Transcripts For CNBC Squawk 20240704

Down about 118 points, nasdaq opening down about 117 points. S p 500 off by 16 points right now. Take a look at treasury yields. The 10year at. 93. The 2year at 2. 863. And crypto prices. Weve been talking about crypto quite a bit these days. Up about 4 this morning. Its crazy. And take a look at ether etf. Thats surging too meantime apple is canceling its electric vehicle product. That thats accordinging to those that know. Many employees will be shifted to the Artificial Intelligence division. Apples ceo apple and ceo tim cook have never acknowledged the electric car publicly but referred to working on e autonomous systems. Theyve never been open about this but are now scrapping it. People are looking at it as a major failure. I dont look at it that way. I think what was happening is there was an internal battle inside apple whether to even go this route and i think tim cook was always on the fence. You mean a failure for evs, not just apple. I think the failure of evs right now has almost no impact on this. Thats what i mean. If you just read the headline and youre a person who thinks that that this transition is rushed and not going to work, you would by like, see . I would want to know the real story behind the story. The only real story behind the story is theres always been a debate behind the company. Frankly, could you ever capture any margin on a vehicle that looked anything like the devices in the margin that theyre capturing on this. It would be margin dilutive. Remember when data was the new oil. You wanted to own the car because if you had the car, you wither going to know where your customer was at all times. By the way, if you have the phone, you know where your customers are. By the way, apple doesnt like to play around with it like others do. Its very interesting to think of it. You dont think the ev market overall has anything to do with it . I think that its one reason, but i think the other reason is apple has been left behind, left out of the ai party almost entirely. When you think ai player, apple does not come to mind. Its a big step from making iphones. It wasnt going to fly or be autonomous. Thats the future. I think they are behind, but i think youre going to see when they come out with their new ios in june, youre going to see all sorts of ai in there. But the resources are significant in terms of people, in terms of cash spent, in terms of mine share of the corporation. Gm said they were not going to make evs, would that be a commentary on the overall ev plarkt for you . Part of the edge of the whole thing was, okay, were going to go map the world. They need to do that to begin with. In the process of doing that, thats going to help our maps. Were going to do apple carplay, which is in virtually every car in the world. Even the way they approached developing the car was always a hedge with the idea that, you know what . If that doesnt happen, were going to get ten things out of of it at the same time. Hes big meaning tim cook on not the goggles but the vr headset. Not just that but ar . Ar. That was a huge part of it. You wouldnt do it just to do it. When you look at how difficult it is with tesla entrenched where it is. They were going to do it with a partner anyway. I mean, how much that would be a money pit for apple to try i mean, look. Rivian is so wellbacked. Amazon, ford initially. Deep pockets and yet it cant seem towork itself. This is not eve in the make nif isnt 7 anymore, tesla, is it . If its not in the magnificent 7 . The fact that it was in the magnificent 7 is a striking and amazing thing. A company that had a combined capital of the big three . Which didnt always make sense either. It should be a big market. You think it would replace it . It should. Will it . Im not convinced and apple is not convinced either. All right. In other apple news, they met with the Justice Department to persuade it not to file an antitrust agreement next it. Apple lawyers met with assistant attorney general jonathan kanter. Theyve been probing since 2017. Theyre trying to impede rivals from effectively competing. Also with rival and unitedhealth. I think were overdoing it. They definitely everythings on the red. But in this case, dont you think if you own a Doctors Group and you own insurance and you own you think that theres something there. I think that in health care, theres some incestuous dealings that might that you probably could look at. Do you think so, sorkin . United in health care. Dont you think theres some arrangements . Unfortunately, yeah. Yeah. Kroger i dont know why people make the case if youre not near a walmart and theres only a couple of supermarkets in your small town, maybe it makes a difference. Youre advocating for this deal. I think the walmarts of the world are the real competitive threat toward monopoly. Its not kroger and albertsons getting together. How do you work it . I dont know. Wasnt your dad an antitrust he was. Have you talked with him about it . I have not talked about this transaction. I think he would make the argument this is anticompetitive. With margins of 1 in that business probably, right . Because again part of it is the business isnt just selling the food the way you think it is. Its selling the shelf space. I mean the shelf space is really sold. People forget that when you walk into a store, most of these companies in some cases theyre paying for shelf space. Thats a whole different business. And if youre the only if youre the app store, youre the only place in town. You know its for the unions that need them to offset each albertsons against each kroger at contract time. We can talk about unions, but i dont think were going to have time. We can talk about the big starbucks story, starbucks is about to to its grand capitulation. Its reappeared. Oh, my gosh, that never happens. Lets talk real quick. Starbucksion yiezed employees are going to receive pay hikes. This was potentially a thank you in negotiations between starbucks and unions representing some baristas. They also say theyre providing some stores with credit card tipping that was only available to nonunion stores. Now its a function of lets get together, try to get these lawsuits put to the side, and lets try to negotiate. There are only f4 . This to me potentially lays down the carpet and says unionize away, which is completely at odds. Almost the antithesis of what Charles Schultz wants to do. Once you get a union between the workers and the company, that it breaks the entire ethos of what the company is all about. Kind of like delta versus united. It goes back to delta versus united. Youre a union bashr. Im not a union bashr. Youre a realist in this case. But i dont know if im going to be flying with united any time soon, but the difference is when youre on a delta flight, first of all, the satisfaction is through the roof and Customer Satisfaction has done quite well. Whats amazing, the people that work there are super happy. At 12 15 if a seatbelt is missing and its missing and someone has to be at lunch, someone will wilgo do it. United will say, its lunchtime, lets delay it. Am i adding hours . The entire mental framework and construct with how you work within the context of being at one of those Airlines Versus being i think that that is what people inside at least the management of starbucks fear. Let me do one more thing. Credit card tipping. Youre getting chinese food. Youre picking it up. Takeout. 10 , 15 , 20 , what do you hit . Other and i go to zero and i say i had to get you to say it. I find it offensive. Its everywhere. There are some place where i told you what happened to me at newark airport. I went to a Self Checkout and you scan the item yourself and put the credit card in and the theme pops up and says what tip would you like . Yeah, you get the tip. Maybe you get the tip. With a. I. , youre tipping the ai bot so wehe can take his ai girlfriend out. To an ai movie. Coming up, an optimistic tone in washington. Did you see it . Theres a fireplace and the Vice President was there and there it is. Oh, my god. Im describing it. Anyway, odds are i would get a deal sitting there sipping some hot chocolate. Looks good befe e orthend of the week. Also later, something is coming up, but its andrews taxi cab announcer this cnbc program is sponsored by baird. Visit bairdifference. Com. To help you see untapped possibilities and relentlessly work with you to make them real. You always got your mind on the green. Not you. You your Business Bank account with quickbooks money now earns 5 apy. thats how you business differently. Intuit quickbooks. The all new godaddy airo helps you get your Business Online in minutes with the power of ai. With a perfect name, a great logo, and a beautiful website. Just start with a domain, a few clicks, and youre in business. Make now the future at godaddy. Com airo you got this. Lets go. Gobble gobble. Ive seen bigger legs on a turkey rude. Who are you . Im an investor in a fund that helps advance innovative sports tech like this Smart Fitness mirror. Im also mr. Leg day. 1989 anyone can become an agent of innovation with invesco qqq, a fund that gives you access to nasdaq100 innovations. I go through a lot of pants. Before investing carefully read and consider Fund Investment objectives, risks, charges, expenses and more in prospectus at invesco. Com. In michigan trump ibiden haf the vote. Trump is expected to win by a margin of 68 to nikki haleys 26 . He said hes already looking ahead to the general election. Congressional leaders from both parties striking an o optimistic tone after a white house meeting yesterday. Speaker mike johnson is expected to put forward legislation that would keep the government fully open. The details are unclear. There are some bizarre sticking points. Did you see some of the weird sticking points whether veterans who want to buy a gun get reported to some background check . I mean its very arcane whats in these things and the details, and you wonder why we dont get anything done sometimes. Everybody has something they want. Congress has until just after midnight on friday to fund the departments veterans affairs, one of the things in there. There are essentially other agencies that have been operating on temporary extensions. The deadline to fund the rest of the federal government is a week later on march 8th. Joining us to talk about all of the Political Risks in the market, the head of policies and politics with wolfe research. It had to be before that meeting yesterday. So that meeting is for example, you said the odds are increasing for a shutdown and things arent looking good, and then this morning shutdown risks receding. Washington post, a deal in sight to avert closure. You were probably surprised at the progress made at the white house yesterday. We never thought there was going to be a long shutdown. It was do we get a lapse . I think johnson made it quite clear in the last few goarounds of this that he thinks shutdowns are not good for rchs politically, and that he does not have the appetite for a big knockdown dragged out fight. Hes probably on track for getting things done before the deadline, but its still not a forgone conclusion. I dont know that the situation has changed that much. I think the risk of a shutdown that makes any risks to the markets remains low, has always remained low. This was kind of a question, can they color inside the lines or run a little bit overtime . When you hear about one of the sticking points is the minutia and how much to spend on the program for whims, infants, children, that was a major problem because i guess 7 billion has been ear marked. 6 billion has been ear marked. They want another 7. Not watching the sausage being made, how do they come to agreement . Its a dollarsandcents negotiation. The rest of the sticking points as you mentioned before are more a set of conservative policy writers around abortion access, gun rights, visavis, veterans. Those have been the main sticking points. The question is at what point does johnson turn to his right wing and say, sorry, were coming up empty on what youve wanted to do for months and months and months. Its always been inevitable that it would not make it into the bill. Its less of a real negotiation than you might think. In some of those cases theyre talking about this stuff a lot. The biggest decision is when does johnson actually turn to his right flank and say its time to move on from the government levels we agreed to months ago. Then were back to the real world and were back to ukraine, the border, and israel, and the right flank is still there. Ukraine is just on everyones lips at this point. Some of the anecdotal evidence coming from there, no bullets, no ammo, its pretty dire. The pressures increasing on mike johnson, but how does that work with theaforementioned right flank or the people that dont want to do it . Right. Its a very similar dynamic where if you put the supplemental defense spending bill with israel, indopacific funding on the house floor, it would pass easily. Its a question of the intrarepublican caucus politics, when he is willing if hes willing to go ahead and allow a vote on this thing. But for the substantive support, its pretty clear its a tough vote for house republicans, even people who are broadly supportive, dont necessarily want to have to go on the record and vote up or down. So, you know, hes been dragging his feet on it. Hell continue do so. Thats going to drag late march at the earliest. Thats something hell be hoping to deal with march 22nd if not longer. Everyone else at that meeting was putting as much pressure on him as they possibly could. Its just not a priority. Hes trying to get the funding government bills through. From his perspective, the game here is keeping the lights on. Some of these issues like ukraine funding despite the reports from the front lines are not you know, i think hes not indicated hes ready to do it. Both sides are grasping at that the border political football. Both sides are painting a narrative that would benefit them, all leading up to the november election. So i dont know how that getting up. With ukraine, tobin, i mean i can see some of these guys and gals are philosophically opposed to not knowing where the moneys going, but are there some that really want to eventually do it, but theyre just dragging their feet a little bit because it makes a if they really think its a good thing to do, that we need to do it, just dragging your feet to make a political point, its like kind of like nero, isnt it . Fiddling while rome burns. If you want to physically do it, you cant eff around if you really want to succeed. Theres a song, hope yes, vote no. Thats where a lot of republicans are. There are plenty of people who would be happy with aid to pass wu dont want to vote for aid. If johnson puts it on the floor, its going to pass