. it's 5:00 a.m. at cnbc global headquarters, and here's your 5 at 5:00 the november rally continuing to regain momentum on growing evidence of a cooling but growing economy. president biden hailing productive talks with china's xi jinping but showing limits in the push to ease ongoing tensions inflation over that's the take from morgan stanley's outgoing ceo setting a new target for the fed's fight against high prices. shutdown averted the senate working late into the night to complete a deal to keep the government up and running.

and walmart on deck as the retail giant hopes to duplicate rival target's quarterly success with its well-received result yesterday. it is thursday, november 16th, 2023, and you're woatching "worldwide exchange" on cnbc good morning, and welcome to "worldwide exchange. i'm mike santoli in for frank holland. something of a quiet open. yesterday the s&p 500 did manage to tack on about 2/10 of a percent to the prior day's rally. leaves the s&p up about 10% from the lows of just about three weeks ago on the correction there with signs of cooling inflation being reinforced by the ppi number yesterday the dow at this point indicated basically flat the nasdaq was the outperformer. again, yesterday it is showing a little bit of weakness down 24 points at the open watching shares of target at the

back of yesterday's post earnings rally, the stock jumping 18%, the best day in four years you see shares actually following through a little bit to the upside off about 2/2 of a percent. cisco shares plummeting on worse than expected guidance the stock down almost 11%, a little bit worse in the immediate aftermath of the report and the guidance after the close yesterday. we will have more on this and what cisco's ceo is saying coming up. and checking the bond market, obviously been a big part of that story the pullback in yields from 5% or, above 5 on the two-year note yesterday actually yields elevated a little bit. kept the stock market rally in check. ten-year note now right at 4.5, excuse me, it was down from about 4.62 just two days ago, and energy, oil prices have been benign for a while now, down another quarter of a percent certainly some global growth demand concerns weighing a

little bit now wti crude weighing 76.43 also giving us a little more evidence of that cooling inflation as well. sticking with the markets and positive signals in the fight against inflation with wholesale prices seeing their biggest monthly drop since april tw2020 this month fueling an optimistic outlook from james gorman speaking with our colleagues at the asia summit gorman was asked if he thinks we've officially tackled inflation. >> my simplistic answer is yes, inflation was 10%. there were some structural issues are we done? we've not done is 2% absolutely necessary, my personal view is no, but directionally to be heading in that around 2, 3% i think is a very acceptable outcome. >> for more, let's bring in

annika treon markets seem to have come more over to the view that inflation was maybe last year's problem here in the u.s., to some degree in europe as well. in the u.s. anyway, growth seems like it's holding together is there anything that gives you pause about that outlook, or can we be comfortable with it? >> i peen, we would certainly agree with this big release. it's also what was mentioned earlier, direction, the direction of managing this inflation problem is looking really encouraging we're not at that 2% target, but the big question is is this 2% number even that important what's more important is the feeling that inflation is under control, which is key. >> it certainly is key, and you know, interesting you bring up is the 2% number even that important? i suppose you have to have some

kind of target even the federal reserve in its most recent outlook doesn't anticipate getting specifically to 2% for another couple of years. it seems as if there's a lot of room in there to allow policy to do its work. is it your thought that the federal reserve and the ecb have done all they're going to do in tightening >> well, definitely. both central banks have introduced symmetry in the inflation target, which is one step closer to being more lax about the fact that we're not hitting that 2% number have they done all they need to? so on one hand, this is really, really good news this means they need to be less aggressive it means that rate increases have been working through the system on the other hand, financial conditions are very important, and because financial conditions have basically tightened themselves because of bond yields going up, stock markets going down, well to certain areas. that made central banks feel more comfortable the economy was

tightening itself especially because of bond yields if bond yields get more and more benign, that does mean that central banks have to watch a little closer. >> what do you think about the growth outlook, at this point, you know, in the u.s., 4% plus gdp number in the third quarter tracking 2% here looking like a little more of a slowdown in other parts of the world. what's your take on whether the supposed hope for a soft landing can occur? >> the growth rate has been amazing. far higher than what we would have expected. we need to ask ourselves why and i think the problem that all, you know, economists like myself go through is we go through this statistical extrapolation. we're obsessed with saying this happened in the last cycle, and this happened in the cycle before, therefore growth has to come down. but you know, there's a bunch of stuff happening. i mean, one big lesson we've learned is the interest rate sensitivity of the economy is far lower than it's been in the past, so you know, rates have gone through the roof in a very

