inventory. i still don't have one of those -- two of those i should say. it's wednesday, march 13th -- oh, my god, is it? my anniversary. >> what? >> my marriage. >> oh, it is? >> yes! >> you just realized this? >> no. happy anniversary, penelope. "squawk box" begins right now. ♪ good morning, everybody. welcome to "squawk box" right here on cnbc. we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. happy anniversary. >> i got married on friday the 13th. >> and scotty's birthday is the 15th. >> the ides of march. it's crunch time.

you know what it's like. you have twins. weren't they born on the same day? >> they happened to be born on the same day. >> i think you mentioned that. >> you have to gear up for that stuff. you can see right now, a mixed picture for the futures. it looks like the dow futures are up by 26. the dow was up yesterday by 236 points yesterday. the s&p was up by more than 1%. it closed at its 17th record-high of 2024. again, it ooh is only march 13 ft. so that's pretty rapid success for all of those new highs. the nasdaq was up by 1.5%. it reversed two days of declines. this came after the cpi number was a little hotter than anticipated. all in all people looked at it saying housing inflation was coming down to some extent and it with was good news. >> if you took out treasury yields, they were higher. they jumped on the cpi.

the 2 yeee2-year's at 2.6%. alaskan airlines is confirming the plane that lost the door plug was actually scheduled to under go maintenance later that night. i roy. to get straight to phil lebeau with the details on -- it's been the story we've been talking about. this detail changes, i think, the entire narrative. >> it does, andrew, and it comes down to the question of should alaska airlines have flagged the airplane in question earlier for maintenance before the flights. clearly hiendsight is 20/20. why didn't they bring it in before january 5th? here's what happened on january 5th. remember, there had been a couple of instances where warning lights had gone off within the airplane. that along with some concerns about, you know, was there a

whistling sound in there, according to an attorney representing people who were suing the airline. there had been reports of that. maintenance was scheduled for the day of the flight. that night. essentially when they came back from the last flight, the flight in question. alaska's safety chief and the airline stands by their decision. they stand by their protocol when they say, okay, something needs to come in for maintenance. we felt we were making right decision at the time. when you look at the ntsb investigation, the preliminary report, when they looked at the airplane and door plug in question, the preliminary report says, according to the ntsb, bolts were not put into the door plug, and as a result, that contributed -- was a primary contributor to the fact that the plug door was ripped off in mid flight. that investigation, by the way, it continues. there's going to be a hearing in august as the ntsb continues to look into this incident. and as you take a look at shares of alaska, keep in mind the

max-9 that the passengers were -- some of the parliamentarians who were on this flight, they're suing alaska airlines. no doubt if this gets to trial and often if you have a suit like this in involving an incident or airline or boeing or airbus, whoever the manufacturer is, often these never get to trial. but if it does get to trial, you can imagine that the attorneys for the passengers will have a field day with the fact that this was not brought into maintenance before that flight on january 5th. quickly take a look at shares of boeing. we've talked about the mass production limits and the impact that that's having on airlines. doj, faa, and ntsb, they're all investigating boeing right now. guys, they've been in the barrel, really, for your the last couple of months especially since this incident giving the revelations that have come out, but really in the last two weeks as more and more revelations have come out either about this

flight or where things are in the manufacturing of the aircraft, it's been a rough couple of weeks for boeing, and you have to wonder how much longer this can continue before you start to see things level out a little bit. >> phil, can you make a couple of distinctions and points here? how much of this does it change the dynamicaround whether this is a boeing issue or does it become an alaska airlines issue if they decide not to pursue it the way they should have been? was this part of a regularly scheduled maintenance program? >> no. >> this was something -- just to be clear -- i wanted to make the distinction. it wasn't that they were putting this into maintenance. they knew they thought they were supposed to put it into maintenance. >> andrew, there were a couple of incidents where warning lights had gone off, and they stand by their decision not to have pulled it sooner because from their perspective, they

have a protocol where using predictive apps, et cetera, that they say, okay, this is what we think should be done next. and they believe that they made the right decision that it was not a careless decision. they also made some -- remember, they pulled it from flying to hawaii. that it could not fly over long distances of water. they wanted it to be flying -- i think it was going down to portland, to california. but itwas over land or portland back to seattle. >> that's safer. >> so they made some changes there. >> hey, phil, just to point out, 100%, i don't want to remove any of the problems with alaska air or what potentially happened there, but just a reminder for everybody who hasn't been following this closely, this is plane that was delivered to alaska air two months before. so this was a brand-new plane. >> right. it only had 154 cycles. one cycle for a kmeshcommercial

airplane is takeoff and landing. >> the idea that there were no bolts put in the door, that wasn'ting a contributor. it was the reason. >> the contributing factor, yes. >> they knew about it for at least several flights before this flight. >> that's the question, becky. becky, first of all, it's easy for us to look back now and say, well, you didn't see that they didn't have bolts? remember, that door plug within an aircraft, the interior, it's not like you can see the fuselage. >> no, no, no, i understand that entirely. but the idea that you had just brought up, i had not known before about the whittling. >> that's according to attorneys in "the new york times" article. the attorneys representing the passengers say there have been reports of that. that has not been confirmed separate from that. >> we all hear sounds on planes. all of a sudden it goes -- and i look over and penelope and she

looks at me. it's the flips or something like that. but whistling might -- if it's not coming from the galley, i mean, if the air is getting in or out somewhere, that's not -- no, that's not a good sign. and then i stillam obsessed with when there's a change made at boeing, phil. i mean we moved the headquarters so it was closer to the lake house and the shore house and we need it for the ceo? maybe it would have been better to maybe be focusing on some of this stuff, don't you think? >> well, that's at the heart of the complaints that are out there regarding boeing, that they dropped the ball in terms of manufacturing, quality controls. and yesterday they came out and said they will be doing their own audits, and they're doubling down on their efforts to make sure that they're following manufacturing processes that have been set in place, but clearly when you saw the initial audit that was done by the faa,

i mean, what was it, 89 failures or 89 checks out of 89 failures? clearly they have a long way to go in terms of f manufacturing quality. >> which is, you have one job, right? manufacturing quality on an airplane? >> i think it's pretty telling, phil, that they're changing their compensation structure so that it's not so tied to making your production quotas and more -- much more tied to safety issues. >> it's going to be a hume part of future compensation there. >> it probably should have always been. >> a long ways to getting back to where people expected them to be in terms of f the manufacturing rate. they're capped at 38 per month. they're not even building at 38 a month on the max. i think they're closer to 31, 32. rightly so. they want to make sure they get all of the bugs stripped out of the system that are being flagged by this faa audit, the

internal audit they're going to be doing this month. i wouldn't be surprised if they do a few more because they need to make sure they're doing it the right way because clearly they have not been doing it the right way. >> phil, it's weird that flights are -- i mean i'm hearing anecdotally it's hard to get flights where you need to go. i wouldn't think that would happen -- >> that's the capacity, joe. >> it's happening because some of these things are getting maintenance, i guess. i thought the ground -- i thought they weren't grounded anymore. i thought we should have been back to normal by now. >> in terms of the overall industry and capacity? >> yeah. >> no, we have far more demand than capacity. >> like united said there was a -- there were groundings for a while. they were working with 10% or 15% fewer planes. >> yes. >> that was gone. now they actually need delivery of new plains to satisfied the

schedule? >> right. >> amazing. >> remember, joe, it's not just boeing. it's the fact that airbus -- look at how far production dropping during the pandemic. and as much as boeing -- boeing has separate issues, but as much as airbus would love to crank up production and move at a much faster rate, it can't. engines are not produced at a quick enough rate because the pandemic, somewhat institutional knowledge walked out the door. you can't flip a switch and say, okay, let's start building the engines. whether it's whitney, general electric, rolls-royce, there's a limit to how quickly they can go. if you're not getting a lot of those core elements of the aircraft to move quicker in terms of production, you can't get final assembly moving as quickly. look, we really brought down capacity over the last couple of years. the demand has snapped back to a certain extent. we'rer at prepandemic levels. you're not seeing levels of deliveries at that rate.

>> okay. >> phil lebeau, thank you for walking us through a story that is, i think, just about as troubling as in these days. >> is the rolls-royce the rolls-royce of engines or is it just like -- you know what i mean? is it like you know how something is -- >> like toasters? >> it's probably not. i don't think the rolls-royce is the rolls-royce of engines. it may be okay. is it known to be the best -- >> it is. >> you're saying are rolls-royce engines better than ge? >> i'm just saying, is it a ross royce? i'm fine with pratt p whitney. never mind. the rolls-royce -- you're the rolls-royce of morning anchors. see how that works? >> i'll take that. >> you're welcome. we're going to move on on that. take your win and run with it. news just out from eli

lilly. the company is adding amg zon as a new pharmacy par art never called lillly direct. it includes the popular weight loss drugs. prescription drugs ordered through lily direct will be delivered by amazon or their pharmacy partner true pill based on the insurance and other factors. meantime the ceo was on capitol hill regarding tiktok. tiktok's ceo focusing his lobbying efforts on the senate where the bill is less certain. there is a little bit more time given how quickly all of this has happened. we're going to see where all of this goes and whether you can actually divest this thing. i think that's the big question

if you actually read the bill. it's possible it's not a divestment bill but a banning bill. >> if china allows it. >> it's not i've enabout china if you read the rest of the bill. >> what's it about? >> it's unclear if you can divest the business and run it inthe ter nationally. you'd have to separate it to a u.s.-owned business. it could. be connected to europe or other parts of the world, which in this case you could not do it, and that's become one of the bigger issues about the language in the bill. >> why couldn't that do it? >> because the bill says you can't operate with the rest of the world at all. >> but there are some -- like they couldn't do just a u.s. version of it? >> you probably could not -- it would not make sense to just do a u.s. version of it. probably not. coming up, jamie dimon -- and you definitely couldn't do it within six months. that would be impossible -- urging the fed to wait past june

to cut rates. our next guest wants the central bank to cut next week. that is next. and then coming up at 8:30, our interview with strife co-founder john collision. he's going to be speaking out about one of the business's largest private companies, that is stripe. "squawk box" is coming right back. life, and cultural treasures. because when you experience europe on a viking longship, you'll spend less time getting there and more time being there. viking. exploring the world in comfort.