with many more democrat votes than republican votes. Theres lots of strategy like were waiting until some future time when its going to work better and more everyone looking at political incentives with the threats of most members of congress coming from primaries than the general electorate and saying, its a tough vote id rather not have to take. I think youre hoping johnson will eventually decide hes willing to bear the backlash from the right, put it on the floor, pass the vote with more votes. But ultimately be relieved that it got done. Its amazing. Tobin, do you like your job . This is the best system in the world that we have, and yet this is what it is. Its hard to fathom sometimes, isnt it . Yeah. Not a great time in washington. Certainly no way to run certainly no way to run the most powerful country in the world, but this is what we have to wo, with. You probably say that a lot. To be a like a little engraving here, it is what it is. Tobin, thanks. Wolfe research. Good to have you on. Coming up, Warner Brothers discovery standing down. Im not sure they were standing up. Were going to dig into the story that has everybody in media land. At cdw we get your teams work in different places, in different ways and across countless different networks. So how do you get everyone on the same page . Microsoft surface devices, orchestrated by cdw. They adapt to each user and deliver multilayered security, so your workforce gets seamless experiences wherever they roam. For devices that fit your unique workforce, trust Microsoft Surface and it orchestration by cdw. People who get it. Your record label is taking off. But so is your sound engineer. You need to hire. I need indeed. Indeed you do. Indeed instant match instantly delivers quality candidates matching your job description. Visit indeed. Com hire [storms sound] whatever weather comes your way [wind and snow sounds] weathertech has you covered. [bird chirping] [laughing] with our laser measured cargoliners. No drill mud flaps and floorliners. To secure your phone dont forget the cupfone. Order yours today at weathertech. Com. You never know when its gonna be a weathertech day. Perfect weather today. Why choose a sleep number smart bed . Can i make my side softer . You never know when its gonna be a weathertech day. I like my side firmer. Sleep number does that. The queen sleep number c4 smart bed is only 1,599, save 300. Shop now at sleepnumber. Com box. Warner bros. Discovery is no longer in talks with pair mount global. Joining us right now is pucks matt bellamy. Im sure some of the same sources tried to talk to you. Is it your sense this was really in the offering to begin with . No. I think both of these companies are exploring whatever there is to explore at this point, looking at whoever it is theyre looking to talk to, but the sense is there was not some big, you know, big, big ruck to do a deal between these companies. It with us exploring, talking. Frankly it was surprising that sources would say it was off just because it was never really on to begin with. Im with you. Im with you. Let me ask you this. Lets talk about the chessboard. I dont know which of the pieces on the chessboard right now you think is most interesting, but if you wither to play out the chessboard over the next 12 months, how do you see the possible permutations . I think the most likely and i know im in the minority on this. I think paramount goes to david ellison, skydance, and the redbird group. Theyre the only ones that are serious about this. Theyre in the middle of diligence. This is Larry Ellisons son. They have companies behind them, tencent and others. Paramount would be smart to do a deal with them. This is a company that wants to keep the studio, sell off other stuff, and is willing to pay a premium. It may be there, it may not. We dont know what that is. I think warners has to look to comcast and see if Brian Roberts is looking to do a deal with them, or i think they try to chug it out and hope that this ad market gets better and that their numbers turnaround and some of the Free Cash Flow actually enables them to invest in the company, which is what the street seems to desperately want out of warners. They want a narrative. They want to hear, how are you going to grow . Can you walk through to the extent people have sort of i dont know how much you think its real or not. Paramount and the company come taft, joint venture, of sorts, with paramount and peacock, how that would work. Well, the way ive heard it described, and this has been reported in the media. The journal has writtenen about this. There could be some sort of commercial combination of the paramount plus and peacock. A teamup to get a little more scale in the streaming wars because peacock and paramount plus are the subscale late entrants to the streaming wars. Theyve not been doing great. Theyve been doing better, especially with the peacock wildcard football last quarter, but this would be a combination of the two units. It would be a commercial partnership all the way down to it could be a bundle. They may do a deal where they bundle them together, split the revenue in some way, and thats what this ends up being. But this could be something more where theres a combination of the units or some kind of a coming together of those two units to better compete in streaming, which is ta big problem with all of these companies. Matt, final question. Warner brothers discovery, theres always been a question. Were coming off the sale or i should say post spin of that business from at t. It was impossible to sell that Company Given the Tax Implications of that time, but once you get past thecalendar because of the way the rules work, you can actually sell the business without the same kind of tax problems. Do you see that Company Getting bought, or do you see david sal is slov being a buyer long term . I think right now theyre open for anything. Theyre open about searching for deals. They said that essentially on the earnings calls. Zaslav said that. The stock is so low right now that a pure acquisition by another company, that would just be a disaster from where this company went two years ago, but i you know, at some point they may not have a choice if the economics continue to decline. I think that there will be some kind of a some kind of a deal, whether its, you know, falling into the arms of comcast, which it seems very happy to just sit back and wait for warners to have more problems. Or whether its going out i dont see them being able to be purely inquisitive, like theyre not going to go after a big company. I dont think they can. They have too much debt still, and the financials of the stock are not there. So theyve got to find a deal. To be honest, i dont know what the best past is for them. Matt belloni, thank you for waking up. Congratulations. Theres a big piece on him in the new york magazine. Hes like big time now. Hmm. Yeah, hes the big belloni is the big time. Thank you, sir. Coming up, the first ever change makers list. 50 women in philanthropy. Thats next. Announcer executive edge is sponsored by at t business. Nextlevel moments need the next level network. And this must be the ocean view . Of aruba . Huh. This listing is misleading. Well, when at t says we give businesses get our best deal, on the iphone 15 pro made with titanium. We mean it. Amazing. All my agents want it. Says here. inviting pool. Come on over too inviting. Only at t gives businesses our best deals on any iphone. Get iphone 15 pro on us. on cnbc. This morning we look at the change makers list. The 2024 change makers includes 17 sectors and the companies have a total valuation of 47 billion. 11 Public Company ceos overseeing a combined market cap of about 170 billion. Five women deploying technology to jump start philanthropic impact and four women shaping up sports. Each has accomplished an achieving past year from a lifechanging drug to a startup looking to minimize and repurpose plastic waste, from solving the formula shortage to driving new value in sports and media. These change makers demonstrate transformation, growth, innovation, and impact. Theyre driving change through new approaches to old problems, aligning purpose and profits. You can find all 50 change makers from our inaugural list on cnbc. Com changemakers. Youll learn about the new event celebrating these women coming up on april 18th. These women are inspiring and they aur new models for successful leadership. Melissa, i cant wait for you to put it out. How did you put this list together . It looks like a daunting task. It was indeed. There were so many amazing applications. Over 700 applications. We had the guidance of our Advisory Board and we valuated quantitative and qualitative metrics, looking at the reach and impact of these women, focusing on their accomplishments over the past year. Any key themes that have emerged from the list . One thing that was really interesting is a wide range of the women on the list were focused aligning purpose and profits. There were a number of companies in the Renewable Energy space, health space, formula space, child care space. What these women are trying to do is have a possible tissue social Environmental Impact while at the same time making a lot of money and trying to prove the va val yoo u and successfully proving the value in these successive business models. Is the advantage of having a purposedriven company that your incentives are aligned so to speak you want to do good and you want to succeed . I think thats a big part of it. Its much easier to hire a talent if youre showing having additional purpose beyond generating profit. If you look at the business models, its not one to one or buy one, get one. Theyre looking at how theyre succeeding. Theres a Company Called repurpose global. Theyre working with big corporations all around the world to remove plastic from the environmental. And theyre making money in their success. Or another company focused on geothermal energy, which is more of the Renewable Energies by. Shes trying to make it more successful. Or upwards, a childcare company. It would have such broad him plications across the whole u. S. Economy. All right. Julia, i look forward to taking a look. Julia boorstin, the change can makers list. Coming up, a chinese country that has a problem with builds. Thats coming up next. You know doug, ever since switching to workday youve been a real rock star. Rock star . What do you know about rock stars . Billy idol . I mean wheres the skintight leather . My shoes are leather. Wheres the unnecessary zippers . That thing billy, rock star is just how doug feels when he uses workday. Thanks, rory. Ill show you rock star be a finance and hr rock star. Workday. For a changing world. Billy idol just stole your golf cart the future is not just going to happen. You have to make it. And if you want a successful business, all it takes is an idea, and now becomes the future. A future where you grew a dream into a reality. Its waiting for you. Mere minutes away. The future is nothing but power and its all yours. The all new godaddy airo. Get your Business Online in minutes with the power of ai. Power e trades awardwinning trading app makes trading easier. With its customizable options chain, easytouse tools and paper trading to help sharpen your skills, you can stay on top of the market from wherever you are. E trade from Morgan Stanley power e trades easytouse tools make complex trading less complicated. Custom scans help you find new trading opportunities, while an earnings tool helps you plan your trades and stay on top of the market. E trade from Morgan Stanley contributing to its economic woes. Eunice yoon looking at it. Good morning. Reporter thanks, joe. You and i have spoken before about chinas ghost cities, but as i found out about this city, the degree of overbuilding is much more widespread. Thinking of buying a home in china . Maybe not this one. This house developmentwas built in 2011. Most of the buildings like this one have never been occupied. As you can see, theyre not well maintained. Here in the city of nan tong, pa apartments are everywhere. Theyre weighing on the economy. Rhodium has 26 mill up. In in nan tongs case, they were hopin hoping people would move from the country to the city. Because of chinas demographic decline, nan tongs population is declining. Local projections forecast it could take five years to find buyers for all of the new unsold apartments. Making matters worse, falling home prices and a bad job market has slowed sales. In 2019 this building would have sold out in two months. Today, theyre hoping for three years. The fear is many of these homes will never sell and remain a burden on the real estate market. Some of the homes are empty because people bought them as investments without ever intending on living in them. So that makes the developments that much more lonely. Guys . I liked a couple of those places, eunice. I had my eye on it. Thats not going to happen though. Thats amazing though. How many structures in china are empty . I know its a big country. But there are stadiums, apartment buildings. You cant just build and they will come because sometimes they dont come. Reporter yeah, well, thats the problem with the whole china growth model because china has been driving its growth through investment, and a lot of that investment has led to excess. Excess houses, for example, infrastructure, as well as manufacturing, and thats the main issue. What were seeing now is china hasnt made the switch to leaning more on consumption, and right now they have this massive property issue in their hands. In addition to that as i mentioned earlier, in the property sector, its really been seen as a way for people to invest their money because of the closed capital account. So because of that, you see a lot of people betting or at least in the past betting that the market was going to go up. There are a lot of o developers throwing their hat into the sector and that didnt happen. Thats where we are right now. New york is looking for housing and a lot of our big cities here. We could use about 7. 