainty in its 2025 full year outlook. comparable store sales also rising 6% for the quarter. the firm noting that the success of burlington's off price business model during tough economic times is something to focus on as well. so burlington up 12.5%. andrew, i'll send things back over to you guys. eastman. >> welcome back to squawk. welcome back to squawk. it is it's right past welcome. >> we're welcoming. >> and it is awkward. >> squawk squawk squawk.

>> big box retailers are guiding lower despite a pretty solid holiday season. joining us right now with some retail stock picks in this wild world we're living through michael baker d.a. davidson managing director senior research analyst given what we're hearing from from retailers, what do you like? what don't you like? and how soft or, you know, how soft is the is it really right now for consumers? >> well. >> february does seem to. have softened. >> quite a. >> bit. and we'll see if that. continues into march. >> some of that was. weather in february, but some of it is what we're calling policy rifts concerns and policy rifts. >> that's rates. that's inflation. that's fx. that's tariffs. >> of course. >> and so it is leading to a little bit of a slowdown. >> in. >> consumer spending after a really strong. holiday season. that's why we're. >> seeing that that that. guidance for 2025. >> be a. >> little bit low. >> so the names that we like in this kind of environment which is really uncertain, you know, who knows what's going to happen

tomorrow with the policies. and every day it seems to changes. we think. >> that there's a group. >> of defensive names that have growth characteristics. and that's really. >> what. >> what what has been working year to date and what we're sticking with those names. >> like walmart. >> those are the warehouse clubs in particular bj's, which we think is a little bit under the radar screen. reported a very nice number this morning. auto parts retailers actually benefit quite nicely from tariffs. o'reilly is our favorite name there. autozone is also been a good stock year to date. so that's where we're really focused right now. >> what don't you touch. >> you know. >> discretionary names. >> that that. >> sell wants. >> rather than needs. are a little bit tougher right now. so. we're sort of. >> sticking staying away from from. >> those at least in the short term, at least until we can get some clarity on. >> what's. >> going on with with the policies and who. >> knows when that will happen. >> but to us, it's. >> really about the. >> retailer selling. needs rather than wants. they have the

ability to push. >> through tariff increases. >> again, that's. >> the auto parts. >> retailers in particular. those ones are actually pretty interesting because. >> as new car prices go. >> up, people. >> are going to. >> keep their car. >> on the road. >> longer. >> of course, and that really helps the guys like. >> o'reilly and autozone. >> when you say the wants, rather the needs, where do you put like luxury in that luxury. >> to me is a want. >> and so, you. >> know. >> certainly higher end customers. >> who shop. those types. >> of stores might be less. >> impacted by some of these. >> policy things. but but. >> nonetheless, we think those are, you know, less. >> favorable right now. >> than than the. more needs. >> based retailers. >> you know, another name. >> that i think is interesting. >> here, maybe. >> we're. a little. >> bit early, but is home depot. housing is. >> a little. >> bit tough right now for sure. >> but most metrics we're looking. >> at. >> are bottoming. >> in that if they're. >> down year. over year, they're down less. >> they're getting. >> less worse. and in. >> fact, some some of the numbers we're seeing. >> refis etcetera. >> are actually. >> getting a little bit better. >> but what.

>> what percentage of sales at home depot do you think are needs rather than wants? meaning a lot of, you know, home depot has succeeded in large part because people love to redo their homes and fix things, the things that need to be fixed or needs. but a lot of it is wants. no. >> sure. >> yeah. at least 60. >> to. >> 65% of their business. is break. >> fixed. >> and that's been pretty solid. the remodels. >> all. >> those types of things. >> that's been pretty weak. but but. that's been weak for three. >> and a half years. >> really since the end. >> of. >> the pandemic. >> it's getting a little. >> bit less weak. and in fact this past quarter. >> they had. >> their first year over year increase in big ticket. >> that's tickets of. $1,000 or. more and. >> about two and a half years. >> so again, we might be a little bit. >> early, but but you're starting to see the end. >> of the light. >> at. >> the end. >> of the tunnel for what we. >> think is sort of a best, and. >> we call it a. >> best in breed, best of breed bison. >> name a best. >> in. >> class type retailer that i think. >> you. >> really. >> want. >> to buy in front of what we think will be a turn, right? >> michael, it's great to see

you appreciate your perspective on all this, as we're all trying to make sense of what happens and what comes next. thanks. >> all right. let's bring in someone to talk markets now eric friedman, chief investment officer of us bank asset management, which has $505 billion in assets under management. what do we want right now? what does the market want, eric? does it want more rate cuts down the road. so softness is okay. does it want rip roaring earnings. does it want clarity. what's ailing it. >> yeah i think. >> it's a combination of the above joe. probably the biggest factor we're focused on is number one will consumers hang in there. we're starting to see. >> some. >> deterioration at. >> the margin. >> specifically if you. >> look at. lower end consumers, that's been well documented. i think the prior. >> guest did a good. >> job. >> going through that issue. but it's really a matter. >> of will that that. >> core consumer slow down. >> beyond the lower. >> income consumer. >> we actually. >> rate consumers scale a 0 to 10, zero being worst, ten being best. we've gone from an eight to a five in relatively short order. >> it's been. >> an orderly move, lower if you will. >> but i think. >> that the first piece.