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citadel's ken griffin said he thinks the fed should move slowly to cut interest rates. speaking at a conference in florida, forgive p saforgiven s the worst things they could do is cut rates, pause, and start raising rates again. they'd have to do it more quickly, and that's like the stop and start we saw back in the '70s and '80s, which didn't work too well until volcker came along. our next guest nowthat we've said that. our next guest says we should cut rates next week. he's chief economist at pantheon macroeconomics. we were talking off camera, trying to understand -- i think ken griffin and jamie dimon have similar reasons for thinking you should wait, and i think that is that inflation can be resurgent,

and if you start and then have to raise later, that increases a hard landing. if jamie dimon is worried about a hard landing, he should want to cut rates now. he's not. i think he's worried about it getting out of control and you have to go much higher. you think a soft landing is happening but they should cut rates now, why? >> i think inflation is going to hurt people. this idea that it could rebound is kind of rooted in what happened in the '70s where it did rebound, but there were an awful lot of things that were different compared to now. all the things i wanted to see to renormalize after the pandemic, they've all happened. the labor market has normalized rapidly, supply chain issues are a thing of the past. no global food crisis like we had a up canal of years ago, and the housing market crisis as well. you know, fearing that there's

something just around the corner, well, you need to tell me what that thing is, and i'm not seeing it. >> even the tight labor market isn't what everyone used to say it is. i would tell you that it looks like the markets are anticipating cuts near term. stockmarkets hitting highs, gold hitting highs, bitcoin hitting highs. this is the fed cut reopening the spigot, turning things pack on. these are all signs. the market will be disappointed. >> they will be for sure. >> they're expecting the fed to pick up. >> they're right. the case for dog nothing is irritating. i keep hearing whispers they're going to sit there. i really struggle with that. it does depend on the inflation picture. >> you think a cooler number today, cooler than consensus.

>> you know, the ppi has been performing great. it's been fairly noisy, but the trend is downward. it certainly wasn't terrible. all the leading indicators are telling you things should imprav over the next six months or so. i'm getting nervous about the spring and summer labor market. we're seeing hiring indicators softening. i'm really uncomfortable with it. >> is everyone seeing that? i haven't heard anyone talk about it. we saw the unemployment rate tick up a little bit. >> it did. >> that had to do with participation. >> that was noise. what i'm worried about, small business that doesn't get the attention it should. it has a pretty reliable indicator which has dropped hard in the last three months. at the same time, the challenger

layoff notifications have gone up, google searches have gone up. >> ian, let me stop you there. if we should be paying more attention to the ifb, they sayi. >> that's what they say. it's sometimes different than what it shows. >> they also said they had to pay a lot more to hire new workers and that's where they expect inflationary numbers to continue. >> i read in the come men day, jobs hard to fill. hiring is falling. capex is falling. actually the selling price number is balling as well. i'm struggling to reconcile what they said with what they actually know. but the hiring index that keeps me awake at night, that's dropping hard. that's a bit of noise. three months to me is looking like a trend. four or five months is for sure a trend. i'm getting twitchy because it's

happening at the same time -- >> cpi is hotter than anticipated. three months would be a trend? >> i would be surprised. >> you don't actually twitch. you feel twitchy. >> i always feel twitchy, joe. >> could we see it happen? i'm going to keep you talking about this. e we're restrictive right now. >> yeah. >> what do you think the actual gauge is the fed uses? what is that core piece? what do you think it is a month from now, two or three months from now? you think it's around where? >> in the second half of last yearing it was 2% in q3 and 2% in q4. >> how many cuts do we need right away? they should go a half point next week. >> i would be delighted. >> you're kidding. >> i want to be clear. >> i know that. but you -- you're ian

sheph sheph shepherdson. you think they should go a half point. how many total this year? >> this year i would like to see a cut by 150 in total. the sooner they start, the better. >> do you think they ever would go 50 if they need it? would they ever say, holy cow, we should go 50? not now, but six months from now. >> if they see two or three payrolls minus 100, yeah, they might do 50s. i don't rule that out. it's been four years since covid. i don't say anything is possible or certain. it doesn't mean the next six months will be the same. you know, at turning point you get surprise. you don't get surprise consistently, and this is a problem for the fed because this fed in particular wants to be absolutely certain before they do anything. and the problem is if you wait until you're absolutely certain,

then you've probably waited too long. >> word to the wise. well, they're worried about -- they all think volcker was dom. >> volcker saved the world. >> they don't want to be montgomery burns -- oh, that's the guy on "the simpsons." i didn't see any twitching. it must be internal. did you see it? >> no. hoe looks very strong and confident. >> i feel very twitchy on the labor market. >> you to? >> yeah. this year looks great until you look into the details. >> why would they try to hide that? >> you'd have to ask them. the really thing that yells out on the data is three straight declines. >> listen, i believe in the accent. don't you?

are the greatest actor -- was laurence olivier, kenneth bran na -- >> i toejts think i sound like olivier. i could work on it. >> thank you for coming in. >> thank you. when we come back, adidas comes out with a selling warning as they sell out their yeezy inventory. and later we talk about the ruupf ypn- ocrto prices with mike novogratz. "squawk box" will be right back. >> announcer: this cnbc program is sponsored by baird. visit bairdifference.com. pickle! yeah, aw! whoo! ♪♪ these guys are intense. we got nothing to worry about. with e*trade from morgan stanley, we're ready for whatever gets served up. dude, you gotta work on your trash talk. i'd rather work on saving for retirement. or college, since you like to get schooled. that's a pretty good burn, right?

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continues to sell off its remaining yeezy inventory. north american sales are expected to decline by single digit rate this year. the sports giant terminated its relationship with artist yeezy, kanye west, over anti-semitic remarks the rapper made in january 2022. it would not write them off but sell the remaining shoes at cost. italy's finance police raided the headquarters of a.kac mi milan.

at issue, there are allegations elliott still owns ac milan. it says the accusations are false. i don't know if you remembered about the prospect of this happening after the liv deal. the company's club has aurjed to merge the men's and women's tournament. the deal doesn't include the four grand slam tournaments, the saudi led tour would potentially mean bigger paydays. they did it with golf. this was the next sport you could do it. >> because they're all independent contractors. i suggested that one day it's possible that you'll see them go to basketball and say to lebron

and steph and a couple other people we're going to create a three-on-three summer league, and we'll pay everybody a bagillion dollars to have a fun and crazy league. why wouldn't they. >> i thought you were going to say to news anchors. i thought you were going there. >> you're not a news anchor. you're an analyst. >> i'm a news anchor, i'm not a journalist. coming up later this morning, we're going to ask senator ted cruz where he stands on the bill that would force bytedance to divest tiktok. he gets almost as much twitter mail as the bad orange man. tell him, if you hate him or love him, and tell friends. here's a look at yesterday's winners and losers. we're coming right back.

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good morning and welcome back to "squawk box." we're live at the nasdaq market site in times square. take a look at the futures. if we opened up right now, the dow would start up 50 points, the s&p up 2 points. the nasdaq is off by about 15 points. becky. if you're one of those drivers who likes to hit the gas pedal every once in a while or if you ever brake sudden will i or ever drive above the speed limit when you're on the empty road, you might look at the data privacy settings on your car features. insurance companies are buying data from third-party brokers that use all those connected features in your car to actually track your driving habits. the insurers use the day to to set your new premiums. in some cases that could be pretty devastating. there are reports in "the new york times" story that customers

had their insurance rates jacked by double, some who couldn't even get insurance. joining us for more on this is theresa payton. she's former white house chief information officer, now for dallas solutions ceo. let's talk about this for a second. people when they use onstar from gm or similar things where you can call in for roadside assistanced on ask them to unlock your car may not realize those systems are also tracking every single move you make. >> they are. ostensibly for consumers, this could mean lower prices in the future if they inn incentivize to have good driving patterns. how do they know those driving

patterns and behaviors are unique to you as an individual? >> i think what's in surprising to me, the information they're collecting, they're selling to third-party brokers and without you knowing you were tracked, your insurance rates go up. we all know about progressive where you can sign up with your insurance company to say, sure, you can follow my every move because i em a perfect driver. you get an incentive for doeg those things. but this is happening without people realizing it. >> here's the thing. businesses do need the opportunity to optimize, modernize, and leverage the data that they have, but we as consumers need to opt into that and say, i give you permission to monetize my data and here's how i give you permission to use it. this really speaks to businesses have a need to economic play leverage data and data modeling,

but as an individual, we need almost a privacy bill of rights where we get the opportunity to also monetize our own data and either get did counts, breaks, and know what's being collected. the downside is if you're collecting this data as an individual level, it indicated a pattern of lime. do you prefer highways, toll roads o back roads. how often do you typically i drive, do you go to urban areas, rural areas. those can help somebody statistically model what you're going to do next with probably greater accuracy than you would guess about yourself. that data has to be protected as well. you created it, used it, stored i, and now it has to be protected. >> not so much how over you are on the speed limit? >> yes, that's exactly it. >> going through a stop light? >> yes. braking hard. >> hitting a tail --

>> yes. you're in trouble. >> i'm not going to have a license. do you remember that -- they said jim carrey -- >> how long were you watching? >> do you know why i followed you? he said it depends how long you've been following. that's horrible. >> it's been goinging on for years. >> how do i have insurance then? >> maybe you haven't opted into some of these programs realizing. teresa, that's what i would talk about. i was thinking about signing up for the new program that's been offered in the car recently. this has changed my mind recently. this is not worth it to call onstar or whatever the equivalent to say, hey, unlock my car for that. i've got aaa for this. if i do sign up for it, am i unknowingly give up my right to pricecy? >> you bring up a great point.

you know, you have to read those terms and conditions. most people don't have time to do that. what i would say is i think the real challenge here is people are opting into programs to save money, but there are programs of data collection happening where you didn't know that you opted in at all to that data collection. >> this is a different thing. that's what i mean. they're taking this information, maybe i clicked on a box and said, okay, i understand you're going to do something with my information. i didn't realize you were going to do this with my information. what's the pushback? what could happen to change this? >> yeah. i think what has to happen here, the hill has to come together and agree on some type of privacy bill of rights for individuals where -- because this is not just an issue for the automobile industry. this is an issue across a lot of industry verticals where data is being optimized and monetized and rightfully so by businesses

to try and give us better pricing and to give them better profitability, but at the same time, there is a duty of care. as soon as you collect data, use the data and actually share it with third p-party brokers. there has to be an incentive, privacy duty of care data. becky, you and i need the opportunity to know what we're opting into and opsinting out o. the other thing is you're opting in rather than opting out. it should be the other way around. >> buyer beware. don't buy into these services. that's what i would say for now. teresa, thank you for your time. >> thanks for having me on. coming up, we'll talk on the house vote on tiktok and whether it will result in the u.s. ban of the platform outright. that's straight ahead. a reminder you can get the best of "squawk box."