2 million units, if youve got those t anlable, eunice. Buthk you. We will see you again soon. Squawk box will be right back. Announcer this cnbc program is sponsored by baird. Visit bairdifference. Com. H custr demand. In real time. jen so we partner with verizon. Their solution for us . A private 5g network. ella we now get more control of production, efficiencies, and greater agility. marquis with a custom private 5g network. Our customers get what they want, when they want it. jen now were even smarter and ready for whats next. vo achieve enterprise intelligence. Its your vision, its your verizon. Were you worried the wedding would be too much . Nahhhh. inner monologue another Destination Wedding . . Why cant they use my backyard with empower, we get all of our financial questions answered. So we dont have to worry. Empower. Whats next. Wall street forecasts over 100 billion in sales for antiobesity drugs known as glp 1. But these treatments are largely administrated through cumbersome injections. Enter Lexaria Bioscience with their patented oral delivery technology. Early studies were glp1 suggest reduced side effects and better blood sugar control with reduced spikes. Lexaria bioscience. Transforming the future of glp1 drug delivery. Tomorrow night on cnbc, it is a premiere of our new doc big shot, the ozempic revolution. You can tune in. Heres a sneak peek. It is estimated up to 5 million americans are taking them, a staggering figure considering the weekly injections need refrigeration and possibly a lifetime commitment. For faith ann and her parents, they were worth a shot. Where do you give yourself the shot . In my stomach. Yeah, i dont like to watch. You can hear the click. It is done. Wow. Can you tell me what youre on and how long youve been on . Ive been on mounjaro since may. Ozempic since july. Whatever she gives me. Yeah. Hes been on no, he switches. He goes between mounjaro and ozempic. Theyre all in a class of drugs called glp1 receptor agonists, which mimic naturally occurring hormones in the body. Glp stands for glucagonlike peptide. It helps the body regulate insulin and glucose or blood sugar and also helps the stomach feel full faster and longer and it also affects appetite centers in the brain so that people have less of a drive to eat and there are reports it helps with what we have come to call food noise. Joining us now to talk about the weight loss drug frenzy, michael ye, great to have you with us. Great to be here. And, of course there are about 70 to 80 potential drugs in the pipeline in development out there. Yesterday viking therapeutics tripled in value in single trading day based on its results of a dual agonist. Im wondering at this point, what is the bar . Because a lot of analysts are saying the data was very good from viking. It is as effective, looks as effective and promising as the other drugs in the market. Shouldnt the bar be that it is more effective, that there are fewer adverse effects, not that so far it is the same or as good . Yeah, yeah. It is a great question. Great to be here, melissa. You know, we were at a dinner this week with investors in two big obesity experts and i think they called it an arms race for new therapies for obesity, for what could be a 100 billion tam around the world in an epidemic. I think the context for your answer depends on each company. There is going to be different therapies and modalities for different types of people. The drugs dont work the same for every person. Some people would want a weekly injection, like some of the therapies you just mentioned. Amgen, one of the stocks we like a lot as a monthly injection or better, that is coming, and there are also oral drugs that are coming. So, for viking, that was a very strong result for a small company. And, of course, there is others coming. And, of course, viking also has an oral study going on now of the same compound and those readouts will be due out at the end of the quarter. Im wondering of the names that are not eli lilly and novo nordisk, who do you like in terms of having the next great candidate . You mentioned amgen . How about others . Amgen on one side, late stage phase two, also zeeland, a company that is a recent metabolic mash data last week. There is also the oral compounds, structure therapeutics, which has data coming up, and there is other interesting modalities that are people are trying to do beyond just glp, melissa. One of those is scala rock, regeneron and scala rock are working on myo statins. Some of these drugs improve on losing muscle. There is other Small Companies like ventix, which works on antiinflammatories. A lot of Different Companies beyond lilly that i think over this ten years i think are going to be important. It seems like it would be an easy acquisition for big pharma to make because theyre searching for ways to extend their pipeline, a lot of cash on the balance sheet, a lot of pressure to do something, when you look at the stock price. Who do you think are likely candidates for acquisition . Well, first i would say roche and astrazeneca both made smaller acquisitions over the past few months. I think that people are looking at some of these smaller companies. You know, pfizer obviously, a company which has been long talked about over the last 12 months with some disappointments would be looking at some of this. Perhaps j j also. These are the biggest f gest pharmaceutical companies that have the cash to do this. Some of the early data, when you have a safety issue, melissa, could be a problem. So as more data plays out, it will be interesting. Michael, thanks. Michael yee, jeffries. Programming note, do not miss the documentary big shot the ozempic revolution tomorrow night 10 00 p. M. Eastern and pacific. Squawk box will be right back. Tailormade for trader minds. Go deeper with thinkorswim our awardwining trading platforms. Unlock support from the schwab trade desk, our team of passionate traders who live and breathe trading. And sharpen your skills with an immersive Online Education crafted just for traders. All so you can trade brilliantly. I got the cabin for three days. Its gonna be sweet what . Im 12 hours short. Have a fun weekend. Unnecessary action hero unnecessary. Was that necessary . No. Neither is a blown weekend. With paycom, employees do their own payroll so you can fix problems before they become problems. Hmm get paycom and make the unnecessary, unnecessary. See you down the line. Upbeat music upbeat music [sfx wind, rain and rolling thunder] nobodys born with grit. British announcer rose is really struggling. Its something you build over time. American announcer thats 21 missed cuts in a row. [car trunk slammed shut] for 88 years, Morgan Stanley has offered clients determination and forward thinking to create the future. Crowd stop it . Only you can see. American announcer rose, back in the winners circle. [crowd cheers] [music out] Las Vegas Grand Prix choose tmobile for business for 5g solutions. Because tmobile is helping power operations and experiences for hundreds of thousands of fans with reliable 5g connectivity. Nows the time to accelerate your business. Good morning. Futures ticking lower this morning as investors look towards key inflation data. Look at where you should be putting your money to work. We have that straight ahead. Plus, for Republic Services, trash is cash. Waste management companys ceo will join us to talk about the garbage business and beyond. And will a. I. Take your job . Well look at how the technology is impacting Companies Labor decisions. All that as the second hour of squawk box begins right now. Good morning and welcome back to squawk box here on cnbc. Live from the Nasdaq Market site in times square. Im joe kernen, along with Andrew Ross Sorkin and melissa lee. Melissa lee. Melissa lee is here for the whole threehour party. It is very melodic. Only two more hours left. Yes. And youre so happy. The countdown continues. When she does that, it is the sort of pretend that, you know, but she really is, she really is, it is a way of sort of throwing people off a little bit, but we know. We know. Here are the futures okay, cut with a knife. Here are the futures down, down 115 now on the dow. Saw some similar action yesterday. The dow paired its losses and the nasdaq ended higher yesterday, but down today. Not a lot happening in treasuries. Tenyear has sort of been locked in a little bit of a range as far as yield goes. 4. 28 . But thats a big but, crypto, 59. Yeah. 59. And last time we were talking about it, 58, when we were talking about it, andrew, it, you know, time goes fast, youll see. But we were talking about 26 or 27. Really it seems like last week. It was a couple of months ago. But we were wondering what is going on, when is it going to move on the anticipation of the etf, what about the fed easing . Is that going to be what finally and, you know, you go to bed, wake up at 59, 58, thats unbelievable, almost back to where, you know, you always point out how anybody who bought at 63 or 64 is losing money. Youre not going to be able to i wont be able to say that. You might be able to might go back down. Thats one of the things that if you buy it, you better be ready for anything. Which goes to the idea of is this a store value . I dont think so. I dont think i dont think that does. If you have something that is the best performing asset over five, ten and 15year periods, it is a store value. Im ready to say that. Im ready to give it on the record. Lets get to dom chu with a look at the mornings market movers. Good morning. Lets start off with the move on earnings on ebay which came out after the bell. The shares are up 4 right now, premarket. Around 15,000 shares of trading volume. The Online Auction marketplace reported better than expected profits and revenues thanks in part to a better Holiday Shopping season. It also gave a more robust Current Quarter forecast as well. Ebay also announced a dividend boost by two cents a share and added 2 billion to its stock buyback program, total authorization to 3. 4 billion. Ebay shares up 4 on that. Shares of online gdating platform bumble down, it reported a bigger loss than expected on revenues that fell shy of estimates. Bumble offered a disappointing Current Quarter forecast given a slowdown in user spending. Job cuts will happen in the first half of this year. Bumble shares down 10 . Capping things off with a check on the media space. Paramount global and warner bros. Discovery in focus after warner is said to have shelved talks to buy paramount global. Both companies have declined to comment on the issue. It said that film studio Skydance Media is in the process of Due Diligence on a potential deal and media mogul byron alan did make an offer for paramount last month, but nothing formal has materialized as of yet. Warner bros. Down. 5 and paranount global down 1 . Ill send it back over to you. Thank you for that. Want to bring in alexandria wilson alonzo. Excuse me. Im having a problem this morning. Hooked on phonics. Elizondo. Elizondo. Cochief Investment Officer it is like im hiccuping. You drink so much coffee. It doesnt matter what youre drinking. It is how fast. How many cups of coffee do you drink . One. One cup . In the morning. One in the afternoon . Yes. Worried about too much caffeine. I drink two cups of coffee, thats it. Some mornings its more. Bring any another, please. Sometimes it is very tiring, you know, because it is very complicated stuff. He pointed at him when he said very tiring. Yes. Exactly. Exactly. Anyway, very nice to see you. Nice to see you too. Were trying to figure out what to do in this crazy market. What are you doing . I think the most important thing for us is direction of travel. What does that mean . The global cutting cycle is here. It has been delayed. But that just means that, you know, thisshould be very positive for risk assets. Now, there is a huge but in there, which is it is not just, like, by length in your portfolio and beta and hope for the best outcome. In fact, we have seen like very differentiated outcomes in the month of january amongst active managers for the recent period for first time. Since 2007, the best month for active management. So were you think that continues or thats a weird fluke . We really do think it continues. I think the market is going to reward fundamental analysis and being a little bit more agile in terms of, you know, relative value and then paying attention to when the market gets a little bit too extreme in front of itself and being thoughtful about not timing it but pairing back risk. Im going to make a presumption that a lot of our audience is just owns the s p and might own the russell, might own the dow. Do you think it is a bad idea in. I dont think it is a bad idea at all. The biggest question is, is this a bubble . We view this as being a scale game. The market is rewarding scale players and if you look at it, there is about 30 of the market, there are 30 of organic investment. That means that theyre really driving a lot of what is happening in the u. S. Economy. And thats a place to be. How much of this sort of is a Virtuous Cycle in that if youre a manager, your index is the s p 500, so you got to be in these names so there is this sort of money flow situation where you got to be in them, no matter how painful the valuations you may think they are, you dont want to be in that part of the market, but you have to be in order to meet your performance targets . I think last year you could make that argument. It was very difficult. You saw that for active management, but you did see material differentiation in this year, the earnings the first quarter. I think it is really starting to say, were moving away from, like, the market just trades the theme to there is real fundamental differentiation amongst these names. How much of the a. I. Halo do you think on a percentage basis is in the averages right now . Im not saying it is wrong, because i remember when the internet definitely in 99 was having a positive effect on the, you know, on the averages. But in hindsight, how much of our current world is internet 50 of the gains in innovation we have seen for internet. It was worth it. Is a. I. Going to live up to that . I think when you even look at some of the most recent names that are reporting, yeah. And then therefore guidance is showing there is more conviction there. Should the s p be up an additional 10 , 15 because of a. I. . I think it is not really. When you lift the hood, and you look at valuations just in terms of pes, the average stock looks about average for where you should be in this type of cycle. So we dont really think thats the case, but to your point, sentiment and positioning right now arent necessarily tailwinds, right . The market is, you know, i would say the market is very happy. People are invested. And so you need to be thoughtful about, you know what we would call buy the dip. We had people come on and say, look, were in a president ial election year, it is going to get complicated this fall, and maybe a bad situation. What do you think . I wouldnt necessarily say it is a bad situation. But i do think were going to start looking through the fed being the only game in town to now youre going to see some volume in the equity market where it has been in rates. When you start to see what the policies are going to be that are put forward. Any of the trade rhetoric picking back up, youll see certain sectors trade better than others. Thank you. Thank you so much. Appreciate it. Coming up, we got the ceo of recycling waste and Environmental Solutions Company Republic Services. Hes going to join us. And the Company Reported results after the bell, also facing some labor issues. Well talk about that after the break. And later, apple winding down its electric car effort after years of development and billions of doarlls. How folks working on that project now are being shifted to work on a. I. Well talk about all of that when squawk box returns. Announcer this cnbc program is sponsored by baird. Visit baird difference. Com. Wall street forecasts over 100 billion in sales for antiobesity drugs known as glp 1. But these treatments are largely administrated through cumbersome injections. Enter Lexaria Bioscience with their patented oral delivery technology. Early studies were glp1 suggest reduced side effects and better blood sugar control with reduced spikes. Lexaria bioscience. Transforming the future of glp1 drug delivery. This is our future, ma. Godaddy airo. Creates a logo, website, even social posts. In minutes how . A. I. impressed ay i like it who wants to come see the future . get your Business Online in minutes with godaddy airo new projects means new project managers. You need to hire. I need indeed. Indeed you do. When you sponsor a job, you immediately get your shortlist of quality candidates, whose resumes on indeed match your job criteria. Visit indeed. Com hire and get started today. Is it possible to count on my internet whose resumes on indeed matlike my customersria. Count on me . It is with comcast business. Keeping you up and running with our 99. 