Foreign, foreign, foreign, happy happy inflation. Day To all of you who celebrate, but things are about to get wild in less than 10 minutes. The CPI report the Consumer Price Index Report AKA A pleasure of pleasure. A measure of inflation is about to be driving folks.

A measure of mingled inflation is coming down the pipeline in less than 10 minutes and things are gonna be a little little crazy, so we might as well watch the whole thing and see kind of craziness that we'll be playing now. I Want to throw out there that I uh I'm not myself gonna be trading it I'm gonna be watching it I'm gonna be as you know. I'm gonna try to be a little bit more rule oriented and wait till like probably 10 a.m this morning to do anything. usually the first hour after the inflation report.

Lots of chop, lots of volatility. To the upside to the downside, the last time we got one of these reports, a minute before it came out at 8 29, there was a massive burst in volume. Uh, someone got the information early and then of course the administration the Presidential Administration was like, no, we highly doubt that happened even though they're the people who get the report a couple days before everyone else. Just so you know, Joe Biden will be speaking at 10 A.M Today The fact that he's speaking at 10 A.M Today tells me that there's a good chance the inflation number comes in lower than expected.

That's my kind of bias right now, because why would he want to publicly speak if it was a bad number If it's a good number? Of course, he wants to get up there with all the cameras and everything and brag about how great he and his team are doing. Um, so I Have a feeling right now, the Line in the Sand is 6.5 percent 6.5 percent that is currently the Line in the Sand I. Have a feeling that we're about to come in a little bit below that, which would be bullish for the market because it means that there's going to be a less likelihood of the Federal Reserve Continuing with their restrictive hawkish um I guess stance, policies, monetary policy so everyone is going to get fun. It's gonna get fun.

It's gonna get fun. It's gonna get fun. There's going to be high volatility, high volume I Do believe there's a good chance of this ripping I Really really do. because once again, why would Joe Biden be speaking at 10 am? This was just announced yesterday.

The fact that yesterday he's like oh yeah, I'll be doing it and that's why even you see the Futures Market drifting up right now. So I think there's a couple things to this there. It's not a hundred percent guarantee, but I would argue. There's a couple things pointing to the upside potential of today, so we'll see that is obviously my bias.

that's how I'm leaning. but if things start to dump, maybe we're going to turn a little bearish. So um, let's pay attention to the overall. Market That's the big thing.

Then we have some stories of what's going on with Bed Bath and Beyond We have to talk about Uh FTX We have to talk about American Airlines There are a couple other things, but for now, let's focus on the overall Market because that is clearly the Uh Paramount thing that matters at this exact moment. What is this one? FTX Founder Sam Bateman Free denies stealing user funds and repeats claims of solvency in new posts. Well, we will capture that a little bit later, but does not matter right now. So Stock features rise slightly in run up to key inflation data I Can't shake this feeling, but it very much makes me feel like once again, the numbers were released to Wall Street beforehand.

uh I Find it very hard to believe that it wasn't released last time. there was simply too big of a volume Spike before the report was out. Uh, they just fired the information a little bit too early. Uh, we are on a pretty nice push recently.

NASDAQ logs its best win streaks in September as stocks rise ahead of December inflation report. So overall, the Market's been looking pretty good. This is the Spy ever since Friday the 6th we've been pushing, we had a nice pop day, a little bit of retraction and retest and we're ripping and now we have a second Gap Up we're gapping over a previous Gap There was before this morning's very bullish action. there was a gap field to 396.31 but now it's kind of opposite.

Now we have uh, this upside gaffel has now turned into a downside gaffer which is obviously possible. very rare, but nonetheless, it has happened so in the chart. Immediately we have a downside Gap fill to 395.60 and then there's another deeper one at 390 65. I Wouldn't be surprised if the top one gets hit today just because it's such a high volatility day.

But yes, I'm still leaning bullish. Inflation is expected to have declined in December but it may not be enough to stop the Fed So we do have this handy fan handy dandy fancy schmancy fed watch tool. Where is it Fed watch? So I have too many fed rates right here? This is kind of the Market's perception of what the next rate hike were going to be. So as of now we're at 4.25 As of now, there is a 77 chance that the next rate hike which comes in early February will be only 25 Bips.

Uh, we're going to see how this change after the report. I Mean obviously this is going to be massively impactful to this number, so we can monitor this. But as of right now, we're still looking at a rate hike which is still hawkish. But it says minimally hawkish as you could be because 0.25 is the lowest that they're going to raise it.

Other than that, you're just holding flat. Let's see how this changes: I Would expect that if inflation comes in below 6.5 you're actually going to see the odds of this go down. the lower the inflation report below 6.5 which is currently the Line in the Sand, the greater the chance of the Market's perception of the FED being less hawkish. So that's what we're going to be paying attention to.

Um, if it comes in higher, you're going to see those odds go up. If it comes in really high, you're going to actually see the odds of a 50 bips right hike start to spike. But once again, this all comes out in just over two minutes. So anyway, uh, we are looking at year over year.

Six point five percent. And if you're talking about Core, you're looking at 5.7 Remember what core is Core is the inflation taking out food and energy. So right now I actually I might as well write this down so we can talk about it in real time as the reports are dropping. So we are looking at 6.5 Uh, 5.7 That is for the year over year totals.

And then if you're looking at the core CPI Um, for month over month, that's 0.3 and then just the normal CPI is actually a drop of 0.1 Once again to be very very very clear, the fact that the administration just yesterday scheduled a public speech for today at 10 A.M gets gets me to believe the fact that the Market's about to rip because he's going to use this as kind of like a a braggadocious moment. Anyway, the Dow, the S P, and the NASDAQ are all green green oils. green yields are coming down, things are clearly clearly clearly leaning bullish. Uh, five things to know before the Stock Market opens, we could return to this.

But the main thing you need to know is that the CPI report is about to drop and this will 100 be determining what happens today. We might as well just drop this for now. Technicals don't really matter in moments such as this. And let me do, we'll listen to a live talk about what in the world is going on.