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advanced defense and intelligence-related chips. the congress department says the c.h.i.p.s. act grant was set to pay $1 billion and the pentagon promised to cover the rest. the pentagon scrapped it in recent days and lawmakers are directing them to use c.h.i.p.s. act funds to make up the balance. it's unclear whether they'll seiche less money overall or if it will come out of the c.h.i.p.s. act funding itself, which, of course, would leash less funding for other companies. we're looking to see what's going to happen. the stock off on a bit of that news. coming up, the question of the morning, is time running out for tiktok. the house set to vote on a bill that could ban the popular social media app. we'llo al okt the fallout if the app is shut down in the united states. "squawk box" is coming right back.

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welcome back to "squawk box." later today, the house is going to be voting on whether to ban

the controversial social media app tiktok. joining us with the what the long-term potential risks could be is toby. let's start with handicapping the possibility of this vote today, but maybe more importantly what happens next when it goes to the senate. >> absolutely. the house vote today i think is very likely to move forward. there seems to be very little doubt about that. certainly the folks in the house who are spearheading this are expressing complete confidence they're going to get through. the senate is a much bigger question. we're not really seeing any signs that senate leaders feel pressured by the actions of the house to do thing here. in general, the senate doesn't really like to take marching orders from the house. i think you look at key senators like maria cantwell or mark warner who has his own bill on this. their view is going to be, we have our own approaches to this problem, we agree that tiktok is an issue, but the fact that the house, sort of suddenly snapped

into action over the course of the past week is not necessarily going to mean that we need to leap to take their direction on where we're supposed to go. i think the senate piece of this is kind of going to quietly grind to a halt. i'm not sure we're going to see anything in terms of immediate action in the senate. and there aren't going to be a lot of opportunities to tack this on to anything else that the senate is doing going forward. there are not a lot of bills that are going to get done before d.c. moves fully into election mode. >> your read of this bill, and there seems to be a debate even on the hill about this and within the tiktok world and others about whether this is a divestiture bill, and uses the word divestiture in multiple places in the bill itself, or what some people are describing as a ban bill, meaning that the practical ramifications of the way the bill is set up given the timeline of not just the six months but how it would have to operate around the world and what not, that effectively could not operate.

which do you believe? >> i think given what i expect in beijing, this will probably end up being an effective ban. i think from a -- from the perspective of the sponsors of this bill, i think they would be perfectly happy to see divestiture. the idea this entire thing is intended to orchestrate a ban i think is not really correct. but, you know, china has said explicitly in response to past cfius noise that they might try to force a divestiture, they're not going to allow that, that's the message from bytedance leadership as well. i have no particular reason to doubt that's the case. certainly for a u.s. china perspective, the idea we're going to extrapolate this sort of prize internet company is going to rub folks the wrong way in beijing. if they refuse to approve a sale, it ends up being a ban. i'm more concerned about that than logistics of finding a buyer on the requisite timeline. that's also challenging. but i think it is conceivable

you can get that done. >> what would the ramifications be on the chinese side? i think if you're sitting in beijing today and try to put yourself in their shoes, or and -- i'm not talking about the government, just the entrepreneurs and the like, this is one of those situations where, you know, entrepreneur starts a company, it works, works in a very big way, and effectively it looks like the u.s. is trying to kill the business. what do you think that does inside of china and to the relationship with the u.s.? does it matter? >> it is obviously not good for a u.s.-china relations perspective. it is one of a number of important points of tension in our economic relationship, but i think that semiconductor export controls being at least as important. so certainly not as if we're sort of royaling over the relationship that had been going well up to that point. from the chinese side, they had very mixed messages to investors over the past couple of years. on the one hand, various attempts to court foreign

investments, we are open for business, but then, you know, actions like the kind of crackdown on tech on and off over the course of the past couple of years, things like the way that ali pay was treated or snatched away from yahoo! in significant part, it is not as if this is a reliable regime that you can kind of count on for rule-based governance of investment. >> and are you a believer and we haven't seen what some of these classified meetings might have suggested, that the chinese government is actually using tiktok in meaningful way to influence our society or do you think that the truth is that this is about the prospect if you will that given the reach of tiktok, if the government were to want to do that, it could, but hasn't done so yet? >> yeah, i think more the latter. when you look at the suggestive evidence that is advanced by people about tiktok as a

propaganda instrument by the chinese communist party, it tends to mostly revolve around the suppression of topics of concern to beijing. in terms of what people identified so far, just kind of problematic patterns of what gets advanced algorithm. the concern more in d.c. is that it is hard to detect this stuff. there is not a line of code you can point to which is part of the problem with the project mitigation plan that tiktok has been developing over the course of the past two years in response to national security concerns in their cfius process. even if you have total access to the source code, it is not easy to identify, you know, efforts to change at the margin what kinds of content people are seeing. so, certainly i think the prospective concern is real and to understand how this would be a problem in terms of direct influence in u.s. elections and i think that is probably adequate to motivate. >> i want to thank you for your perspective this morning.

nice to see you. thank you. >> thanks. still to come this morning, the crypto surge. bitcoin now over $73,000. ethereum is over $4,000. mike novogratz will tell us which levels to watch next. "squawk box" will be right bac k. 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.

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infrastructure. the second hour of "squawk box" begins right now. good morning and welcome back to "squawk box" right here on cnbc. we are live at the nasdaq market site in times square. i'm andrew ross sorkin with becky quick and joe kernen. a lot going on this morning. let's show you the futures right now. if things opened up right now, we would be up on the dow about 48 points. the s&p 500 up about 4 points. nasdaq up about 2 points. treasuries, let's show you the ten-year and two-year note. the ten-year, 4.161. two-year, 4.607. and then crypto, we're going to be speaking a little bit with mike novogratz from galaxy, but you're looking right now, that was energy, we'll show you bitcoin, $73,290. we'll talk to novogratz about all of that in the next half hour and about the impact of the

crypto etfs. joining us now to talk markets, the president and chief investment officer for piper berman, $463 billion in assets under management. i don't know, i wouldn't really start with you on crypto normally, but since i just mentioned -- but i wonder whether it is a -- i wonder whether it is an indicator of just risk on more broadly in the system. >> i think to an extent it is. i think there is a bit of frothiness in the markets, hard not to see that, right? we had enormous rally since the beginning of november. equity markets up 25%. rarely have you seen that powerful rally. and it doesn't, you know, normally breed some level of frothiness and we have seen that. but, you know -- >> what do you think is driving that? >> i think you have the pivot in october, for sure. so i think you have an environment where despite a

number that was slightly hotter, but essentially in line yesterday from an inflation standpoint. but i think -- i think it reenfor reinforces the fed is going to move rates down. i think the expectation is that it is going to be in june. i think the markets close out with a probability of -- >> bitcoin went from $65,000 to $17,000 as the fed tightened. 500 basis points. the minute you pivot, from $17,000 back to -- >> by the way, what does that say about this idea that it is somehow some great hedge against -- >> because that's what they're saying, there is 21 million, so if the dollar is going to be -- global markets are at new highs. if it is fiat currencies that are going to be printed -- >> that means it goes up in both cases. it goes up when markets are

excited -- >> went down when the markets -- >> went down when the nasdaq went down, it went down. >> when the economy was strong, because the fed was raising 500 basis points, it dropped 70%. >> i think the dollar, you should be -- you argue -- >> because it works -- when you're inflating, it should be going up too. inflation causes the easing. >> got to look more broadly at the sense of -- >> we have been in an environment where we're shifting from quite an abnormal environment that we have been in for the last four years, i think we sort of maybe got used to it, to moving to a period of economic normalization. so you now have the inflation coming back into a range of normality, of rates moving back, monetary policy, global supply chains are back, consumer behavior is starting to normalize. i think that creates a dynamic where i think for long-term risk taking it is a better environment. the fed is not fighting you anymore, inflation is not your

left -- >> the move we have seen in the markets since november, you say we're now too frothy? you used the word frothy in first sentence of what you said. and if that's the case what are you doing about it? >> when markets move with a powerful rally we have seen, it is not unusual to see a pullback. that's a look back historically, right? when you think about valuations, more relevant to determine whether in fact markets have gotten to an extreme excess, that's not what we're overly concerned about, right? more concerns about earnings in a sense. i think you've seen that dispersion of earnings between some of the super megacaps and the rest of the market, right? we're struggling to be flattish, right, from an earnings standpoint. but from the valuation standpoint, essentially we forget sometimes the s&p 500, the tech sector technically is like 30, 35%. but you add in names that aren't part of the tech sector, google,

amazon, meta, that is 40% of the s&p 500 is tech. you think about valuations, if you're 25, 30 times for tech and 15 for everything else, that's not valuations that frighten us. >> some of the smaller cap -- the russell is actually a great value investment? >> we think small caps have become quite cheap. they had a very powerful rally in october and november and december. russell 2000 is up 22% in two months, pretty amazing. i think the dispersion in relative valuation is still significant and if you're seeing an economy that is growing at a decent clip, right, gdp now is at 2.5% for the first quarter. the u.s. economy, the foundation of a lot of this rally has proved quite resilient and in that environment, small caps should do okay. >> when does the 34 trillion -- when does that become front and center for everyone? you saw the budget, going up ten years, we're still going to be

over 100% of debt to gdp and that was -- world war ii is the only other time. and if you're spending that much on servicing the debt, you don't have anything left for anything else. it just seems like we're going to have to debase the currency. >> that's our biggest long-term concern. i think it comes into focus once you have some clarity on what the results in november are. and then what those policies are going to -- >> entitlement reform, neither one of these guys have any -- are saying the things that are necessary to deal with that situation. >> i agree. it is an incredibly frustrating dynamic and if you project out longer term by whether it is 2030 or 2050 -- >> it is 130%. >> higher than that. even cbo is estimating you could be in the 200 plus range. doesn't seem sustainable. >> devalue your currency, it seems like. >> i think you either grow and inflate your way out of the

problem. but it has got to be dealt with at some point. right now it is not a dynamic that the market is overly concerned about. remember september '22, liz trust and the uk markets got a wake-up call that almost took down the entire pension plan when debt sustainability was a question for the uk. >> so back to practical terms what are you telling your clients to do? if they're sitting on cash, they're telling them to put it into the frothy market or hang out for a little bit, we have seen these kind of situations before? wait it out? >> we're advising clients to move the cash that they have built up and saved, particularly in the individual side, let's say, into fixed income and equity markets and think about that long-term opportunity that is now getting created. we're not pounding the table per se, but nonetheless, with rates coming down in the short-term, at some point, whether it starts in june, but the direction of travel is clear, rates are coming down, so that 5% or 5.5%

you could get for waiting to take risk is now going to deteriorate, sostart moving the curve and fixed income and in equity markets with long-term perspective. >> joe, thank you, sir. nice to see you. >> thank you. >> appreciate it. >> talking to him. okay. >> i mean, you know, you get -- i get that every other day. coming up, the biden budget plan expected to reduce the deficit by $3 trillion over the next ten years while raising taxes on the wealthy and corporations. we'll speak to budget committee member dan kildee about that. tiktok and much more after the break. the surge in a.i. and bitcoin mining straining the power grid. a look at how the demand for energy is impacting the nation's energy infrastructure. "squawk box" will be right back. >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com.