9 network reliability. And security that helps outsmart threats to your data. Moaire dida twoo . Your data, too. Theres even roundtheclock customer support. So you can be there for your customers. With comcast business, reliability isnt just possible. Its happening. Get started for 49 a month. Plus, ask how to get up to a 800 prepaid card with a qualifying internet package. Dont wait, call and switch today Waste Management Company Republic Services forecasting better than expected revenue for the year. Attributed high demand for garbage collection and disposal. Joining is john vander ark, Republic Services ceo. For years, good to see you, thanks for joining us this morning. For years we used garbage, believe it or not, as a pretty good indicator of the strength of the economy. And i guess in boom times there is more garbage. There is another one on, i think, i75, you can count the trucks going under a bridge on any given day, and you can tell how the economy was based on that. So there are certain indicators that seem to work forever. What are yours telling you right now . Yeah, i think youre right, joe. I think we have 13 million customers across every secresecretary sector of the economy and the signal is largely strong. We see a Strong Industrial economy, coming off a good year with a good forecast next year. Small business, very strong. I think the one spot obviously is housing. Our temporary construction business, with high Interest Rates, Housing Starts have been a little bit slow on that. And were forecasting a pretty conservative year into 24 and not planning on a bigger recovery until 25 there. The outlook you gave was in the last six months, you boosted it by how much, would you say . Well, were coming off three straight years of double digit Revenue Growth, which for us, you know, were at low growth industry. So that just gives you a sense of the strength. Now, were forecasting about 8 Revenue Growth for 24. And most of that is inflation coming down and pricing will come down, but our costs will also come down accordingly. But still a really strong outlook going forward. You, looking at that 189, jon, you know that this company, this stock has never, ever been at 189 before. Are you aware of that . Yeah, we started 11 years ago and i think it was in the low 30s when i started. So we had a really nice run. Certainly for our investors, but also for our customers. Our Customer Service has gotten better and our employees. We added more than 15,000 jobs over that period as well. 58 billion market cap before the move today. So that is this was this is the rollout, this is one of waynes rollouts, wasnt it, when it started . Yeah, he started it in south florida. And he was legacy republic and it merged with allied waste in arizona in 2008 or 2009 and those two companies coming together, i joined shortly after that and we had a really good run over the last decade. Amazing that, yeah, i mean, obviously founded Waste Management with one garbage truck too. He really knew this business. How much is the whole Green Recycling just the whole ethos, how much does that play into your business right now . I would if i ran a garbage company, i would do i would pick up garbage and do what i needed to do as well as i possibly could. I would try to do some of that other stuff, but if you mind your ps and qs, you have a Profitable Company if you just do this right, dumpsters, rent them, pick things up, show up on time, youre more important than a doctor to a lot of people, i think. Like your utility, nobody pays too much attention until it doesnt work and then theyre very interested. We start with Customer Service. Were going to get something off the ground 5 million times a day and so thats our bread and butter. But increasingly we have moved from a Waste Company to a recycling and Waste Company to a sustainability company. And thats where customers want to go and thats where we see profitable growth opportunities. So, working hard to electrify our fleet, were moving into advanced recycling, and we have a new Polymer Center opening up. Were doing Different Things and not at the expense of our base business. Thats the core that allows us to do the other things. You said some positive things, conciliatory things about unions and it is true, i mean, everybody deserves to do as well as they possibly can for themselves and for their families through collective bargaining. But you, in the past, have liked to have an interface with your employees, and try to do right, maybe without necessarily unionizing. Is it going to happen . A third of our front line workforce is unionized. Were certainly pro employee. Thats where we start. We had a great run there. Our Employee Engagement is at an all time high with 99 participation. Our turnover is down 400 basis points. And that third of the workforce that is unionized, it is broken up into more than 100 unions because were a local business. So, were going to fairly bargain with the union and get a deal that we want to get it right. We want to have market competitive wages so that the best people come to our site rather than other sites. At the same time, you dont want to get out of market because that reduces the competitiveness of your team, and ultimately that ends up costing jobs. Yeah. Well, jon, do your kids go at school, my dad is in Waste Management. Yeah, whatever i need, thats a jersey joke. That goes back to the youre shaking your head. Seems like a digression, but go ahead. Far be it for me to ever digress. The industry changed a lot over the last 20 years. I know. Especially when it has been rolled up, obviously. Not the same as it was. I would i would brag if i was in Waste Management. Thank you. Good to have you on. Thank you. Coming up, the latest out of washington on a possible partial Government Shutdown. The futures right now indicating lower open with the dow looking to lose 129 at the start, s p down by 17. Well be right back. Announcer now for todays aflac trivia question. On this day in 1983, the final episode of what popular sitcom aired after 11 seasons . The answer when squawk box returns. Uh. Hiphop limping mmhmm medical bills uhhuh pancakes cash who pays you cash when you have medical bills . Grrr no idea. [tapping] gap the gap left by Health Insurance . Who pays cash to help close that gap . Aflac oh, aflac get help with expenses Health Insurance doesnt cover at aflac. Com pictionary . so this is pickleball . Its basically tennis for babies, but for adults. It should be called wiffle tennis. Pickle yeah, aw whoo these guys are intense. We got nothing to worry about. With e trade from Morgan Stanley, were ready for whatever gets served up. Dude, you gotta work on your trash talk. Id rather work on saving for retirement. Or college, since you like to get schooled. Thats a pretty good burn, right . Got him. Good game. Thanks for coming to our clinic, first ones free. You know doug, ever since switching to workday youve been a real rock star. Rock star . What do you know about rock stars . Billy idol . I mean wheres the skintight leather . My shoes are leather. Wheres the unnecessary zippers . That thing billy, rock star is just how doug feels when he uses workday. Thanks, rory. Ill show you rock star be a finance and hr rock star. Workday. For a changing world. Billy idol just stole your golf cart announcer now the answer to todays aflac trivia question. On this day in 1983, the final episode of what popular sitcom aired after 11 seasons. The answer, mash. Welcome back to squawk box. Fears of a Government Shutdown easing after leaders from both parties struck an optimistic tone following a meeting at the white house. Emily wilkins joins us with more. Good morning. Good morning, andrew. We got three days left until the Government Shutdown. But congressional leaders are starting to consider another shortterm funding bill to give them just a little bit more time to negotiate some of the details. Now, were still waiting on the detailed text of a bill to keep the government funded. Were expecting that either today or tomorrow. But lawmakers are still stuck on a handful of issues. Speaker mike johnson floated moving the deadlines to march 8th for the parts of the government that are facing the deadline of this friday at the end of the day. And march 22nd for the rest of government funding that was initially set to be handled next week. Johnsons office emphasized theyre only going to have another shortterm spending bill as part of a larger agreement to finish a number of overall spending bills to continue funding throughout the rest of the fiscal year. The proposal followed a meeting at the white house where johnson and other congressional leaders said they would be able to prevent a shutdown, both house and Senate Democratic leaders told reporters after the meeting that yet another stopgap could be needed. Now, of course, it is not clear how much resistance johnson is going to face within his own party if he tries to move yet another temporary measure. A lot of lawmakers are sick of those, they dont want to see another one. Plus there are several major sticking points in those larger fiscal year bills. That includes one making some Grocery Stores nervous. A proposed Pilot Program to limit the ability of certain foods under the snap Nutrition Program. The National Grocers association warned in a letter to lawmakers that such a program would be difficult to implement and, quote, quickly drive up food costs and strangle the program with needless red tape. Now, the pilot is being offered as a counteroffer to allocate another billion dollars for a Nutrition Program for women, infants and children. The government warned that program may not have enough for all applicants for the First Time Since the 90s. Andrew . Emily, thank you for that report. Well see what happens next. What do you think . Geez, it is like a boy who cried wolf, i assume it is going to get done. One of these times maybe it wont. But we talk about it every time. I dont like talking about it anymore because we talk about it and it always gets done. See everyone is watching you eat your banana. I know. On television. You have to do the tease. You opened the banana, youve taken a bite. You heard of a guy named stanford meissner . Remember brando . Everything he did was method acting. Im going to be who i am. Im going to do things i would normally do. I just scratched my nose. I did not try not to im not going to dig for gold. But im going to do things that i would normally do. Okay. Thank you for not digging for gold on air. America appreciates that. Let me get to break. Coming up, can commercial real estate be contained . Well find out after the break. And then Savita Subramanian will join us. Squawk box will be right back. Now im going to sneeze. Fresh, warm hot dogs when im not selling hot dogs, i invest in a fund that advances innovations like robotics. Fresh, warm hot dogs, straight out of my torso one for you, one for you. Oh, youre a messy one. Cool, right . So cool. Anyone can become an agent of innovation with invesco qqq, a fund that gives you access to nasdaq100 innovations. Hot dogs fresh, warm hot dogs before investing carefully read and consider Fund Investment objectives, risks, charges, expenses and more in prospectus at invesco. Com. Mortgage data just out a short time ago. Diana olick has the numbers. Good morning, diana. Good morning, joe. Yeah, that 7 handle on the 30year fixed continued to hit mortgage demand last week. Total application volume dropped 5. 6 compared with the previous weekend, thats according to the Mortgage Bankers association. And that is seasonally adjusted. So, this is as the average rate on the 30year fixed drop a tiny bit to 7. 04 , from 7. 06 for loans with 20 down. Rates are off the peak of 8 from last october, but still up from the 6 range that we saw for much of the winter. Refinance applications dropped 7 for the week, they were 1 lower than the same week a year ago. Fha and va refis were hit hardest. There are very few current borrowers with rates higher than today that could benefit. Applications for a mortgage to buy a home dropped 5 for the week and were 12 lower year over year. Interesting on the purchase side, though, the mba is showing applications for a mortgage to buy a newly built home in january were up 19 from a year ago, big difference. So, a lot of that is the builders buying down the Interest Rates on the mortgage for their customers. Also, rates in january did have a six handle, but, still, it is a really big difference between the new and the existing market and thats because there is an 8month supply of new homes and 3month supply of existing homes. I spoke with a Mortgage Broker yesterday who said he had lots of people looking to get prequalified for a mortgage, just not a lot of homes going under contract. So, it is not for lack of demand, joe. So, when were trying to gauge where we are, with all the cross currents, people always bring up housing as the one area where if you were to, you know, just raise an eyebrow on how well the economy is doing, it is housing. Would you say it is stronger than it should be at this point, or not as strong . No, not as strong. Not as strong at all. We have the 7 Mortgage Rate now and youre seeing buyers pull back. This is the beginning of the spring market. March next week, thats when it all starts. Were seeing demand out there, there is not enough homes for sale on the existing side. Even though there seems to be a lot of supply for the home builders, theyre notbuilding at the pace that they should be, given the demand. And thats just because of all sorts of hurdles they have with financing on the smaller builders and for the bigger builders, theyre concerned that at 7 , theyre not going to be able to keep buying down the rates without it hitting their margins too much. And so theyre pulling back, they dont want to have too much supply. This is not a robust Housing Market because, joe, it is an unaffordable Housing Market. It is weird, though. The demand is there at this point, but it is there, if they can afford it. The people that are supplying the supply seem like theyre not confident that its going to continue. No. I mean, builder confidence is still in negative territory. Okay. All right. Thanks, diana. Jpmorgan jamie dimon talk about the defaults being higher, part of that is a normalization process. They were so low for so long. All of the credit youre watching is things go up and theyre not at a crisis level, just going normal. So, yes, if rates go up, and we have recession, there will be real estate problems. And some banks will have a much bigger real estate problem than others. Joining us now, marty berger, former Silverstein Properties ceo, and infinity Global Real Estate partner ceo. You Just Launched your firm in this kind of environment, and we all know that Office Real Estate is terrible, vacancy rates about 19. 