The fed futures priced that out to july instead of june. If you look at treasury yields, there was a 10basis point jump in the tenyear yield. 4. 27. The twoyear yield at 4. 68. Looking at the hotterthan expected Producer Prices for two months whand hotter consumer prices, it makes you won beder t you see with inflation. The price of bitcoin as we talked about that before we came on it never closes. You never know to base the change. That change doesnt tell you what is happening. Here is the range from yesterday. I can look at coinbase where i watch it. The high was 73,418. We say that. The low was 65,500 i did some math. Thats 8,000 on a 73,000 stock. More than 10 . If you decide you want to tread into this, be ready to buy at 73 and wake up the next morning to see it at 65. The weird thing about it, gold and bitcoin is supposed to go up with inflation. When inflation is running, it means the fed will not cut. They will not print. Liquidity play. They will not print and everybody wantsthe pivot and the easing cycle. June . Fed futures priced out to july yesterday. We go back to the animal spirits is the economy it also ran up. It ran up with the supply and demand. That is an idiosyncratic issue. And when people think the economy is great and super excited . Nothing to do with the economy. I think it has a lot to do with the biden economy in terms of printing money. I dont think it has anything to do i disagree. It is utterly connected to the nasdaq and to a risk on. It goes up when rates come down. Rates do not come down if the economy is strong. Rates come down if the economy he is weakening or inflation is easing. I think copper prices were at an 11month high. That is an indication of global manufacturing. The nasdaq is dying for rates to come down. Any riskon the nasdaq 100 was down as well and now on track for a second week in a row of losses. Thats the first time thats happened since october. Any risk asset. What is better . A red hot economy where you know rates are going up and they are not going to cut or an economy where it looks like inflation will moderate and rates will be able to be cut . That iswhat spurs the animal spirit. Its both. Its like everything we talk about. Great jobs number. People are employed. Why the initial kneejerk reaction may have been why the stocks were up, too. It took until later in the day before it turned around. Rates back from 4 to 4. 30 . I dont think were cutting in june. Jamie dimon. They shouldnt cut because that could cause can i ask a question . Yeah. The Biden Administration. Back in the trump administration, did you think the economy was terrible because rates were so low . It was inflation. Thats the age old question. What causes rates . I understand that. I think it is very hard to say that was a great economy because rates were so low. You are saying the reason you have to bring rates low is the economy is terrible. The best thing in the world is good growth with no inflation. It is all about inflation. You went to 40year highs on inflation. I know the inflation story. 40year high on inflation is why we went up 500 basis points in rates. You go into a cycle the like that and bitcoin went intfrom 65,000. We are trying to get back to normal. All of the numbers we read are skewed. Real wages are rising. Almost 9 . Right now, real wages have dropped 6 in the biden economy. It is that simple. No bump from the state of the union. Zero. 37 . I have seen the polls. When you go to the supermarket, if you ever do, if your guy is out and you finally go to the supermarket, everything is 7. Everything. Cereal. I got sugar pops. You like those . Sugar pops . You still buy those . I buy honey nut cheerios. You believe 7 everything at the supermarket is somehow going to turn into 4 at the supermarket if donald trump is your president . We might close the border. We might there are other issues. There are a lot of usuaissue that might get better. Swing voters are unhappy with trump. The thunews alert from washington. Reporting that the u. S. Planning to award more than 6 billion to samsung to help expand the already planned 25 billion project in texas. The sources telling cnbc that the white house planning to extend funds to intel in the form of grants and loans from the chips act. The Commerce Department declined to comment on the report. Joe. Shares of adobe are lower. 448 a share beat estimate of 438. Revenue was higher. Revenue guidance was lower. Expressing concern over a. I. Competition and the openai video Generation Model which sparked fears to cut into the adobe Video Editing business. It will work with openai as it deploys its model. Wall street was not thrilled that kevin plank is returning as ceo. Evercore downgraded the stock saying planks return was a signal that the turn around strategy wasnt working and the Key Performance caterindicators deteriorating in the current quarter. Senators from both sides of the aisle rejects the tiktok divest or ban bill. Republican senator ted cruz said he was glad the house acted, but said the bill should be subject to a full amendment process. That process could tie up the bill for months and potentially kill it in an Election Year when lawmakers are busy campaigning and when they dont want to tick off the 170 million tiktok users here in the United States. In the meantime, the Chinese Government is signaling it wont allow a forced sale of tiktok. Bytedance is interpreting that as the government there prefers the app be banned in the United States rather than be sold. If they cant have it, no one can. Spacex conducted a third test flight of the rocket yesterday which was successful. The rocket flew further than previous tests. It lasted an hour before it broke up above the indian ocean. It did not splash down as intended. Spacex and nasa celebrating that flight as successful. Lyft and uber will cease operating in minneapolis after the Ride Hailing Services raise wages to 15. 57 an hour. Uber and lyft promised to push for statewide legislation to counter that city ordinance. Wow. They are saying forget it. We cant make it work gl. Fast food restaurants close down. Same thing. When when come back, nvidia helping the conference next week. We will tell you what is going to happen next. You see the nvidia shares there at 884. Later, we will talk to mark deamelio about the potential impact of tiktok on his business. Squawk box will be right back. Announcer this cnbc program is sponsored by baird. Visit bairddifference. Com. 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. Thanks for coming to our clinic, next. Next. Stop. We got it . No. Keep going. Aga. [ sigh ] next. Next. If you dont pick one. Oh, you have time. Am i keeping you from your job. Next. I dont even know where i am anymore. Stop. Do we finally have it . Lets go back to the beginning. Are you. Your electric future. Customized. The fullyelectric audi q4 etron. When i was your age, we never had anything like this. What . Wifi . Wifi that works all over the house, even the basement. The basement. So i can finally throw that party. And invite shannon barnes. Dream do come true. Xfinity gives you reliable wifi with walltowall coverage on all your devices, even when everyone is online. Maybe well even get married one day. I wonder what i will be doing . Probably still living here with mom and dad. Fast reliable speeds right where you need them. Thats walltowall wifi on the xfinity 10g network. Welcome back. Nvidia is set to kickoff the a. I. Conference on monday. Ahead of that, our next guest says she is seeing levels of speculative options trading tied to Semiconductor Stocks hitting levels never seen before. Many are positioning for that momentum to continue. She documents this in the piece frenzy over a. I. And nvidia turbo charges the Options Market. G gunjan is the writer. Gunjan, this is casinolike activity. What is taking place . Becky, one trader said this is the biggest casino in the world right now referring to nvidia options and semiconductor options. Over the next few days u , we h the nvidia conference and micron earnings and smci set to join the s p 500 after the market close today. The conference that nvidia is holding keeps coming up in c conversations with traders more than the Interest Rate decision. This is the thing that everyone keeps bringing up. I think people are on the edge of their seats to see how much higher can the a. I. Trade go . How much room is there to run . If you are looking at nvidia shares over the last six months, they doubled, but this week, they are down 7. 5 . I think people are starting to if h question if this is a straight trade. The path of nvidia has wide implications. I was looking at data and it moved in tandem 14 of the 19 sessions. What is interesting when you look under the hood, people have been positioning for the stock to keep going higher. What traders are telling me is the prices of trades that profit if nvidia kept soaring. Think 1,000 calls in shares which are surpassing the bearish trade that would profit if the stock fell. If you look at the stock, it is not telling the full story. There is more exuberance and activity under the surface. Sg the fed may not be front and center for the traders, but maybe it should be if you are questioning the rationale or thesis that the fed is cutting rates sooner than later. The hotter than expected Inflation Numbers have done a number on crypto prices. You can see it playing out in the tech stocks. That is the fascinating disconnect. It feels everyone has moved to the soft landing trade. Inflation is going to fall idea and not much can shake that, at least in the stock market so far. A lot of the fear this week has been concentrated on the bond market. A little bit of selloff in treasuries. Microsoft hit another high yesterday with the a. I. An annou announcement. Right now, that fear about decreased rate cuts is not seeping into the a. I. Trade and the s p 500. It is when you see stocks and bonds differentiate, people start to wonder who is right. Can that bifurcation continue and conventional wisdom suggests that the treasury market is smarter. The bond market is smarter. Who is the smart money . Nvidia speculators or the treasury traders . That is the big effortgest ques right now. We have the divergence happen this year. Stocks have kept rising. A. I. Trade has kept reaching new heights although we see a selloff in the treasury market. Next week with the nvidia conference is the the next big test. What do traders say they need to hear from nvidia on monday in order to make these trades make sense . This has become a story stock. I think a lot of people are watching the speech on monday with the keynote address and what does he say about the products or customer demand . The total Addressable Market . That is going to be the highlight for a lot of people. They are clinging to his every word. We have seen speculative frenzies in the past and everybody is trying to figure out where we are in the cycle because a frenzy doesnt mean it will be over any time soon. What do traders watch for . What i will say is we are seeing levels of speculation in options that we have never seen before. What does that mean . It tells you people are really, really excited about the a. I. Trade in particular. Most of it is concentrated in Semiconductor Stocks. Some people are looking to play catch up. Maybe they missed out on buying nvidia shares and they are turning to the speculative bets. The risky trades to profit to continue to rise in the stock. Options activities is surpassing from 2021. A hot trade. You hope you dont get burned by it. Exactly. Gunjan, thank you. Thank you. Coming up, the Senate Committee arguing the pros and cons of the fourday workweek. Its friday. We will bring you the highlights after the break. I would run on a sevenday workweek. Dont work for andrew. Being a changemaker means embracing uncertainty to deliver p performance. You have to start with curiosity. Be curious about the challenges in front of you. You have to have commitment to go the long haul to do that. It requires partnership to come up with creative solutions. Lastly, it requires agility to pivot enoueewh y nd. I am here because they revolutionized immunotherapy. I am here because they saw how cancer adapts to different oxygen levels and starved it. I am here because they switched off egfr gene mutation and stopped the growth of tumor cells. Theres a place thats making one advanced Cancer Discovery after another for 75 years. I am here. I am here. Because of danafarber. What we do here changes lives everywhere. I am here. Theyre waiting for you. Hey, do you have a second . Theyre all expecting more. More efficiency. More benefits. More growth. When you realize you can give your people everything, and more. Thank you very much. [applause] ask, now what . Heres what. You go with prudential to protect, empower and grow. With everything you need to deliver, you guessed it. More. One more thing. Whos your rock . Learn more at prudential. Com 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. 