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welcome back, everybody. the white house is saying president biden's budget proposal would reduce the deficit by $3 trillion over the next ten years by once again taxing the megarich. joining us right now to break down the president's proposal is dan kildee. he serves on both the ways and means and the budget committees. and congressman, thank you for being here today. why don't you lay out your views of this budget proposal? >> well, i think it is a good starting point. what we have been saying on the budget committee and we have general agreement but when it is the specifics, it is not so easy to come to an agreement, what we have been saying is we have to address the issue on all fronts and that includes revenue side of the question. we can have -- and will have a robust debate as to what the president's proposals might actually do and whether or not we accept all of that.

but most important point is the investments we make have to result in growing the economy, we have to reduce spending where we can, we can come to some agreement on that and stick to it, but we actually have to put revenues on the table. many of us think we went too far in 2017 on some of the tax reductions, lots of republicans that i worked with over the years agree with that. so i think the president's budget says everything is on the table, it is obviously congress' job to take that and turn it into legislation, looking forward to that debate. >> congressman, some of the ways that the president's budget lays out to raise this additional revenue that you point out, i think it is probably questionable whether you can get them all through. and axios did a good job this week laying out the real numbers of what the deficits are starting to add up to, what it looks like, what the national debt is going to look like under this. points out that even under the budget's own assumptions that fiscal deficit is going to be

1.78 trillion in 2025. that's 6.1% of gdp and that's a bigger deficit in terms of the gdp. it is wider than the u.s. ran in any year between 1962 and 2019 with the exception of the 2009 to 2012 aftermath of the financial crisis. those are big numbers and axios points out that if you are not raising taxes on people who make $400,000 or less, it is going to be very difficult to get back to normalized levels. >> it is going to be difficult. we're in a difficult spot. what we have to look at is both the tax side of the question to make sure we are raising the revenue where we can and everybody pays their fair share. but also look at the investment side, the spending side and that's overlooked that there are, they're spending it on spending. the kind of spending we ought to be emphasizing are those aspects of investment that do affect the

growth in the economy and reduce the dependency on government programs. just simple example would be early childhood education. it is often looked at as loss, as money spent that we don't get back. i get the point and it is a serious one. i do think we have to apply a much more thoughtful approach even to the spending side of this question. investing in housing, for example, increasing home ownership in marginalized communities is a transfer of equity that has a long term benefits in terms of stabilizing a neighborhood, a family, creating a nest egg through the construction of equity in their own home. so all spending is not equal, i guess, is best way to put it. >> on that point, let me give you some of the issues raised by

jodey arrington, the republican house budget committee chairman. he has some issues with what is being targeted for spending here. one would be $90 billion that the president has requested to expand access to free community college, even after both the house and the senate push back plans to broadly forgive student debt. he talked about $11 billion that biden wants for the department of the interior to preserve the stories of cultures and history across america. $3 billion for the state department to advance gender equity and equality worldwide. there is some issues that people might take a point with. >> i understand that. and, look, jodey arrington is a friend of mine. very often there is a focus on certain aspects of the budget for which there may not be an immediate return. but that it is an important part of a government function to preserve our culture. >> $11 billion to preserve stories and cultures of history across america. that seems like a pretty big price tag. >> it is not the spending that

is going to affect the long-term economic health of the country. i get the point and we can have debates over specific pieces of this, but i'm not sure that that is the make or break in the federal budget. it is a reflection of our values. we have to sometimes do some things that don't have that immediate return that we see as >> congressman, when you talk about government spending, you do insert the word invest a lot. and i understand that sounds better than spending. but when you look at a -- what we're talking about as a percentage of gdp, and it is not going to come down anytime soon and it is much higher than it has ever been historically and that would indicate that it is a spending problem as much as a tax problem. and the more you raise taxes, the harder you make it to grow for the private sector. really does the investing in this country. the private sector.

so we're looking at greater than 100% debt and deficit, you know, to the gdp as far as the eye can see, the only way out is growth and raising taxes doesn't help growth. it just helps the growth of government which doesn't help anyone. what are we going to do? growth is the only way out in the private sector where that comes from. >> i take the point, i think the question is, what is the sweet spot here? it is my view and the view of many that in 2017 we went further than we should have. but i don't, for example, support simply flipping the switch and going back to the tax code the way it was before the 2017 cuts. people like former ways and means chairman dave camp, when he was trying to work on this specifically to the corporate rate didn't think we should go or could go as far as we did in 2017 without having a negative impact on the long-term fiscal

questions. we have got to get back to something that might not please everyone, but is going to find that sweet spot. on the spending side, i take your point, except that on the domestic discretionary aspect of federal spending, which is where so much of the rhetoric goes, that is not growing at the same rate as other aspects of the federal budget are. but that tends to be the focus when we get into a debate about spending cuts. on that aspect that -- of the federal budget that does have a long-term return on the quality of life for americans, and may actually impact growth, often is where we look to cut, rather than dealing with the thorniest issues, defense spending, healthcare costs, you know, the social security and medicare. >> entitles, entitlements. you can't get president biden -- when former president trump was on the other day, he didn't say that he was going to cut entitlements. he was making a point that he was going to try to cut some of the waste. but immediately the biden

administration came out and said, this guy's going to cut your entitlements. we will not on my watch. it won't happen. you can't talk your president into even talking about entitlements, congressman. it is the -- we're not even close to getting any -- either side to address that, which is -- as you say, that's the elephant in the room, right? >> it is the elephant in the room and we have to be able to take action where we can find agreement. there are ways to cut our overall costs without reducing benefits. i think it is one of the fallacies -- >> sounds like trump. that's what trump said. >> i've had a lot of things said about me, i don't know if i can accept that one. >> you need to go to a booth or something. >> right. >> congressman kildee, thank you for coming on with us today. obviously this is very serious conversation and deep one and we hope you come back and talk more about it. >> thank you so much. i appreciate it. >> okay, coming up on the other side of this, a look at this morning's premarket moves including a downgrade for tesla. we'll tell you about that.

plus, look at the futures right now ahead of the market open. dow up 56 points. nasdaq looking to open 10 points higher and the s&p 500 looking to open 5 points higher. we'll be right back after this. >> announcer: time now for today's aflac trivia question. what year was tiktok launched internationally. the answer when "squawk box" returns. see that? that's like the gap in my health insurance. gap in your health insurance? yeah, it didn't 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 doesn't cover at aflac.com wish we had aflac on our team. you can! ( ♪♪ )

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>> announcer: and now the answer to today's aflac trivia question. what year was tiktok launched internationally? the answer, 2017. by 2018, the app ranked first among free downloads on app stores. get to dom chu with a look at this morning's stocks to watch. hey, dom. >> our first stock to watch is in the auto industry. specifically electric vehicle giant tesla, which is down roughly 2% or so-so far premarket, just around over a million shares of trading volume. now one of the downside catalysts today is a downgrade by analysts over at wells fargo to underweight or sell weighting. they also lowered the target price to $125 from $200.

they think that the member of the so-called magnificent seven group of megacap tech related stocks does not look so magnificent anymore and they see tesla's premium valuation to other members of the mag seven diminishing given what they expect to be diminishing sales volumes and lower deliveries. and by the way, for more on that story, head to cnbc pro where subscribers get a more in depth look at that tesla call from wells fargo. shares down 2%. speaking of autos, not all negative. the auto analysts at morgan stanley led by adam jonas out with a note raising their view of the entire auto industry globally to attractive from a prior industry rating of in line. they're looking at a trend of lower spending, also increased cash returns to shareholders. also more runway for traditional internal combustion engine or ice vehicles and attractive valuations as reasons to be more positive. some of their overweight rated carmakers include ford, general motors, ferrari, rivian and tesla, by the way.

a bit of a diverging view from wells on that front. and we'll end with the crypto stocks with bitcoin prices setting a fresh record again, topping $73,000. the intraday high so far is just around $73,700, depending which exchange you're looking at. keep an eye on stocks like exchange operator coinbase and crypto miners like riot platform and microstrategy which owns billions and billions of bitcoin on its balance sheets. your stocks to watch on cryptos and autos. back over to you. >> dom, thank you. coming up, the need for more power. bank of america pointing out in the latest note that the physical buildout of data centers will lead to more demand for electrification. we'll look at the nation's demand for energy and the strain on the grid next. voatand galaxy digital's mike nogrz talks markets and crypto. we'll be right back.