6 according to moodies in the Fourth Quarter there are certain pockets and we were talking about this during the break that are still pretty strong. New york city housing, the vacancy rate is 1 to 2 . Where do you see opportunitys . Again, thank you for having me here. Yes, the multifamily properties in new york city are very robust because there is a lack of supply, simple supply and demand issue. And new york city continues to thrive on the business side. The businesses need to house employees. And people want a shorter commute these days. And to do that, they want to be closer to the core of the city. And the city is not producing the housing that the mayor and the governor desperately want to produce. In terms of your role in this mismatch, of what people need, versus what we have alot of and that is vacant offices, do you see a path to converting some of these properties . Is that way too expensive . Where is the opportunity . There are opportunities to convert properties. Theyre happening right now. I started one when i was at my former employer. And thats going swimmingly. But it is very difficult to do. The vacant space in the Office Market is not going to be solved by conversions to residential. It is a partial solve, only a small part of it. And when we start thinking about all of the debt that is coming due, and the staggering numbers coming due in the 12 to 18 months or so, can the fed cut enough to sort of come to the rescue of some of this debt . That i cant answer. But it is going to be an interesting market out there when all these loans come due and people that have good operating profits have poor capitalization structure and it will create opportunities for folks like me who are coming in to try to help that situation. So youre setting up now. Is it the hope that in the next 12 to 18 months when the 1 trillion is coming due in terms of debt that thats when you pounce . Thats exactly the strategy. Are there certain markets in the country or is it new york specific . It is nationwide. Focusing on the major cities in the United States and new york in particular. Where are you looking to pounce first . New york city. I love new york city. It is strong and vibrant and doing really well. You drive around the city in the new black car, do you take a look at buildings, thats what i want, thats what im looking at, i know thats vacant, it is sitting there for a long time, im going to ait. How do you approach it . You have to look where the Financial Success is going to come. And it may not be from a pretty looking building. Right. But it is a lot about location, correct . Location, location, location. And near a business hub, et cetera. Thats very true. Youre also in the financing part of the business, correct . Yes, i started that platform at silverstein and i plan to do another one in my new venture. Who are you lending to . This could be Construction Loans to the mismatch in liquidity were going to see when all the loans come due. They might be senior loans, might be preferred equity. So were thinking about, for instance, private credit in the great days of private credit, maybe there are still great days, 12 is that what youre looking to lend at . It depends. If it is a senior loan, it is more secure and will be at a lower rate. The more risky Construction Loans could be in midteens rate. Not a bad return there. Correct. Marty, thanks. Hope youll come back and keep us updated. Thank you for having me. Okay, coming up, apple shutting down the electric car project after a decade and switching workers to the a. I. Project. Well discuss that after the break. Speaking of a. I. , the Technology Driving companies to more layoffs, especially in the tech sector. An outlook for jobs in the industry is all coming up right after this. Its time. Yes, the time has come for a fresh approach to dog food. Everyday, more dog people are deciding its time to quit the kibble and feed their dogs fresh food from the farmers dog. Made by vets and delivered right to your door precisely portioned for your dogs needs. Its an idea whose time has come. Wealthchanging question are you keeping as much of your investment gains as possible . High taxes can erode returns quickly, so you need a taxoptimized portfolio. At creative planning, our Money Managers and specialists Work Together to make sure your portfolio and wealth are managed in a taxefficient manner. Its what you keep that really matters. Why not give your wealth a second look . Book your free meeting today at creativeplanning. Com. Creative planning a richer way to wealth. The future is not just going to happen. You have to make it. And if you want a successful business, all it takes is an idea, and now becomes the future where you grew a dream into a reality. The all new godaddy airo. Put your Business Online in minutes with the power of ai. Welcome back to squawk box. Apple winding down its electric car effort. Steve kovach joins us now at the table with more on all of it. What is happening . Scrapping plans, hitting the brakes, whatever metaphor you want to use. This is all coming after about a decade and billions of dollars in spending. Bloomberger first broke the news last night, confirmed all over the place. This decision comes after years of leadership changes and deviations from the original dream of a selfdriving electric car, they were calling it project titan internally, with no Steering Wheel or gas pedals. One point, apple thought it could sell its car by 2020. The project created a revolving door because between talent from tesla and apple attracted executives from Traditional Car Companies as well, gm, bmw and the like. But nothing has ever shifted in the last decade from this group and many top execs bolted after just a few years. The last project leader that was doug field he was famous for making the tesla model 3, he left apple for ford in 2021. And most recently the group is run by kevin lynch. He was originally hired by apple to make the apple watch. His job is changing now by the way. Hes going to start reporting to apples a. I. Boss, john giannandrea. Now the employees will be affected. Many of those focused on the car, the hardware of the car engineering. Theyre likely out of a job, but if there is one bright spot for apple here, we have been talking about this all morning, some of that talent is going to be moved over to that group to work on Artificial Intelligence. And speaking of a. I. , lets talk about what tim cook said in 2017, calling the companys selfdriving car project, quote, the mother of a. I. Projects. There are several ways to look at this. Ill give you two. The realization that it is better to focus the investment on the technology that is happening today, that would be a. I. , instead of chasing a highly regulated and low profit margin market like the auto market. And perhaps all that selftime and money spent on selfdriving, the a. I. Can apply to whatever magic a. I. Thing apple is going to be working on and expected to announce later this year. Or you can look at this as a straight up blunder and apples failed attempt to disrupt the entire journey at a 10 trillion industry that apple could have tapped into. I think Morgan Stanley was saying they had to capture 2 of the 10 trillion, bigger than the iphone business. Do you look at this as a failure . We were talking about the other things that happened in the last couple of years. They got out of it. They were working on this, not just the ev part of it, but they were trying to do mapping, they got maps out of it, car play, 98 of cars. Something like that. You cant rent or buy a car without car play in it. And i was making the argument, the entire time they were going this route, they were hedging the whole effort. It is possible. You got look at it in the other way too. They hired real car engineers to work on this. They wanted to build an actual car. And that shifted so many times. Look, i remember elon musk saying teslas robo taxis are coming next year. That was five years go. No one has figured this out yet. Waymo hasnt figured it out. Why spend all that effort on something that is five to ten years away . Did you believe when they say theyre redeploying the resources to a. I. , is that something you say in this environment where you have to say it. You say a. I. Anything. Look at kevin lynch, the executive who i mentioned who was in charge of the project up until yesterday, really, he was there for the apple watch. And now hes almost been demoted or maybe sidestepped now, reporting under this a. I. Group. The real question is can those learnings which they did which cook called the mother of all a. I. Projects, can that be translated to some a. I. Ios version that might come this summer . Apple has never been on the bandwagon, as all the other big cap tech stocks have said a. I. This, a. I. That, apple has not done that yet. Everybody is waiting for june, the developers conference, to get any sense that apple is ready for primetime in terms of an a. I. Offering. Thats what investors want. You got to get i was talking to tim cook with jim cramer on their Earnings Report just a couple of weeks ago, and, you know, this is the a. I. Story hes been hammering for the last year and a half as we talked about this. It is built into so many products already. Whatever apple shows on the iphone that is doing some new a. I. Stuff, we have seen it from samsung, from huawei, that stuff has been going on forever. Theyre labelling it different. The question becomes, is it more like a marking thing, like 5g was. The 5g iphone came out. You dont believe that were going to learn in june or july i do believe. That there is going to be something that is going to feel very much like i can talk to oh, yeah. I talk to chatgpt now. The problem with chatgpt is it cant go access all of my different apps for it do all the thin things that i want it to do. Do you think theyre so far behind in terms of being able to build a large long model of their own that can do all it is relatively easy. Photos is such an easy place to talk about, andrew. They have been doing this a. I. Stuff for photos for years and years and years. Every time you take a picture, with your iphone, a. I. Is happening to make the picture look better, to get it focused, and so forth. Theyre going to add more to that, i believe, or you can do spli Something Like you said, like remove joe from the photo to make it look better. Wow, to make the photo look better. Selfies are already they make you they jazz you up. This is better. Exactly. But i dont want that. I want to be able to say, make the reservation for whatever and then it is going to go into open table and just going to go do it. Yes. Thats the hope. And right now if you say if you ask siri to do that or put something on the calendar, it wont necessarily do that. I think thats more of the kind of thing were going to see in june or next iteration of ios . Behind the scenes large language model. They talked about it. Doing Public Research in this. They have their models out there. What i really want to know is how much theyre spending on nvidia. That is what this capex now that theyre not spending on the car, how much of that is going to go into generative a. I. Like i said earlier, that is a technology of now, the car thing has never panned out for anything, not just for apple, waymo, you name it, no one has been able to do it. There have been a lot of promises. This is happening now. This is achievable now. Thats what theyre focusing on. Thank you, sir. Thank you. Appreciate it. Coming up, more a. I. Is a. I. A jobs killer . Well find out after the break. Well tell you definitively whether it is or isnt. And then later in the show, palantir cofounder and investor joe lonsdale jns uois to discuss a recent deal with open gov and its software. Squawk box will be right back. Whoa, how did you defeat them . With a little kung fu strength and by connecting my devices to the most powerful force of all. Skadoosh. Hah, huh . Cool right . Amazing. Harness the power of xfinity internet and stay connected to the things you love. Ah, theyll be like this for hours. Hello dad, hello dad, hello da. Uhoh. Good bunnies. Ahh welcome back to squawk box. Damage control at alphabet ceo problematic responses from a. I. Model gemini finding Image Services distorted and inaccurate images a female pope among other errors. Preventing similar instances. No a. I. Is perfect especially emerging stages but we know the bar is high for us and we will keep at it. Artificial intelligence leading to more layoffs. This Company Leverage a. I. , going this right now. More on the future and founder on the board of amazon and pepsico and former head as well. Good morning to you. Good morning. What do you think . A debate whether a. I. Is coming for our jobs which jobs are coming, all that. Where do you land . A. I. Is here. A. I. Will continue to impact your jobs, my work, and the society and communities that we live in, and whats most important is, to really take the time and be intention and understand the power of the tools, butlications when the tools arent monitored appropriately. Your view productivity gains some say make us superhuman, more productive, thats great. The question is, if its an augmented tool to us as humans, fabulous. If its replacement for us, less fabulous . Yeah. I am not a believer, in fact, i feel very strongly, that a. I. And generative a. I. Will make humans more