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. Welcome back to squawk box. Bernie sanders arguing their case to reducing the federal workweek from 40 hours to 32 hours without a reduction in pay. Citing a. I. Which would allow workers to cut back on hours and spend more time with family and on hobbies. What do you say, folks . One of the issues we have to talk about is stress in this country. The fact that so many people are going to work exhausted physi physically and mentally. The fact we have not changed the fair labor standards act. This was 1940 we came up with the 40hour workweek. Who will deny the economy hasnt changed over that period of time . Uaw president shawn fain spoke in favor of the bill saying many employees are working for less pay and cant retire until later in life. Republican lawmakers expressed opposition to the bill. Senator bill cassidy said it would harm Small Businesses which would lead to layoffs if businesses cannot keep productivity up. I would not know where to start on this. I wouldnt want to live in a World Without Bernie Sanders. You know, from the land of ben jerrys. I love it. It is silly. You love the work. You know i do like a sevenday working week. Five days . In this country, we try to have a really i was going to say strong economy. For a lot of americans 35 hours. For a lot of americans, if we had a 40hour workweek. We are at a 35hour workweek for decades. They take an hour lunch break. When i started working, it was a 35hour workweek. It is funny. The idea of the fourday workweek in the white collar land because they are working from home and taking more time. The other truth is, folks working on the u. P. S. Truck, those folks are working 12 hours a day. I get mail on sundays. U. S. Mail. I will say there is a separation. This is more of the inequality argument that comes in if you are able to fa nagel a fourday workweek. That is is when minimum wage is coming into play. You get the same amount of money, but work 3h2 hours. It is true. Remarkable productivity and advances. We hope it makes us more productive. The advances in a. I. Have been seen as shareholder gains. It will come back. We figured out the sewing machine. There have always been great advances. This is transformative. Bernie, what i love about bernie, any night of the week, you can see him on the late night shows. Never see ted cruz on one of the late night shows. You see bernie. They are all the same. They are all like minded. He is a socialist. He vacationed in moscow on his honeymoon. Hes crazy. Hes crazy. What he is describing is walle. I suspect he is turning out to be closer to right than wrong. We will know in 30 years. He is a little early. Ill give him credit and say hes early. I will buy you dinner in 30 years. I know. That is the direction of travel. One of the things he has done over the years, whether you agree or disagree, he does this early anchoring. He puts out these stakes about ideas. Ideas you and i think are crazy in the moment which has come true . Think of all of the Different Things we have what of bernies anchors has turned out to be right . Not one. What they do is move the midline. If you are talking about free student tuition or the idea of the wealth tax, all mof those ideas were from Bernie Sanders. Think about all of the people who are working at fast food joints around the country getting all sorts of benefits they never got 30 years ago. Because of bernie . He has changed that dialogue. Thats how i argue it. I would say that child labor laws put in long before he was born. We try to make work better. I wont tie anything to Bernie Sanders at this point, except, to me, he is funny. Im glad he is around. Remember the meme that went around after the inauguration with the mittens . The democrats screwed him over with biden. Oh, my god. It might be bernie. He can never win. Bernie sanders as president of the United States . Hes there stoay ridiculous things . Coming up, a read on the economy from david malpas. Announcer executive edge is sponsored by at t business. Next level moments need the next level network. Lets check. Says here it gets plenty of light. 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. only at vanguard, youre more than just an investor, get youre an owner. Us. Our Financial Planning tools and advice can help you prepare for todays longer retirement. Hi mom. Thats the value of ownership. 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 good morning. Welcome back to squawk box. Were live from the Nasdaq Market site in times square. On this friday morning, dow futures up 40. S p futures up 12. Nasdaq up 42. This is after the down day yesterday. Treasury yields have been higher. Tenyear yield moved up ten basis appoipoints yesterday. In the meantime, bloomberg is reporting united is looking to replace orders for the boeing 737 max 10 which are five years behind schedule. That report says united is in final negotiations for the planes to be delivered between 2025 and 2027. Ceo scott kirby said they were in the market for airbus, but not willing to overpay. That is what scott talked about the last time he was here with the frustration. United is an all boeing fleet. The idea of adding any of the airbus is shocking. It means they will have to change some of the operations and pilots able to fly on other planes. It is a significant overhaul. I imagine it would not stop with ten planes. It is like trying to buy a wendys single at noon. I havent bought one in forever. Oh, surge pricing. People need jets. You are not getting any for a while. Because of the problems with boeing. A duopoly. We had scott kirby on. You never want to say it. You could tell just looking at him. With what is happening with boeing, we might go to airbus. The problem is they will not be able to expand the schedule the way they planned if they cant get the planes. President biden looks to raise taxes on the rich and our next guest advised multiple president s on the economy and says there is no size limit on u. S. Spending or taxation which could create a potential train wreck in 2025. Joining us now is former Bank President david malpass. Ever since the budget came out, david, we have been talking about it. You can definitely raise taxes and supposedly cut the deficit by 3 trillion, but almost everyone agrees back with simpsonbolls. There are no spending cuts. We had pandemic spending and we had the same level after the pandemic, which makes no sense. Thats right. Washington is in disarray. You know, i started in the budget process in 1984 with the Senate Budget committee. It has gotten worse year by year since then. The National Debt is exploding. We really need growth now. When you look at the consequences, what is happening is the government is spending so much money that it hurts production. Were seeing it around the economy. Raising taxes, you said that raise 3 trillion, i dont think they would. They always overestimate how much they can do because people respond when the taxes go up which produces less of it. As you look at the number of problems that were facing, the boeing problem you just led with and the Companies Going to the european alternative. On semiconductor, look what happened. The dei craze or really focus undercuts the ability for the u. S. To make semiconductors. Japans doing it. Chinas doing it. Taiwan and south korea is doing it, but we cant do it because of the blockages in the process. Now we cant export lng. Liquified natural gas because of the ban on that. Thats going to drive up Energy Prices worldwide. Im really worried about world growth. We keep looking at u. S. Growth, which is right, but from the perspective of the world, you have the u. S. Government absorbing giant amounts of capital and spending it in ways ineffective. You end up with a mess globally. You see that in all of the fragility and outbreak of wars. There is so much waste going on in the u. S. It is the ageold question, Central Planning versus the private sector. Now you can add into the mix mmt. Modern monetary theory. Because we have the currency which is accepted around the world and we can always issue debt with the reserve currency of the world, that there is no the chickens will never come home to roost. Thats what we think right now. Combine that with what we hear one side saying about investment. We will invest. If the government knew how to invest more effectively, they can do some things right, but more effectively than the private sector, we would have Central Planning. The combination of the government that sticks its nose into mmt is why we are where we are right now. We will never get out of it ever. Thats right. Debt is growing now. 34 trillion National Debt. It will be 35 trillion by the summer. In 100 days. 1 trillion every 100 days. Thats right. You see the Inflation Numbers from yesterday. Its hot inflation. It means things are not affordable for people. Houses are not affordable. Then they dont make them. You end up with this with the government fuelling consumption. You are not getting the supply on the other side, especially not from american producers on the other side. Maybe europeans will be making the airplanes. In china, im worried about china as well. We see the end product of their Central Planning with the economy that is freezing up because of their deflation phase because they overbuilt in certain areas. It is driving down prices. So, you know, the answer, i think is clear. Not hmodern monetary theory. People have to speak out on Government Spending. I was happy to see chairman powell doing that last fall a little bit. The fed is a really important voice on this. I think we also have to really think about a size limit on the government. There has to be some check and balance that pulls us out of this spiral. If it worked, david, if it worked, we would do ten inflation reduction acts every year. Ten every year. We would have 30 gdp growth because we have three and we have the fed with the Balance Sheet of 100 trillion. If it worked, we would do that. We would be in zimbabwe. It would cost 1 trillion to buy a sncnickers. They would be out of power. We dont have a grid that is Strong Enough to support that. Right. I wonder if we learn this permanently. We dont. Every generation has to learn Central Planning doesnt work. It gets frustrating. 60 of people in college now are socialists. We can thank our ak democademic that. At some moments people write laws where they knew they needed to have checks and balances. I think we need to do that on the fiscal side. We also need to do that on the fed side on the Interest Rate side. Right now, were in the phase for high for long is somehow going to work. I dont see why or how that will increase production or get us into a better spot as a country. Very important is the commander in chief. This is the u. S. Which has a system where you need a strong executive because thats where the guidance comes on the war effort and on the afghanistan pullout and the problems in gaza. I was concerned yesterday by the undercutting of israel and allies by people in washington. How dcan that be . Putin did not like one of or president s. Now schumer with the same thing. David, we have to run. I hear the music. Good to see you. When we come back, the s p retail index is up 14 since the start of the year. We will talk about the take ways from the retail earnings season and what to expect in the current quarter. Reminder, you can get the best of squawk box in our daily podcast. Follow us on your vofarite podcast app and you can listen anytime. Well be right back. Your shipping manager left to find themself. leaving you lost. 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 trading at schwab is now powered by ameritrade, giving traders even more ways to sharpen their skills with tailored education. Get an expanding library filled with new online videos, webcasts, articles, courses, and more all crafted just for traders. And with guided learning paths stacked with content curated to fit your unique goals, you can spend less time searching and more time learning. Trade brilliantly with schwab. grandpa vo im the richest guy in the world. Hi baby woman 1 vo i have inherited the best traditions. woman 2 vo i have a great boss. Its me. man 1 vo i have people, people i can count on. man 2 vo i have time to give grandma vo and a million stories to share. grandpa vo if thats not rich, i dont know what is. vo the key to being rich is knowing what counts. Well, now most retailers have reported full year results and looking forward to 2024, it is probably fair to say it is a mixed shopping bag for the sector. Courtney reagan is here with the expectations Going Forward. Good morning. Good to be here. Most retailers have inventory and promotions under control which led to improved margins. Forward guidance is wide for many and cautious for most. The u. S. Consumer is resilient and quote choiceful. A term used this quarter by several executives to describe Discretionary Spending patterns. Lseg says 40 of retailers mentioned inflation in the results. 26 were negative announcements and 28 of the 43 gave disappointing q1 guidance. Ulta beautys forecast is below the street for the first time in three years. Ulta is and will be a beneficiary, but executives are looking ahead with caution. Dicks Sporting Goods is resonating with shoppers and kohls active businesses being a weak spot. Dollar tree took a hit after it reported and called out weakness in the Family Dollar business citing a strapped lowerend consumer. Many of the stores serve a lowerincome shopper. Target announced a plan to open 100 is stores, macys and Family Dollar plan to close hundreds of loca locations. Xr, it is week to date. Williamssonoma is up in double digits. Dollar tree is down. Under armour announcing kevin plank is returning as ceo. It was a couple of busy weeks for retail. It all comes down to executing fundamentals. I wonder if it is guying on i geog geography. Is that a poorly put together combination of the companies or one of them was in a worse location. That is a really good point. There are thousands and thousands of Dollar Stores. So many. Probably more Dollar Stores than any other type of retail location. That probably does account for some of it. Family dollar called out a high level of shrink at that location. Again, you know, issues with the consumables. Walmart is picking up share. That is interesting. If you remember with the financial crisis, it was the opposite. So many people were going to the Dollar Stores for the fillin trips as opposed to walmart for the whole grocery basket. Courtney, thank you. I love high levels of shrink. We sanitize it so much. High levels of shrink. Im saying that because thats the term they used with shrink. We know shrink encompasses all forms of inventory loss. They did not say theft. You are using their words. Except their dumb word choiceful. So many. Why make up a dumb. Executives being choiceful. [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. As an independent financial advisor, my promise to you is simple. As a fiduciary, i promise to put your interests first, always. I promise that our relationship will go well beyond just investment decisions. Its the intersection of your money and your life where we can make the biggest difference. [announcer] Charles Schwab is proud to support the independent Financial Advisors who are passionately dedicated to helping people achieve their financial goals. Visit findyourindependentadvisor. Com welcome back to squawk box. Bernstein initiating a crypto rating with a bullish call for the sector. Analysts expect the total Crypto Market cap to reach 7. 