All right, let's get watch live. We have co-sponsors across time in Congress apart across, you know, committee representation across ideological spectrums, and in fact, we're introducing it today with more co-sponsors than we've ever had. At the point of introduction, uh, and I've already received texts from additional colleagues saying oh, I Read: you're introducing it today I hadn't you know put my paperwork in but I want to be on it when we introduce um and really, what it comes down to some of the pushback that we've heard from colleagues is just ready. Um, you know what would be the impact on on them? How would this sort of change things? And you know what? What Chip and I have said all along is it's It's really straightforward.

we go into classified briefings. We have meetings with CEOs of large companies who share very openly, their challenges, their experiences, their successes, what's working, what isn't and the American people should never be reading reports in the news that Congress had right before the report came out. Hard selling. Classified briefing about potential invasion of Ukraine was the case last year.

Big volume Spike right before it came out would benefit because of those difficult situations who are selling stocks that would be expected to potentially lose Push the ban Congressional stock trading. but it's clear if I might just kind of take it off the table that restores traffic. We got to go. They're trying to cut off some data that's coming across the tape in just a couple of moments.

Yeah, thank you again for joining us though. it is. uh, we've got about 10 seconds time for the December CPI number. We all need to uh to take a deep breath.

Rick Santelli has it Rick, What is it? What is it? Yes, our December read on PPI Expecting a headline number to be down one tenth to one percent, it delivered. It's down one tenth of one percent. high water mark June of this year at 1.3 That was the highest since 2005.. Strip out the all-important food and energy.

It's up three tenths Exactly as expected. Up three tenths. How does it compare? High water mark in this series was April of 2021. it was up nine tenths.

That was the highest level since 1981.. Let's go to year-over-year Consumer Price Index Expect it up 6.5 Exactly up 6.5 High Water in June of this year 9.1 This is now the sixth consecutive lower month and and the high water mark goes back to 1981. Finally, in my opinion, the most important metric CPI year over year X Food and energy known as the Core expected up 5.7 all four of them exactly as expected of 5.70 and high water mark September of this year at 6.6 This marks the third consecutive month that this metric is lower. And as you look at what's going on here, interest rates? Well, they moved a bit lower.

Now they're kind of hovering a bit. but the fact of the matter is is that it, for whatever reason the equity markets are going lower, interest rates have moved off of their best levels. and I Think that the reason is is that we're still looking at numbers that are a bit sticky is something we the Insiders expectations. No surprise.

But in the final analysis I Think the issue is that many would have liked to seen it maybe a smidge lower. Let this thing simmer. I Think my opinion is you get a lot of cross currents based on what positions investors had going in, what they're trying to put on now. But ultimately I'm not sure if stocks are going to be that much lower as the Dow futures indicate and do remember stocks were trading at the new highs of the week before this number and interest rates were trading at new lows for the week before this number.

I think that about covers it Joe Back to you and the panel. Yeah, we've had a couple of numbers that were so much. I Think this is so positive in terms of of maybe laying some fears Rick I Guess cooler than expected I Think continuation expectations, expectations and they hit those. uh, those expectations.

They just didn't surprise us with accidents. There was no surprise I wish we had gotten even cooler than expected number and that that obviously isn't what happened exactly I Think you nailed it there. Joe And what's more? Ultimately, this now becomes an issue where the markets have already taken much of the slack out of the rope in both directions in terms of interest rates bucking. Guidance by the FED Uh, the United States We're not going to change.

They're not going to change till it's so apparently obvious that the high water markets in the rear view mirror and it's not that inflation stops going up or even that inflation goes sideways. I Think we're now at the point where many would like to see more negative signs and make that headline number and Rick the commodity the Tailwind of maybe some Commodities coming down China's reopening so who knows if we can count on that. uh too. Uh, thanks Rick Let's get Uh to our panel for some instant reaction: Mona Mahajan Senior Investment Strategist at Edward Jones Dana Peterson's Chief Economist at the conference board Betsy Stevenson former Chief Economist at Labor Department currently an economics professor at the University of Michigan Michael strain director of Economic Policy studies at the American Enterprise Institute has got uh for the lease Maniac Steve Leesman still here or is here or is back and uh Rick is still here Um, so let me start.

Mona did I Don't know whether you want to talk about the the Market's reaction. Let's just talk about the report itself. Expectations were probably ratcheted down and then it didn't over deliver. there.

Is that what we're seeing? Yeah. I Think you and Rick both nailed it on that one look the morning. about two percent. The S P has been up two percent since the start of this year.

The NASDAQ up over three percent. Some of this good number and we think it is a good number has been priced into markets already. But yeah, keep in mind, um, expectations have come down so that six and a half percent year-over-year figure uh, we got was down from an earlier expectation of seven percent. The 5.7 on the core side is also a lower number.

So we are moving in the right direction. and when we see leading indicators of inflation including the Isms, including the supply chain pressure indices, even things like break even inflation and consumer expectations of inflation, all are moving lower. So our hope is that the trend does continue in this direction. and in fact, we we see core inflation heading towards uh, the three percent levels by your end of 2023.

So continued good. Trends Yeah, and we've seen a reversion doctor where things were in stocks and bonds of the Dow files back up. Dana So again, it's just just a another data point. Can we discern anything from from the trend? Is it? Is it going our way? If you're hoping that inflation cools, yes, this is a good Trend And certainly what's important will be what's in the guts of the report.

Whether or not it's in those uh, areas that are demand driven such as rents and also uh, services. But certainly this isn't a positive direction and we think the Fed's going to look at this favorably, but it's probably not going to cause them to not raise rates. We do think that they're going to hike at least two more times 25 basis Points each. Michael What? What's most important as far as components? We so we worry about labor.

but we saw that in the last employment report. Santoli's here too. So I'm talking to Michael strain? uh at this point. Wow, that's an eight box.

That's that's uh yeah. one more row we'd have one more Road we'd have 12 and really get some some decent uh analysis here. but um Michael strain is China going to be I mean won't Commodities couldn't we have seen the the best. the coolest numbers from Commodities of China totally reopens and then then we're back to uh, you know folk, maybe labor becomes a Tailwind at that point.

If it does ease a little, it could happen I mean when I look at the report I I'm a little less uh, happy about the numbers than I Think some of the the previous panelists are I think overall headline inflation is clearly heading in the right direction. We saw another month where big cell inflation, massive population, right to where we were. but we didn't see uh, core Services inflation. and that's really where the inflation is coming from.