important. In the workplace i believe, and we have seen at a coaching platform that works with Companies Investing in their people that the skills of judgment, of listening, of dialogue more important. Skills that are not about preserve length are data gathering. Right. You know, doing spread sheets, and, you know, generating analysis that, quite frankly, can be done more accurately and efficiently with technology. You lived with Goldman Sachs a very long time. Apprenticeship culture a Culture Creative essentially young people coming out of college and part of it talking about creative judgment and part came from ostensibly, staying up all night, knowing every number on the spread sheet and that one, that one cell all of that, yes. That one cell would actually, it was wrong and because of that one cell in the formula the whole thing is absolutely wrong . Okay. If all of that part of it goes away, if you cant know whats actually happening, the distance, can you ever be able to train and learn how that culture could get that judgment that is ultimately going to be the most important aspect of what youre talking about . I think when you consider and look at the output of a. I. , youre going to have to have the ability to continue to drill down. So its going to give you an answer. Going to give you a suggestion, but youre going to have to be able to look at it, look at all of the numbers and say, wait a minute. That one does not really jive with my instincts. Rights . Going back to what i said before. Judgment and instincts are of higher value. I question whether actually doing the spreadsheet is the most critical thing in that judgment. I would suggest that the mentorship culture in any Strong Organization really comes with sitting down with your manager or your leader and discussing it, and determining, what are the data points that could make sense from a judgment . Why couldnt judgment of the a. I. Model 20 years from today be better than the judgment of a human . How im sorry . Thats the point of the sing goo singularity. When its so powerful, why wouldnt essential judgment, human judgment is faulty and based on experiences and input and everything youve learned. If a machine knows a billion times more than the most advanced human, why couldnt the actual judgment be superior to i dont think a machine is going to have 20 years from now . 20 years from now where is the human being going to be . I dont know. I dont think we know that. I think machines eventually could supersede human kind. Thats it. We dont know. Its critically important we get on top of it and do the work what is your take on issues around bias in a. I. . Oh, i think its very important. I think that, you know, a. I. Has to be responsible. Lets take an example. If you were to look and use Historical Data to predict who would be the right, you know managing director, even starting out, analyst at any organization en entrylevel position. Data says go to one of five schools of one demographic will to present yourself in a certain way and quite frankly, thats based upon history that has biases worked into it. Its critically important to be responsible with the tools. Goes back to the question you asked before. Are we just going to get rid of people and judgment . This is an example where it could be dangerous to do. So great to see you this morning. Thank you. Thanks. Appreciate it. Coming up, Market Opportunities with is a vita sub b is a vita subramanian after the break. And 80 at the open. Well be right back. Makes trading easier. With its customizable options chain, easytouse tools and paper trading to help sharpen your skills, you can stay on top of the market from wherever you are. E trade from Morgan Stanley power e trades easytouse tools make complex trading less complicated. Custom scans help you find new trading opportunities, while an earnings tool helps you plan your trades and stay on top of the market. E trade from Morgan Stanley wall street forecasts over 100 billion in sales for antiobesity drugs known as glp 1. But these treatments are largely administrated through cumbersome injections. Enter Lexaria Bioscience with their patented oral delivery technology. Early studies were glp1 suggest reduced side effects and better blood sugar control with reduced spikes. Lexaria bioscience. Transforming the future of glp1 drug delivery. You founded your Kayak Company because you love the ocean not spreadsheets. You need to hire. I need indeed. Indeed you do. Indeed instant match instantly delivers quality candidates matching your job description. Visit indeed. Com hire the all new godaddy airo helps you get your Business Online in minutes with the power of ai. With a perfect name, a great logo, and a beautiful website. Just start with a domain, a few clicks, and youre in business. Make now the future at godaddy. Com airo good morning. Stock futures under pressure. All three major averages pointing to losses opinion the s p ended higher for the past five sessions. Meanwhile, bitcoin continues to catch a bid. The cryptocurrency nearing a price it hasnt seen in years. Closer and closer to that six handle. Reports say the government investigating United Health over antitrust concerns. Former fda commissioner dr. Scott gottlieb will join us on what washington is hoping to accomplish. The final hour of squawk box begins right now. Good morning. Welcome to squawk box here on cnbc. Live from the Nasdaq Market site in times square. Im melissa lee along with joe kernen and Andrew Ross Sorkin. Becky is off today. Taking a look at u. S. Equity futures setting up for a low e open. S p losing 18. 5. Nasdaq down by 78 and dow losing to 119. As for treasuries, stable picture throughout the morning. Ten year yield 4. 287. Two year 2. 687. Data at 8 30 eastern time. Gdp. All eyes this week on pce out tomorrow. Among todays top business stories bitcoin moving closer to 60,000. Main cryptocurrency higher jumped 15 just this week close to 40 this month as investors poured more money into u. S. Bitcoin etf. Apple, meantime, abandoning plans to build an electric car according to multiple reports. Some of which said some workers on the project would be shifted to a. I. Roles within the company. This closing the chapter on the decadelong effort at apple. The company declined to comment. Another apple headline, bloomberg says Company Representatives met with department of justice officials in a final attempt to convince them not to file an antitrust suit. These meetings usually take place before officials decide to go in or xscrap a planned lawsuit. Back to the markets. Over to senior markets common dater mike santoli. What are you watching this morning . A giveback of very persistent rally in s p 500. As you talked about. Yesterday marked four months since the october low in the s p 500. Up by 23 . One down week. Not eve an 3 pullback in that time. T tell us, a persistent rally. These types strong, persistent rallies mean positive things for further gains down the road multiple months ahead. Also means stretched perhaps in the short term. This area between 5,000 and 5,100 talked about for weeks. Where a lot of the trends have had, potential destination point, lets say that. Also a lot of focus on the broadening out effect of the market. Ive argued, markets not quite as narrow as portrayed. Look at this vxf, vanguard extended market. Everything in the market aside from the s p 500. 3,600 stocks. The other hand not just small caps. Led by crowdstrike and snow flaik flake and bigger stocks not yet in s p 5 ha00 trying to break o of this range. Starting to see speculative retailbe driven call option stuff. Robinhood shares last year. A vertical move and a result in recent weeks. Looks aggressive and bitcoin looks aggressive. Crypto stocks, too. A lot of smaller kind of former story speculative names starting to break through. Looks like, wow. Look how far theyve come. Back to crazy days again. And puts it in perspective and so many charts look like this. Boom, crash, long neglect period and a little awakening. Well see whether this is an echo or if its the start of something big. Joe . All right. Thank you, mike santoli. And savita is here with us. I know interested, too. Mike . Lets talk more about the markets and economy. New gdp data due out 8 30 eastern time. Big surprising could be better growth numbers. Here with us, Savita Subramanian. Always good to see you. Hi. Great to be here. So discretionary . Yeah. Retail . Yep. Travel . Well yeah. Travel i think maybe a little less, though, but my sense is that the world is not investors, professional investors, are not preepared fo a positive growth surpriser. Prepared for almost every other tail risk. In meetings i hear talk about the most dire scenarios. U. S. Debt defaulting, civil war in the u. S. Nobody talk answer the fact we keep revising gdp higher and earnings are still surprising. Thats the crux of it. That were still in this wall of negativity, wall of worry, and folks are hiding out in certain scenes like a. I. Obviously has been a great story, but i think theres more to go in terms of gdpsensitive companies actually coming back to life. Weve seen a little, glimmers of home ringe retail. Despite commentary, listen to the lowes earning call, cautious. Remain under pressure, et cetera, yet stock was higher. Interesting price action there. Yeah. And seeing al signs of life in biotech recently. Uhhuh. Wheres the money is it money coming out of mag seven . Look for value in the quote unquote, market . Coming out of more defensive areas of the market. Interesting is if you look at the average Portfolio Manager or the average mutual fund, theyre beta relative to the market lowest weve seen since 2008. And so beta what is beta . A bet that the markets going move higher. Nobodys got a bet on, that the market will move high per. Thats interesting. In an environment folks talk sentiment is bullish and everybodys already invested, when you look at actual asset allocation, Pension Funds have the lowest allocation public equity weve seen in, you know 20shgsknow, 20 years. I think theres a couple of stocks that Everybody Loves but the rest of the market is forgotten. Weird, also recessionfocused. I guess thats what happens when you raise rates. Yes. Think its very quickly, yes. Now its surprising the United States is the best economy. We should always have the best economy. We should. My question now is do think any what were seeing is related to the Infrastructure Spending . Doing much of that yet . The chip stack, ira, all of these things that we did is this a result of those . The other thing, i think, is that we flip the house and the country nothing new has been done. Havent spent anything out. Totally gridgridlocked, waiting november. Exactly. Sometimes leave the u. S. Economy alone, i think, and this will happen. Right . We havent done anything yet. I think youre absolutely right. Which is right . Benefitting from the program. A little boost. Fiscal impulse contributed to gdp growth, but i dont know if its contributed dramatically to Earnings Growth for the s p. I think Earnings Growth for corporates has been driven by really effective cost management, by some efficiency gains were starting to see. Companies spending on automation and efficiency since 2019. Your productivity . Our productivity. Yes. Thank you. And its starting to play out, and surprisingly in stable markets. Think about it. 9 inflation over the last two years but margins havent really been rocked by that. So i think thats testament to corporates actually doing pretty well when you leave them alone and let them figure out their business. Figure how well screw this up. I guess the election could screw it up . A wild card. Positive, both sides of the aisle are proeconomic growth, pro which republican versus democratic winner is a different story and expressed in the Market Opinion one sector i would stay away from on Political Risk for the next few quarters is health care. Health care is the most crowded sector in the s p 500. Has higher refinancing risk than we all would imagine, because companies have didnt a lot of debt deals and the most governmentexposed sector in terms of fiscal spending. If we do see fiscal austerity on the table, thats one area we could see now regulatory front page right. Today. But doj, talk with Scott Gottlieb about that today, too. If you want to do some thing, health care is the damndest place to be. A Doctors Group here and selfreferring, Images Center over here. If you dont watch them like a hawk, and you wonder why a lot of our inflation over the years has been health care. The population, too. Yeah. I mean, i guess i just wanted to make whats right for margins and certainly is. Been, had a great ride. I think the one bear take i hear a lot and want to debunk is just the idea that the market is too expensive. Folks will take todays s p compare it to ten years 20shgs years, 30, 40 years ago. I dont think that makes sense, because the market today is such a different animal. Its, you know, half it is innovation and asset companies. 20 years more than half was manufacturing. Were in a different ball game here. You cant just look at the s p today and take that pe and compare it over time. I would cautious investors bearish, might notbe the right framework in this environment. Thannice to see you. Thanks. Talk about health care. Fda commissioner Scott Gottlieb with us, and antitrust against unite health. The component hit on the news. Well talk about it after this. Youre watching squawk and this is cnbc. What is cirkul . Cirkul is the fuel you need to take flight. Cirkul is the energy that gets you to the next level. Cirkul is what you hope for when life tosses lemons your way. Cirkul, available at walmart and drinkcirkul. Com. This is remington. Hes a member of the family, for sure. We always fed them kibble it just seemed like the thing to do. But. He was getting picky we heard about the farmers dog. And it was a complete transformation. His coat was so soft, he had amazing energy. He was a completely different dog. Its a nobrainer that remi should have the most nutritious and Delicious Food possible. Im investing in my dogs health and happiness. Welcome back to squawk box right here on cnbc. Futures now, 104 points off often the dow. Nasdaq down 81 points. S p 500 looking to down by 18 points. Doj, department of justice launched and antitrust probe into United Health. The company has gone into scrutiny in recent years broadening across the health care sector. Our next guest says the move seems the a little dr. Scott gottlieb a cnbc contributor serves on board of luma and pfizer. Scott, said, not entirely jokingly, that this business is a great business to be in. If you if you do operate it a certain way, there are some gray areas that can be almost selfserving in the way things work, depending on which operations youre talking about. Where one hand can kind of you can sort of watch the other at the same time. United health care has been doing it for years. Well, look, i heard the last conversation. A lot of this consolidation you see in the marketplace, this under way about 15 years accelerated after the Affordable Care act, the result cms, medicare, Medicaid Service systematically underpaid doctors certainly for medicaid and increasingly for medicare, doctors and hospitals lose money on medicare lines of business. What theyve done in response, consolidated. Sold practices to hospitals, to insurance companies. Those entities used the scale acquired to gain efficiencies and drive up prices. Cost shift to the private market privately insured patients. Cms has been aware of this. The government, we were aware of it when i was there. Certainly cms aware of it under the obama administration. Doj bemoans, cms and others i think accept in not applause allowing to do systematically under pay. The result the 50 of all markets according to a survey by the American Medical Association are controlled by one large insurer and 50 , more than 50 physicians controlled by one large insurance. 