5 trillion by 2025. Joining us right now is crypto. Com ceo chris meserlek. Good morning to you. Lets start here. If 7. 5 trillion, what is the current market cap of crypto right now . Bitcoin is, what, about 1. 5 . About that, yes. So we are looking at roughly 3xing the entire market according to the analysts in about 18 months. And we have been talking this morning and really all week, maybe in the last several weeks, obviously bitcoin has been on this remarkable run as has ethereum and so many other currencies we can discuss to be described as currencies or what they should be described as. But when you see this type of move, how much of this is literally just a supplydemand issue that is being created by the halving of bitcoin, but more importantly the etf market and how much of it is Something Else, meaning it has to do with what you think the fed is going to do or what the economy is doing or what the nasdaq is doing . I think the move is predominantly driven by the inflows from the bitcoin etfs. There is a very successful product and there is a problem of supply side. So, it has to be reflected in the price. What do you make of this move down, though, even in the past couple of days . What is that suggestive of . I think it is a healthy move, removing some of the leverage that built up in the system. And, you know, what we want to avoid is we want to avoid sudden progressive spikes. We do like to see steady inflows into the industry, into bitcoin, that allows us to have about 12 to 18 months can you figure out though, chris, what is happening. In the past 24 hours, we have gone from 73,000 to 67,000. Was that a function of the Retail Market selling actual bitcoins or was that institutions selling etf the etf . What do you see, given the flows that you see, actually happening behind the scenes . So, we sit on a ton of proprietary data. We can look back at 2021 cycle from retail perspective, and compare it to what is happening now. Looking at the data and the intent as a signal from retail side, were probably in december 2020, january 2021, we are seeing this kind of ma metrics. I think this is driven by what is happening in the Options Market and the correction. But you have to remember, this volatility actually is pretty low comparing to what we have seen in previous cycles. So thats what i want to ask you, is that over . 20,000 to 3, 65,000 down to 17, now there is etfs, more mass adoption, more institutional ownership. Are those days over . Can we still expect 80 high to low moves for bitcoin in the future . I think you would see a steady ramp up and thats what we want. And i think it is the size of the market and the increasing liquidity happen, you will see lots of sudden moves. This is this is an asset that you want to hold for decades, not for days or weeks. Kris, it is a longer conversation. I hope we get to continue it with you. We appreciate you joining us this morning. Thank you. Thanks for having me. Coming up, were going to read the charts with Katie Stockton. I wonder about the resistance on resistance and support, thats what were talking about, for bitcoin. Plus, ticking off tiktok creators. The house passing a bill that could lead to a potential ban of the social media giant. We have reaction from the head of a creator family, the cofounder of damelio brands. Squawk bo cinrit ck xomg ghba. 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. At pgim, finding opportunity in fixed income today, helps secure tomorrow. Our timetested fixed income suite, backed by over 145 years of risk experience, helps investors meet their goals. Pgim investments. Shaping tomorrow today. The dow snapping a threeday winning streak this morning. Futures are pointing to a bit of a bounceback. Were going to talk market technicals. Plus, hot inflation data and the feds rate path. Well hear from a former fed president on when rates may come down. And the impact of a potential ban on tiktok on content creators. The father of two of the most lucrative tiktok stars out there joins us to talk about what the potential is. The second hour of squawk box begins right now. Good morning and welcome back to squawk here on cnbc. Friday morning, were live at the Nasdaq Market site in times square. Im Andrew Ross Sorkin along with becky quick and joe kernen. We got a lot going on in the markets. Were going to show you that. Plus a lot going on in crypto land. Were going to look at the charts in a moment with Katie Stockton who will help us out. The dow looks like it would open up 40 points higher. Nasdaq 34 points higher, the s p 500 up 11. 5 points higher. Treasuries, tenyear note at 4. 281 . The twoyear at 4. 692 . Bitcoin at 67,452. Taking a trip up from 73,000 down to 65,000. A lot of volatility in the last couple of hours there. A closer look another that technicals. Katie stockton, cnbc contributor. I want to talk equities, definitely. And the breakdown in some of the magnificent seven. I want to talk bonds. I want to talk gold. But, we have been talking a lot about bitcoin. Last time you were on, i think we im going to exaggerate i think we said there was resistance at 30,000. Got through that. Got through that. You said it could go to 36. This is happening quickly. It has. I mean, it is a parabolic which honestly this market has a lot of those right now. But for bitcoin, it is pending confirmation of this major breakout, the resistance, the latest resistance, which we consider to be final resistance was just shy of 65,000. I think we may havetalked about that level. Above that, there is no other resistance. You get this measured move objective, which assumes the same trend will maintain itself and that gets it to about 80,000, 81,000 over the intermediate term, which, for me, is around 2 to 4 months. Near term, however, just as of today, were seeing it confirmed shortterm sell signal. This is based on the indicators. It is the first one in a few weeks. That would call for a couple of weeks of consolidation, within this very steep uptrend. I dont think anybody would be surprised by that. I didnt hear any numbers below 60. We like to use the 50day moving averages. What is that . I dont know. I should have looked this morning. Forgive me. That would be a surprise for mid50s. If you look at the 50day moving averages for any of the names that are steep in parabolic up trends, it is really initial support on a chart. It doesnt mean you have to ride to down 20 , but rather have some kind of stop loss discipline. We dont have any major breakdowns in the megacaps. We have consolidation under way. We have shortterm loss of momentum. Really nothing concerning. Nothing with apple or tesla . Well, okay, apple actually does have the shape of what we would call a longterm double top formation. So if it were to break down decisively below this 170 support level, that would be pretty major for apple on the downside. Just apple . Just apple. Apple has been the laggard. Not the nasdaq, nothing of that shape or form there. Tesla is its own beast, and has pretty freshshortterm breakdown. You think a lot of the we see a broadening. We see a lot of catchup to the generals in the nasdaq. Definitively. It has been a concentrated leadership environment of late with the 500 benefitting from nvidias huge move and yet breadth of participation has been super strong, meaning the equal weighted benchmarks, midcap benchmarks, those have pretty major breakouts. And it is a global upmove that we have seen. Around the world were seeing big breakouts to even new all time highs for some benchmarks that have lagged the s p 500 for many, many months and even years. What about the volatility . We havent really seen much on the vix. It does feel like there are more volatile elements out there. Its been making higher lows. So it is really quite subtle on the vix. If you look closely on a daily bar chart, you know, the chart would project maybe 18 to 21 as a range for the vix. To elevate it, we have seen much worse from it. But we have been over the past couple of weeks recommending vix products as a hedge, a shortterm, topdown partial hedge. We dont want to be fully hedged in exposure because we believe this to be more of a neutral, sort of consolidation within a very strong uptrend. Have yields broken out on the tenyear . Yields have short side momentum. The initial resistance is around 433 to some minor level and above that, it projects about 455. That, to me, is a likely level for it to make a lower high. Are rate cuts off the table . I dont know. I need you to know. I need you to tell me. I need you all to tell us. Inform the viewers. So i do think that 455 is probably likely based on what were seeing in the indicators. We have an intermediate term momentum gauge that is on the verge of its first crossover, or buy signal in the way for yields for months now. I think it is a move that could sustain itself here maybe a couple of months. Is there any way you can chart inflation . Do you do that . You can chart anything that has a number, right . But when you a downtrend . Has it stopped . I would say it is more neutral. Neutral would be it is not as exciting, but thats what we really need to know that last mile. And you think well, you know, thats a fundamental question. Whether the fed moves the goal post. 3 is pretty good. Do you think that would ever happen . Probably not. I dont know. Im the wrong person to ask. Okay. Keep trying. I do keep trying. How about leadership and sectors in the s p . Anything look really bad, anything look really good . You know, it has been a very offensive market. So youre offended . The defensive sectors have, of course, lagged. If you look at the Consumer Staples sector versus the s p 500, same with utilities, very well defined downtrends, reits as well. And, of course, to contrast that, we have technology in a very strong uptrend. How about the russell and small caps . The russell has assumed better relative strength. It is far from being strong. But we have a russell breakout that to me has very bullish longterm implications. It is almost like i feel like this year is a year of the longterm turn around. Thats where i think there is some excitement because you can find them in financials and healthcare and in value stocks. It is funny, you said the final resistance was exceeded by bitcoin. But then you still gave me a number for the next one. Thats called a measured move. So it is making a 100 projection of the trend essentially. 80,000 it seems kind of conservative, doesnt it, but it is all we have. Some people that come on, they hear numbers like 150,000 and things like that. I wouldnt rule anything out. It is not necessarily a stopping point, but a natural we never talked about gold. Gold is the same it really is. Gold, the level we had been watching was final resistance, 2063 per ounce. We have an objective. I think it is close to 2280 or so based en that same analogy. It is only final for a while. Then you get then resistance comes back. Right. These are very subjective and also fluid levels. But when you derive these some are much more final that i worry about. The market is dynamic. We have to react to it at times. But at these levels, thats where you expect a corrective phase. Katie, thanks. Of course. Okay. When we come back, United Health group outlining a timeline for restoring some services taken offline for more than two weeks after that cyberattack on its change healthcare subsidiary. That impaired payment and data programs. The companys payment platform restored today. Well have a lot more on the details on that after the break. Later, tiktok creators voicing concerns over the possibility of a ban. Former treasury secretary Steven Mnuchin telling us yesterday here on the broadcast hes working on buying or trying to buy the whole company. Well bring you some reaction to all of that from somebody who made tiktok a family busins. lbeig bk. Es power e tr announcer this cnbc program is sponsored by truist securities. 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. Morikawa on 18. He is really boxed in here. Market not a good spot. Are. Off the comcast business van. Into the vending area. Oh, not the fries wheres the ball . Anybody see it . Oh wait, there it is back into play and. Aw no, its in the water. Wait a minute. Are you kidding me . You got to be kidding me. Rolling towards the cup, and its in the hole what an impossible shot brought to you by comcast business. You can make money the hard way as a bullfighter or a human cannonball. Or save money the easy way, with xfinity mobile. Existing customers can get a free line of our most popular unlimited plan for a year not only will you save hundreds but youll also be joining millions who have connected to americas most reliable 5g network. Sure is a lot safer than becoming a stuntman for money. Get a free line of unlimited intro for a year when you buy one unlimited line. Visit xfinitymobile. Com today to learn more. Welcome back, everybody. United health says that it is aiming to bring systems back online by today after a massive healthcare hack described as the most serious on the u. S. Healthcare system to date. That disruption is in its fourth week. It brought payments and other systems offline and is estimated to be costing Healthcare Providers as much as a billion dollars a day. For more on this, we want to bring in former fda commissioner dr. Scott gottlieb, a member of imlumina and pfizer and cnbc contributor. Dr. Gottlieb, i dont know we have done enough to explain this situation and describe to people what is really happening. This is kind of catastrophic. What happened . It is very pervasive across the entire Healthcare System. This is one of the largest facilitators of Health Claims and medical claims in the country. They handle about 15 billion claims a year, totalling around 1. 5 trillion. Basically a third of the entire Healthcare System, we have a 4. 