>> is will consumers really stay involved? i do think that. >> the clarity. >> on the policy front. >> is. >> probably more. >> just on the idea of what. >> stop start. >> versus what. >> is truly game on. if you. >> think about even little. >> things like the buildings in in dc, you know, are those really for sale? those not for sale? what's happening with tariffs? >> there's just. >> those incremental things at the margin that we as investors want a little more clarity and we don't need perfect clarity. >> but why do we even think that inflation as it relates to tariffs or the uncertainty of tariffs is somehow a temporary measure? that's the thing that i don't understand. i mean, we just live through this. i think everybody knows the game, which is when prices go up, prices stay up. >> yeah, i think andrew, to that. >> point. >> one of the. >> things that. >> we looked. >> at for the last two months, university of michigan consumer data, consumer data and surveys are softer. >> surveys at times. >> but still. the american consumer isn't really. buying the idea of temporary inflation. they have this idea that, look, inflation may come in north of 4%. the fed does not. care about politics. the fed says, look, if it's going to be a. embedded inflation expectation where workers are demanding more in

terms of income, that's going to be more embedded. that will. >> not be. >> temporary whatsoever. so i think that's the. >> percent would even be tariffs. that would how much is our how much is left. over three and a half at least. what are you talking about. what's the margin that's. >> been. >> caused by by tariffs. >> yeah i think that there's. >> probably an extra half to 75. >> bips. >> that are, that are somewhat above the current run rate, you know, run rate. i think the expectation is that tariffs will get down to 2.5% real cpi. if we see the tariff layer on top of it, that could be more stringent. again this is before europe even comes into the picture. that's the thing that i think is really key is. >> a half to three quarters. >> yeah i think. >> it's a half. >> to three quarters premium. on with a psychologist. >> what's ailing consumers right now because it hasn't happened yet. so is it just the expectation of something happening or that they eating a lot of eggs? what's happening. >> i think. >> it's the. >> cumulative impact. you know i think that if any, it's almost like the runner on a treadmill, if that ramp remains elevated in the form of shelter costs, food costs, transportation costs, if they remain elevated, that runner will slow down. so it's

not so much what's necessarily net new. it's really about what has already happened. and that cumulative impact we think is starting to weigh in. it's starting to move up the scale of income beyond just the lower income consumer. >> it's just. it's odd to watch that the anticipation or the assuming jobs are going to weaken. we haven't really seen it yet. maybe it happens tomorrow assuming inflation's going to come back. we haven't had a print that shows 4% yet. we haven't. we've had three prints that were a little bit higher than than what we saw. but so is it. can the expectations of these things be self-fulfilling? >> yeah. >> it could. >> be. >> the great. >> billy shakespeare, much ado about nothing. ultimately, people worry about things. or it could. >> be real. and then it happens. >> yeah, that's right. i think. >> there's always. >> this this notion of markets front running. you know, andrew made a great point of that earlier this morning that markets tend to front run what actually happens i think there's a little bit of a premium probably an excess premium on inflation expectations. but i do think that for consumers that cumulative impact is starting to make a difference.

>> well you think the s&p is going to hold or not. >> we do. >> we think. >> 64 you know 60 is our target 6480. that's that's 24 times 270 operating profits for this year. that's about you know it's a little bit of a discount to consensus. >> that's a nice gain. >> yeah. yeah. >> just scared the hell out of me. and you're looking for 6400. why didn't you start with that? >> no, i should. >> have i. that's. >> my wife said when i proposed to her. can i, you know, you know, you. >> did. >> you beat around the bush there? >> i did, i was not greenspan esque, but i could have been a little more forceful. >> that's interesting. see, eric's ready for morning tv. >> yeah, there he is. he's got he's. >> got he's got ready for gene. he does. >> thank you for giving keeping us. >> you got any extra? >> yeah. apparently i'm. >> no, we're full service brokers. no, you. >> both do a great job. >> that's right. thank you. there you go. you like the camaraderie and stuff? you do? yeah. >> yeah, yeah. >> there's a nice buffer who's not here today. >> but there. >> is a there's a good yin and yang here. >> absolutely. >> you were. you're taking that role, right? yeah. right. >> he's got an invitation to come back. he does i'm coming

up. when we come back. the white house looking to limit harm from new tariffs by easing up on autos, at least temporarily, canada and mexico for the next month. we'll see what that all means. and we're going to speak to canada as prime minister candidate karina gould about the tariff battle, the border and so much more. you don't want to miss it. plus, kroeger out with quarterly results. earnings of $1.14 a share, $0.03 better than estimates. that's on revenue of 34.31 billion. that's below estimates of 34.51 billion a same store sales, growing 2.4% during the quarter. analysts had expected a 2% increase for the full year, kroger seeing earnings coming in mostly below estimates. and of course, its ceo out, which we've discussed already. squawk box coming right back.