What we need is for the labor market to cool down, wage growth to cool down. Uh, and that is. That is how we can get inflation kind of from four and a half percent down to two percent. I Think going from eight nine down to four and a half is what we're seeing.

That should be relatively straightforward. The hard part will be getting wage inflation down, which will allow the FED to kind of get get the final final mile done. Uh, by returning price inflation to the Target. These numbers don't indicate to me that that that that's happening I think I Think we're not seeing an acceleration in core Services inflation.

but we're not really seeing a deceleration there either. That's what we need to start saying. kind of interesting movement in a dollar. What? I Just saw Mike And the stock Market I Don't know who knows what happens you.

You watched that It was a kind of a knee-jerk quick knee-jerk reaction. but now the two-year yield below where it was prior to the number? Yeah, absolutely. I Mean obviously you need to let it settle out. But we did come into this number with the premise being inflation is decelerating.

There's some downside momentum We've been saying in recent days. the burden of proof is Shifting toward those who believe it's going to be sticky at a higher level and the market is kind of trying to move beyond that. It's the shelter, the rent areas that seem like they are the sticky parts. That's the part the Market's gaining some confidence is actually going to give way down the road.

All that being said, not sure about the direct Fed implications of a quarter point or a half Point hike in February Not sure it matters very much. the market is saying fed's just about done. They're going to let the hire for a longer idea do the work. From this point, a greater chance, Expectations and inflation expectations have come into line.

So I think the market in general is okay with this. It's now all about are we going to see the lag defects on economic growth? which right now it's just not giving way that quickly. And I think that's good news for the economy. Uh, whether you think that that's sort of bad news for the Fed, I'm not convinced we can make that lead just yet.

Oh, you haven't talked to Talisman yet? I think we're adding. You know if we can't do 12? Uh I Just don't think with eight weeks? okay, we got the ten. we got a 10 bucks. we got a ten Box 25 more.

Uh bang for our buck here. Uh Steve What do you make of this? We're we're working on adding a few more we're gonna have. Paris Hilton Go ahead. Max it up.

I mean I Think viewers are missing out on the real added value of if we all talked it once, they would really be able to get more out of it. They've done that. We do that on a lot of these panels. Steve Yeah, let me.

uh. let me give you a little bit here. Um, food remains uh, uh. stubbornly.

High Actually, uh, zero two for food at home? Uh, from zero five. But but the food away from home remains 0.4 percent. That was up. I Think the story here.

A cent only just touched on it. You have this rise in the, um, uh, owner's equivalent rent number. It's actually up on the year over year and that pushed up energy. uh, less Services the core.

the core energy. uh Services less energy. sorry about that. That pushed up the uh a core Services number and I think what's happening and and Mike was right on.

This is the market is looking through that and they're saying rents in the in the real world that we know are coming down and that's going to filter into the index in the months ahead. The other thing I Want to say Joe is I want to rise. In defense of the much beleaguered headline index, it is down 0.1 Everybody says let's look through it. let's take out this.

let's take out that. let's take another thing. let's go back. Joe It was the surge in fuel prices that created the double digit inflation that freaked everybody out.

Now that it's coming down, why are we ignoring it? It doesn't make all that much sense I Get that the FED looks through. it did not use it. But if it's the headline number and gas prices that creates the expectations for inflation that the FED is so worried about, let's not be so quick to dismiss and when it goes negative. Rick Uh you.

you gave us the number and then some analysis. Do you have more? or should I go back to the top and and get through all 10. Uh, we're just there to look pretty I Think us right? Is that is that why you guys are? well? I Always always right. What's going on? What's this? Great discussion was going on.

Interest rates as you pointed out, came down to pre-number levels. Uh, the equity markets have firmed up I think Joe that this is going to be a big day for stocks. To the upside: I Think you're going to continue interest rates drop and you know that 5.7 that we had. To me, that is the issue to pay attention to.

Okay, the the 6.5 year over year and Steve is exactly right. All those month over months are going to give us all the new year-over-year data over time and to see that first step. The first minus sign, you know I have a database in my brain that goes back to January of 2020. there's no negative number in that volatility.

so I don't think that's a significant back to as I said. Mona Have you been? Uh, let's look at the 10-year Are you inspired to say some additional Things based on what you just heard you. Yeah, you know it's interesting. I Do think uh, some of the things that we've talked about in terms of dollars, wage growth Services inflation those keep in mind are lagging parts of CPI And we've talked about how shelter and rent prices in real time are coming down and we can probably all see some real life examples of that.

But it does take you know about six months to show up really significantly in these CPI numbers. Similarly, you know wage growth jobs are for 4.6 below expectations of five percent. The FED has told us they'd like to see closer to three and a half percent to kind of achieve their two percent inflation. Target So we are moving in the right direction.

Uh, certainly the leading indicators, as we noted, are moving in the right direction and some of these lagging indicators are now starting to uh show signs of of easing as well. So I think, um, the direction of travel is still good. I Think the FED has two more rate hikes as was noted. but I think the market and the FED are coming together around five percent terminal rate, which is also a good sign that we have some clarity around that.

Dollars? No, they're not. I Mean that's that's the problem, but it's just one of the realities we're dealing with right now. The conflict is the market is not taken on that five percent. It is rejecting it, right? And it's rejecting it more this morning when you see the two-year yield fall well and and then I'm just going to take a look at the FED Fed fund.

Futures Outlook We, uh, I need my glasses for that. We're at 444 for January 24th, which is means that the the market sees the FED uh cutting rates. After reaching that five percent, we've got to get the Betsy Before you've got something together, we're getting further apart. I know you got something for us.

Uh, coming up Steve too. Uh, so I want to get to Betsy Betsy I'm sorry, you know it's confusing a Deca box. but what do you make of these numbers? a Deca box? Oh, hitting expectations. But let's combine this with that fantastic Jobs report we got I Mean when you consider that inflation is coming down at the same time, we still have pretty red hot employment growth.

It looks like the FED is just really orchestrating. Uh, this move? Uh, really? Well, you know we keep hearing people talk about recession, but what we're seeing is continued economic growth, continued hiring while prices are coming down and in terms of looking at that headline number, I totally agree with Steve Chair pal said, you know the FED normally looks past it, but we're not going to look past it anymore because we know that shaping people's expectations. So Hallelujah we see a negative number on that headline number and I think that that is going to start calming people down further and gives us even more hope that we can continue to have employment growth and economic expansion at the time. Steve Uh, thank you one and all.