50 of the market across the u. S. You consider consolidation. These acquisitions pacman acquisitions. Bought up doctors in onesies and twosies. A lot under the radar. Could a defense on the part of United Health be that medical lawsuits are through the roof at this point or is that neither here nor there . Not like margins are amazing because theyve made all of these acquisitions. Seen in the latest quarters. Mlrs are skyrocketing. Yeah. Facing litigation in california right now. This may be just the doj investigating whether or not it wants to join that federal suit. In northern california, m h health sued United Health care alleges they own the physicians about 90,000 physicians across the u. S. Came to that Health Care Group saying we dont want to kpcompete for primary care doctors. That Health Care Group refused to do that, alleged think froze them out of negotiation. I dont think insurers run on tight margins will be part of their defense. I think go marketbymarket if allegations of specific markets, have too much concentration and unfair Business Practices taking place in those markets, but it is the case that insurers arent doing well either. Seeing reimbursements down under medicare and medicaid pap problem with systematically under paying providers through certain Government Programs hoping that those providers can make it up in other parts of the market. You see business arrangements like this ultimately increase concentration in the market as people try to react to the fact theyre not paid a fair wage on certain services. Look at hospitals now and look across their lines of business. Literally they lose 10 to 20 outside of cardiology, urology and other highpriced services and over invest in those services. Too many cardiology tweaks in hospitals, one place they can make money. All that is, none is the way its supposed to work. Supposed to go where you need. Health care inflation moderated. All we talked about five years ago. Is that because of what youre talking about . Is that actually a good thing, what weve seen with cms and with reimbursements . Well, look, there is some argument that can be made that the cons consolidation has driven efficiencies. You can deploy services, Information Technology other Services Helping roto reduce cos and invees efficiency. Coming in to acquire doctor practices produced reforms, new business arrangements increasing efficiency. Part of why inflation has moderated in recent years but talk to the doctors, theyll argue and hospitals, they argue getting squeezed, losing money on a lot of government business. Theyve had to make up for it by shifting costs to privately insured patients. Only so much they can do. Only so much cost they can shift to privately insured patients before you see too much inflation in employerprovided insurance. Employers are pushing back. Thats happening in most markets. Theyve dealt with physicians that are, a group that might own an imaging lab over prescribing procedures . I mean, thats the thing of the mostly. Is it not . Is that part of this . Stark provisions are now, have been in place for decades. The ability to selfrefer, referring to buy a roodology have radiology, own your own practice. Its largely scrutinized by regulators. A wall street journal article more related how opt mimum is ts and well find out more in about two weeks when united files its 10k. They stepped in, in recent years, to block mergers, acquisitions of large Physician Practices by hospitals and insurance companies. Ftc is waking up to this. Hard to police because a lot of acquisitions arent in big purchases. Theyre, like i said, pac man acquisitions buying up small doctor plaques that fall under the radar. Final point here. Remember, all health care is local. You control 50 , 60 of the market, thats a monopoly. Even if you dont control this across the United States. Most people get their health care locally. One entity, hospital or insurance company, owns most of the a monopoly in their local market. Well have you back when we know a little more. It will be clearer. Thanks. Thanks a lot. Coming up, what happens with a. I. When it comes to local government. Speaking with cox acquiring their company. Reminder heading to break. Premiere of a new cnbc documentary. The ozempic revolution. Tomorrow. One and only thank you. Squawk box will be right back. You know doug, ever since switching to workday youve been a real rock star. Rock star . What do you know about rock stars . Billy idol . I mean wheres the skintight leather . My shoes are leather. Wheres the unnecessary zippers . That thing billy, rock star is just how doug feels when he uses workday. Thanks, rory. Ill show you rock star be a finance and hr rock star. Workday. For a changing world. Billy idol just stole your golf cart upbeat music upbeat music wall street forecasts over 100 billion in sales for antiobesity drugs known as glp 1. But these treatments are largely administrated through cumbersome injections. Enter Lexaria Bioscience with their patented oral delivery technology. Early studies were glp1 suggest reduced side effects and better blood sugar control with reduced spikes. Lexaria bioscience. Transforming the future of glp1 drug delivery. This is our future, ma. Godaddy airo. Creates a logo, website, even social posts. In minutes how . A. I. impressed ay i like it who wants to come see the future . get your Business Online in minutes with godaddy airo welcome back to squawk box. Sam bankmanfried seeking a much lighter sentence than the roughly 100 years faces. Arguing a roughly five to six and a half sentence they say would be appropriate arguing ftx clients would get most of their funds back and cited bankmanfrieds medical condition including autism. Sentencing scheduled for march 28th. A big debate about the current, whats really happened here as we talked about. It is true that, in fact, most creditors will get 100 cents on the dollar. Very interesting. Compared to where we were a year and a half ago where everybody thought they had been lost money. Wrong. That did not change the allegations or the prediction, but does it change, you know unlike Bernie Madoff where, you know, nobody got anything back. Is that a different, does that change how you think tab . Ag about it . From a deterrent . Part of the effort or really about keeping him in prison . Well see. Interesting. Coming up, breaking gdp data ntnelook at bitcoin as we just meiod. We are coming right back. Adult. It should be called wiffle tennis. Pickle yeah, aw whoo these guys are intense. We got nothing to worry about. With e trade from Morgan Stanley, were ready for whatever gets served up. Dude, you gotta work on your trash talk. Id rather work on saving for retirement. Or college, since you like to get schooled. Thats a pretty good burn, right . Got him. Good game. Thanks for coming to our clinic, first ones free. The future is not just going to happen. You have to make it. And if you want a successful business, all it takes is an idea, and now becomes the future where you grew a dream into a reality. The all new godaddy airo. Put your Business Online in minutes with the power of ai. Get to Julia Boorstin with the latest. Julia . Lmelissa, disney creating a joint venture in india. A lot of speculation. Creating a joint venture with viacom 18 as well as Reliance Industry limited. Thats the giant media conglomerate based in india. Part of the deal the transaction will be valuing joint venture at 8. 5 billion and Reliance Industries investing closing 1. 4 billion. Joint venture controlled by these three companies with a 47 stake controlled by viacom 18 and 37 controlled by disney. So iger saying in a comment here that this is a really key way to take advantage of the opportunities in this market. I want to point out this addresses some of the issues of the lower performing assets that disney has had in india versus the higher performance streaming app this year. Back to you. Julia, thank you. Meanwhile, Rick Santelli is standing by from cme in chicago, breaking economic data. Rick, numbers, please . Yes. Second look at four quarter gdp. Last look was 3. 3. Lose 0. 1 moving to 3. 2 on consumption. Exact opposite. Ramped it up from 2. 8 in the rearview mirror. Expectations dropped a bit. Instead increases to 3 . 3 . Thats solid. If you recall, 3. 1 was the final q3 of last year. Moving in good territory. An important number. On the pricing index, moved up insteads down. Expecting it to remain 1. 5. The smallest since Second Quarter of 2020 but it moves up to 1. 6 , and finally, look at price index from a corporate pce quarter over quarter, 2. 1. Also 0. 8 more than expected. 2 the last two quarters. 2. 1, of course, a smidge higher. Comp moves towards 3. 7 Second Quarter last year. On the trade balance, which, of course, a deficit. Minus 90. 2 billion grew a bit. As a matter of fact, right now that would be the lightest deficit going back to july of last year, and now we have inventory. These are january inventories which means theyre going to be numbers that potentially add or subtract from the Current Quarters gdp. Of course, we get end of april. So retail inventories are half of 1 . Expecting them to be up 0. 8 rear yew mirror contribute tock the last look towards end of last year. Hole s wholesale exact opposite. Down. Pay close attention especially after the sale in durable goods and last year. After all that we see Interest Rates on a two year, which at 467. Down a half basis point. Current 20924 highyield close for maturity is 4. 72 . And ten year, 427. 428, down. The number high yield closer to 2024 thus far. Ten year maturity 4. 23 . Joe, back to you. Okay, rick. Lets fwlibring in our panel tok about this. Professor of economics and public policy. And harriet of Foundation Research fellow and our own steve liesman. Steve, let you go first. What was the most interesting part of all of those things rick just told us about that would cause traders to sit up and dake notice . Anything . First of all, everything rick says is always interesting to me. Right, right. How about the consumption thing . Here the grading of the bonds and in the afternoon interesting. Im a rick fan on all that. Consumption going up. I dont think the fed will be that disturbed by a tick higher in the price index. Joe, were in a really, really, whats the right toward say it, sort of boring Holding Pattern here, joe. When i look at everybodys expectations for the fed, its all aligned. Its like we have kum ba yah on this. Ive got an yearend funds rate january 25 contact at 453. Fed forecasting 4. 6. The main economists at 4. 6. Awe all aligned on that. Gdp number. Forget Fourth Quarter, done pt 32 above potential. First quarter coming in. I got q2, 2 somewhere a little potential for the low end. Ive got 3plus on high end, and we are waiting for the data to break in a way that would allow the fed to cut. If it doesnt, it wont, and whats so interesting to me, joe, ill stop here. The market seems completely not fussed by all of this. Stephanie, joel, even rick, and steve. Brought this up earlier. Interested in what you think about this. Stephanie, we we had a lot of, between 202 and 2022, had a lot of programs. Like the Inflation Reduction Act. Tip act. Theres another big i cant remember. A lot of it. Infrastructure what im talking about. Are we is that the best economy in the record relatively speaking . Is it as a result of those programs, or is it because since 2022 we havent done anything else, because of gridlock and havent added significantly the 33 to 34 or a little of both, stephanie . Say we havent added to it in the sense we didnt pass additional fiscal packages. Joe, those packages dont go away. Inflation reduction act, remember harks an uncapp subsid. Investors really look at that. I can tell you conversations spoke to over there, where are we going to find growth . Nobodys was looking at china. Eyes popping because they saw this Inflation Reduction Act with this untapped, you know, capacity to come in and make investors in the u. S. Economy and so much enthusiasm, and thats going to be with us for years to come. Infrastructure, same with chips and scientce act. Its fiscal, a story, and sticking around a long time. Why i think the economy continues to hold up the way it does. You see eyepopping numbers. Steve mentioned. Gdp now of the it fed. I think wont be surprised at all in 2024 that it looks like a really good, strong year, unless something breaks. Joel, if stephanie the right, all we need. Are for hear its working. Plenty of other ideas, im sure, on how to spend taxpayers money. Do you attribute our relative performance, best in the world, to those programs . Well, the problems were facing today are indeed because of these programs that have been passed. Results will be with us for years to come, but this is not a positive. Dig deeper in economic numbers and we all know that Consumer Spending accounts for twothirds of the economic growth. Ask yourselves, how is it consumers have been spending beyonds rate of inflation the past two years even as their real incomes dropped . And thats because consumers have taken on an inordinate amount of debt. Typical families, 4,000 of credit card debt. Drained savings. Thats how weve seen consumers with the inflation rate past two years, how we continue to have a positive economic growth, even though families are feeling the pinch. Theyve got goneinto debt, drained savings in order to spend more. This is not a positive. And this is why despite the positive economic numbers, expressing discouragement with the economy. Rick, i probably dont need to ask you. And in my own mind if were at 130 of gdp, 10 or 15 years from now, on debt, none of this is were not going to remember any of this in a positive