5 trillion Healthcare System. What this system does is it handles claims not just for United Healthcare, but for other insurers as well. Doctors will subscribe to this system, contract with it. And it will tell them whether or not patients are eligible to receive a prescription or whether theyre eligible against their Insurance Plan to receive a certain procedure, what the cost will be, what the provider will be paid, what the copay to the patient will be. So, a patient comes into a provider right now, goes to a pharmacy, and this system is down, they dont know whether or not their claim is going to get covered, the provider doesnt know whether or not theyre going to get paid, the patient doesnt know what the out of pocket costs are going to be. These are being adjudicated by hand in many cases. Some insurers stepped in and said, look, if you milwaake a g faith effort, well stop the providers. Other insurers havent. You have the system now in many cases in limbo, some elective procedures are getting pushed off. Others just are getting done, but providers dont know when theyll get paid and theyre out of pocket for the revenue right now. Are there surgeries that are life threatening that arent getting done as a result . Are there people going without necessary medications as a result of this . Yeah. I havent heard any anecdotes with things that are necessary, arent getting done. I suspect there are elective things that are getting pushed off. I heard stories where prescriptions are getting filled for two weeks at the a time, so pharmacies arent filling prescriptions for a month, three months at a time, because theyre uncertain whether or not theyre going to get reimbursed, whether or not the patient is eligible to receive a medication what the copay is going to be. There is definitely some dislocation in the market right now. Were probably going to see that show up to some extent when we see Quarterly Earnings from some of the big provider systems. I suspect were going to see when united reports on april 12th their earnings what the costs to united has been. They have stepped in to back stop a lot of the claims. Some of them probably the patients werent eligible for and united has to eat the costs. They have done quite a bit on the pharmacy side to back stop pharmacies. A lot of pharmacies are mom and pop pharmacies, 20,000 pharmacies in this country, fully a third of all the dispensed medication, upwards maybe over half from mom and pop pharmacies, not the big chains that dont have the ability to bridge themselves in an instance like this. We think of this as being such a wide system, Healthcare System. The idea that there is a point of redundancy that affects a third of all of that, was this a surprise to you . Yeah, it was. I think that we need to look outside the industries we tradition a looked at where there is single points of failure. There is other medical Processing Companies like wavestar that process a lot of claims. We never thought about these sort of single points of failure, these single nodes, in industries that are perceived as fragmented, so it is hard to take down. You perceive the medical industry as a fragmented industry. What happened here, this is a wormlike virus that has Lateral Movement within the system. So it didnt just infect this change Healthcare System inside United Central servers, but it branched out into all the nodes that were connected to that. So literally every Health System that is connected to this change Healthcare System now needs to be checked to see whether or not this wormlike feature had Lateral Movement into those systems. Thats why it is so hard to get this turned back on, because they need to check every node that is connected into the change Healthcare Infrastructure if you will. This is the same virus that was same group that was believed to be behind the Colonial Pipeline Ransomware Attack in 2021 and the attack against mgm and caesars in 2023. It is a known group, a known feature, if you will, a known attack, just hasnt affected Something Like this in the Healthcare Industry before. If it is a if theyre able to identify a weakness in the system that you as the former head of the fda didnt even recognize or see, i mean, that suggests an awful high level of sophistication. Is there the idea that this could be potential nationstate, really targeting u. S. In infras infrastructure . Well, the group that is responsible for this isnt believed to be a national actor. This is a known ransomware gang. I think we need to look i think other groups that look for the soft targets inside the u. S. Economy need to now look differently, through a different lens, to see whether or not there is other very fragmented industry that you never thought had a single point of failure that has a soft target like this. Cms was slow to recognize this, i believe. They didnt put out their first statement until march 5th. We were alerted on february 28th. Attack happened on february 21st. Cms, the center for medicare, Medicaid Services didnt put out a statement until the 25th. The government was slow to act as well. I dont think there was a recognition of how pervasive this would be and what the impact would be across the healthcare landscape. We started to hear i started to hear it anecdotally from providers hooked into the system, the impact on their offices and you started to see things appear online from providers complaining about this. But i think there it was slow to recognize or the government was slow to recognize what kind of impact this would have if it was protracted and should have been recognizing this was going to be protracted right from the outset. You look at shares of United Health and over the last month they have gone from 520 to 489, a drop of 6 . What youre talking about, the potential implications, sound like theyre not even going to be able to really get their arms around the reliabilities at this point. I think theyre getting their arms around it i talked to people close to this. If this had happened to any other entity, i think this would be game over. The fact that United Healthcare owns change healthcare and can bring enormous resources to bear to try to get this system back online is one of the reasons it probably will get back online. If this was still an individual company, stand alone company, remember, united acquired this back in 2022 for 13 billion. This is a stand alone company and didnt have the deep pockets of united behind it. Im not sure it would be getting back online as hopefully it will. I think on the pharmacy side and the provider side as well to some extent, theyre back stopping claims, saying to pharmacies, if youre making a good faith effort to check eligibility, were going to make sure you get paid. Some of those claims patients wont have been eligible for those products or theyll have had higher copays, they wont claw that back or leave the providers on the hook based on what theyre telling pharmacies. I suspect there will be a hit to united. Im not sure theyre stepping in the same way, others are connected to the system as well. This is uniteds problem, theyre being moreaggressive in trying to back stop some providers right now to make sure theyre going to get paid so they can continue services, even where patients based on their Insurance Plans wont be eligible to receive the service or receive the prescription product. Scott, thank you for explaining it to us. Thanks a lot. Coming up, a look at some of the movers, preMarket Movers with the futures as you can see all in the green. All three indices. Were coming right back. Announcer time now for todays aflac trivia question. Where is the tallest waterfall in the continental United States . The answer when squawk box rern tus. See that . Thats like the gap in my Health Insurance. Gap in your Health Insurance . Yeah, it didnt cover everything when i got hurt. Good thing i had aflac. Hmmm the cash i got from aflac helped pay for medical expenses, groceries, rent. It really helped close that gap. Go, go, go yay go aflac go duck get help with expenses Health Insurance doesnt cover at aflac. Com wish we had aflac on our team. You can 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 and now the answer to todays aflac trivia question. Where is the tallest waterfall in the continental United States . The answer, washington. Colonial creek falls in North Cascade National Park falls 2,568 feet. Lets get over to dom chu with a look at this mornings preMarket Movers. Good morning, dom. Lets kick off our friday edition of morning movers with nvidia. The biggest computer chip company in the world is up fractionally right now around 400,000 shares of premarket trading volume, looking to try to snap a twoday losing streak. The stock entered corrections or 10 plus drop from their recent highs. You remember hit a record level a week ago today. A drop of that magnitude is sometimes something traders Pay Attention to for momentum. Though if we put it in context, remember, that 10 drop is very tiny compared to that 265 move that shares have seen rally over the course of this year and the last 12 months. So, it is a small blip, but it is a big options day and highly traded stock so keep an eye on any kind of volatility nvidia today. Sticking with megacap technology, apple shares up fractionally this morning on just about 100,000 shares of volume. The iphonemaker and app services giant has been an underperform over the medium term. But apple now has purchased a canadianbased Artificial Intelligence startup. Darwin a. I. Specializes in technology around inspections during manufacturing processes. That acquisition comes as apple looks to deploy more resources to bring a. I. Products to market. Apple shares up onethird of 1 . Well end with a surge in shares of magical pharmaceuticals, up over 25 at this point right now. Just around 35,000 shares of volume. The u. S. Food and Drug Administration approved the companys first ever treatment for a potentially deadly Liver Disease known as nash or nonalcoholic stapido hepatitis. Andrew, Madrigal Pharmaceuticals up. Back over to you. Dom, thank you for that. Have a great weekend. Coming up whether we return, the latest inflation data changing the feds outlook on rates. Thats the question. Well have that story and were going to hear from former Kansas City Fed president thomas hoenig. And then later, for the damelios, tiktok is, yes, a family business. Were going to speak to the person behind some of the biggest content creators on that platform. Well get reaction about a posslean fib brom congress. You do not want to miss it. Squawk box coming right back. Theyre all expecting more. More efficiency. More benefits. More growth. When you realize you can give your people everything, and more. Thank you very much. [applause] ask, now what . Heres what. You go with prudential to protect, empower and grow. With everything you need to deliver, you guessed it. More. One more thing. Whos your rock . Learn more at prudential. Com 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 one of the Big Questions for the fed next week, whether the last two months of inflation data changes the feds outlook and the prospects for rates coming down. Steve liesman is connecting the dots for us right now and joins us with more. And, steve, we keep saying these are oneoff numbers, but when you start to have number after number rack up, makes us want to take a closer look at all of it. It is two in a row, becky. There is risk next week in those fed protections for the economic and rate outlooks. The socalled dot plot after two months of bad inflation reports making little progress toward the feds goal of 2 inflation. The median official in december forecast 1. 4 for gdp. We are running above it, at least so far in the first quarter. Core pce at 2. 4 . Wall street thinks that were going to come in at just 2. 8, down a tenth for the february pce. And the fed funds rate at 4. 6 . The median, 2024 projection in the middle is 4. 6 or three cuts. If just two of the 19 officials decide, hey, we should cut only twice, then the median moves to two cuts. It takes two to tango on this one. For the fed, it comes down to a question of how do you think about the past two months of inflation. Are they signs of a stall if they have to worry about in their progress or are they just some officials said theyre just noise, bruce willis said there are risks to the outlook with joe wallace, with the economy, continuing to outperform and consumers still resilient. The fed may be far more patient on rate cuts than its forecast implies or the market has priced in. He doesnt think there is a change, but as he points out, there is the risk. Futures market ganz s began the looking to end the year at 3. 8. Thats long gone. It is now building at it was then building at 160 basis points of cuts. Now the contract trends at 456 with just 80 basis points of rate cuts built in for this year or right about where the fed is at 3 25 basis point cuts. The question is whether the fed moves the forecast again and markets have to price in the risk about both when the fed cuts, we have been talking about that, but also now in play is by how much. I think that 80 is going the way of 150, possibly. But i change constantly. But who why in gods name would we ever have just given back all this hardwon normalization, just for no reason . Why . Why . Why would we have done that . Five is not crazy. Five is historically where things are. It is interesting, joe. It gets down to that debate, maybe youll have it with mr. Hoenig, about where the neutral rate is. Right now according to the feds own look at the world, theyre really tight. Theyre putting a lot of restraint on the economy. Why do you need that restraint if you are going to be at or getting towards your inflation target . The fed said let it ride. The fed said they didnt need to cut. You are right, joe. There is a discussion going on about whether or not that neutral rate is higher. Whether the fed is imparting less restraint on the economy than it believes. Well, if 70 basis points can just disappear into thin air, 80 can disappear, same way, steve. But lets and i was going to say, thank you for i think i called mr. Hoenig hoenig a few times, but i could be wrong. I could be wrong. I call him hoenig. Hes here. Thanks, steve. And maybe lets ask him. For more on the fed rate, thomas hoenig. Which do you prefer, sir . Hoenig is more thats nice to know. You never said anything. Youre nice. Former Kansas City Fed president and mercadas center, probably said that wrong, distinguished senior fellow good to have you on either way. I think i can pronounce tom. It isnt tom, is it . It is tom. Good to see you, tom. What about that discussion were having, are we restrictive right now . I dont think so. I agree i think that socalled neutral rate that the fed talks about is higher than what the fed has been talking about. I think a real rate is probably closer to 2 given the amount of debt, given the strength in the economy. And if you had 2 inflation target, 4 is a number, rates now are 5. 