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for one month. that is from recently imposed 25% tariffs on mexico and canada. but canadian prime minister justin trudeau reportedly will not lift retaliatory tariffs on the u.s. if president trump leaves any tariffs on canada in place. auto trade between the us, mexico and canada totaled $345 billion last year. joining us right now is karina gould, former canadian government house leader who is now liberal leadership candidate for canadian prime minister. and welcome to the broadcast this morning. my question to you is what do you think the tariffs that the us is imposing on canada are really about. we've heard about fentanyl over and over again. but there are reasons and they're not being articulated by this administration necessarily. but there are lots of tariffs that canada already has on the us. >> well, look, i don't think that these tariffs have a real objective in the sense of what donald. >> trump is talking about. >> if he's. >> talking about fentanyl. >> i mean. it's minuscule

amounts that come from canada into the united states. but if that's what he cares about, well, then let's put. >> together an. >> inspection team at the border to inspect every truck. >> that goes south for. >> fentanyl and every truck. >> that comes north. >> for illegal guns. >> that's one of the. >> issues that we have as canadians. so look, at the end of the day, these tariffs are unjustified. they are ill conceived and they're hurting. >> not just. >> canadians, but they're hurting americans. >> and they're going to make the price of everything more expensive for american citizens. >> you didn't answer. the question was about the tariffs you already have on. >> the tariffs on the us, meaning we talk about peanut butter or milk. >> milk, butter. i got a long list, karina. >> well, okay. but in fairness, what we're talking. about with that is really minuscule. and there is not. a trade. >> imbalance when it. >> comes to. canada and the united states. >> we have. >> the free. >> trade agreement between. >> canada, the us and mexico.

>> that has. >> served our countries very, very well. it has enabled prosperity on. >> both sides. of the border. >> and so. >> let's keep building things together. let's keep doing stuff together. >> why do you say there's not. you just said and i just want to make sure that we're we're all on the same page. maybe that's the polite way to put it. you said there's not a trade imbalance. where do you get that from? >> well that's correct. so the. numbers that the president. >> is putting out. >> is just simply. not true when. >> it comes to canada. >> and the united states. we build things together. we do stuff together. this is good for american. >> businesses. >> and it's. >> good. >> for canadian businesses. and let's keep building things and be. >> strong together. that's something. >> that we should be working towards as. canadians and americans. and that is. what has. >> enabled north american prosperity. >> and i hope that that's something that we can continue. >> to do. >> so as it relates to fentanyl, do you just think the president is lying to the public? >> well, there's no data to back

up what he's saying. but what i will say is that we care. about fentanyl. it's a scourge in our society as well. so we have put in place strong measures in canada. let's work together with the united states and make sure that we are keeping fentanyl out of. both of our countries, because this is a crisis in canada and it's a crisis in the united states. and i think. >> there's more. >> that we can do together. >> on this. >> but it's. >> not about fentanyl. >> coming in from canada to. >> the united states. >> there is very little. fentanyl that goes. >> south of the border. >> and so if that's the case, then let's work. >> together to make. >> sure that we are eliminating this scourge in both of our countries. >> the actual trade deficit with canada was in 2024 was 63.3 billion. it's mostly energy and we need that. and in terms of services trade, we actually have a surplus in the united states with with services. but then there really are i mean, you say the usmca, you get above a

certain point and there's really crazy tariffs on a lot of stuff. and it's not minuscule. it's people that's 100% fish products, 100% shoes, 30% cocoa, 30% sugar, 265%. i mean, physician, heal thyself. get rid of. why can't you get rid of those? and then? then you'd be in a much better position to say we don't do anything wrong. >> well, let's look at what we're. >> talking about. i mean, in terms of. the major. >> things that we are trading between canada. >> and the. >> united states. you know, the us. >> depends on canada for so many things. >> i mean, let's. >> look at potash, right? >> canada provides 80% of. >> potash to. >> the united states. >> that is something that you. depend on. >> you talked. >> about energy. >> this is something that is important for. >> the us market. you know, let's. have that conversation. these are things that the united states is putting tariffs. on that are increasing.

>> the cost. >> of everything for everyday american citizens. >> let's make. >> sure that we are having that. >> conversation. >> because at the end of the day. >> president in. >> the united states is. >> making life more expensive. for americans. we would. >> rather continue. >> to have this relationship. >> to be. >> strong friends. >> be allies. >> as opposed. >> to, you know, put the energy security, the food security, the national security at risk for both canadians and americans. we have had such a. >> long standing, important. >> relationship as canadians and americans. let's work together. these tariffs. >> are not the. way to. >> do it. this aggressive economic. action against. canada that has been your friend, your ally. >> your partner, our soldiers have fought. >> and died together is not the way to go about this. >> let's have a conversation. >> but this. >> aggressive action has spurred canadians. >> who are generally a. >> happy and kind people. >> into. >> a level of anger. >> what's the rationale, karina,

for all those tariffs that have that? i've got 30 of them here, and i have people writing in saying that they can't even sell their products in canada. they have to be marked up two and a half times in canada just to sell into into that country. what's the rationale? and that gives the perception that, you know, we're patsy, we're big, strong, you know, biggest economy in the world down here. and you almost are benefiting from our largesse and our you know, that's what you hear from from president trump all the time that we're being taken advantage of. if you got rid of some of these tariffs, maybe there wouldn't be that perception. you have a much stronger arguing position. >> well. >> i mean, i don't think that the united. >> states can. >> say that. >> canada is. >> taking advantage of the us. i mean, we have such a strong economic relationship. i mean, look at the big three. look at the auto industry. i mean, this. >> is a relationship. >> that is symbiotic. >> that works. >> well, that benefits people on both sides of the border. >> you know, we.