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welcome back to "squawk box." the futures are in the green. dow futures up by almost 60

points. the nasdaq up by 8. the s&p 500 up by 5 points. the surge in a.i. and crypto mining is straining the u.s. energy grid to the brink. yesterday, bank of america securities strategist savita subramanian noting utilities could be a beneficiary of the boom as increased power usage is leading to the physical buildout of data centers. for a closer look, let's bring in managing director timothy fox. thank you for joining us. we all plug things into a wall and expect it to work, tim. is crypto mining really incrementally making things much more difficult? is that really where we need to point fingers at this point? >> well, good morning, yes, the power sector is facing a new normal. power demand has been flat for the last decade, still currently is. americans consumed less power last year than it did in 2022. however, annual consumption and peak demand forecasts, those are now higher than at any point in the last decade. and cryptocurrency, artificial

intelligence and the associated data centers that serve those industries represent a large portion of that increase. the problem is cryptocurrency is a digital asset that moves at the speed of light. power plants are physical assets that take years to build. >> right. i mean, large part of the increase. so, out of total energy usage, how much is crypto mining? >> currently data is hard to come by and that's one of the problems. but the federal department of energy is trying to get more data. it appears that crypto mining consumes between 25 and 90 tera watt hours. >> we got to have a grid for, you know, 99% of the reason we need the grid working isn't for crypto mining. it is for turning on lights and working air conditioners and

everything else. so what is the answer? what do you want to do? when are renewables ready? when is solar and wind ready to satisfy the demand? what do we do before that? >> well, that's one of the most prevalent questions facing this industry today is how do you transition to intermittent and clear resources without risking reliability. we want to go green without going dark. there is a policy problem. the biden administration wants to decarbonize the grid. 20 states have targets to mandate decarbonizing the grid and the states in the biden administration they set the targets at a time of flat to declining load demand. we would suggest the targets just got harder to hit. it was already tough to decarbonize the grid. it is going to get tougher if you need to keep conventional power plants on mind to serve growing demand. it is hard to green up while you're growing. >> so what did you just tell me? natural gas helps in terms of emissions, doesn't it? what about nuclear, what about

clean -- is clean coal green? >> i think a few -- it depends who you ask. i think generally speaking most of these states that have set policies to decarbonize the green do not consider coal of any kind to be carbon free. so, it depends on -- >> natural as? they consider natural gas to be good? >> it depends on who you ask and we are not advocates. i would say you're right, what we have seen, though, is there has been a transition, somewhat moved to a pragmatic approach, to carbon free resources. >> before we were looking at solar and wind, now there is a lot of policymakers and advocates that are promoting nuclear power as a base load carbon free resource. >> did you say -- you don't advocate for natural gas usage? >> correct. we don't. we're not advocates of any kind. >> okay. all right. but if we had to -- what

about -- for the next 30 years, how are we going to do this? we can't build nuclear overnight. do you think it is a good idea, the lng move. that will probably last to november and then probably reverse that. do you think the lng move was a good move by the biden administration? >> well, again, i'm sorry to keep saying this, but we're not advocates and lng exports is not a topic i cover. >> so we don't go dark, let's say you were in charge, tell me what we need to do keep the grid running. >> you're trying to put me on the spot by being ann eadvocate >> wait a minute. you work for clear view energy. i asked you what we should use to keep the grid going and i'm trying to put you on the spot? what are you doing at clear view energy? what do we do to continue to live the way we live now?

>> you got to ensure the grid. there is a concern that moving to resources will put that at risk. that's one of the most prevailing questions we're facing at this time. a lot of states believe you can do it. the biden administration believes we can do it. there is a lot of states with conventional resources that think that is not true and we're seeing a buyifurcation among states. states are reinforcing the importance of incumbent conventional resources. >> well, okay, tim. thank you. >> thank you. >> okay. coming up, mike novogratz on the other side of this, the surge in bitcoin, the rise in etfs what does it say given where we are in the markets? we'll talk about that after is th. power e*trade's award-winning trading app makes trading easier. with its customizable options chain,

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billion, also a miss. that company's first quarterand full year earnings guidance missing the street's expectations. you can see that stock right now, down by 9%. dollar tree says it plans to close 600 family dollar tree stores. this is a company that -- companies were merged, they announced a merger in 2016 and they were talking about the stores being combined and now they're talking about a thousand of those stores that they'll be closing. we're watching shares of intel, this after a bloomberg report said the pentagon is pulling out of a plan to spend as much as $2.5 billion on a chip grant to the company. defense spending was part of a spending package that allocates $3.5 billion for intel to produce advanced defense and intelligence related chips. the commerce department which disperses the chip acts grant was set to pay $1 billion and the pentagon had promised to cover the rest.

but the pentagon scrapped that plan in recent days and lawmakers directed commerce to use the chips act funds to make up the balance. so, it is unclear right now if that means intel will be receiving less money overall, or if the short fall was going to come out of the chips act funding, which, of course, would then leave less money for other companies. and ibm telling employees yesterday that it is slashing the size of its staff in marketing and communications division. that division and the company said previously that it would undertake some workforce rebalancing, but planned to exit 2024 at roughly the same employment level as it had at the start of the year. becky, you haven't been able to listen to harvest moon on spotify. but now you can -- >> why? >> he boycotted it because of joe rogan being on it. is he is back on it. don't you get nervous when you

see someone trending? >> because you think they're dead. >> that's what i get nervous about. but he's not. he's trending. did he already go -- maybe he's trending for some other reason. i thought that's what they were seeing -- you like harvest moon? do you know -- >> i don't know if i know harvest moon. >> i'll play it for you. >> we have to go to commercial though. >> we will. we can do that. or, i mean, don't get that a lot. coming up, mike novogratz on the markets and moving crypto and the next bitcoin levels to watch. and then in the 8:00 a.m. hour, senator ted cruz is going to join us to talk about the day's tiktok vote d choranmu me. we're coming right back.

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eli lilly, the company is adding amazon as a new pharmacy partner for its direct to consumer site called lilly direct. the pharmaceutical giant launched that site in january to offer direct access and home delivery for some drugs including the popular weight loss drug zepbound. prescription drugs ordered through lilly direct will now be delivered either by amazon's pharmacy unit or by lilly's other online pharmacy partner, which is truepill. depends on patients' insurance coverage and other factors. see eli lilly shares up by about two-thirds of a percent. amazon shares are flat. >> thinking about it, so hard, andrew. thinking about it. the needle. it is just so hard.

as you gain weight when you age, every ten years you gain five pounds. >> go for it. >> it is so hard. i'm not doing anything -- running, i'm doing everything. >> so why won't you go for it? >> i don't know. i don't want to cheat. i don't want to cheat. i don't want to eat. >> worrying about potential side effects and other implications. >> what's in your brain, you get addicted to it. i already have ozempic face, i don't need a worse ozempic face. what is novogratz do for his -- how does he keep his physique? >> he's ripped. we'll talk to him right now. price of bitcoin surging again this morning, passing through the $73,000 level. ethereum up over $4,000. joining us is michael novogratz, galaxy ceo. mike, let's talk about why it is ripping. it seems to me this is simply a more of a supply/demand issue than it says anything about either liquidity in the market or just anything else. this is idiosyncratic to this unique and particular moment. am i wrong or right?

>> well, listen, there is a mindset shift, right, that all of a sudden the u.s. has broadly endorsed bitcoin, right? you think about what is going on in d.c., this is a vote, right, the american people have just voted and they have voted, they like bitcoin and they like digital assets. and so washington needs to get off the stick, get off the couch and start doing something. this is going to be an issue for democrats in this election who have been perceived to be standing in the way of bitcoin and races like ohio and montana, the senate races. the crypto pack is putting in money. and so, i think that's what you're seeing. you're seeing baby boomers get their first shot, right, through the ra channel. there is $80 billion or trillion of baby boomer wealth and they're putting the small amount -- and bitcoins don't like to sell. they often think of anywhere net worth and how many coins they have, not how many dollars they have. >> that doesn't explain gold, mike. >> gold is going up as well. we have a political situation where both candidates seem to want to spend a whole lot of

money. when biden's deficit -- or biden's budget came out with a trillion plus deficit, and, you know, that doesn't engender a lot of spirit when it comes to wanting fiscal prudence, right? bitcoin has always been a report card on fiscal stewardship. and we have got no stewardship in d.c. right now. >> we're cutting. we're cutting events. don't you think bitcoin is expecting the fed, when it pivoted, did bitcoin go down because of the hiking cycle we were in? now it is going back up along with the -- >> there is two vicectors of bitcoin. one is adoption. this move is mostly adoption. and the other is macro. the factors are the fed, but it is also -- and it is mostly congress and the budget. we're running deficits that are in crisis levels and -- >> i mean, i think we're going

to both agree, it is the adoption issue. right this very moment -- >> 100%. >> more adoption than anything else and it is adoption via etf and therefore we have a supply and demand problem. >> and having. >> prices outside of the margin. >> let me ask you this, -- >> right. >> throw in ethereum in a big way. part of expectations somehow we'll have a ethereum etf and that will create a similar dynamic. do you think that that's the right way to think about it, and do you actually think that there will be an ethereum etf? >> i think there's a, a fierce debate inside the s.e.c. right now. right? i mean, gary gensler before at the s.e.c. is on tape saying definitely not a security. since he's been at the s.e.c. hasn't made a ruling on it, and i think what the s.e.c. is doing is debating, can they call

ethereum security with this idea that it changed, went from proof of work, for validation to proof of stake? if they -- they can't make that argument. it's a tough argument to make. they have to -- you know, they're going to approve the etf because it's the same argument won the bitcoin. ethereum futures. if you have it for futures you have to have it for fed. what the court said last time. >> who takes that case to court? is that a coinbase case? i don't even know -- funny. grace gayle, effectively put this into business as an etf, grayscale. good or bad for grayscale long term? >> listen, it -- i think if you're very sober and own a whole lot of bitcoin shares in your own etf and price goes up 100% you're pretty happy. and so, right?

that court case crunched the discount from minus 40 to 0, and drove bitcoin prices up. so the grayscale holders are thrilled with that lawsuit. i think the same with ethereum. >> mike, are you out of the business of telling us what -- i wouldn't even try, at this point. remember in the past always asked. all right, 40. going to 35? 35, going to -- now at 30, going to 20? so we went from 20,000 to 2,000. went from 65,000 to 17,000. we're now at 73,000. is it, are we past where, because of this adoption you talked about, are we past the point of it going back down to 20,000 and then back up, do you think? >> listen, i think so. this has been a wild ride asset. we're from myself discovery. charts, 100,000. could be a target. you don't know when you're in price discovery mode, because, look, a billion dollars of

inflows into the etf complex. long that's is positive price will grow high perp if it becomes negative you'll see the first real correction. right now every trader is watching, add up etf see the net. long as they're inflows. of course lots of others inflows and outanothers in the bitcoin universe. right now the zeitgeist of the trading decision. frothy, funding rates high. times like this you have to be ready for a correction. i don't think we go back below 50,000, 55,000. the new floor, unless something dramatic happens. >> thought you were out of that. i don't know -- >> mike, interesting. most inflows seem to come in via etf. interesting way to play this, if you will. but if everybody ultimately is buying in via etf, becoming sort

of the majority approach to touching this, quote/unquote asset, there's a question about what the asset is doing. right? >> well, listen. you know, market cap at 74,1.5 trillion dollars. i think etf 40 billion. still very small percentage of bitcoin's price. the -- the genius of bitcoin really is that white paper sets the monetary policy for this ecosystem in code and in a world where -- look at the nigerian. pull it up on your chart. if you're in nigeria, like, it's interesting. ups -- now in every country on earth bitcoin's at an all-time high. in some charts staggering how much wealth is preserved. until you get countries that run more credible fiscal policy,

people are going to want to buy that story. it's a story that's spreading. right? there's, what? 8 billion people on the planet. >> the question i'm asking, though, if all the coins eventually get owned by etfs. maybe you're saying right now obviously that's not the case. but the direction of travel is that if that becomes the case does that change the dynamic which people thought at some point along the way bitcoin would be used, as discussed, as potential currency of some sort? if all of the coins are effectively owned by the etfs, unless you think loaning out to other people. a possibility, too. the dynamic of the whole thing sort of shifts. no? >> i think it's a false supposition that etfs will ever own even more than 20% of the total bitcoin. like, they're loading up now. it will reach and equilibrium at

some point. nice chart. reach equilibrium at some point and a lot of people still just want to custody their own coins, have them in a, you know, a foreign location, custody that they, they don't trust the country they're in. so i think the privacy and the self-control piece of bitcoin isn't going to go away. so we're bringing in people that feel comfortable in the etf. a wonderful way to participate but i don't think ever more than 20%. >> okay. mike novogratz. nice to see you today. thank you, sir. >> thanks, guys. >> you bet. when we come back, tusk ventures founder bradley tusk will join us on tech valuations and the potential for a tiktok ban. and later, senator ted cruz on the border crisis. the president's budget, and that possible ban on tiktok as well. we will be right back. i'm te world. hi baby!