Uh, and I do I do mean that? but Steve You are sticking around round and now you've got some breaking news that we want to get to immediately. Yeah, Philly Fed President Patrick Harker Making some comments, he's come after me I Don't know that he wrote his speech before the data came out, but he said he expected to raise rates a few more times. 25 basis point hikes will be appropriate going forward again. I Do not know if he knew about the Uh CPI number before making these comments.

He expects the FED to be sufficiently restrictive sometime for sometime this year, and it will hold at that restrictive rate. The goal is to slow the economy modestly. Harker says the unmistakable signage. He says of a slow down the interest rate sensitive sector National Economy he says remains relatively healthy Americans are still spending even if he says they are digging into their savings to do so.

He's concerned about commercial real estate, something we've talked about on the show quite a bit, but the labor market as Betsy Stevenson just talked about in excellent shape. unemployment rate He says we'll top out at four and a half percent this year. Inflation he says goes to three and a half. He is not forecasting a recession I'll leave it there Joe in case we can hear more from Betsy or some of the other of brilliant members of our panel.

I Think they're gone, they are gone. The DECA box has gone I was just considering so five and five but if it was nine, we could do a full Hollywood Squares thing. Um you know what I mean is that your dream joke? Is that what you always wanted to be? Who was the guy who was the uh Charlie Weaver yeah guy with the hat there were some yeah I don't want to be him. All right Uh thank you Steve we do have uh Andrew did you I included you I hope that that you're welcome.

Okay I think you did. Becky thank you as well. All right when we come back we're gonna get Jim Cramer's First Take on the new CPS Jim Cramer's first time. By the way, the Dev keeps pushing back into the president.

Obviously continue to keep an eye on that. Stay tuned. you're watching Squawkbox and this is CNBC got a second chance at life Jim Cramer's first take. All right Five things to know before that stock market bill goes Ding Ding Ding Ding Dong today Thursday January 12th we just got the CPI report.

wasn't hot, wasn't cold, it was exactly what you expect. The best way I could really put this is emotionally. do you know in your mindset when you go and you get gas station sushi you know exactly your expect. your expectations are set and every single time it hits your expectations.

The Gas Station Sushi Not better than it's ever going to be, but also probably not worse than it's ever going to be. It is just gas station. Sushi That's exactly what you got this morning. It hit the expectations.

We'll go over the nuances of what was in the report, what wasn't in the report, but just very quickly. I Want you to know it's Epi day, uh, the first hour 8 30 to 9 30 there's going to be craziness. then you have Market open. so that's also going to be craziness I myself am going to be sitting on my hands until around 10 a.m before I Really do anything because I expect there to be a lot of whips all both.

to the upside to the downside: I don't want to get chopped up in it I don't want to be made into Chop Suey So I'm just I'm just gonna wait for it personally. I really did believe. Actually, today is going to be even more insane. The report came out at 8 30.

Market opens at 9 30. so volatility volatility. and then the President of the US Mr Joe Biden will be speaking at 10 A.M Mostly likely to kind of take a, uh, an opportunity to brag about how he's solved all of our problems. So we're gonna.

It's gonna be a day of just crazy volatility. Whipsaw! Upside Downside. So what does that mean for you? It means size down and probably widen your risks. You want to leverage down in these types of scenarios because you might have a good trade on you just don't want to get whipsawed out of it with some Randomness and the randomness of today is going to be considerably higher of what we've seen recently.

So just everyone be a little prepared for that proxy fighting at Disney. We could cover that a little bit later. Uh, nonsense. So we're going to talk about Bed Bath and Beyond AMC.

Uh, once again, if you haven't, the Dollar's still going down. interesting. Uh, Bbby is already Rip City again today. Um, it's up.

Uh, it was up 68 yesterday, up another 21 this morning. So obviously we'll be watching it. And just because of related sympathy plays, AMC is going to be up. Let's see how Gme is doing this morning.

Uh, Gme is also up. Uh, slightly green. Gained seven percent yesterday. So really, Bed Bath and Beyond is the one leading this play.

This isn't one of those things where um, I by any means would tell people to like diamond handed. Yeah, Bed Bath and Beyond has to keep going. What it is is basically people heard that the leadership team was saying hey, we might be heading to bankruptcy so of course, shorts piled in. And then whenever shorts are powering piling into a name such as Bed Bath and Beyond, then there's this uh, Counter Culture movement that says hey, maybe we could screw with the shorts and that's exactly what they're doing.

Uh, bed, bath up another 20 today. My point in bringing this up to you: is this a reasonable degenerate High volatility active trade without a doubt. Is this something that you should be putting all your money into and Diamond handing no matter what happens? Absolutely not. This is the time where if you're in it and please be aware, it's a degenerate trade and I'm in by no means against that I Just am saying it so you know maybe the appropriate size to be taking.

This isn't something you bet the farm on, but as it moves in your favor, keep just moving your stop loss up. If you're already in the money on this, like if you're already pretty far away from your entry price, this is the time we're at. In the worst case scenario, your stop loss should be set at exactly your entry, but if anything, just keep dragging it up behind you and if it ends up reverting great, you made money. This is an active trade.

This is not a trade to get married to because most likely this will end in a very negative way. For Bed Bath and Beyond, it would break my heart for any of you watching right now to end up getting stuck in this trade. Do Not get stuck in this trade I Want to be very very very clear about it and with AMC it's a sympathy play? this is Bed Bath and Beyond AMC Jimmy. They're probably being traded as a basket most likely, so this is just a sympathy reaction.

and if you're an active Trader of AMC I would say that the main sentiment of what's going on with Bed Bath and Beyond goes with AMC because when it starts to fall when one of these Falls it's gonna drag the cohort down with it if I had to throw out a guess. um I do like it I mean hey, any pressure on the shorts, it's exciting to watch. but I'm just begging of all of you. Don't get married to the trade.

This concept of like diamond handing it no matter what happens. that's pretty stupid. It really really is. The point of you being in the markets is to make money, so don't all of a sudden lit a great trade where you're up money like blow up in your face.

Very very silly concept. Flight delays ease FFA failure. Um, so we're going to be talking about American they had earnings but yeah, they were down for like an hour like all the flights in the US Starbucks Uh, tough fins. return to office policy.