>> have natural. >> resources that. >> the united. >> states depends. on that we. sell to the us. i mean, we. sell our energy at a much cheaper rate to the united states. than what we would sell for. >> it around the world. >> so there is a very good relationship, a very. >> strong economic. >> relationship that. >> people on both sides of the border benefit from. and that's the relationship that we want to continue with as canadians. >> but right now. >> we are feeling very attacked by. >> this aggressive action. >> and i have seen this kind of patriotism. >> in canada where. >> you have, you know, little. >> old ladies going to the. grocery store and choosing. >> to buy. >> canadian products. >> over american. >> products because quite frankly. >> we just don't understand. >> why we're. >> being. >> attacked like this when. >> we have only. >> ever been a good friend. >> ally, partner. >> and neighbor to the united states. >> could you could you imagine removing any of the tariffs that you have on things like peanut butter and wine and beer and coffee and apparel? i mean, there is a list of things that that canada does have their own

tariffs on. >> well, look. we negotiated. >> an agreement with. >> the. united states. we negotiated nafta. we recently negotiated burisma. and so. >> those that's the agreement that we have put in place. >> and i have to say that as canadians, we. >> feel that. >> the relationship. >> with the united. >> states, the. >> trust has been broken because when we sign an agreement. >> we mean it. and we live. >> up to those standards. >> and what. >> we're seeing from the president right now. >> is that, you know, his. >> signature on that agreement. >> isn't worth it. and so, as canadians, we're. >> saying. >> hey, we came. >> to. >> an agreement, we. >> made it. >> we negotiated. >> these things already. and instead of you guys abiding by your end of the deal. >> you're now. >> attacking us. so if you want to have a conversation, let's have a conversation. but this aggressive economic action is not the way. >> to do it. you know. >> canadians are known for apologizing, but we're not going to back down right now, and we're not going to apologize for defending our economy, our jobs, and. >> our way of life. but what we do want to do is continue. >> to have a strong.

relationship with the. >> united states. we've always, you know, liked being. >> your neighbor. >> we've always, you know, wanted to come visit the us. but now what we're seeing is canadians canceling. >> their american vacations. >> because they're. >> so offended and. aggrieved by this. >> action that we would rather settle things at the conversation. >> table, as opposed. >> to with. how this aggressive action. >> is going. and we will have to retaliate. >> because unfortunately, we've. >> been forced to. >> karina, i want to thank you for joining us this morning. i hope we get an opportunity to talk to you again. >> i don't. >> know if. >> this all. >> plays out. >> i don't know, karina. >> you know, vacationing in the middle of january in nova scotia, i don't know, or in one of the western territories. we'll see, we'll see. >> don't, don't. >> no tickets for you to florida. you're headed over to get your skis. >> i would like to go to florida, but they. feel. they feel. right now. >> all right, we'll see. >> we'll see how long. if you stick with this. we'll see. thank you. see you later. all

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>> generics. >> now only. >> $1 per tablet at 30. >> welcome back to squawk on the street. rick santelli sorry. squawk box. rick santelli here live at cme hq with some very important breaking news. let's start out with the trade balance which we know is a deficit. this is the january number a new record a new record. we've never had a trade deficit as big as today's -131.4 billion, 134.4

billion. and keep this in mind pre covid. you know what the biggest trade deficit we had was. it was 68.3 billion. so hey how about pretty much doubling that 24, when it was a little bit over 2%. unit labor costs 2.2. that's definitely better than we were expecting. meaning lower where productivity was higher. unit labor costs come in at 2.2%. that follows 3% 2.2%. well, it would be the smallest also since the third quarter when it was half of 1%. now let's go to initial and continuing claims 221,000 on still an unrevised 242,000. so

we're down 21,000. and it really does show you that there might have been some seasonalities that popped up that last week. 221,000. well, we had 220,000 on the second week of february. just to kind of put a face on it. we're kind of right in the middle there. and continuing claims a different story. they moved up very close to 1.9 million, 1,897,000. remember the last time we had a read at 1.9 million? it was literally exactly at 1.9 million. that was second week in january of this year, and that harkened back to, well, november of 2021. very quickly, i want to highlight some things. i was shocked this morning. i know many wanted and looked towards the ecb to lower rates 25 basis points. but i thought after yesterday's historic rise in yields maybe maybe they would stay pat. they didn't. they did lower. and another issue. we were all