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the clock is ticking on tiktok. the house set to vote today. that could put the app on the road to being banned. it will go to the senate, after

that. in a few minutes we'll speak with texas senator ted cruz about what happens next. meantime, new questions for alaska airlines and boeing after that 737 doing plug blowout in january. a new report technicians wanted the aircraft to get checked out just before the accident occurred. co-founder of one of the biggest private companies in the world sounding off in an exclusive interview in a bit. hear from the president of fintech giant stripe. 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. i'm joe kernen along with becky quick and andrew ross sorkin. take a gander here at the

futures markets this morning. up 37 points now on the dow. it's a little, three points, less, actually on s&p and nasdaq actually in the red this morning. treasurys. >> a good word "gander". >> yeah. take gander. take a gander. an old-fashioned word? >> it is, but i wlik it. >> hotter than blue blazes. i get grief when i say that. ever heard has one? i got a lot of crazy uncle expressions. treasury yields -- go figure. 4.17%. i know we have seen a backup after that cpi, which i don't know. a little hotter, didn't really seem to get anyone that worked up. we'll get another, you know, number eventually, which gives us an idea whether inflation's really back or not. maybe mike santoli knows. for more on the markets bring in our own mike santoli. for numbers that were kind of hot they were pretty well

digested by the equities markets, mike. maybe not the bond market quite as much. >> they were, joe i think the stock market didn't use it as an excuse to have this weighted pullback. a lot of internal drivers hotter than expected core cpi and how much or little it will translate into the pce inflation. slicing and dicing of that number. sensitive to the idea, i think, maybe we have sticky inflation. other things the market seems to seize upon. take a look. s&p 500 one year, about a two-day wobble. momentum trade a slight reversal. invedia down 10% less than two days bounced yesterday and result here again a really persistent uptrend pup see briefer and shallowing pullbacks along the way. i still with, didn't cool off much. might not be far from that moment again where it's like either simmer down or we're going to boil over if things like nvidia don't maybe calm down. a lot of focus on this momentum

factor trade. whether actually still vulnerable to some kind of reset. now, financials. just over a year beyond the silicon valley bank meltdown. you want to typically see financial stocks and banks participate to the upside. here's pve. s&p banks index. decent recovery. up 23%. looks like an attractive one-year chart. you saw brokerage firms, more capital markets side doing better. typically bullish. banks are off their highs, been sort of reset a little here in the last month or so, whereas the trading oriented parts of financials have been doing better. coinbase happens to be in that iai as well. i did want to switch over and look at the way the market keeps going from one potential dr derivative a.i. play to the next, older tech companies. broadcom had its sort of vertical reset higher once

seemed it was right in the mix in terms of along with nvidia, in terms of supplying this area and then you had dell. its vertical move a little results, and capex and yesterday, day before, oracle, similar thing. looking at here, the market craves other ways to leverage this long-term secular trend. it's finding it to a degree in these stocks. the question is whether these companies are getting somewhat miscast or overplayed as part of this theme, joe. >> harder you look, it's -- is it directly proportional or indirectly to the real quality or the real veracity of the whole a.i. play, i think. people think they missed something and beating the bushes and may or may not be realistic or not, what they finally find, mike. what's next? can you tell me the next few companies on discovery right now? >> look at, tune into to the 9:00. >> all right. thanks. mike santoli. all right.

the house is expected to vote on a bill today that if signed into law would give the chinese parent company of tiktok six months to divert the popular video sharing app or face a ban in the united states. for more on that story we bring in bradley tusk. he is the ceo of tusk ventures and bradley, you may be the perfect person to talk to about this story, because you kind of wrote this playbook already with uber when it was facing bans around the country. >> yeah. worked for us. not sure it's going to for tiktok. >> tell us what you did at uber? >> everyone thinks uber's a giant company and it is, but back in, like, 2011 we were a tiny series a start-up launching in san francisco and new york and just a couple other cities. the taxi industry wanted nothing to do with us. right? they leaned on the politicians who they give money to do say, hey, you guys can't operate. and we knew we couldn't outmuscle them. couldn't afford more lobbyists or campaign contributions all that. so we had to throw a hail mary

which is enlist our customers and put right on the app, if you like this product, if you like this service, if you want to keep using it, you've got to let your elected foibles know and super early days didn't even have the technology directly connect them to city council member. first time ever did it in washington, d.c. and just sent them a list. here's your city council member, their phone number, and got a letter from the ceo, travis, at the time. over several years several milli abdicated on our app and became most popular in the country. >> i think tiktok is far more popular last week start add campaign pushing their users to reach out to elected officials. according to the "washington post" some offices getting 20 call as minute people saying, don't take my tiktok away. >> look if you're tiktok and you believe this bill will pass and

the there's a central threat, look, committee voted 15-0, good reason. >> shocking. >> they're worried. >> committee in the house, 15-0. >> it's like a miracle, literally. >> right. >> but the reason i think it's more challenging is a few things. a little issue with uber. first were generally having people reach out to city officials or sometimes state officials. if they get, like, 50 calls on an issue or emailsthat's a lot. right? congress was getting a lot from tiktok they get a lot on everything. that's just the way congress works. they're a little more immune. second, the people calling for us for uber adults who had experience with taxi experience with uber and knew what to say and how to make the case, that they were a registered voter in that district. what you hear from congressional offices people calling utterly confused what they were supposed to say or why they were calling or where they, who they were voting for. >> some suggestion even it would provoke a backlash convincing

some of these representatives that this is a little out of control, that what they are worried about, the chinese communist party having access to their citizens and motivating those citizens to do things, proof of concept on that? >> yes and no. yes for sure on the 50-0 vote confirmed that, find out at 10:00 what the house looks like overall and very much is proof of exactly that, which is why i think they show ban tiktok or force sale of it. same time what we learned with uber, and repeated this process, companies like fanbuhduel and others. policy puts out political inputs. a politician truly believes they could lose their next primary if they don't do what enough people do, do what you want. >> you believe should be banned? >> exactly what becky said. i believe we've given the chinese a direct tool -- >> fundamentally unanswered question. >> yeah. >> that there is direct evidence

that the chinese government has used tiktok, not perspectively, buttoday, has already used tiktok to fundamentally either influence americans' use of all sorts of things. >> yep. >> and/or is using your data in some, in some way that they're not supposed to? >> i'm not sure about the data. i can say as parent of a 15 and 17-year-old both use tiktok rec larly, look at the issue in israel and kind of consent received. not seeking. pushed on them all the time encouraged them to be so anti-israel and so pro hamas. that's not happening out of nowhere. >> you think there's a function of -- rolled effectively into this thing? >> makes more sense for them do it than bytedance to doss it.

somebody's doing it. real separation chinese government tells bytedance jump, the only answer is, "how high?" >> i see that on twitter x by americans. on reelz, a lot less politically-oriented anything on reelz these days and i think just had a crack bdown. >> broadly ban is. platforms have no legal liability for any content posted on it. they're incentivized to push this on everyone. banning tiktok is not a substitute for regulating -- >> the question is, you see that content, part of me says, it's terrible content. very unhappy about that content. 230 might be the thing to put into effect here, but it's not clear to me that that keconsents

being served because the chinese government instructed somebody at tiktok to do that so much as built in an algorithm a flywheel for this negative content? >> tiktok admitted it used its own app to spy on reporters as an attempt to track down journalist sources. other instances of this as ell. >> comes a little down to, to you trust the chinese or not? i don't. >> uber, by the way, used to do the same thing to journalists right here in america. why i say it's a very slippery situation, and i just don't think we've seen evidence yet -- that the chinese government is actually doing this. >> that's right, but -- the company may be doing this. >> with that said, stakes between someone's taking a delivery car, a taxi or stakes between whether or not israel exists or not -- >> i don't disagree. the question, is that driven by an algorithm. >> yeah. >> that is just looking for hateful content because they

think people will interact with it and spend more time on the app or because xi jinping or somebody else instructed somebody to do that? a fundamental question. >> i would guess, if i were in the house voting it is both and therefore rather be safe than sorry ands for dismissal. >> thanks for coming on. >> thanks for having me. the other side of this, much more on this expected vote on tiktok. lawmakers expected to weigh in on the app and then the senate's turn. we're going to actually get to speak with a senator, who's got a strong opinion about all of this. ted cruz is going to be with us. we'll talk about that. also the border and so much more. u'.y tuned yore watching "squawk" and this is cnbc.