5. Thats modestly restrictive. Given the fact that the economy in 2023 was stronger than expected and were starting off pretty well this year, i would say that the neutral rate is higher as some people are arguing right now, higher than the feds recent forecast. Well, were slowly finding religion, i think, from 150 basis points and now were 80. Will there be cuts in july, do you think, now . I think the fed given the recent testimony of the chairman, i dont think the fed will flip too quickly and too much, but i would say that three cuts would be a surprise to me given the strength, unless something is happening in the next two months to change things or change perspective on people. I would say two cuts at most and if the economy stays as strong as it has been, and i wouldnt be surprised by that, since it is an Election Year and there will be no tax increases and no spending cuts in the amount of spending going on is pretty strong, i would say were going to have a relatively strong 2024 and then 2025 will be, if there is an adjustment year, will be in 2025, it would be my suggestion. And that environment, i dont think i would be in a hurry to cut rates either. But i dont think theyre going to change their dot plots that much because they dont want to shake the market up. But in their minds, they know that they have a chance of losing their Inflation Gains if they cut too soon. So, they got a lot on their plate here this week and for the next two or three months. And i wish sometimes i wish we could talk to god, i do. I would ask questions and i want definitive answers. Youre as close as we have today. So, was the there is two scenarios, the inflation really was transitory and caused by the pandemic, and supply chain issues. And it is just now coming back down. Or, we spent too much money for the last eight years, the feds Balance Sheet is too big and there is some permanent inflation embedded in the system that is going to make it tough to go back to 2 from 3. Which is true . Is it really going to be hard or is there too much money sloshing around . I think there is a lot of money sloshing around, for sure. I think it is going to be difficult to get to 2 because this is, you know, it was a supply and demand factor, but the supply has been pretty much addressed. And now we have a hangover of this 6 trillion spending, and that we have to deal with. I think thats part of i will say to you, i think there are three reasons the fed would advance their cuts. One is that they actually get much closer to 2 of the next two or three months than i think they will. Second, the economy has a surprise slowdown. And, third, if the Banking Industry shows effects of its wounds, the higher rates, and their asset quality begins to show deterioration, that might accelerate the cut as well. So those are the kinds of conditions i think happen before the fed actually would want to cut rates very much very soon. When you look at what scares people, like, inflation in south america in the past, cant 3 i mean, i can live with 3 , can we move the goal post, make it a lot easier . I think moving the goal post would not make it easier. We have 3 inflection and then 4 inflation and then on and on from there. Once you move those goal posts, your credibility goes own. And i think driving to 2 would give us in the long run a more stable economy, people would have more confidence in the feds ability to maintain 2 Going Forward. But if they give that up, as they did in the 70s and little by little then they pay the price for it later on and thats been the history, i think. You saw the budget proposed. You know that neither candidate is going to do anything with entitlements that we have. So, what type of long term gdp growth are we going to be able to have and do you think that the debt to gdp stays over 100 permanently and what does that mean for gdp growth . How do we how do we deal with that . Do we ever . I think given the Current Congress and administration we have, i think, yes, i think Government Spending will be hard to bring down. Government taxes will be hard to increase, so i think we have a permanent deficit and the implication for that as pointed out by the ceo of the Congressional Budget Office means that your productivity does suffer in time. And your real growth rate falls from 2. 2 or 2. 3 down to 1. 8 . I dont think thats unreasonable at all. So i think we do have some real issues that this country has to face and i think the interest on the debt loan will push that debt up unless we get things back under control, which we are showing no tendency to do now in this country by either the congress or i think either administration that might come in in the future. I think we have huge challenges. Only when it does start to really push through with higher inflation on a continuous basis will the American People become very impatient and begin to require some of that be addressed. But not anytime soon. Okay. Mr. Hoenig, thank you. Kansas city former Kansas City Fed president there. We got it right. Im not going to forget either. And bartels, marian bartels. Coming up, much more on todays Market Movers and what you should be watching ahead of the opening bell on wall street. Look at the futures now, 66 points higher if we opened up on the dow. S p 500 would open about 14 points higher. Nasdaq looking to open about 39 points higher. We are coming right back and we will be talking tiktok after this. Why choose a sleep number smart bed . Can it keep me warm when im cold . Wait. No im always hot. Sleep number does that. Now, save up to 1,000 on select sleep number smart beds. Plus, special financing. Shop now at sleepnumber. Com something amazing is happening here. Climate researchers are weathering a data storm. Thats because cdw transformed their devices and infrastructure with Lenovo Thinkpads and powerful edge to cloud solutions, delivering faster insights and increased performance, giving them the scale to stay ready for whatevers next. Make amazing happen. Lenovo and cdw. Shares of ulta beauty are falling. The specialty retailers Fourth Quarter sales rose 10 , beating forecasts. Ulta is projecting full year earnings below the streets expectations and says it sees a slowdown in the industry. The companys dealing with softer sales of makeup and hair Care Products and that stock now down by about 6. 5 . Pager duty is tumbling today. The Fourth Quarter results just edging past forecasts, but sales expected to come in below estimates. Management saying it sees strong momentum from midmarket and enterprise customers, but still see headwinds from small business. Looking at the stock off now this morning a little over 18. 5 . Were watching the shares of chinese ev maker neo. The company said it plans to review its mass market brand in may. The new brand will be named ledow, in chinese, which is it says it is meant to reflect families having a happy time together. Must be a minivan. They have focused on the higher end of the market with suvs and sai sedans priced higher than teslas models. It has a large scale delivery by the Fourth Quarter. It will be good if they can get keanu reeves as a spokesperson. I was just looking at a clip from nio, from the matrix. Different. Like ben cerra for cerave. Leslie picker joins us right now with breaking news. Hi, leslie. We obtained a letter, David Solomon plans to send shareholders today where he talks about the firms strategy, his views on the macro environment, and a. I. And china. Solomon calls 2023 a, quote, year of execution for Goldman Sachs, while saying hes optimistic about 2024. Solomon says the firm stands to benefit as Capital Markets rebound. This may be a little more constructive where activity is improving but it is a ways off. As for the broader economy, while solomon says it is proven more resilient than expected and markets are predicting rate cuts, though i think inflation may prove stickier than many anticipate. He said ceos, quote, tell him that Economic Conditions for the consumer particularly at the lower end of the income strata have gotten tougher and seeing behavioral changes. But the fed now has room to ease if Economic Conditions start to decline. On a. I. , solomon says that it is, quote, important to keep perspective, that, quote, adoption rates will lag, the most fascinating use cases are in their early stages and a lot of work still needs to be done in data security, Regulatory Frameworks and ethical considerations for the technology to reach its full potential. He does believe that there is, quote, no question that generative a. I. Is going to disrupt a wide range of industries. Wow. A. I. Is on everybodys minds. What can be done . Yeah, and it is interesting, because were seeing, you know, it was two weeks ago that jamie dimon said a. I. Is not just hype. There are real use cases here. So you got the banks really investing money in here into a. I. For things like operations, for the way that theyre communicating with customers, for the way that theyre gathering research, so it is already being done in real time. And then, of course, they have a ton of customers and clients who are a. I. Companies themselves. So theyre really on the forefront of what this technology is. I thought it was really telling that solomon said, you know, this is an amazing technology, but there are some things that we need to work through before it becomes essentially ubiq ubiquitous. Leslie, thank you. Good to see you. Coming up next, tiktok creators voicing a lot of concern over the possibility of a ban of that social media app. The father of two of the most lucrative tiktok stars out there, marc damelio, joins us next to talk all about it. Then later, former pro tennis player and now coach brad gilbert will join us to talk about the move by the saudis to invest in tennis. Hell join us from indian wells, california, where hes coaching coco. Well talk to him all ouabt that as well. Squawk box coming right back. K meets bold new thinking. To help you see untapped possibilities and relentlessly work with you to make them real. Glp1 drugs used in weight loss treatments stand out as the biggest global blockbuster, but these treatments require cumbersome injections. With lexarias patented oral delivery technology, early studies suggest a better way. Lexaria bioscience. My name is oluseyi and some of my su favorite momentsy. Throughout my life are watching sports with my dad. Now, i work at comcast as part of the team that created our ai highlights technology, which uses ai to detect the major plays in a sports game. Giving millions of fans, like my dad and me, new ways of catching up on their favorite sport. Welcome back to squawk box. The house paging a bill that could lead to a potential tiktok ban or potentially a sale. Well see. Former treasury sent Steven Mnuchin sitting at this table breaking news right here working to get a group of investors together to buy the group. Take a look. I think the legislation should pass, and i think it should be solved. I understand the technology. Its a great business and im going to put together a group to buy tiktok. Youre trying to buy tiktok . I am. Sh it should be owned by a u. S. Business. No way theywould ever let Something Like this in china. Joining us two of the most lucrative tiktok stars out there. Youve made much of your empire on the platform that is tiktok. Whats going on the dimelio family watching this play out . Its interesting. Charlie texted me the other day. Is tiktok getting banned . We went through this over a year ago where we knew early on that with what happened with vine we would, because were in social media, diversify, which weve done. Were, although tiktok is probably biggest platform for us we are on all the other platforms, too. Just as looking at how this plays out, how important is it for you and are you having to do thinking, okay. I got to transition more to these other platforms . Do you say, i got to call Steven Mnuchin try to get in on buying tiktok . Part of that group . Ive open if Steven Mnuchin wants to call me. Id love to talk with him about it. Look, were in a very fortunate position our run with tiktok has been great. I dont want it banned but it could happen and if it does were already planning accordingly. Do you think its a National Security threat . Probably thought about this maybe more than most americans . It starts to get outside the realm of what i do every day. I havent seen evidence. Not that i would, but i havent seen testified is a National Security threat. I think it is probably one of the biggest platforms for free speech ive ever seen happen. To me that is very important. Probably the neem have been able to build careers and get their message out, i can hold up a phone right now and i have 10 Million People that potentially could see what i have to say and it could so that is really important. Whats the difference in your mind, between tiktok at platform versus instagram as platform, versus youtube shorts as a platform . How do you think about it . You said yourself, okay. Im going diversify. What do each of the platforms bring you that is potentially different, or do they all feel similar to you . Tiktok, both instagram and youtube have tried to mimic tiktok. Right. Tiktok like in a bottle. It still speaks to me. Whatever my interests are comes before my page. You think that algorithm is better for example than you get on other platforms . It has been. Seems to know you. I think thats why everyone loves to scroll on it. You created a number of businesses and brands