talking yesterday about how the jump in yields 30 basis points in a boon was the biggest jump in yield since 1990 reunification. however, if you're a real bond guy, the var or the value at risk basis points were more valuable, more valuable in 1990. therefore. therefore, what we see. excuse me, they are to yesterday's loss based on value was the biggest in history, the biggest in history, because the value of basis point in 1990 is different than the value of basis point today, when it was at 9%. it was less. it was less. we don't want to get lost in the weeds there. another thing. let's show a chart. if you look at our yields joe minus yields in europe on the ten year boom. that difference now is the closest they've been in 20 months going back to july of 23. we really want to pay attention to that. capital flows money and the interest rate differentials

pricing currencies all are going to pay attention to that. and we continue to see the world's yields really did follow yesterday's pop in the german yield curve. back to you. >> all right rick. i was going to ask you about and steve can weigh in too. but what the atlanta fed how does what is in those numbers that is so volatile that can go and actually be predictive? i mean, where are we now. what do you think gdp is going to be for what they're calling -3%. what do you think it's actually going to be? >> i still think gdp is going to hold up rather well. i think the uncertainty that's facing investors that seem to be looking for significantly less growth, the recessionary word, of course, comes out. stagflation has been reused as a as a term once again. i personally think that all that conventional wisdom is going to be wrong. now, i understand that what this administration is doing is rather hard to predict, and the ultimate direction that the economies are going to be

affected may be a bit confusing. but in the final analysis, in the final analysis, i do think that what we are doing trying to rejigger trade is very difficult. joe. i mean, this monster machine of global trade doesn't shut down for maintenance. it doesn't hit a pause button, so you could tweak it. so i think it's going to continue to make markets volatile. but in the end i had to make a prediction. and this is only my opinion. i think some of these extreme market moves ought to be faded. i think conventional wisdom on this topic will prove to be wrong. >> so steve is there. that's the atlanta fed. is there a liesman fed? what's your number? what's the liesman fed gdp number? >> well, we're. >> going to wait joe. we do a rapid update, as you know, and we're going to wait till the jobs number tomorrow. it's not our model. what we do is, is, is. look, it's a good question, joe, and i'll take a second to respond, because atlanta fed is one model of the economy. why the market has decided to back

this one model. there are many models out there. goldman has a model and bank of america has a model. mark zandi, action economics mike england has a model. we put together the average of 20 models. joe, when we do our rapid update, because we don't think one model is the right model necessarily. what you see in the atlanta fed is a massive decline or subtraction from the import growth. and this relates to the data that came out today. and the reason you need to understand that is when we import a lot of stuff, it's a negative for gdp until it sold or ends up on the shelves as inventory. at this moment we are not counting it where it's gone. it's just come in and some of this looks like it was a big gold import, which is a weird thing. other parts of it, however, could be front running the tariffs. so you would have a negative subtraction in january maybe in february as well. until things normalize and we figure

out what the trade rules are and companies can get back to a more normal or average instead of front running these tariffs. it's good news, by the way. the claims number did not go up more broadly. i am still tracking some additional claims or continuing claims in dc, virginia and maryland. they have been up about 10 or 11,000. again, folks on this score and i didn't look at it, but i can in a second look at the separate track for federal workers on jobless claims. they are tracked separately. what i'm looking at in the maryland virginia area and dc area are the effects of private contractors. it's just something, joe, we're going to watch over time, see how it affects how much offset comes from the private sector. but right now, it's a time of uncertainty where it's very difficult to be forecasting what's happening in the economy. and i'll tell you monday what the number is when it comes to averaging all of the models out there.

>> i think they're bringing the gold in just to get a couple of bars in fort knox in case someone goes and finally looks down there, right. they got to they got to stick a couple in there just to just to make it look good. >> at least for a show, right? >> at least for show. what do you think's down there? >> yeah, exactly. >> exactly. >> nobody knows gold. i remember, you know, you know, you see goldfinger. i mean, i remember the. >> president has to know. doesn't the president have to know? he's the president? >> i don't know, i don't think anyone's known since i was graduating from high school. steve. that's the last audit. you're 93. >> well. >> maybe he should do the fort knox area 51 tour and solve all these issues. >> exactly right. we'll find gold plated aliens down there for. for more on the global economy, let's bring in jay bryson, chief economist at wells fargo. is it your fault that we look at that atlanta fed so seriously? what's the bryson gdp

number. >> yeah. so the. >> bryson gdp. number is going to be probably. >> in the one. >> percents that we know right now. i mean the thing with the fed was, you know, as steve. >> just pointed. >> out. >> what they were really reacting to was that big advanced trade number. >> that we got. >> last week that subtracts from gdp. to the best of my knowledge, they haven't figured out what's happened to inventories. >> i mean. >> in my sense, a lot of that's probably. going into inventories. so that. >> will offset that. >> will help. >> push up the gdp. >> at this point. >> i'd be very. surprised you get a. >> negative number in. >> the. >> first quarter. >> i mean, if. >> you do. >> you would look at. >> consumer spending. >> you look. >> at investment spending. you'd say. >> okay, this negative number is. probably just like a one. >> off quirky sort of thing. >> it doesn't mean. >> we're in recession. >> i don't envy what you try to do, jay. is it can i help you figure out what expected effects of tariffs, what the expected