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nvidia. we spoke with tech investor bradley tusk a few minutes ago potentially forcing tiktok's owner to divert or see it banned. next stop, the senate, facing a tougher road. joining us, senator cruz, ranking member on the commerce

committee. would you be a "yes" on the bill as it currently stands, senator? >> depends what the bill specifically says. i will say this, i'm glad the house is acting. i am deeply concerned about tiktok. been very vocal about my kens with tiktok. had ceo testify before the judiciary committee a few weeks ago and i vigorously questioned him really on two fronts i'm concerned about tiktok. number one, concerned about chinese surveillance and es scene nosh. tiktok is controlled by the chinese communist government. it has 170 million users in the united states, and gives the chinese government the ability to monitor, number one what they're saying, number two, physical location using gps. number three, potentially what they're searching for and doing with their phone. all of that is concerning. we also know that china has used it to target journalists in particular going after them on tiktok. that's one set of concerns. a second set of concerns is the propaganda that the chinese

government pushes on tiktok and in particular at kids. i think it is deeply, deeply harmful. you look right now at the israel/hamas war unfolding. every age cohort of americans when asked who's in the right with overwhelming ling with israel except one age. 18 to 29. we see tiktok in particular pushing pro-hamas propaganda. i think it is dlibd. deliberate. designed by the chinese government and clad the house is acting to address what are very serious risks. >> right. the privacy issue seems like it's in something that, it either exists or doesn't exist, senator. as far as propaganda issue, former president trump had an interesting flip-flop on this. you probably have seen it. something swirling around who he's talked to, might be even have campaign financing or

something, the gentleman from susquehanna, but he does make one interesting point. do you think -- there's chinese propaganda and propaganda i'm sure you've noticed on some of the american social media platforms. pick your poison. both bad. but his point was that you get rid of tiktok you just, you just giving meta and all the, maybe the perpetrator here what you would call propaganda, they just become even more powerful. is there anything to that? >> well, the problem is that disregards the actual facts of what's going on online. i'm a bill critic of big tech. a.i. and speech enormous. jurisdiction over 40% of the u.s. economy, a member of this committee and if republicans win

majority in november be chairman of commerce committee and protecting free speech is credically important. much as i don't like that facebook or google or meta does, not owned or controlled by the chinese government and it's not simply the algorithm. a different study comparing different hashtags on tiktok versus instagram. h #ti #tibet. 30 times more than tiktok. ui uighur, 8-1 versus tiktok. tiananmen square 57 on instagram. most compelling. harb #hongkongprotests 171-1 more likely to appear on instagram than tiktok.

that's not accidental. that is deliberate, clearly, i believe driven by the chinese government because they want to suppress speech they don't like and i think the house is acting to address a real national security issue and importantly, joe, what the house has done, as i understand it, is not ban tiktok. a lot of the headlines, house votes to ban tiktok are inaccurate. what the house has done is said, china needs to sell tiktok. that the chinese communist government cannot own and troll tiktok and if they don't sell it they can ban tiktok. understand the legislation it not eliminate tiktok but put it on the same footing as google, youtube and get that chinese government out of the business. >> do you tiktok yourself? >> i do not. >> ever used it? >> i've seen it. i have not done a tiktok but i'm not a 13-year-old girl and don't

do a lot of synchronized dance k. i've tried it, not to defend the platform. i was curious to search for the word tibet, search for uighurs and hong kong protests. seen the same studies you've seen, and for whatever reason it's very available on tiktok. meaning, you have to type the words in. i mine, that's the only way i found, it wasn't served directly to me, but to the extent we believe the chinese government is somehow running tiktok you would think harder to find the stuff. put the words in and you can go on a tear. you go down a rabbit hole on these issues with some of the most provocative content you can imagine. things i imagine you might agree with in terms of being very critical. -- of the chinese government in fact. i mention, i wonder whether you've seen classified orrer internal documentation that

shows the chinese government actively doing something beyond the studies seen that say, we're seeing more of this, less of this, whatever. but actual evidence that there's email traffic or telephone calls between chinese officials and people inside tiktok saying, hey, tweak the algorithm to do this? >> so what i would say is, you're asking the wrong question there. it's not if you go affirmatively looking for content that is about hong kong or tea bette, can you find it. it is, rather what is tiktok suggesting to the user? one of the most powerful tools any social media company has, suggestive algorithm, watch this next. watch this next. it's how that he drive a message. our knowledge has grown exponentially ever since elon musk purchased twitter. when he went open kimono and showed how twitter was

consciously driving consistent with their political ideology. unless you change that that's the single most important signal of free speech we've had in a long time. something i asked the tiktok ceo in front of the judiciary committee. how come in china when chinese kids are using the equivalent getting apps on math, science, application discipline and here our kids using tiktok getting points, suggested chewing on tide pods. it's dramatically different. i think the chinese government has an agenda. >> the chinese product is completely product directed in a completely different way, beaux the but by the way draconian rules because of their rule. u.s. is a different place. you have to decide what you want to be. talk free speech.

that doesn't exist in china. >> right. why none of us would want the chinese communist government in charge of free speech and public discussion in the united states. the particular bill, i said, i have not examined it. if and when the house passes it comes to senate i'll address it on the merits. to be clear, legislation has been introduced on this topic that is dangerous goes too far. i don't want to empower the u.s. government to sensor and use power against social media companies more broadly. if and when that bill comes over i'll look at it closely, but the concern about tiktok is real and significant, and my objective, if we actually pass legislation, is not to eliminate tiktok but eliminate the chinese government's control and power over tiktok. that's a qualitatively different concern than any other social media company. >> senator, not much time. i know you want to talk briefly about the nil stuff, the name

and -- i got ask you about the budget and the one introduced by president biden. i don't see how, if it was a republican-led budget, i still don't see how we get below 100% debt to equity at any time in the next ten years, and i just -- i wonder if you worry about that? and have a solution? how would we do it? how would republicans do it? the one biden introduced, is it going to be law and it's hoar risk but you've got no answers. republicans don't. >> well, that's not true. let's take them one at a time. focus first on the biden budget. this biden budget is not real. a political campaign document. it proposes massive new spending. proposing $17 trillion in new debt. our debt gets worse and worse and worse. it proposes $5 trillion in brand new taxes because as our economy is struggling and people are hurting, what the biden

administration is saying tax the hell out of job creator, hamme job growth in particular goes after the oil and gas industry. you know, when you fill up your car you think, i really think gasoline needs to be more expensive. i really think we need to spend $10 a gallon to fill up my car or truck. well, then you may be a congressional democrat, or work in the biden white house. this is a budget out of step. by the way also a budget that does zero to secure the border. asks instead for more money to fly more illegal immigrants to more cities in the america to expand the invasion at our southern border. a political document not a real budget. you said republicans have no agenda. i disagree strongly. the only answer on the economy and deficits and debt is we've got to get gdp growth up back to historic levels and the way to do that is tax reform and regulatory reform. instead of massive new taxes on job creators we ought to cut taxes simplifying the tax code and repealing the 94 executive

actions biden has taken to hammer american energy, hammer american oil and gas, to unleash america's energy dominance. that drives prices down for everyone. that's how we turn things around as we get back to growth. >> well, senator, out of time. get you next time on some of the stuff you've introduced on nil if that's all right. >> great. >> thanks. when we come back, a rare and exclusive interview with stripes co-founder and president on the state of the business and one of the world's largest 'le mpieans. wel be right back. helps secure tomorrow. our time-tested fixed income suite, backed by over 145 years of risk experience, helps investors meet their goals. pgim investments. shaping tomorrow today. 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 you're in business.

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exclusively from the president and co-founder of stripe including his comments on a.i. the company's latest tender offer and so much more. stay tuned. yore wchu'ating "squawk box" and this is cnbc.

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giant stripe out with its annual letter revealing new financial details one of the world's largest private companies. stripe announcing surpassed $1 trillion in 2023 payment. increase 25% from the prior year and the company saying "robustly cash flow positive " and expect it to continue in the year

ahead. i spoke with the president and vice president john collison and started asking about factors that have driven this growth. >> there's been a lot of growth with enterprise customers for us. that's a really exciting trend. we actually just announced hertz is working with stripe to modernize their car-booking experience on the best digital app experience and much more coming to stripe to re-invent product offerings. and we notice despite the fact everyone is a bit doom and gloom about the start-up system we have data what they're actually doing and actually growing outside of funding. despite the fact funding has come down start-ups themselves are doing really well. the last one, overall industry, more specific to us, but we're sharing a lot for the first time about our revenue automation. subscription billing companies coming to stripe to manage infrastructure and quite a significant business for us and

this year we expect it to passeds 500 million in revenue. >> i was struck by the data presented about start-ups. the idea that more recent start-ups are so much more cash-flow positive. for example, than the ones that started in 2019 and what you think that's a function of. >> i think two things going on. obviously. firstly, fund arrangement changed. start-ups growing with less funding or less excessive funding than there was in 2021. obviously, a bit mad at the peak of 2021. $100 million series and things like that. start-ups focusing on more profitable growth. second thing, the kind of start-ups we're seeing are changing. there's tons of a.i. start-ups. think of all the openai, midjourney, and others, these folks building on stripe. what we see with a.i. start-ups in particular, growing quickly. grew by 250% last year.

the sector of a.i. start-ups overall and seeing that because interest costs are so i hoar a.i. products you see paid products from these start-ups much earlier than from other companies. >> what is it, what is your take on the state of play as relates to the consumer, the strength of the consumer and this environment right now? what are you seeing? >> we spent all of last year people predicting doom, gloom, winter in europe, everything like this. everything we've seen so far is that consumer spending is, has held up real well, and that continues all the way through this month. obviously that isn't a prediction about future state of affairs and in general we have present-day data rather than necessarily something that predicts quite a number of unforeseen things in the future. everything we see is quite robust. >> talking about new billings systems business. curious in terms of revenue. make a pie chart of stripe the next five years what you think

revenue rmix looks like? >> five years ago, de minimis. now, we just announced this year we xbebt to do pass 500 million dollar run race. growing much quicker than the overall stripe business and think very much quicker because this is such a hair on fire problem for businesses. you know, it's so frequently the case that we talk to businesses and the, one of the primary things block them they can't build their products, big i.t. transformation products slowing things down and actually getting into detail in the letter, actually like a complex tech systems challenge for them. you've probably experienced it as a consumer. want to sub describe to something, favorite property, newspaper, why are they making it so hard for me to give them my money? not good for you or for them. so that's been taken off quickly. an acute problem for businesses. >> you mentioned a.i. in the context of start ju-upstart-ups.