short period of time, and the economy is sort of okay. so you know, do we need to stand here and be very bearish about global growth? no, we don't do we need to be cautious about extrapolating strong earnings growth estimates on certain companies, yes but that's not the same as being very bearish about global growth. >> it's a good reminder that somewhat slow but steady growth was a pretty decent formula sometimes for financial markets. w we'll see if that can be the case again thanks so much for the time. turning to developments in washington and congress get ago deal done to avoid a government shutdown late last night, brie jackson joins us now from washington with more. >> reporter: the senate overwhelmingly pass add two-step continuing resolution. its passage means a government shutdown has been avoided, at least for now. the continuing resolution bill will fund the federal government through early next year. the bill does split government

funding into two groups, some departments will be funded through january 19th, while others will be funded through february 2nd this means that congress will have to deal with two more government shutdown deadlines in early 2024 now, the ladedered approach was not favored by some. among other things, the spending bill does not include wartime aid for israel and ukraine that's something that the white house pushed for but senator chuck schumer says lawmakers will work on coming to some type of agreement for funding for the war-torn countries after the thanksgiving break. the bill heads to president biden's desk for him to sign into law but again, it is only a stopgap measure, so mike, we're likely to be back to government shutdown talks after the holidays. >> yeah, another chapter to come, brie, thanks so much. let's get a check on some of this morning's top corporate stories, silvana henao is here.

>> good morning to you general motors tentative labor deal with the united autoworkers moving closer to ratification. the union continuing to count votes by members following the approval of the agreement by workers at gm's arlington texas assembly plant yesterday that vote coupled with strong votes in favor by smaller warehouse and parts facilities, helping to offset votes against the deal earlier in the day. tiktok apparently joined meta platform in the fight against attempts to make the eu market more competitive the chinese based company challenging the decision to -- gate keeper under the digital markets act saying such a designation could hinder its ability to grow. tiktok arguing it does not meet the required criteria to fall under those rules. and microsoft's ceo says his company is fine avoiding china's

market is satya nadella stressing his company doesn't rely on the company for too much revenue as it navigating growing u.s. restrictions. >> the reality of tech as an industry today is it's globalized, and the question is how does it sort of reconfigure as all of these new policies and trade restrictions all just play out, whereas trat least for now today, the majority of our business is in the united states and in europe and in the rest of asia, and so we don't see this as a major, major issue for us quite frankly other than any disruption to supply chains. >> microsoft has a more visible presence in china than some of its peers with meta's apps or google's century engine not working there and amazon closing its online marketplace in 2019 >> thanks so much. see you again soon a lot more to come here on

worldwide exchange, including the one word investors have to know today. more on the highly anticipated sit-down with p president biden and xi. and we talk to a walmart investor ahead of those results on the key metric she's watching from the retail jienlt d giant and we're on the ground in las vegas as drivers gear up to race the streets of sin city this weekend. back momt. in a moment in a moment. in a mo. (sfx: stone wheel crafting) ♪

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welcome back take a look at u.s. futures. hanging around the flat line, which means they're hanging on to the recent gains. the s&p 500 around that 4,500 level. it's about a two-month high down just a point so far in the early going. dow jones industrial just barely positive and the nasdaq off about 20 points. let's see how europe is shaping up as its trading day gets underway julianna tatelbaum with the early action. >> great to see you. here in europe we're off to a mixed start. we've got some green, some red on the board germany trading up by 4/10 of a person half a percent higher for the spanish market and the italian market hoteling up on the downside, underperformance in the uq, ftse down 4/10 of a percent tech 40 down a third of a percent and the smi in switzerland down about 2/10.

it is a decent day let me highlight two movers. part of the reason why germany's outperforming siemens reported record revenue profit at its industrial business rose 11% on the year to 11.4 billion euros as comparable revenue jumped 11% in contrast here in the uk, we're seeing a major slump in burberry shares. the british high end fashion group has warned full-year operating profit will come in on the low end of forecasts amid a global shelowdown in luxury spending in china they've seen a slowdown in september they've also seen a slowdown in sales in the north americas region shares are down nearly 9%, dragging broadly on the rest of the luxury space mike, back over to you >> thank you so much, peerkt it.