effects of doge can it can watching it cause people to change their behavior before anything actually happens? how can you come to any conclusions on your forecasts with all this swirling around? it just it seems almost impossible. >> well, so any. forecast at the. >> end of the day tends to have a wide confidence interval. >> around it. >> and right. >> now. >> that confidence interval is just even wider. and so i mean, what we've tried to do here, joe, is you know, we've tried. >> to say. >> okay, we see these different announcements that are kind of coming and kind of going, etc, etc. you know, what's the. probability that some of this stuff goes into effect? and so, you know, if we have a 25% tariff on canada, if we have a 25% tariff on. >> mexico. >> is that whole thing going to go into effect and what's the timing? and so. >> then we. >> try to. >> figure out some sort of probabilities. but it's i mean. >> it's a real. >> art to right now in. trying to figure out those probabilities and. >> what. >> effect it does have on, on your forecast, because let's

face it, i mean, it's changing and it's changing. >> in real time right now. >> the jobs number tomorrow is it it seems like it's too early for any of these things that have had a real world impact. but is the prospect of these things, will they cause the number to be weak, or are there other reasons why the number would be weak tomorrow? what do you expect tomorrow? >> so we're at 170. >> 170,000. and so that's roughly in line with consensus right now. i think it's still too early to see a big. effect in terms of at. >> least the. >> doge sort of thing, and the federal employment. i mean, we're thinking that's going to subtract maybe 5000, maybe 10,000 from federal payrolls. >> but, you know, keep in. >> mind the survey week here was the week of i think it's. february the 9th through the 16th. and so it was. >> probably a little. >> bit early for a lot of. >> that stuff to really. >> start to. >> show up. it will have a bigger effect. >> in the. >> in the coming months. you know, we're thinking in the order of. >> tens of. >> thousands. >> but probably. not hundreds. of thousands. >> at least not what.

>> we're knowing right now. and, you know, as steve was saying earlier. >> the thing. >> to really kind of keep an eye on as well. >> is what's. >> happening in terms of private contractors around the country, around the country. are they being affected right now in terms of some of these, those sorts of effects? >> we had surprisingly strong gdp is all through last year. is there anything that's happened so far that that makes you think that, that it's going to be weaker or that that we've heard it or that that somehow we've undercut that economy? or will it will it surprise people because it just keeps percolating along because it's the greatest economy in the world? >> yeah. >> so i mean, in terms of. >> what our expectations are. >> and this goes back to our conversation just a few. >> minutes ago. >> in terms of the tariffs. >> i mean, we. >> are looking for a slowdown. later this year as the tariffs as some of those tariffs start to start to hit. and we're not looking for a recession, but we are looking for a slowdown. and then. >> as you. >> move into. >> 2026 because you. >> have a.

>> lighter regulatory. >> touch, that. >> should probably be. >> pretty good for capital investment. spending that kind of picks up. >> we also. >> have a placeholder in there for additional. >> tax cuts. >> towards the end. >> of. >> the year, which should help consumer spending. and so. >> when i think about. >> the contours. >> of our. >> forecast, 25. >> is. >> more about. >> the negative effects from tariffs. 26, i think is more. >> about the positive. >> effects in terms of maybe a lighter, deregulatory sort of touch, as well as any potential tax breaks that you get. >> starting next year. >> okay, good. all right dave bryson thank you. appreciate it. >> thank you. >> thank you. back to dom chu right now who's got a look at some of the areas of the market that are moving. and of course we are in the red right now pretty much across the board. >> yeah pretty much andrew and joe. and when that bear comes out on the animations, you kind of know what's happening in the epicenter of a lot of this is continues to be technology in the nasdaq specifically. so if you look at the place that we are seeing the most volume and the most downside activity within the s&p 500 and the nasdaq 100, overall, it continues to be a focus on the

semiconductor stocks, computer chip names among some of the worst decliners in the pre-market trade so far. supermicro is down about roughly 5.5%. broadcom is down 4.5%, nvidia down over 3%, micron down nearly 3%, and the vaneck vectors semiconductor etf down about 3% as well. so chipmakers a big focus here. i also want to go back to something that rick santelli was talking a little bit earlier about with regard to the massive move that we've seen across the atlantic, specifically in german bond yields. that ten year bond is at 2.85%. it's only up about seven basis points now. and i say only because as rick alluded to yesterday, we saw a historic move higher to the tune of almost one third of 1%, 30 basis points higher. and that was again the highest move that we've seen on a one day basis in german yields since german reunification, going back to the year 1990. now you're seeing what we are seeing here is the highest yield in over a year for those german bunds. and by the way, that's carrying through to

other parts of the interest rate complex as well. some of the ripple effects that we are seeing on the back of this move in yields are coming via the european stock markets, because the german dax has now hit another record high in the session. you compare that to kind of the euro stoxx 600, which is the orange line in the broader s&p 500, which is this line right here. you can see that move. so keep an eye on those yields a big move higher having a lot of ripple effects across the globe andrew i'll send things back over to you okay. >> thank you for that. we're going to keep our eyes on this market as things keep moving around. meantime, senator david mccormick of pennsylvania is going to join us. he serves on the foreign relations, banking and joint economic committee. we've got so much to talk to him about, including ukraine, the battle against fentanyl and the president's plan for the american economy. all that coming up after this. >> at capital. >> group, we take care when crafting. >> our active. >> etfs. >> our portfolio managers and analysts collaborate to strike