light, i dont think. No. Absolutely not. Heres the problem the problem is, that you can prime an economy with stimulus. You can prime an economic in an industry with subsidies. You can prime innovation, even if its government led and not the way i would like to do things and historically on great expansions opinion really more about private than government enterprise, but priming isnt the same as sustaining. Thats the difference, i think. We have programs as stephanie pointed out that just keep on giving into the future, and i think that the sustainability, the need to constantly throw money into the economy, is not going to end well. Many, whether its about auctions or debt in general, its like, aww, never been a problem. Reserve currency to the dollar, do anything you want. Never going away. All of those issues in the past have been true. Always been different. Plus, when it does finally flip its not going to give a lot of forward warning. Its going to be like when you have a bank issue that comes out of left field. So, yes. 130, 140 in debt gdp. My guess paying a trillion and a half dollars to service our debt every year and not a good thing. Steve, do i hear you . Why do things come out of right field . I dont bad wind ever think about that . No. I just want to make an economic point here, which is you cant talk about what future generations are going to say about the debt level without talking about what theyre getting in return. Part of the debt were talking about here is a massive infrastructure bill. Something the Prior Administration tried to pass. Couldnt get done. With general agreement on need for infrastructure. Republican officials around the country didnt even vote for the infrastructure bill touting benefits of it. It was a general agreement if it went to a pandemic you had a security issue relative to the absence of chip rproduction in the country. Yes, may decry the idea we have 100 of gdp debt, but also going to be, roads will be theres going to be trains and also issue about the fact we are we are making a payment on our Social Security and payments on medicare. These are things that people are getting in return for that debt. If they dont want the look at the in california yes. How good is that . The problem is, look at all infrastructure, faced in china. Epiphany, okay . Building infrastructure with industry people are fighting. Electric vehicles. When they mandate this stuff i understand you have to have infrastructure. The way were going about it is not very good and the ceo is looking at all of these years of growth winding up with with joe. You are not getting me to see hit and support government efficiency of spending. It does exist. Im saying cant talk about debt on one hand without thinking about the other. Let me jump in, because go ahead, steph. You started all this. I did. Let me try to own it. So rick mentioned the report. And the ceo report called economic and budget outlook. You guys have been talking about the budget part of it. You know, cbo says average 2 trillion a year over the next decade. Quoting debt to gdp range forecast. But what about the Economic Outlook . What does it seltell us economy will be . On average, 2 oever the next decade. Inflation next decade on average, 2 percent. Yesterday we were told the definition of a soft landing, in his mind, real gdp growth 2 inflation, its 2 . What are we complaining about . I can tell what you were complaining about right now. Thats because of Congress Actually implementing what called for, rampant money funding to Fund Government expansion. People like myself warned this would have disastrous effects on the economy. Inflation soar to highest in d decades and thats exact ly wha happened. Money used for highways. A big part of that speed along the Energy Transition and most americans dont want that Energy Transition to these renewables. Look at california. See that many californians are paying double electricity prices people are paying elsewhere. Think we are mortgaging our future to force all of our fellow americans to rely on those types of Energy Sources well pay for this doubly. Interest on the debt and with far higher electricity prices. And i cant think of anybody else needed. Rick, steve, stephanie joel. That was that was some sit up straight. Was that not pretty good . Dont you think . I think did a nice job there, joe. I did nothing did nothing. You does it, joe. Joe, were talking about it and yelling at each other, di, youa good job, joe. Perfect symmetry. Stephanie, rick, joel. Symmetry. Right, melissa . You do that on your show . All the time. Coming up i got to watch that show. Never mind. Local government ready for a. I. Disruption . Get into that with open gov cofounders. Get a take on tech at large. Squawk box will be right back. Welcome back to squawk box. Paying close attention to Bitcoin Trading above 60,000. Broke through in the past half hour or so. Ether jumping. Thought to be the next candidate for etf approval at 3,300. Stocks in crypto complex rising steadily even after approval of bitcoin etf. Coinbase up 6 . Marathon digital up a 8 . A check on futures. Not too much reaction on the back of gdp. Looking at lower open across the board with s p down 12. 5 points. Nasdaq looking to lose 67. Meantime, financial infrastructure platform stripe out with news. Interesting. Signing agreements now with investors to provide liquidity current and former employees and doing it through a tender offer. Value strike at 65 billion. Scraw valuation 50 billion. Far below the valuation in 2021 trying to get liquidity in hands of employees. Many at the company a very long time awaiting a liquidity event. There was an expectation the company would go public at one point. Clearly theyve taken the decision not to do that for now. Private companies and sales and folks making money. Cox enterprises buying open gov in a deal nearly 2 billion. Open gov provides Cloud Software solutions for state and local governments, which the government uses to track finances, permits, planning and more. Joining us first on cnbc open gov founder, and cofounder and chairman emeritus, a partner of hbc. Good morning to you both. Congratulations. Zac, i remember back in the day, when you first began this journey, and it has been quite a journey, because i remember what open gov started as and what it is today. Tell us about the journey. Thanks for having us, andrew. Really nice to see you. Joe and i and a couple technologists started almost 12 years ago. I was living in half a shipping container in kabul at the kabu the time. I was an advisor to general mcmast er, and we had a vision o bring the cloud to government and a missiondriven company was the way to do it. Our mission is to power more effective government. Its been a total grind, but we have 1,900 governments now, and i couldnt be more excited to be partnered up with cox and looking forward to the future, big time. Joe, what was the decision to sell the company . And do talk about the transition, because i thought there were some very interesting lessons about how you start a company and what the original vision is and ultimately how it changes. Its always bittersweet to sell these things. In this case, it truly was a missiondriven company. This was a hard thing to build. Zac had to double down. Its a tough market, selling to these governments, but you know, its amazing. Weve attracted hundreds of people that are just obsessed with helping these governments, making them work better. Today, with all the populism going on, its fun to have a group thats focused on making things competent. The partnership with cox, to tell you the truth, because its a missiondriven company and because cox can put huge amounts of resources into this company to make it grow faster to combine more things into the company, when you have governments that like to buy a lot more from just one company, turns it makes sense to be acquisitive and bring in new technology. Whats interesting about your business is a startup, you bought a couple of businesses along the way. Yeah, we bought eight companies along the way. As joe said, if a government finds a vendor that they trust, they want to do more business with that vendor, and so its all about finding the right adjacencies, delivering value, delivering trust, building longterm relationships, so permitting and licensing, procurement, enterprise asset management. That was a deal we did. In fact, cox underwrote the deal a year and a half ago for cartograph asset management. The city of los angeles is getting ready for the olympics, maintaining their streets and lights and sidewalks using opengov. A lot of the guts of government and how to be more efficient, how to adapt to change, how to strengthen public trust. Thats really what we do. Joe, youre always trying to make government more efficient. Were always talking policy, how can we make things better. Now that youve seen the insides of at least how a lot of these state and local governments operate, how much more efficient can you make it . If i put you in charge of the irs, what would you do . I would probably use a lot more a. I. , unfortunately. But you can make governments a lot more efficient, a lot more effective, and i obviously give government a hard time, as you know, for not being as efficient as it could be, but when you have people in these governments, not all of them, but you have some really great people there who want it to work and who are willing to take the risk on new software, better software, and it was inspiring to work with so many people over the last decade who said, you know what . The stuff were doing is wrong, its broken, its not as good. Lets do the right thing. With opengov, we proved you can get thousands of governments to do the right thing, which is pretty awesome. Whats the next lowhanging fruit, if you will . Im not saying this was lowhanging fruit but given you helped create palantir, helps with the government, defense and the like. As you said, it was definitely something thats very, very hard to do. Zac had to triple down, and its amazing how hard he and the team worked. It was an unnatural act to build a billion Dollar Company in this space to help these things. I think there are more ways to apply a. I. Tools on top of these saas tools. I think theres lots of ways we can you dont want to outsource jobs in the u. S. Government but you want to make people three times more efficient on top of systems like opengov. Any thought of taking this Company Public at any point . Are the markets closed . Did that factor into any of the thinking around selling the Company Versus continuing on independently . So, we have been partnered with cox for the last few years. Theyre diversifying. Its one of the Great American family businesses, its 125 years old, and we share values, we share culture, we share big vision and mission. I dont think its impossible, andrew. I think one in three chance in the next few years we might actually do Something Like that, but for the time being, its business as usual, and its like its the beginning today. Its part of whats so exciting. The whole company is really fired up to get into the market, continue our mission to power more effective and Accountable Government and do it with a partner that has staying power and that cares about customers, cares about employees, cares about doing the right thing. Congrats, guys. Thank you so much. Thanks for having us. Coming up, top stocks making moves in the premarket as we count you down to the opening bell on wall street. Ng thing. But as you get older, it naturally begins to change, causing a lack of sharpness, or even trouble with recall. Thankfully, the breakthrough in prevagen helps your brain and actually improves memory. The secret is an ingredient originally discovered. In jellyfish. In clinical trials, prevagen has been shown to improve memory. Prevagen. At stores everywhere without a prescription. grunting at Morgan Stanley, old school hard work meets bold new thinking. laughter at 88 years old, we still see the world with the wonder of new eyes, helping you discover untapped possibilities and relentlessly working with you to make them real. Old school grit. New world ideas. Morgan stanley. Im jack black. Get tickets right now for kung fu panda. You dont have time for a drum solo. Get tickets [ screaming ] get tickets skadoosh. Get tickets little more than half an hour to the opening bell on wall street. Dom chu joins us now to look at some of the mornings top premarket movers. Joe, lets get you caught up on some of the earnings stories of the morning. Tjx stock is up fractionally around 70,000 shares of volume. This is the Parent Company of offprice retail chains like t. J. Maxx and home goods. It reported profits that matched estimates on revenues that were slightly better. Total sales rose by 5 during the quarter so those shares up fractionally. Were also watching a near 9 jump in shares of coupon. The ecommerce platform, which some folks call the amazon of south korea, reporting better than expected quarterly results, highlighted by a 23 rise in net revenues during the quarter so those shares up 9. 5 . And then were going to cap things off with a check on bitcoin prices and just the entire crypto ecosystem overall. Bitcoin prices did go north of the 60,000 mark and theyre holding there right now, the highest since november of 2011. Ethereum prices, also higher alongside of that, 3,354 for ethereum right now. Youre also seeing more broadbased bitcoinrelated stocks Like Exchange operator coinbase, Mining Company marathon digital, Business Software company microstrategy, which holds 11 billion of bitcoin on its balance sheet. And joe, melissa, andrew, just to put it in perspective, the total market cap, according to coin market cap of bitcoin, 1. 19 trillion right now. Meta platforms is worth 1. 2 trillion for reference, and Jpmorgan Chase is worth roughly 570 billion. So, twice as big as Jpmorgan Chase. That kills jamie. Thats got to kill him. Very good. Thank you, dom chu for that. Amazing. Michael has to come on. I want to have him on. Dont you want to have him on, sorkin . Yeah. It was when he was going to get margin calls, he doubled down, and now, alltime high on the stock. Down85 now on the dow. Take a quick look at the nasdaq, also lower. It is probably the big story, back above 60. Its been a couple years, but there it is. Join us tomorrow. Thank you. Thank you. Big special coming up tomorrow night. 10 00 p. M. Eastern time and pacific. Squawk on the street is next. Good wednesday morning, welcome to squawk on the street, im david faber with jim cramer. We are live from post nine at the new york stock exchange. Carl is on assignment. Lets give you a look at futures. Its hump day for me and jim. Thats what we like to call it. Looks like were going to open lower. Whats going on . What happened . Its just that kind of its