how are you using a.i. in the context of stripe? >> using it extensively and found ll lens are powerful -- for augmenting human performance, making people more productive. maybe you've had this experience, going to chatgpt or going to claude or a.i. model going back and forth to wok through the problem. i think people tend to too quickly jump to the paradigm, andrew ross sorkin can he be replaced by a.i.? the much more common pattern we see is maybe people getting 10, 20, 30% more productive in their jobs and so you get an overall productivity increase but maybe looks different. >> also wanted to ask a little bit this year you stepped in as the int pterri interim period o. what was a massive, massive growth period. curious? >> luckily out of that dark

period now, and stephen tomlinson joined late last year cfo, great to work with. i spent a decent year last year as cfo. fabulous experience. all founder should step up to be cfo of their business. highly educational and a much better fingertip feeling for the business. i think 2023 wases sin a way go for the business. start in a start-up context but i think more focus on business fundamentals. spent a lot of time focusing on top-line growth. segments absolutely key to our expansion, like getting more on stripe and start-ups and the revenue automation, stuff like that ensuring operating expenses don't grow out of line in that. healthy for us and a lot of businesses. >> what was it like culturally i ask because obviously a period of time this was a company that

was devalued order close to $100 billion. now less than that obviously. you did this tender offer at, so some employees to get liquidity. curious what that experience was like on a very personal level and what you think it does to a culture? >> look, we have the very strong opinion that it does no one any favors or businesses to, less valuation drift from the fundamental business value. so especially in fintech. across all tech more broadly. valuations really raise between peaks of late 2021 and analysis and you saw that in the public markets. a lot of 2x, 3x declines. and talk about that with stripe as well. with the choice of, do you kind of deny this reality or just say, okay. a new price. we're going toestablish this price. that's not even choice, we think. the answer is obvious. start-ups don't do themselves

favors denying that it exists. also shareholder oriented, access to liquidity and did that tender offer last year and this. wanted to provide liquidity and would take being very shareholder friendly and delivering great returns for shareholders and take that quite seriously. >> how hard for the staff, though? for the team? i do think that no matter who you are, you look on a screen at some point and say to yourself, i'm worth x and then look on the screen, 12 months later, 18 months later. i'm now worth -- does that make it more complicated? >> no one likes red numbers on a screen. that's fundamentally human nature. people would rather the number go up than down. however, people are smart. and i don't think when this happened the fact that the valuation was down from the peak 2021 valuation. people are smart see what's going on in the industry. i think it can be overblown. these stories kind of of, you

know, employees how they're feeling about stuff, because we're dealing with a pretty sharp population. >> talking about numbers that go up and down, you and i have had conversations over the years about crypto and we're now back in a moment where the number's going up once again. so curious how you thib about crypto and whether we should call crypto a currency given you're involved in the world's payments? >> because we're involved in the world's payments we probably think about if in a much more payment-specific lens. so there's people interested in it as a digital and store value. we don't have a house scrview o that. it's a bit of a, in search of a problem in a payment context. may be lots of other uses. just in a payment context. we are very interested in emerging long-term use case. a lot of countries have currencies that are less good to use that are less good store value.

a lot of places underdeveloped payment systems. we have a team working on crypto stuff at stripe. that is, i would say, the angle we think is most interesting. >> what do you think chances are elon musk's x becomes a payment platform? >> i have no idea. i think forward-looking pr predictions in this sphere is something that will get you bitten. >> end this looking back for a moment. your letter starts and ends on the late charlie munger. i wanted you, if you could, to speak to his legacy and the impact he had on you as a founder, because he clearly did. >> look, charlie was a fabulous teacher. whether there are so many people who kind of followed his teachings and wisdom. i think he said all of this stuff that sounds really simple. right? invest in businesses that are fundamentally good businesses that are in balance with ecosystem, not rent extracting or anything like this. you know, a famous speech about

coca-cola as a business and how that worked what made us a good business and a grower things like that. when people first come across his teachings they can sometimes find find, is that it? oversimplifying for us? the thing that i got to realize as i got to know him a little bit is that i think he did actually think about the world that simply and, you know, not overcomplicating it and a remarkably successful investor. in the old school companies like coca-cola and able to learn new tricks. was successful investing in alibaba, byd and other companies later in life. took a set of extremely simple frameworks and important high integrity things like this and used them to grade success. had a big impact on me and many other founders.

>> john collison from stripe. fascinating business. hitting this mark, i think 23 years to get there and it's -- the business continues to grow. the question is, of course, for the investors community sdshs this become a publicly traded company eventually? there was an expectation two, three years ago it was. when it actually had this nearly $100 billion valuation now at $65 billion and trying to provide liquidity creating a secondary market and tender offer like, see what happens longer term, but it's -- >> a fascinating story to watch. the number of small businesses that they have. the information they have about the small businesses, as you were talking about, going after the big guys, too. >> now, that's been the next -- the new frontier for them has been larger companies. he mentioned hertz as a good example, but not just people switching to stripe to have a different product. because the product is a better product and interesting to see what the revenue mix of this

company looks like in the future. it's not just a payment business. doing billing and other things. some may not be sexy or fun but the undergirding underneath the financial system for so many businesses around the world. >> they printed the reprint of charlie's al manac. they learned a lot from charlie munger over the years. >> that's it. take a look at it online a letter came out this morning. out about 8:30. top and bottom of it all about charlie munger. >> real writers, too. >> early to bed. >> early to rise. >> you need to know that for -- for hosting a morning show. >> yeah! >> yeah. >> isn't your life better than what you think? >> yes. i'm a much more boring person but i live a better life as a result between going to bed early and getting up early. >> i'm not sure andrew agrees. you've got a lot of things living in this city. a lot of things you miss out on at night. >> i'm naturally -- i don't know

naturally a morning person. >> no, you're not. these are things that you would be invited to that i would not be invited to. >> that's true. that's true. >> and in manhattan, absolutely true. not why i do what i do and i don't expect to be invited. >> all right. >> when we come back. >> disinvited. >> exactly. yeah. i think banned is the word. when we come back, top stocks to watch making our way towards the opening bell on wall street. oracle shares gaining 12% yesterday. post earnings. best day in more than two years and shares hit an all-time high. if that weren't enough founder larry elson made more thanes $15 billion on that stock gain. stay tuned. this is "squawk box" and this is cnbc.

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welcome back to "squawk box," everybody. the futures this morning, indicated higher for the dow, up by about 53 points. the nasdaq has turned down, off by about 55. the s&p futures, down by just about two points. less than an hour before the opening bell on wall street. dominic chu is back, joins us with a look at some of the top premarket movers and it's today's, which i just assumed it was going to be today's, dom, but in case anyone was wondering, these aren't yesterday's or tomorrow's. >> it could be tomorrow's. i don't know. >> you could do that. you're right. >> i don't have that crystal ball, but i'll try my best to lend some insight into that. let's start off this morning's movers here with a check on shares of tesla. it's a very popular stock amongst our audience. the shares are down roughly 2.5% right now.

now, one of the catalysts today is a downgrade by analysts at wells fargo. they cut it to a sell or underweight rating. it was a neutral, equal weight before. they lowered the target price to 125 bucks. they think the so-called member of the magnificent seven of mega cap tech stocks doesn't look as magnificent anymore. they see tesla's premium valuation to the other members of that group diminishing, given what they expect to be lower sales volumes and lower deliveries over time. by the way, for more on that story, subscribers can head over to that part of our site to get more in-depth look at that tesla call from wells fargo. now, turning from the roads to the skies, shares of both aerospace and defense giant boeing, also alaska airlines are in focus this morning after a "new york times" story that on the day of that fuselage blowout, which forced the emergency landing of an alaska airlines flight, there was

supposed to be a scheduled maintenance check. that story could trigger more scrutiny into how safety and maintenance issues play themselves out. we're watching both of those shares. and then another earnings mover this morning tied to the consumer, that's retailer dollar tree. the owner of its namesake stores, also family dollar locations, is down roughly 8% right now. 350,000 shares of volume. it reported results that largely fell shy of analyst expectations. there are some questions about comparability to the profit estimates that analysts have out there. dollar tree said it's going to close roughly 1,000 stores over the next several years. we're keeping an eye on those, andrew. back to you. when we come back, we're going to talk markets and try to get you ready for the trading day ahead. stay tuned. you're watching quk. "saw"

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welcome back, everybody. joining us right now is sylvia jablonski. sylvia, we saw these numbers yesterday, but the market's been taking it in stride, and you think it's basically game on from here. >> i do. good morning, becky. i do. it was hotter than expected yesterday, you know, year over year, we're kind of not cooling to the point that we should be. we're not quite at that 3.7 expectation level. services cooled off a little bit, goods went up.

one of the nice numbers in the read was health care and we know that's a huge part of pce, which is the fed's preferred reading, but overall, i think the number is par for the course in a pass down to deflation, and the market wasn't highly surprised by what we saw. the market is more in line with the fed, too, in terms of the three to four cuts versus the six to seven we were talking about earlier in the year. there's some stability now. >> you like some pretty expensive stocks. it seems like you think the leaders are going to continue to lead the way. >> i think the leaders are going to continue to lead the way, because i think that we're at the beginning of this a.i. innovation trend, and so when you see days like the first couple of days where, you know, nvidia fell 10%, amd fell back, you know, there's a good opportunity if you have fomo and haven't gotten into semiconductors. but i like cheaper etfs that have baskets that contain these names, fiber security types of etfs that have the chips, the

a.i. plays, everything that you would need to run a.i. and machine learning. there's two ways to do it, buy the expensive stocks if you'd like to, if you can afford it. if not, there are a lot of etfs that give you exposure. >> you're also a big fan of eli lilly. >> yeah, so, eli lilly, i think, kind of obvious story there is the weight loss drug, zepbound, but they're also winning in mounjaro. there's expected $10 billion of sales to come there. metabolic diseases, diabetes research, alzheimer's, cancer drug treatments, and talking about a.i., these kmaencompanie starting to implement a.i. to come out with better drug trials, better results and things like this. i think the obesity trend is going to be the hot, kind of, trade on that name for the year, but they just have a good diversified portfolio as well that i like. >> among the magnificent seven, you mentioned nvidia already that you like that, but amazon is another top pick for you? >> yeah, so, amazon, i think

it's another great portfolio of things, like lilly, but in a different sector, so they're obviously playing in a.i. they have the anthropic investment. they're already selling some of their services for generative a.i. to large companies. they have their cloud business. they have the e-commerce business. they remain a leader. they have some threat there, but they're still really reducing cost there, running an efficient business. they're getting into pharma. we heard the eli lilly announcement this morning that they're going to distribute to them. i think they have so many different opportunities in the hopper that they're bound to perform. they're one of the sects that hasn't had this parabolic run if you look at nvidia, amd, 90% year to date performance, and amazon is nowhere near that. i think they have a little bit of room to run in a.i. >> sylvia, thank you. we will see you soon. >> thank you. folks, let's take a final check on the markets before we hand things over to "squawk on the street." the futures are up for the dow. s&p futures are flat. the nasdaq, down by about 48.

of course, this comes after a day of gains across the board yesterday for the major averages. continuing to watch treasury yields, a little higher this morning. ten-year at 4.18%. two-year is at 4.6%. that does it for us today. we hope you join us right back here tomorrow. right now, it's time for "squawk on the street." bye. ♪ good wednesday morning. cramer has the morning off. coming off that record close, futures mixed as we sit in this brief data vacuum today between cpi yesterday and ppi retail sales tomorrow. bonds are under pressure, ten-year approaching 4.2%. our road map begins with momentum fueling this market's record run. how concerned should we be? we are also counting down to that house vote on legislation which could result in tiktok being banned in the united states.