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ukraine president zelensky, a washington examiner op ed by freshman senator david mccormick saying that despite friday's debacle, there is still a path forward to promote peace while restoring deterrence. senator mccormick joins us now this morning. he also has a new book out called who believed in you how purposeful mentorship but changes the world. it's going to be out next month, and i love the idea behind that. senator, it's great to see you. but let's let's start with ukraine and the path. what is the path at this point in your mind? >> hey good morning andrew. the you know, the path i think, is what president trump has outlined, which is essentially stop the fighting, which has killed, you know, hundreds of thousands, millions of people, russians and ukrainians and hundreds of billions of dollars of damage to that, to that region. that's first. second, do an economic agreement with the united states and ukraine. >> which creates economic alignment. >> but it's also. a deterrent for further russian aggression.

third, have a european. >> commitment to really. >> double down on protecting ukraine with continued u.s. support. that becomes a real deterrent and stops the kind of aggression that that this conflict began from russia. that outline gives peace to the region. it gives a safety and security to ukraine, and it brings this terrible killing to an end. >> what did you see when you watched that that meeting take place? i asked, because it's been a bit of a rorschach test for folks. >> yeah, i watched it and i thought to myself, what? what a disaster. because i really do think president zelensky handled the meeting with both a lack of gratitude and a lack of grace. listen, he's been fighting for his the future of his country. i respect what he's done. but the united states has stepped up in a big way. and i thought the way he conducted himself. just wasn't consistent with he's asking the american people it's in our interest to support ukraine, but it's also a huge commitment from the united

states. and i don't think he showed the proper recognition and respect. >> so, senator, here's the thing that that i was thinking as i was watching that and i don't disagree with you, meaning, i looked at that and saw president zelensky not be as gracious or as thankful, maybe, as some people would want. at the same time, i saw the president and the vice president act in ways that i think when allies of ours look at that, they say to themselves, are these folks really our allies? and i wonder when people talk about making america great, whether one of the things that's made america great over all of these years is our loyalty to our allies, and the stability of that loyalty, and whether meetings like that and what i think the both the american public and the global public saw question it. >> well, there's no doubt that our alliances have been an important part of america's dominance on the world stage. they're going to be an important

part in the future. but the key part of any relationship is, is fairness. and so the large majority of americans are deeply committed to nato and nato's partners. but it's also true that. >> the. >> europeans haven't done their fair share. every president for. >> the last. >> 15 or 20 years has been talking about how nato. >> needs to step up. >> and meet its 2% spending target, and so forth. they have failed to do that, and the united states has borne an. unfair share of that burden. and so i think good relationships start with honesty and accountability. and there's an accountability that that our previous leaders haven't had on our european allies. i think president trump is doing that. and that's why i think that you can have a great relationship that's based on honesty and accountability, and that's what we need to have. >> and it's almost i mean, nothing that i heard from, from a lot of the european countries after that surprised me. david, you know exactly what they're going to say. and the point that you make, they've been able to expand their cradle to grave social programs because they don't spend any money on security. so, you know, they act

high and mighty about, you know, the safety net that they've got when they haven't had to look behind, you know, they haven't had to look over their shoulder because the united states is there and we've got a $37 trillion debt hang up from from policing. and, you know, i think it's i hear it i think it's rich to hear it from them and i totally. yeah. go ahead. >> i hear it when i go back to pennsylvania. i hear it all the time. which is, listen, we have our own deep challenges at home, this wide open border. the fact that most working families are living paycheck to paycheck. the fentanyl crisis is killing 4000 pennsylvanians. the war on energy, which has hurt energy jobs in pennsylvania. those are real challenges. we want to support our allies around the world, but we want it to be a fair deal. and that's, i think, at the essence of why you see a growing resistance to supporting allies around the world. and i think, as i said, any relationship needs to be based on accountability. >> senator, let me ask you, because similar concept to some degree, to talk about the

tariffs and what you think the american public thinks about the cost of the tariffs, at least temporarily or on the short term. clearly. i mean, look, you lived in the business world for a very long time. uncertainty unto itself is one of the great enemies of our economy. and so the question is how much you think the american public is going to be willing to accept some pain or some additional cost, potentially, hopefully, to get to the other side of whatever you think this all looks like later. >> what i want to start by saying, i think everything you're seeing is consistent with what president trump said on the campaign trail that he was going to do, and everything i'm saying is consistent with what i said. the tariffs are designed to do two things. there's the tariffs on mexico, china and canada, which is to stop this terrible scourge of fentanyl, 100,000 deaths last year. that's a huge cost to our economy. and they're meant to change behavior. the second set of tariffs are meant to ensure reciprocity, a fair deal for the american people in