A lot of companies are doing that I Just want to read specifically what CNBC said about this. Sure, Bed Bath and Beyond is probably on the brink of bankruptcy AMC Entertainment is struggling with a massive debt load and an environment that favors streaming over theaters and GameStop as well. GameStop But that didn't stop their shares from popping and what felt like a last gas meme stock rally Wednesday Bed Bath and Beyond who's market cap? It was under 150 million earlier this week surged the most 68 heading into Thursday morning. its market value stands at more than 307 million even as the company rapidly Burns through cash runs out of merchandise to sell and lose his customers.

We don't love the strength and the nonsense stock of AMC Um, Carvana and Gme Bed Bath Party Etc So they don't like it, but also, you're not hearing many of these types of players. The founder of Vital Knowledge uh, being active Traders Once again, this is not. You're not getting into Bed Bath AMC Jimmy At this moment in time to be like no, this is fundamentally undervalued I Gotta get in because it's going to trade upward to hit its value on these spikes. They're probably trading over their value, especially something like Bed Bath.

but that doesn't mean it can't go higher. My whole point in this little monologue I have going on is understand the difference between an active trade, more of a medium-term swing trade and a long-term investment. Right now, what we see, especially in Bed Bath and Beyond It's exactly the first case. It is an active trade where you need to be paying attention.

You need to be very I Guess cognizant of your stop loss and as it keeps going up, keep moving your stop loss up. Do Not get married to this trade or you're going to end up being a bag holder. Don't be a bag holder lit Paris Hilton's Lackey Do that for you. Let the person who sells you that gas station Sushi do that for you.

Your point in this is to make money, ride the trend, ride and ride the trend. If the trend changes and eventually it most likely will, you don't want to ride it all the way back down. Don't do that. That's for roller coasters that's not for your P L.

Quick update: Uh wait, hang on is Kramer talking yet? I Don't want to miss the Kramer talk of this CPI No If Kramer comes on, uh, let me know. let me know that let me know that Walmart strikes a deal with Salesforce ticker symbol CRM to sell more of its Tech to other retailers Walmarts To sell more of its own technology and services to other retailers as shark deals with Salesforce so it can get in front of more potential customers Walmart also wants to sell more of its customer insights, fulfillment services, and digital advertising. obviously. Walmart The Walton family has crushed all these sectors.

It makes sense that they want to get that as a service out to other players. So I Do believe this will be a kind of a synergistic relationship between Walmart and Salesforce. So kind of positive news there are we missing Kramer Is he coming on I don't want to miss old Kramer Boy died perfect timing Welcome Back to squawkbox December CPI coming in as expected, down a tenth of a percent. Year over year, it stands at 6.5 Futures Have been volatile since that data hit.

Want to bring in Paul Hickey he's the co-founder of Bespoke Investment Group Uh, what do you make of that data I Don't know if you also heard Jim Cramer's comments right before this with Becky uh, just about how lagging these numbers may be and numbers may be. and perhaps maybe CPI is even less. uh, you know, less strong if you will. Yeah, I mean I think you're exactly right Market Popping back.

by the way, the data is lagging I mean housing costs up in this report I mean nothing is suggesting that housing costs are up here and that's the danger of look face looking at relying on lagging data to base your monetary policy on. So that's that's the look, the concern here. and I think what the market is showing here. You know we sold off a little bit, but the market was right in line with Report with expectations.

and I mean that's down point one percent. Six months ago, when CPI was up one point over one percent on a month over month basis, no one would have ever thought we'd be looking at a minus 0.1 percent. Uh, CPI for the month of December So I I think that's an encouraging if you saw CPI even crashing further, that wouldn't be a positive signal. That would be a sign if the economy is doing really weak.

Uh, only four percent of CPI readings throughout history since 1950 have been, uh, less than minus 0.1 So now to be a pretty ominous signal: I think if you did see a very weak reading there, and I think that sounds like you're suggesting that actually things are weaker today than these numbers are suggesting. And then the question is, is that good or bad news? In the sort of perverse, what does the FED do about it situation? The fact is, every day that goes by, we see another indicator suggesting that the economy is weaker rather than stronger. The only thing holding things up seems to be the employment picture is is holding in. We have both isms below 50 uh, 25 out of 26 prior readings where that's occurred through going back to the late 90s, have been in a recession or coming out of a recession.

There's only one exception. The one difference this time around is that employment is holding up. So I think in that respect, uh, it it's something that we can, you know, breathe a sigh of relief here for uh, when we looked at our going to the year ahead last week looking at what's working in the markets favor and what's not working in the Market's favor. Surprisingly, we saw more things working in the markets favor than against it.

So that's something that, um, for the market perspective keeps us, um, slightly positive here. and I think the message going forward to the years what you think should happen doesn't always happen in the market. take Europe for example. Uh, everyone thought this was going to be a brutal winter.

We were going to be on the verge of a depression in Europe. Um, and look at the major averages in Europe right now, they're all in Bull markets. The footsies within two percent of an all-time high. Germany and France are within 10 of all-time highs.

That's not. That's great. That's a picture that most people were looking at. Foreign.

Okay, we're gonna have to run in literally 30 seconds. Uh, what do you do about all this? So I Think you you take a you know an approach to the market? Uh, like I said, there's more positives The negatives in the Market's Behavior right here. So I think you want to from a longer term perspective. Uh, you want to be looking and putting money to work continuously here.

and you take if you do get a weekday you want to put some money to work. Um, overall the market is. You know, more working against more working for it than against it. Fair enough.

Paul Thank you. appreciate it, thank you. We're gonna get a final check. uh on the markets.

Uh, got about 45 seconds before we hand it over to our friends on squat in the street. We'll have a big interview with Nelson Peltz as they discuss the future of the Mouse House and his efforts. Uh to uh, wage a proxy battle this is. But right now it does look like the market is up on the back of the CPI News Rick was what right? He said wait and see what happens.

Check it out and here we are Bonds of sort of, uh, the Euchre sort of time. 200 points S P 500 up about 20 seconds. we'll see where all of this uh really though lands of course at 4 pm today as uh as everybody waves at all. make sure you join us.