president biden meeting with c chinese president xi jinping yesterday. the two leaders spending several hours in talks to try to improve relations between the world's two largest economies. they agreed to reestablish military communications and combat the flow of illegal fentanyl into the united states. both biden and xi stressing while the u.s. and china are global competitor, they're not locked into a winner take off face-off. >> we're in a competitive relationship with china and the united states, but my responsibility is to make this rational and manageable, so it doesn't result in conflict >> i'm still of the view that major country competition is not the prevailing trend of current times and cannot solve the problems facing china and the united states or the world at large. planet earth is big enough for the two countries to succeed >> a u.s. official says biden

and xi had a significant back and forth discussion on taiwan and the president called on xi to use his influence with iran to make it clear not to expand the israel-hamas war chinese state media says xi was also focused on u.s. export curves and restrictions on chinese products and businesses. let's talk more about all of this with rick waters, managing director for china at the eurasia group. he's also a former assistant deputy secretary and china coordinator at the u.s. state department rick, it's great to have you this morning given where this relationship was not terribly long ago, i'm thinking about the sort of flare-ups over taiwan and the back and forth on the restrictions on technology does this qualify as a real thaw is it a real reset of the relationship are we dialing it back just a little while to where it was before >> well, good to see you i think -- the way i tend to view this is they're in a bit of

a tactical pause in the strategic competition where the fundamentals haven't changed it's been a year and a day since the presidents have spoken, and their last meeting in bali last ye year, it meant to stabilize the relationship if we remember back to that time, no sooner do they agree on a tactical formula to manage the relationship through single level engagements, then you have the surveillance balloon go across the u.s it takes several months to get the process started. they've had senior level cabinet meetings they have put forward a loose framework of working groups between the two governments, and the basic goal is to manage unintended conflict and manage the competition responsibly, but i don't think that we saw from this meeting any strategic change in the picture. >> i do want to get to the sort of private sector implications here president xi was back in san francisco last night speaking at a dinner at the hyatt regency hotel. the audience included some

big-name ceos, elon musk, tim cook, pfizer's albert bourla xi delivering a message to u.s. businesses that got a standing ovation. china is a big market and a friend >> well, the business speech, i think is a feature of xi's business -- >> translator: it is the reaching out to each other and our peoples that has time and again brought china/u.s. relations from a low back onto the right track. i am convinced that once open, the door of china/u.s. relations cannot be shut again so yeah, so rick, your reaction to that message and how it might be received? >> well, i think xi is trying to send a signal of predictability and openness to foreign investors, but i think the speech was long on positive generalities and short on specifics. i think the big questions that the businesses assembled there were looking to have answered, you know, what does he mean when

he talks about better coordinating national security and development? what are the specifics of the data security regimes and the other illegal structures that have been put in place to defend the state industrial policy that presents a lot of fundamental challenges for u.s. and foreign investors. so i don't think that i saw too much new by way of specifics from the speech, but i do think china's signaling that in a general sense they remain open as a market under the conditions that currently exist. >> yeah, and i guess, i mean, a willingness to remain open is one piece of it. another, i suppose is just how much of a growth story will remain with china domestically it seems like that for u.s. businesses and for investors is perhaps the bigger question. >> it's been the story of a lot of this year i've been back to china i think six times this year, and you know, to be fair, i think very few countries had a bounceback after covid. the u.s. was a bit of an exception.

so the cyclical struggles that they faced after the end of covid's hero policy were in some ways expected. i think that the problem really that many are debating now is how much of the structural picture, the challenges they face in terms of demographics, local government debt, and essentially the end of the current drivers of their growth model. how much of those challenges can be overcome through new sources of growth, and that's still a very big question that i think everyone from the party leadership to investors are debating >> absolutely. we'll continue to do so, rick waters, thanks so much appreciate the time. >> thank you. >> and we'll have more on the response from beijing coming up later in the hour. ah ahead we're back in a moment

what is cirkul? cirkul is the fuel you need to take flight. cirkul is the energy that gets you to the next level. cirkul is what you hope for when life tosses lemons your way. cirkul. it's your water, your way. . time now for your big money movers palo alto shares under pressure. the cybersecurity company issuing weak guidance on billings due to more frequent payment referrals or kdiscount requests from customers. ceo na kesha says the market is extremely volatile and getting spooked by lower guidance. >> we had a great quarter. we beat almost every metric, phenomenal profitability, in a

market that's extremely volatile i think the market is getting spooked by the fact that we adjusted billings guidance down. >> shares of maxon solar technologies moving lower. kpaent posting a bigger than expected third quarter loss of $2.21 compared to the sestimate of a loss of $0.90 maxon issuing a weak revenue outlook for the current quarter and full year. shares off by 8%. cisco shares are plummeting on worse than expected kguidance cisco's ceo chuck robbins speaking with cramer telling him clients are installing and implementing products after an uptick in deliveries in the past three quarters the backlog is now back to normal >> as we got into the quarter, we came to the conclusion quickly that because of all the inventory that we have shipped into our largest customers, we have a problem where they have not been able to consume all of that technology, and we have