steel and aluminum and other places. and so if these two things, if these two sets of tariffs result in less fentanyl deaths in the united states and fair deal for the american worker, that's going to be the outcome we're seeking. and i think president trump's been very clear on that. on using tariffs as leverage for reciprocity. and the. >> question is whether there's a way to do that such that it doesn't create. and maybe it's impossible to create the uncertainty that it's creating. you know, we were looking at some stats. you've lived you've lived in the finance world. we looked at mergers and acquisition activity in january. it's the lowest it's been since 2015, at a time when you would think animal spirits and the deregulatory world would would have pushed it in the opposite direction. you talk to folks in the real estate business who are not putting up buildings, because they're waiting to find out how much some of the supplies are going to cost. you got folks at ford, literally on the border of mexico and the us, going back and forth 100 times a day, hoarding parts. all of these things are going to create

an economic cost on the american consumer. >> there's no doubt there's going to be some uncertainty, but there's a lot of certainty to offset whatever uncertainty there is around the tariffs. first, there's a certainty of an energy revolution and huge deregulation and permitting reform to unlock energy, which is going to lower prices. there's the certainty of deregulation. the ten for one, that president talked about in the state of the union. there's the certainty of these huge hundreds of billions of dollars in investment from apple, tsmc coming into the country. and there's the certainty of using tariffs in a way that is for strategic purposes. and listen, the president is a business guy. he's going to monitor the data and make adjustments as necessary. you've already seen some of that. but the goal is clear reduce the flow of fentanyl. make sure we get a fair deal. i think most pennsylvanians that i talk to are in favor of that. >> what do you think the market what do you think the market as a as a former markets guy, what do you think the market is saying? >> well, listen, there's a lot going on. the market's trying to process it. i you know i'm honestly i don't mean this disrespectfully, but i'm focused on the people in pennsylvania

that have had a really bad hand over the last four years. prices have gone up by 22%. wages haven't kept up. i think the policies we're talking about are going to help most working pennsylvanians and most working americans. and that's where our biggest challenge is. >> senator, before we begin this conversation, i mentioned this book. who believed in you that? i know that you wrote with dena, your wife. >> yeah. you made a big mistake there by saying it was my book. it was. it was our book. >> your book together. so who believed in you? >> well, this was a project that came about during covid, when we were our six daughters, were we were all locked up. we didn't have that human connection to dena. i started to talk about the fact that we had both been influenced by mentors, and she, of course, had created these amazing nationwide programs. for me, it was a football coach. i was a benchwarmer as a sophomore in high school. the coach of our high school team got fired. a new coach came in, he watched all the films, and he picked me, plucked me out of out of the field. and he said, listen, this

guy has potential. and he made me the co-captain as a junior of the team. it changed my life. it helped me get into west point and you know, he made a huge difference. and the book is essentially about the people you've never heard of that have made many of the most successful people in the world who they are. they're the they're the true giants. they're the real heroes. and, you know, dean and i were really honored to do it and honored to have this conversation. and we can talk to you and joe and others. almost every successful person we talked to could point to someone who believed in them, who made them who they are. you know, sarah huckabee sanders, satya nadella, steve schwarzman, the list goes on and on. >> how about carried interest? you all right with that, senator? >> well, listen again. my basic premise right now is i want to create an economy that works for everybody. i want to, as we go through these this reconciliation process, i want to make sure we find ways to

fund all the things that we said we're going to do. close the border. peace through strength. make the tax cuts for president. president trump put in place in 2017 permanent and find the cost reductions. they're going to offset that. but we've had $2 trillion deficit. so i'm open minded about thinking about how to do that while committing to the promises we made. and i haven't taken anything off the table. >> senator mccormick, i want to thank you for joining us this morning. we look forward to talking to you again very, very soon as we continue to follow the markets and follow our economy. and right now we do have some red on the screen, folks. dow jones off about three. >> dak has gotten even worse. >> yeah hundred and 85 points. nasdaq down 332 points s&p. >> let's get a final. >> check 71. >> points on on the markets. yes joe go for it. sure. >> give it to us. >> you got you're doing yours. no. the nasdaq's got worse. obviously i can't say why, but it's been. let's see. what was friday? friday was good. monday was horrible. tuesday. i can't

even remember now, but it's like multiple hundreds each day either. either up or down. i think it was good to go along with mccormick. totally. totally worth it. we don't need commercials. we don't need no stinking commercials. we'll see what management says about that. squawk on the street is up right after a quick break. >> and we're back. good thursday morning. welcome to squawk on the street. i'm carl quintanilla with jim cramer david faber at post nine of the new york stock exchange. futures are a bit soft as these economic worries seep further into retail earnings. like macy's and the challenger layoff data a number we don't watch a lot, but it. >> is the. >> highest figure since july of 2022. your yields drop. >> to 3.96. >> this morning. a row that begins with tariffs and the sell off of wall street. and corporate leaders now digesting all the news that's coming out of the white house. >> plus the. doge effect