Uh, tomorrow we're going to be uh, standing by right now to watch on the street. We're here. We're here. Yeah, See you tomorrow, Foreign ER and David Faber live at post nine of the New York Stock Exchange futures.

Uh, trying for a rip here after December Headline CPI comes in her boy Six straight months of declining year-on-year inflation. We'll talk about the implications for the Fed and the markets along with this new proxy fight at Disney in a few moments as the guys on Squawk told you try and Nelson Peltz seeking a seat on Disney's board. We'll begin though with December CPI in line with expectations down to 10th month on month up three tenths when you strip out food and energy on a year on year, consumer prices easing back to 6'5 Jim Although I know you're looking at some things like why would apparel uh, be up five tenths look I Hate to actually criticize what our numbers because it's numbers versus numbers I mean I should have criticized last year's but I'm dealing with melding the companies that I speak to every day with the numbers. There is an apparel glut of just incredible versions.

It's probably one of the greatest sized by apparel ever that I've ever seen. I mean there's anything from denim to to cashmere. It's not on sale, so clothing is up. apparels up 0.5 Give me a give me a break I mean I look at things like new and used vehicles and used vehicles we see are plummeting.

not really reflected here I Know X Food energy well give me a break. I mean well you know eggs are the new Lumber is what they say eggs. You know what they say, that's that was called a joke. but I do want to point out that we have if you looked at three months ago what we thought natural gas was going to be and that is the heating fuel of the country I Think we would say we're in deep trouble.

Numbers: Disco Inferno Meanwhile you got Harker uh saying the days of 75 basis point hikes are behind us. Yeah, that's uh, that's history. you got claims at 205 Jim I mean people are talking Goldilocks this morning? Yeah well if you didn't know any better you would think there's this Fed chairman who's actually doing a pretty good job I know I'm in a minority. well I there's family members probably with him, but this, these numbers are exactly how it's supposed to slow down.

I mean I'm not in a Boeing plane right now Boeing Recommended by Credit Suisse But I would say this is a very clear dashboard and it's going David the way it should. It's not cratering, it's slowing and it's got a lot of businesses that are really playing a role whether it be Logitech or computer equipment. Very bad number last night Taiwan Semi saying the next quarter or two going to be weaker or whether it be beer prices that are coming down. so I can see a plethora of things that are going the way of J-pal Okay, uh, the market seems to uh, be satisfied with the number as well as we've seen the S P bounced around a bit, but we are most likely going to have 27 minutes, but then it came back crazy.

Appropriate response in the markets in your opinion I think so. No. Well, I'll tell you what's truly incredible down 1.4 everyday car we've had this year. So if we're up again on the same information, then I begin to think that maybe there's some sort of Era of Good Feelings that nobody can learn including some people like I don't know Mike Wilson somewhat negative fellow or yes I don't look someone who's right.

you don't make fun of. But the fact is is that there is a very different tone to what's been going on and I thought it might be predictive of this and when you get these numbers and it still goes up again, that's not like 20. we're gonna make. we're gonna make a run at S P.

4K this morning. haven't done that since the middle of December people were saying 33. There were a lot of people 's housing. There will be there were people who came on an ice age.

Yeah, this is not an ice age. it's just not. uh. we are going to be joined by Nelson Peltz As we've said a number of times, only a few minutes from now.

but you know Jim certainly will turn to you and just ask for your overall take on what we've been reporting since roughly four o'clock yesterday. Peltz is coming after a board seat. Um, really only built his position in the company in mid-november Um. although he did begin discussions broadly speaking with them in July at least with management at the time, of course Disney was run by Bob Chapek.

Disney for his part also is going to be replacing as chairman Susan Arnold with Mark Parker former CEO of Nike He's been on the Disney board for some time. He'll step up to the Chairman role after the next annual meeting later this year. and they're reducing the size of the board from 12 to 11. But the main thing here is they said no to Pals who said I want a board seat? The toughest thing for me until we speak to him, of course is that if I were Nelson turns out to start in July What I would say is look I don't trust Jay Peck and then that was verified by the 1.5 billion dollar surprise laws I would like to see someone at Chairman just right now I think um, I was just writing down some of these key levels that I'll be watching today in case I need to make any snap decisions.

Uh, But also what I do want to talk about is some of the individual aspects of the report. So on the screen right now actually is the true CPI report. So obviously it's a little bit more detailed. So overall it came in at 6.5 and the tone of this is everything was in line the CPI report year over year was in line 6.5 Food is still up over 10 percent year over year.

Uh, specifically with food at restaurants being more expensive. Uh, we have a rise of 10.4 versus 11.8 Energy right here is up 7.3 Uh, the one that's up a blistering amount is actually fuel oil 41.5 gasoline. Now year over year is down 1.5 percent if you look at the core CPI which is CPI without food and energy, it's up 5.7 Once again, in line, new vehicles are 5.9 while used cars and trucks are actually down 8.8 and the other just High number I'm seeing here is transportation services up 14.6 So I just wanted to point out some of the big gainers. some of the big losers: Electricity is up 14.3 utility gas Services Maybe this is why they don't want you to have gas stoves anymore up 19.3 Um.

overall I would say everything was in line. It hit expectations. We didn't come in hot, we didn't come in cold, but the trend is nice. This is now the sixth month in a row that we've trended down.

Uh, we peaked in June of 2022 and ever since then, down, Down, Down, Down, Down, Down. Um, with that type of data, it's safe to say that we're trending in the right direction. You might be able to debate the speed. or is this kind of like, almost like a false Valley we bounce off of it I Doubt it.

I Think the days of getting those CPI reports at 9.1 percent for this current economic cycle are most likely behind us. Um, I Say that a little bit cautiously, but the trend is kind of undeniable. The trend is beautiful. Right now.

it's heading in the direction that is better for everyone globally in, especially here in the US Obviously, there's pockets of things that are still expensive. We still have a big battle in front of us, but the battle's not getting worse. The work that was cut out for us, we are slowly and surely chipping away out of it. Um, so is there going to be another right? Like yeah, Most likely in February We're probably gonna right now.