and whole saling as well. In terms of marketing. In terms of the platform selling product for you, is there one, is tiktok the one that maybe because numbers are so big, but from just an effectiveness perspective you say, okay, one does better than the other . I think instagram shopping, tiktok was fairly new on the shopping side. Instagrams been great. A one click. My daughter dixie buys everything just one click shopping. Sail. I buy a ton of stuff on instagram. Awesome. Theyre both good. In terms port over users, able to promote sort of the brand and the empire, if youre on tiktok now, saying to yourself, okay. I got six months from now, may not be here anymore. What do you need to do . Are they the i mean, how easy is it to say, hey, guys. Meet me over at instagram, or is it a totally different situation and how do you do it . I dont think its totally different but i find myself on x more than other platforms. X you think is working . For me personally. For my news, my interests. Do your daughters use x, too . Not as much. Probably more on tiktok and instagram. The whole family over it, can you do it . Do you think you can ever get the same kind of because you were sort of early in tiktok, sort of, that lightning in a bottle moment, can you get the same kitnd of volume of folks following you on the other platforms now than before . I think a lot of people who live on tiktok today are thinking am i late to the game . I havent really joined other things and spent enough energy on it. Difficult. Our numbersen 0 the other platforms, but other creators like mr. Beast is way bigger, although probably top ten on, top five on tiktok. Hes huge on youtube. We have to diversify. We have been and always other apps that come out after this. Top product selling right now . Two products. One is damelio footwear a womens brand and be happy snacks. Gloen blown up in a big way. Walmart opened up. Albertsons in map opening up. In a big way. Nice to see you. The tech rally bloomed ay cording to some and news of an up to 2 billion investment in tennis by the saudis causing a huge stir in the tennis world. Speaking to a tennis coach and former tniens pro brad gilbert. Well be right back. Investment opportunities are everywhere you turn. Do you charge forward . Freeze in your tracks . Or, let curiosity light the way. At t. 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Com . Girl lets go lets go have i heard of dicks. Com . screaming whoa. Dont overthink it. Lets go shopping. Anyone impressed with how fast that was . good morning. Stock futures point to a positive open on this final trading day of the week. The dow trying its sportsfirst positive week in three. Meantime, adobe, Software Giant falling hard on soft Fourth Quarter guidance, and is saudi arabia forcing professional tennis to take a hard look at its future, just like the countrys recently done with golf. That story and so much more on this friday morning as the final 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. Its like 60 degrees out there. Nice day yesterday. Im joe kernen. Its a friday. Did not bring a coat today. I didnt either. Im like jfk. Along with becky quick, Andrew Ross Sorkin, u. S. Equity futures this hour indicated, thats also, that going for us, which is nice. All green across the board. Treasury yield this morning. 430 or so. 427. Talking about that and what it means for whether we get rate cuts or not. I dont know. Lets get down to the new york stock exchange. Our good friend and senior markets commentator mike santoli is standing by looking at the markets. What has, have, highlighting on your mind right now . Well, andrew, that yield move that got the ten year up to around 430 yesterday definitely got the markets attention. One of the themes running through. Figuring out if we have to rethink the rate path, inflation path. Nothing to decisive yet. You see here s p 500 over the last six months along with equalweighted version of it. Equal weight in orange outperformed off the october low then slowed down a little. We know about mega cap dominance, nvidias outsized role. We saw yesterday equal weight, broader, you know, kind of population of stocks suffered more as did small caps with that yield move higher. Thats the pattern. Markets able to broaden when yields are tame and lower. Had a harder time doing that when yields have been going up. Here is a oneyear look at the ten year yield. Essentially challenging just the upper end of this range weve been in since this, start of december. Really since the december fed meeting went essentially rate cuts were put on the table by powell. That was the pivot. People are saying 440. Where we were around thanksgiving of last year. Would mean maybe threatening to get out of this range. Absolute levels are not particularly scary here. Much more whether the trend is going higher. We have handled some treasury options this week relatively easily. Look at the Goldman Sachs commodities index. Another quiet sub emerging as well. Uptrend here. A Commodity Index thats actually very energy heavy, consumption based. Whatever we consume most of, biggest in this index pup see thats obviously been a noticeable move. Again, absolute levels are not particularly concerning. Much more about whether its a trend. Seems like a little better growth and a little higher than expected inflation. So higher metabolism economy with higher nominal gdp. See how the markets handle that, andy. Thank you. All trying to make sense of whats going to happen. The weeks almost over. Almost. Getting there. For more on the markets bring in todd kennedy, chief invest strategist at jpmorgan private bank. Tom, the hot ppi and cpi numbers we got for this most recent month have a lot of people questioning whether we really are going to see a soft landing, whether the feds going to be able to cut rates. Youre still a true believer . Yeah. Certainly are. It challenges a soft landing without a doubt, but when you look at underneath the surface of the inflation data, what you see goodsbased inflation, deflationary a period of time bottoming out. Were through that phase. The covidinduced inflation rebound, if you will. Hard to say that with inflation coming down. Seems to be behind us. Looking forward all about the labor market. Inside the labor market weve just gone through a generational surge in labor supply, and thats from a domestic sense and from an international sense. Domestically workfromhome behavior seems to be here to stay. The linked in survey wasnt wearing a mask going out everything fine. 50 all jobs filled on linkedin hybrid. Here to stay and draws people back into the labor force. When you look at what happens next with the markets. Yep. Youre looking for a change in leadership. You do think the midcaps are going to step up, and take over the reins . I think theres a really big opportunity to see is becoming in this rally. Concentration of performance in u. S. Thetic been stark. We all talk about it. Really since october when that fed pivot came into fruition, s p tech sector has led and at the same time russell 2000 and midcaps outperformed. Quite odd. Given that the tech concentration is so low. I think it were broaden out for a few reasons. Earnings should move from midcaps from negative last year to plus ten this year. Valuations are relatively cheap. A heavy concentration in industrials when the u. S. Government is spending. Even if we get a change in leadership apartment the president level looks should be durable. What if the inflation picture doesnt tame down anymore . I realize only two months, cpi and ppi higher, but if not getting back to 2 that means the fed wont be able to cut rates. Seems a lot of what weve seen frenzy in the market has that as a predication . Yeah. I agree with your point. One of the biggest risks in the market why we spend so much time talking about it. Path to disinflation that labor surge. The fed doesnt need to wait for 2 . Confidence they can get there. Confidence it wont go above 3 . Jpmorgan jamie dimon said theres more pe terrible things coming. Dont cut yet. Always worried was the risks are were in the room trying to figure that out. My job clients and navigating. Immigration surge we havent talked about. Generational shift as well. 1 of the u. S. Population last year from immigration. We havent seen population growth like that since 1910. Bring in Election Year. Stalled because a literacy test slowed immigration. Risk here, too. Slowing immigration is a risk. Yeah. Inside the election. One thing that separates President Trump from president biden. The way theyve handled immigration. Youre saying that open border are a good thing . Or for the u. S. Economy fantastic. Sorry. From the feds perspective to tame inflation, immigration is a fantastic thing for them. Youre getting the calming in the laker market just from supply side rather than having to lay folks off. A fantastic opportunity for them. Wouldnt you like to see Legal Immigration . Instead . Most of the immigration has been legal. I mean, youre this is always hard to see in the data exactly, but the Biden Administration has ramped up visa and immigration from a legal sense and, of course, theres been ilLegal Immigration as well, but this is one of those places as we look to the year ahead where economics and politics really intersect. And for investors i think we generally look around at history say, elections dont matter. This is one instance it does matter, because weve been very luck toy have immigration that cooled this labor market the tway has. Thats misunderstood by the American Public . No. I just think it has political factions to it that are beyond pure economics. In any gallup poll we look at Biggest Issue for americans is immigration. So its polarizing. Just look at a simple economy, if you see Strong Demand for jobs, you can cool that in two ways. Bring more people to the workforce or you have to secondary, secondary effect what becky is referring to. IlLegal Immigration, Legal Immigration ramped up. Also argue thats also good for the fed. Perverse, agree wholeheartedly. You need a balanced labor market to be confident that inflation wont surge back to 3 . The labor supply helped quite a bit. Lets pivot quickly just to talk about the lending situation right now. You were making the point private lending is, has been pretty good. If yields continue to climb what will that mean . Youre starting to see reopening in financial markets. From the fed when they meet next week the realist there, person saying im not so sure inflation will go back to 2 theyll look at ipo market ramping up. Opening again. Lending practices go up. Yeah. If rates stay higher longer, should continue to the see lending activity be subdued and not ramp higher, but i think the market is giving private credit the private direct lending the market thatsworried about that. A bubble. When i look at what bubble is, becky, debt growing in excess of profits. Right . Simple definition. In the aggregate finance market youre seeing profits up. Lending activity tracking as well. Private credit taking market share from high yield and loan so far. Tom, thanks for coming in today. Thank you. Coming up, were going to wrap up a big week of headlines for disney. Next, saudi arabia reportedly seeking a break in the world of tennis. Speaking with a former pro and current coach brad gilbert. Stay tuned. Youre watching squawk box on cnbc. 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. Upbeat music upbeat music welcome back to squawk box, everybody. Futures thismorning a little bit of a mixed picture at this point. Dow futures up by about 44 points. S p up by 5. Nasdaq a little weaker down right now by about 12 points. Joe . Reports that saudi arabia may invest 1 billion or more in professional tennis raising the question about the future of the sport echoin ing how profession golf has been dealing with saudi and money. Joining us now current coach brad gilbert joins us from indian wells, california, where its all happening this week. Coaching the number three player in the world coco gauff. Used to win ugly. Got a book called that. Dont you, brad . I do, joe. Good morning. And hes were going to try really hard to pull some opinions out of him, because he usually, very difficult toget you to ever weigh in on anything. Go ahead. Good morning, yeah. Obviously this week a couple days ago the big kind of surprise announcement that au aundre gazenzi reached agreement with saudi backing for a new potential tour for 26. Also the grand slams, the four big tournaments, also working on a new tour. So potentially for 26 there are two new tours coming. And this kind of started, joe, three years ago. Novak djokovic formed a union called ptpa, and he was trying to bring together a new tour. Which nothing has happened. And obviously, with the saudis, with the liv tour what theyve done in formula one, there is definitely something going, but tennis is, has been totally lacking for where golf has gone. Prize money, were in a 14day tournament here, joe, and, at indian wells. The biggest nongrand slam tournament there is. Theyll be over 600,000 fans from two weeks. Winner gets 1 million. Last week the bay hill golf tournament, three years ago the prize money winner got 1. 6 million. Now because of liv, winner got 4 million. So it is absolutely driven up the price of pga and youve, youre missing half the players. Hopefully the players, whatever happens if it becomes the new premier tour, the new saudi tour, players stand to get a huge windfall and muchneeded. Its not going to be without controversy, i guess, bg. Because its the saudis, again, sportswashing. What i guess we, miscalculated, but are seeing it in media with streaming seeing how everything works, in live events you cant dvr them cant skip through ads. The most valuable content thats created. So everything was, in golf, obviously, what people were making was, what . Totally lowballed and someone else making all that money. Same with tennis. So now would you, therefore, say that this is a good thing, even though its the saudis . Well, its a good thing that were getting the ball rolling. A couple things that are definitely, need to be addressed. Both tours, the ceo, the atp and the wta, it doesnt work like this in professional sports that the ceo represents the players and the tournament. So that is a direct conflict of interests that the ceo represents both sides. That can neverish that is just a massive conflict of interests. The biggest difference between golf and tennis, joe, is every weekend when theres a major golf tournament, especially on the pga tour, its on network television. So right now this tournament has an exclusive in the states only on tennis channel. So which, doesnt have a massive cable subscription. Its a good channel, but they dont pay any tv rights to be on right now. So thats something in the near future that needs to happen. Tennis needs to be, big tournaments especially, indian wells, miami next week, needs to beon Major Networks to take tennis to the next level where it deserves to be, in my humble opinion. Yeah. Billie jean brought parity a long time ago. Nobodys getting paid what they should, men or women in tennis, one thing the for sure. Obviously the top players are doing well, but the big thing in golf thats dramatically changed is the number 100 player. You know, ten years ago in tennis we were making similar money. Now the number 100 player in golf is making more than the number 10 player in tennis. So sometimes competition isnt good. Sometimes competition is great. So hopefully besides this one saudi offer with the atp and wta, that now the grand slams are going to say, you know what . We dont want this to happen. Were going to get our own tour and try to get you onboard, but i honestly believe, becky, weve been talking about this for 40 years. Talking about doing things in tennis since i was playing. Since i had hair, back in the day, and nothing has ever happened. You had hair . I had hair back in the day. Never like joe, but i had decent hair. I can send you to the right place, if you want this. No. Im not hair club guy. Im honest. Kidding. Im kidding. Youd have to go to god. We talked about god earlier. Brad what do you think of the zeitgeistee, i dont know if its in zeitgeist anymore. Saudi in the penalty box among human rights, among other things. Brought up even by jay in terms of golf trying to push liv away. Atp may be different. Based in london, a very global and international sport. Do people care . Does that matter . Are we overstating this issue . Understating the issue, ow players will think about it how the audience will think about it . Andrew, youre not going to please everybody on this decision. Some people are totally against it. But this is a players decision, what theyre going to decide. How theyre going to move forward. And theyre taking, and doing it in boxing, ufc, formula one, golf has done it, and, listen, if they dont have this offer right now from saudi arabia, maybe this doesnt wake up the grand slams or wake up the other tournaments to get something going. So really interesting, though. Youre really just looking at this as the competitive spark and, hey, set up and Pay Attention and somebody start paying these players what theyre worth . I totally think so, becky. The players right now in my humble opinion are completely getting the short end of the stick, and if if we get a same offer from the grand slams to do the tour, i would say, go with the grand slams, because they already control the four biggest tournaments, and that would make the most sense. So i am extremely hopeful that the grand slams now are, theyre calling their tour potentially the premier tour. So to me, theres probably no room for two tours. So hopefully they will figure something out, and the players will get the windfall, and, becky, one thing to keep in mind. Womens tennis is by far the biggest womens sport in the world. Theres not even like, of the top ten highest female earners in sports, i believe nine of them are tennis players. So tennis definitely has all the eyes on the female side. Yeah. And mens tennis, a big sport but nothing like you know, some of the other team sports, but im extremely hopeful this will get, you know leverage. Get it going. Yeah. This is leverage. There you go. Exactly what we need. So youre with coco. Are you able to calmly watch her matches . Have you have you been able to achieve some type of zen where knowing you as i know you where i watch you and i cant even i have to turn off the tv and not watch. Watching you watch the people you coach. Are you better yet . Is there a drug . Whats happening . Aww is there a drug . Adrenaline . You know, coco had a tough one last not. Got through. Plays semis tonight. Any fingernails at all . Actually you know what . Ive not been biting. In the morning i focus on stocks in the morning. You know . Okay. [ laughter ] bitcoin. Bitcoin strategy. Im not a bitcoin guy but i understand it totally. Because, listen, everything is supply and demand. If people arent interested, theyre not buying or selling, then but the genius of bitcoin is so easy. Its like, you cant get it anymore. People buying and selling. Your last big pitch, i told you no penny stocks. Dont say that, but your stock was microsoft. Wasnt it . Youre a genius. Microsoft i think microsoft now, been there ten years and telling you. The banks are like like, if you park your money in the banks youve lost your money. To me, microsoft is the modern bank. You get it, a nice dividend. Could be better. Wish it was. And you actually have a chance for growth. So i i tell my kids this. Listen, park your money where you have a chance for growth. Microsofts and now with a. I. And everything theyre doing, i think, to me is a genius company. And whether or not youre young or old, park your money there. Ive had a little dumb luck, i must admit, with nvidia. The last year, and i wont calla penny stock by any means but i have a big position in onholding and we got smoked the other day on earnings. Thats Roger Federer backed. Do you have oncloud sneakers yet . No. I dont know that one and im going to have to check the price to see if you violated any of our well, its a 12 billion company. Okay. All right. Thats good. Thats good. Okay. We got fine. I was going to ask what youve been telling coco . A life lesson to tell us about winning . You were winning ugly, all i know. You know, i told coco yesterday, i mean, she struggled with her serve massively yesterday, and i dont know of any player that could have gotten through besides her yesterday. Shes a tough cookie, incredibly resilient and she just competes. The thing about tennis is when you struggle youve got know teammates. Its about finding a way to manage yourself, joe when youre not playing at your best. Like you. Right. I try to do that with, with everybody i coach and hopefully they have more talent than me. All right. Got to go. Brad, good luck. Good luck to coco. In a great part of the country. I love indian wells. Good to have you on. Instead of once a year for the u. S. Open. Good to see you. See you at the u. S. Open. Nice to have me on, in march. Right. Enjoyed myself. Okay. E coming up on the other sid of this breaking economic data. Were coming right back. This is squawk box on cnbc. 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 [sfx wind, rain and rolling thunder] [music up and under] crowd get in [crowd cheers] american announcer justin rose has done it. British announcer hes a 17 year old phenom. Nobodys born with grit. British announcer this is hard to watch. Its something you build over time. American announcer thats 21 missed cuts in a row. [car trunk slammed shut] but creating a future only you can see, demands relentless pursuit. For 88 years, Morgan Stanley has offered clients the same determination and forward thinking that define justin roses career. Because the only way to reach your full potential. American announcer rose, back in the winners circle. Is to pair the vision of whats possible with the grit it takes to make it happen. [crowd cheers] american announcer hes done it [music out] among todays top business stories adobe falling postearnings after issues quarterly revenue guidance that disappointed the street. Not including this mornings stock move adobe shares down. Stock off by 11. 3 . Then theres mcdonalds suffering a system failure that left customers in parts of the world unable to order food. Early this morning the website downdetector indicated a spike in reports of the mcdonalds app in australia and the uk. Not related to a Cyber Security account and being revolved. And out an annual letter to shareholders. Optimistic about 2024 and goldman stands to benefit at caste markets improve saying inflation may be stickier than anticipated but Economic Conditions could be better if Economic News continue to deteriorate. And Steve Liesman with numbers, please. Import prices rising by 0. 3 , joe. That is right in line with expectations. Unchanged compared to januarys 0. 8 . That is unchanged, unrevised. Export prices up 0. 8 compared to the consensus up 0. 2. Export Prices Higher than expected. That is down, though, however from the january number of 0. 9. Nonpra toll yum input prices up not much. 0. 2 and Petroleum Import prices up 1. 7 versus january 1. 8. Looks like year over year negative. Minus 0. 8 year over year. Weve been up to this point importing deflation or disinflation from the rest of the world. Looking at the new york state Empire Manufacturing survey. Minus 20 point my a big miss. Looking for minus 6. Still a negative number. You can see new orders negative. Prices paid up. Prices received up. Employment negative 7. 1 as well as the workweek as well. So im looking here. The twoyear and the ten have both been towards the higher side this morning. We had 4. 28 on the 10 and 4. 70 on the 2. Looks pretty in inline. Wheres that 10 . 429, 4. 71. Looking at probabilities, guys. Down below 60 now on that june probability. Had been, i dont know, 16 earlier this week before Inflation Numbers came down to 60 trading 58. Now. Just 11 percent remains. Still odds on bet for the june rate cut, but thats kind of wirthing as well. Becky . All right. Steve, thank you very much. When we come back, what will it take for boeing to fix the list of issues raised by januarys Alaska Airlines flight emergency . We will ask a former investigator for the National Transportation setbod. Afy ar squawk box will be right back. Lets check it out. Says here it gets plenty of light. 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. 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 pap few of the latest developments in the investigation to the boeing 737 max plug blowout failing more than 30 audits of 89 in a sixweek investigation. The National Transportation safety board saying Security Camera footage of factory work done on that doing plug in question last year now overridden. Talked about that earlier. Boeing saying like so many other companies it does not keep security footage for more than 30 days, but then ntsb chair says this will complicate its investigation. Joining us right now is a former ntsb investigators, alan dale. Good morning to you. What do you make of this, and how hard is it going to be to actually investigate this case . Well, its going to be complicated. Certainly mr. Calhoun knows there are people in boeing that nope whether or not the paperwork trail actually existed. If they didnt do the paperwork he needs to tell the chairwoman. If the paperwork exists he needs to find it and turn it over to the ntsb. I agree with him about the video camera footage. The faa, for example, overwrites our own videos from air Traffic Control i think every 30 days. That may not be nefarious, but hes got to fess up and tell the ntsb what happened and when. Right. Alan, tell it to us straight. We read the headlines, its very troubling for a lot of americans. Folks around the world, who board these planes, and i think we dont really know or understand perhaps the way you would or do whether we should be genuinely concerned somehow the culture inside boeing is not of excellence, and is genuinely troubled, or is it Something Else . Well, certainly the culture needs to be addressed, and thats up to the new ceo, mr. Calhoun. But, you know, keep in mind when you board an airliner today youve got one chance in 10 million of dieing. Try to get those odds from your surgeon . Its not that dangerous, but it needs to be improved, and, you know, we need to remember Charlie Wilsons 1950 quote when confirmed as secretary of defense, whats good for General Motors is good for the nation. Were going to have to help him get boeing back on track, and there are things both mr. Buttigieg could do and the new faa administrator mr. Dixon. What are those things . Well, i think buttigieg should, because of the threat of whistleblower harassment, we dont know what happened with john barnett who committed suicide several days ago. I think buttigieg should ask the fbi to investigate that just to make sure we dont have a situation like ralph nader faced back in the 60s with the core of air and General Motors put undue pressure on him were when he exposed the problems. So thats a job for the fbi to find out and certainly mr. Buttigieg can assure of that. Another thing quickly. Dickerson dixon, excuse me, the faa administrator, could send a large group of former faa quality inspectors. Maintenance inspectors. You could hire them pemptempora to go into the boeing plants make sure thing, back where they should be. Boeing had a great reputation and it slipped when he messaged with Mcdonnell Douglas in this competitive world. They are struggling. Alan, do you think they need different management . Do you look at whats happened under dave calhoun and say these problems are persisting . Continuing, getting better, getting worse . Well, theres a lot of inertia to this kind of situation. I think calhoun is trying to address this. He needs to do more to protect whistleblowers and certainly needs to find those records and talk with the chairwoman of the ntsb, and either fess up. We never had the records. Okay . Another example of our failure of Quality Control. Or the record i was going to say. Dont have the records a Quality Control records read reports using dove soap and hotel card keys to check the seals and things. You know, between doors and things. I mean, does that make any