I Mean when we started today, there was a 77 chance of early February of us getting a 25 bips right? hike? Now it went from 77 up to 95.. So the chance of a 50 bips is quickly quickly dropping before eyes because it seems like maybe fingers crossed knock on wood things might be under control. That's a good development. That's a positive development.

so we're not going to pause. We're still going to get another rate hike, but the odds right now are increasing of maybe in this current cycle this might be the last rate hike we see. Remember, you go, hike, hike, then you pause for as of now, an undetermined amount of time and then you end up doing a pivot. Um, as of now, this might be the last one between this particular rate hike in February and then the next potential one in December or excuse me March Uh, later.

March there's going to be another CPI report. So obviously they're going to take that into account. There's other Pce reports, there's other employment reports. My point is, there's a whole basket of other reports that they're going to take into consideration when they do this.

March 22nd meeting that Federal Open Market Committee meeting the Fomc meeting so we could talk about that one a little bit later. But right now the odds are pretty great that in early Feb we're going to get a 25 bips right? Like it went from 77 up to 95 chance right now. Um, you can check this out on the Bureau of Labor Statistics If you go to Bls.gov you can check out the recent CPI report if that's something that you have interested in in checking out. But we are about 20 minutes out from the Market opening, the market vomited it popped.

Taking a little bit of a breather right now. Uh, the one of clear interest is Bed Bath and Beyond it gained 68 percent yesterday in pre-market trading. it's up another 18 yesterday. GameStop gained seven percent up another one point eight percent in pre-market Yesterday AMC gained 21 up another five percent in pre-market uh, Gme AMC Uh, there's a very fair argument that these are all sympathy plays related to what's going on with Bed Bath and Beyond For those of you who are a little bit late to class today, Um, yes, you get a demerit.

you're late to class. Class started early. You weren't here on time. That's your fault, not my fault.

You need to take a little bit of accountability. Uh, but what's going on with Bed Bath and Beyond is not that long ago. A week ago, the company basically publicly signaled that yeah, we're taking a B line towards bankruptcy. Uh, that prompted a lot of shorts to join the party.

and in this day and age and with the way, the internet has become a big troll Factory which I have to admit is hilarious. People started to buy the stock, putting pressure on the shorts and they're slowly but surely starting to get squeezed. And that's exactly why Bed Bath has put in a pretty crazy move. Actually, let's check this out.

Bed Bath ever since this low on Friday January 6th. Like, we haven't even gone one week up 164 percent as of yesterday's close and right now in pre-market it is up 212. This is ripping ripping ripping if you caught any of this action. I Beg of you I beg of you I plead I'm on my knees begging at minimum set your stop loss to break even.

Don't let this play cost you money. Worst case scenario, you should be break even and in reality as it continues to move up and up and up, drag your trailing stop loss with you I begged out of you. Don't let this cost you money. If your question is, can it keep going? Well, yeah, it totally can.

Here's a look at the internal numbers to Bed Bath and Beyond ticker symbol BBB Why Three B's in a y there's too many bees anyway. Uh, the short interest 37.5 as of Market close yesterday Uh, the days to cover 3.6 the cost to borrow 39, the utilization maxed out at 100. The numbers are crazy. Um, absolutely crazy here.

Let me check this out for you. You're going to see the days of cover drop because the volume is getting higher. But what I want to show to you is the short interest estimated exchange reported or text estimated short interest. All right.

And then let's go in the last three months. Uh, you can see that right here. It's gone from about 26 percent to recently it spiked at 39. So it's just beginning Higher and Higher and Higher And you can see right as they announced it, the short interest started to pick up as the stock was going down.

Because people are like, hey, bankruptcy, we might as well short this thing because they even said themselves that the Stock's going lower and then the internet does what the internet does and starts to cause it to rip. which I will never not find funny. Um, but use the I Guess the history of AMC Gme Noke BB All these things. This concept of getting married to a play is not right.

Um, these in my humble opinion. just my opinion. Maybe you agree with me. Maybe you disagree with me.

These are great for active trades beyond your toes. Be agile. Be the agile. Chris Hemsworth of the stock market.

Don't just get into a position be like I Hope this works out. Actively pay attention to it. It's like a plant that yeah, maybe sometimes you can ignore for an hour or two, but every once in a while check in on it, make sure it's doing okay. This concept of just going in and be like no like I I Think there's a sense of greed that I very much have a disdain for.

If everyone's like no, it has to go higher like I refuse to sell until it gets to this value. To this value To this value, the people who say that are bound to fail, they are 100 percent bound to fail when you're in a crazy high volatility short environment a short squeeze environment I should say like Bed Bath and Beyond The best strategy is Trend Following: don't have this random price Target In your mind that like no, it has to go to 10. it has to go to 20. it has to go to 25.

literally no one knows, No one on this entire planet knows And then yet people on Reddit and Twitter who downloaded the Robin Hood trading account within the past year or two apparently they know a mathematical model that none of Wall Street's ever been able to figure out. I'm saying that like sarcastically and facetiously because it's so so silly. The best model that I know of. and maybe if you know another one, feel free to share it with me.

This concept of price Target Prediction in a squeeze environment. It's so silly. It's just snake oil. It's nothing.

The best thing to do is ride the train. If the trend changes, you pull the rip cord, you take your money, and you take your significant other out on the night on the town. Have a fun time and you move on to the next trade. This concept of it has to.

It's really just kind of greedy of like no, it has to go higher, It has to go higher. It has to go higher. It doesn't have to do. and if you have this mindset that something has to happen in the market, whether with it's with the squeeze and investment a trade, it doesn't matter.

eventually. if you keep applying that over and over and over again, you're going to get severely burned and basically blow up all the gains that you have that you gain from that mindset beforehand. I Am pleading with you. Ride the trend as long as the trend is intact.

Stick to your plan. If the trend changes, take your money and move on. and just be grateful for the fact that there's so many internet trolls and probably some people within Wall Street attacking other people within Wall Street But you just move on. Just take your money.

That's fine. The point of being in the market is to make money. Um, so if you're in it I Personally have no position in Bed Bath and Beyond I find it to be a fascinating story. The Reason I'm not in it is because of this.

it's already moved so much. If I wanted to get into it, it should have been between Monday and Tuesday like on this turnaround, but by the time it starts to rip I'm just late to the party I miss the play and that sucks like it's up a lot of money. but if I had any position right now, that was whatever let's say below 350, you bet I would just be setting a stop loss at my entry point and as it keeps going up, I would just be increasing my trailing stop loss behind me to guarantee that I make money on the trade. Guarantee it.

Remember this whole stuff with AMC and Jimmy Right now it is 100 a sympathy reaction to Bed Bath and Beyond If you never heard of a sympathy play, it's basically where in one way or another, a related security ends up trending in the same direction as whatever the initial one is that moving. So basically Bed Bath and Beyond is the originator in this movement and people are like, well, maybe I missed that play, but maybe other memes are going to start to move. and then enough people believe that that AMC starts to go. Gme starts to go, but understand this is a phenomenon that's most likely related to basket training, so they're thought of as like a similar cohort.

and that's exactly what we're seeing. So I Just want to put out that out there. there's no particular news related to AMC or Gme in this, like short period of time. Uh, Fundamentally, these are not fundamental plays I Want to be very, very clear about this.

These are not fundamental plays based on their current numbers. I Want all the companies to turn around and improve fundamentally. Obviously, they have employees, people are invested in it. But if you just take a snapshot in real time of their fundamental numbers, the things are just not that strong.

We're in a very tough economic situation. We're in a very tough quantitative tightening restrictive period. Interest rates are high, debt is becoming expensive, and these companies are just. they're right now.

They're just suffering of kind of a negative bearish macroeconomic environment. Obviously, things can improve, but if you were just to pause everything right now, take a screenshot. Things are not looking that good. That doesn't mean that you can't have crazy movements.

To the upside, it's more of a signal of like, okay, if you are bullish and you get a crazy movement. to the upside, maybe when things turn, take your money off the table. I'm honestly sick and tired of people just getting married to these plays for absolutely no reason whatsoever. This is a quick shot of Bbby once again.

Short Interest: 37.5 percent utilization maxed out I Know a lot of people are going to ask me. so I'll just give you the other numbers right now. if you look at AMC the short interest is 22 utilization max out. Cost to borrow is a hundred and nine percent.

Very, very high If you look at Gme uh, let me give you that one very quickly. the short interest is 24 utilization max out, and then you have a cost to borrow of 21. Remember, these are important numbers, but they're not the only numbers you have to look at the float. Uh, obviously the bigger the float, the more difficult something is to move.

Um, you have to look at general interest across Wall Street But also retail, so pay attention to what's going on in the world of Reddit Twitter Any whatever your favorite social media is, uh, pay attention there. Like is it getting traction among just the retail trading cohort? That is something very much to pay attention to. Um, so there's all your numbers on AMC Gme Bed Bath and Beyond we'll be watching them throughout the day. Um, kind of craziness.

I'm curious if Bed Bath will be able to hold like as of now. Um, it's still up 20 which is absolutely crazy. Uh I myself have no Bed Bath and Beyond position I Do have Gme shares I do have AMC shares. Um, at this point I would love to get out for Break Even but for for me to get out for Break Even they would have to go quite a ways quite a ways.

Did you ever sell your sizable Mullen position. Never had a mall in position. That's another one that I very much think is a great active trade if you want to trade. Mullen Great Ride it to the upside.

Uh, eventually this is gonna get knocked and come down horribly. Don't get caught being a bag holder. Basically the name of the main theme of today's stream is don't be the person caught being a bag holder. If you're going to be an active Trader Do that.

Don't leave. Your active trades turn into like long-term Investments That's a little silly. a little silly. a little silly.

a little silly. All right. let's get ready. Market Opening in 10 minutes and then President Biden will be speaking about the CPR report he'll be speaking about kind of like the economy overall and that stuff around 10 a.m this morning.

So Bell goes dingy ding ding ding in nine minutes. and then Biden speaking at nine or 10 a.m excuse me 10 a.m ET American Airline hikes quarterly Revenue profit estimates after strong fourth quarter. Um so American Airlines Had a pretty solid report. Uh, I Believe.

Speaking of basket trading and related cohorts, whenever you see the first big report of any Airline, you can kind of generally assume the other big players are going to be like that. So when Americans says something like this right away, I think okay Delta's going to say something similar United is going to say something similar Southwest most likely I Know they had a little bit of a specific issue in the past quarter, but they never really deviate from each other. So as soon as I know how the first major airline reported, my best estimate is that that's how the other airlines are going to go for that particular quarter. So American good numbers I'm expecting good numbers out of United Delta and also most likely South West It's hard to believe in a U.S recession this year thanks to three signs of economic strength.

So I know a lot of this is more of like okay, why haven't we heard it? Uh, but remember, the recession is commonly, well, the way most people are taught, it is two consecutive quarters of economic retraction of your GDP going the wrong way. But in reality, a recession is defined by the Nber, the National Bureau of economic research and that group of I'm assuming economic nerds. They're not going to say it's a recession when unemployment's this low 3.5 percent incredibly low and the job market is this tight. Um, yes, there has been a GDP retraction a shrinkage in the wrong direction, but they're not gonna say anything when the job.

Market's this good. When the unemployment's this low, they're not going to call it a recession. Has it become a political tool? Without a doubt? I'm like I agree with you on that. Um, is it a little silly? Yeah, it is a little silly I guess I'm just calling out what their reasoning is.

Maybe you agree with it. Maybe you disagree with it. I'm not really saying that I agree with it. I'm just letting you know kind of where they're at at this moment in time.

All right, where are we at? How much time do we have? About five minutes? A little over five minutes? I've been watching you for two years now and very much enjoyed to see your journey and growth. Although I don't always agree with you I very much appreciate your points of view. Have a blessed day. Shout out Zero! That's so 19 months and you just gifted five memberships.

Everyone give zero a little bit of a round of applause. that was so incredibly nice of him. Slasher I Just guess a guy because I think 80 90 of my audience is male I Don't mean to misgender anyone I don't need to get canceled. All right.

Uh, Prty is ripping way more. Uh, this is another one right here. Party City Uh, it's up 23. You said it's whip ripping way more.

Uh no, it actually isn't. like just based on like the percentage gains it's not. It might be moving. it's just another one that people have realized that they're shorts and they think hey, maybe we can screw over some shorts.

Maybe maybe Maybe Did I Talk about Bior already I Talked about it yesterday. Is it still moving? Um, it moved up yesterday, but now it's getting smacked in pre-market Um, this. the levels aren't actually this good. at 670 they did a 25 for One reverse stock split.

So basically what