sense to you what so ever . Theres a lot of things that need to change, and im not sure getting another ceo in right now at boeing is what they need to do. Lets give mr. Calhoun a chance to fix this, but lets also get the government involved to ensure this Vital Company survives and prospers, and theres a number of things, like i said we all need to do the government needs to do. As a former bureaucrat myself and a whistleblower, i know you need you need to make sure people are talking to you, mr. Calhoun, and you need to make sure you go back to Quality Control. Its back to basics at boeing. What do you mak broadly about government regulation of the airlines . You said the chances of getting, of an accident are uniquely low. Knocking on, in this case the plastic the plastic in front of me. But i ask just because i think theres questions about, you know, whether we have enough folks inside the faa . Whats happening in the towers these days . What kind of regulation or monitors are in place at a place like boeing at the airlines when doing different mechanical work and the like. What do you think of that . Well, clearly in 1978 when congress deregulated the airlines, they didnt give the faa anymore resources. So they didnt have the inspectors they needed and they still dont, in my opinion. Ive worked with those guys in dallas. Theyre a great group. Theres not enough of them. We also know theres controller shortages again. Nobody wants larger bureaucracies but i think it would be wise to invest in people and, yes. Both the ntsb who i think has just got authorization for 70 new employees, i think thats great. We need to look again at the controller shortage and the faa inspector shortage, but clearly calhoun has got to continue his leadership and clean up his act or the companys act, because boeing needs to come back for americas sake, and we can talk about the max aircraft, the 737 specifically some other time. It still needs a few fixes, i can tell you about that. Alan, he wasnt ceo but there for the whole fee average oh, on the board. You dont just date to when he started i dont know. Everybody says the same thing. No. Dont want to switch ceos in middle of a but what would it take for to you say, okay. Yeah. They arent talking to him. Its not working. Things that need to be done at the top. You know what they say about fish . Where it rots when do you finally say enough is enough . Would you ever say that . Well, yeah. If things dont improve in the next several months. Its been years already. Already been years. Five years. Around, better start improving in the next several months or maybe they do need new leadership there in boeing. Alan, appreciate your perspective on all of this and thank you for joining us this morning. Have a great weekend. Thanks so much for having me. Coming up, disney getting swarmed by those looking for the latest taylor swift fix. New york times columnist jim stewart talking streaming with us after the break. Of course, the latest on disneys board room drama. Heading to break check out the shares of evmaker rivian. The stock getting an upgrade. Earning and upgrade at pieper. Or Piper Sandler upgraded it from neutral to overweight with the price target from 15 to 21. Believes investing in rivian is risky but following the post Fourth Quarter selloff likes the demand for the new rv and happy with the plan to delay cap x spending. Stay tedun. Youre watching squawk box on cnbc. At pgim, finding opportunity in fixed income today, helps secure tomorrow. Our timetested fixed income suite, backed by over 145 years of risk experience, helps investors meet their goals. Pgim investments. Shaping tomorrow today. Frustrated by skin tags . Dr. Scholls has the breakthrough youve been waiting for. The first fdacleared athome skin tag remover clinically proven to remove skin tags safely in as little as one treatment. Glp1 drugs used in weight loss treatments stand out as the biggest global blockbuster, but these treatments require cumbersome injections. With lexarias patented oral delivery technology, early studies suggest a better way. Lexaria bioscience. Welcome back, everybody. A pretty eventful week for disney. Whats the harm of letting acts vist investor nelson peltz have a seat on disneys board . The answer is simple if they succeed disney could suffer the same fate at other infiltrated such as ge and dupont. Nelson pelts has a long history attacking companies to the ultimate detriment. In an attempt to fend off nelss pelts. Issues a lengthy and spicy response in part saying this chargedanddisingenuous rhetoric seemed calculated to distract shareholders from disneys poor track record and sidestep accountability. Okay. Join us to talk about the late effort drama at disney and whether the new taylor swift film will move the needle for disney is a cnbc contributor who also wrote a book on disney. Jim, i have been a little struck by how strong disney has come out against this attack. A lot of times youll see Big Companies kind of playing like they are above the fray. Like they dont want to get dragged down to the activist level, but the ad we just showed is almost an electionstyle campaigning ad that really comes out and thats just the beginning what disney had to say about this. What do you think . I cant remember a recent proxy that has become this nasty and it is surprising given its coming from disney. You know, one of the most admired bestknown companies in the world. If theres any company you thought might have been able to sort of float above the fray i would have guessed it might be disney. Thats not whats happening. Ive done a pretty deep dive into nelson peltz track record at previous companies. However you feel about him, whether he should be on the disney board its not true what the video said hes been destructive to value in other companies where hes been on the board. Theyve released figures that show that the since when peltz goes on the board when they leave shares gain roughly 17 on average. Substantially higher of the s p over the period this is was formed. Why do you think disney has taken this strident approach . Well, well, i think there are a number of reasons here. First of all, i think, you know, no company and by the way, when i have talked to a lot of these people when hes been there, none of them were happy when nelson showed up as a shareholder. You know, management wants to continue their plans. They want a board that pretty much goes along with whatever they have to say, and they dont want someone barging in, asking tough questions, and then, by the way, taking credit in some cases for what they said they were going to do anyway. I think thats just human nature. But this goes a little farther than that. I think Disney Bob Iger himself, as you know, had an unbelievably successful career there, left, now has come back and is, you know, in round two, trying to save a company that is in very difficult circumstances, not through any managers fault but through the changing nature of the industry and is in the middle of a turnaround plan, and i think he wants the credit for that. He thinks its working, and the last thing he wants is someone like nelson peltz showing up, getting on the board, and then saying, oh, im the one. I got them to cut costs and do this. I solved the streaming crisis. Theres not enough room in the room for these two egos. Hey, jim, one of the questions thats been asked about the nelson peltz sort of scorecard is when youre measuring it. Are you measuring it just when hes there on the board, in which case, i think theres no question that, actually, on the whole, the companies that he has been involved in have outperformed . I think the question becomes, and you know this better than i do, if you extend out the timeline, if you will, to when hes not on the board, what happens after he leaves the company, and this sort of concept, and maybe you think its a mythical concept or a mythical argument, but its the argument that disney is trying to make, that in many of the circumstances, the stocks have fallen, and the argument is that during that period when he was on the board, they have done things that are shortterm oriented to juice the stock. Well, you know, obviously, you can affect the results by picking the beginning and the end time tremendously, but i think what peltz is saying is reasonable. Its not the only way of measuring return. And he has argued very strenuously that he is far from a shortterm investor. Hes not like the typical leveraged buyout artist. Hes not looking to go in there and flip the do something quickly. I believe hes put out, in their white papers, that the average tenure of their holdings is about six years, which is pretty longterm for he doesnt like to be called an activist investor either, but he is considered an activist investor, and thats pretty longterm. So, again, i dont think its entirely fair to say hes just looking for shortterm results. But there is no question that after hes out of these companies, some of them have not done as well, and hes still in a company like wendys, which did very well initially, and now has been struggling somewhat. But yet, some of the tenures are really quite impressive. Procter gamble, heinz, kraft, spun off mondelez. These companies have done very well. Hey, jim, i want to thank you for your time today. I wish we had more time, but next time. Okay, great. Well see how that turns out. Coming up, a. I. Winners and losersa , group of stocks you need to watch after a break. Well be right back. Nutes 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 unnecessary action hero missing punches . Unnecessary andcheck reversals . Ss. Unnecessary time sheet corrections . Unnecessary unentered sick time . Unnecessary go unnecessary go unnecessary when you can take this phone, youll be ready. Make the unnecessary, unnecessary. Let your employees do their own payroll. I firmly believe that all of these technologies are just going to be an accelerant. The state of the art as it relates to sora allows you to create these really small snippets of video, and the technology is maegamazing in tht now understands physics, it understands interactions. That was adobes ceo speaking about the a. I. Boom. Joining us right now to talk tech and specifically stocks that he likes and doesnt like in a. I. , good morning to you. What companies to you like, and what dont you, given that it seems to be an allin situation right now where there doesnt seem to be a lot of differentiation in terms of how people seem to be thinking about a. I. . Yeah, good to be here, andrew. Thank you. I think were at a kind of wheres the beef moment for a. I. Where all the promise needs to be delivered this year. If you look at investors reactions to several a. I. Kind of stories in the past week, broadcom, marvell technology, oracle on monday, and most recently with adobe yesterday, what youre seeing is a reaction to Slower Growth than expected. Just to spit some facts to you, Revenue Growth for the s p i. T. Sector for 2023 was only 2 . It trailed the s ps 5 . And so, if you take out, also, nvidias earnings estimates which were obviously blowing it away, from q1 estimates, the i. T. Sectors Earnings Growth falls from 19 to 6 . Now that Interest Rates reductions are really off the table for the immediate future, anyway, it looks like, given ppi, cpi, jobs prints, i think investors are showing a much more discerning orientation to these names. Adobe is a great company. Its had a good quarter, 12 Revenue Growth, 18 Profit Growth last night, but the issue, andrew, is that the stocks up 80 year over year, and for all the exciting things like fireflies, a. I. Generative applications theyre pulling into the suite, they didnt up their guidance, and its not having a measurable additive imprint on the run rate. This was a business that was growing 20 year over year revenues. So, who do you think becomes a winner . We keep talking about how this is going to revolutionize the world, and i think it will in many ways, i just dont know if it all comes down to some of these companies or becomes a feature of all of these products. Well, i think the first derivative, the chip makers and the hyperscalers. Weve seen that, nvidia, microsoft, aws, and most recently, oracle. Oracle is guiding for 50 Infrastructure Cloud growth Going Forward because its use case was really generative a. I. That it needed for its superior tech stack. These names are all benefitting. Its the second, third derivative stories, which you mentioned, which its technology is always competitive, and theres this, probably, assumption thats not correct that the new technology is just going to be additive. Oftentimes, it just cannibalizes the existing, and thats why i. T. Spend year over year isnt up, and thats why marvell and broadcom didnt show a lot of growth at the aggregate level, even though a. I. Is growing nicely. So, i think what investors need to do is look for businesses where the a. I. Imprint is really going to materially grow earnings and revenues Going Forward and not just be kind of a story thats cannibalizing the other tech spend. Eric, i want to thank you for joining us. Happy weekend, and appreciate your perspective on all of it. Lets take a quick final check on the markets right now. Dow looks like it would open up about 43 points if we do it in about half an hour and it stays away. Nasdaq would open off about 15 points. The s p 500 up about 4. 5 points. Make sure you have a great weekend. Its been a long but good and crazy week. Lot of news at this table, by the way. Parting is such sweet sorrow. It is. Make sure you join us next week. Squawk on the street begins right now. Good morning, and welcome to squawk on the street, im david faber with sara eisen and mike santoli, we are at post nine of the new york stock exchange. Jim and carl have the morning off. Lets give you a look at futures as we get ready to wrap up the trading week 30 minutes from now when we begin. I dont know what that says. I guess the nasdaq might be down a little bit, mike . Thats exactly what it says. I got it right. How many years have you been at cnbc . Yes. A few. When they barely had a ticker, i go back so far
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