really unloaded over the last six months our backlog is now back to normal >> all right, formula one racing is enjoying a surge of popularity, especially in the u.s., but what happens when a single team like red bull is dominating that's one question cnbc's sara eisen explores in a new documentary about the business of formula one she has more from las vegas ahead of this weekend's grand prix race. >> and mike, that lack of competitive drama at the top is one of the points of tension in the sport right now when it comes to growing fans. f1 parent company liberty media has invested a fortune, more than half a billion dollars in las vegas to make this race a success. everything from buying land to building a permanent paddox structure building on top of the track. they are trying to build the sport in the united states and have had remarkable success so far in doing that, but there is a little bit of a lack for

competition. max verstappen has won 17 races, a record amount so far this season he's already captured the championship red bull has the best car in the league right now, and is completely dominating. does that make fans less interested it's certain willly a topic i tackled. >> hasn't this always been a problem for formula one, it's two, three teams that dominate you christian want the business to succeed, i know you want to win every race >> tell me which major legal sport does not have three or four teams that are -- you know, they're always there. >> but the last team gets the first draft pick there are more rules to make it more equitable. >> and i think the cost cap is going to do that but it's going to take a period of time. i think that it's for the other teams to raise their game, rather than us to lower our game >> max may win every race, but for super fans like i have become, it's been an exciting season to follow the second, third, fourth and fifth place

drivers. for instance, mclaren racing team, cnbc is a sponsor of mclaren has had an amazing comeback and is now taking podium spots because of a software zbupgrade they made on the car. just how technologically savvy these cars are engineering miracles as to to wolf told me it does change the fortunes of the drivers and the teams. one thing f-1 is and liberty is hoping continues here at the las vegas grand prix, which they really are making a bet on the growth of the sport in america back to you. >> thanks to sara eisen. you can see the full documentary "inside track: the business of formula 1" when it premiers on cnbc tonight at 8:00 p.m. pacific and eastern. tell you about the two entertainment giants duking it out in cou ortver the crude cartoon. we'll be right back.

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it's just past 5:30 a.m. in new york, and there's still a lot ahead here on "worldwide exchange." here is what remakes on deck stongs continui stocks continue to regain momentum futures pointing to modest pressure at the open. president biden celebrating productive talks with xi jinping, but calling him a

dictator reaction there to the high-profile sit-down. and getting ready for walmart's results, the investor perspective and the key numbers to watch in those earnings it's thursday, november 16th, and you're watching "worldwide exchange" on cnbc. welcome back, i'm mike santoli in for frank holland this morning let's pick up the half hour with a check on how the trading day is shaping up. developments late last night with the senate approving a stopgap funding bill avoiding a potential government shutdown. you see futures right now actually turning modestly positive we were backing off a little bit about a half hour ago. the s&p 500 yesterday up 2/10 of 1% hanging on to the prior day's gains of 2%, leaves the index up 10% after that correction low in late october the dow looking to tack on 20 and the nasdaq in sights of pulling flat again in the bond market, yields are

tame this morning, about 4.5% exactly on the ten-year note remember, down from 5% a few weeks ago. 462 before that cpi report a couple of days ago two-year note under 490. also, oil has been helping the picture as well. remember, not that long ago people worried about $100 oil in early october. now 76.25 on wti crude, brent at 80, natural gas just a little bit firmer walmart set to report earnings in just over an hour. the key focus for investors, growth in its e-commerce business walmart plus and whether its lead in grocery can continue this after shares of target jumped double-digits on a revenue and earnings beat yesterday. though walmart's still outperforming target by quite a bit this year. joining me now to discuss, ka lay ka deena pew wa, president, ceo, vice chairman of kadina and company who is a shareholder of

walmart. it's great to have you here. exactly what would you be looking to hear from walmart it seems like investors have given the company a lot of credit just for being in the right place for this environment in terms of its focus on essentials, its execution. the stock reflecting a lot of that what would you be looking for in the numbers today? >> well, first of all, thank you for having me again, and good morning from hawaii. you know, the market is watching the results of all of these retailers, notwithstanding walmart and looking for signs of continued consumer strength. i feel like every time an earnings report comes out i'm watching a sequel of a rocky film the consumer just is battling and battling to hang in there and stay resilient we're really watching for strong consumer numbers the expectations, i think, are a little bit different than when target was reporting yesterday walmart, as you said, has been

outperforming target, and so the expectations are really high and the market has been pretty critical of companies with high expectations if they miss at all. so we're looking for forward guidance, forward strength, and hopefully walmart will close out their fiscal -- second half of fiscal year on a strong note. >> in terms of the examinations, the consensus estimates for the current quarter that they're reporting today did inch up over the course of the third quarter, so it seems as if there's a lot of confidence that they can meet these numbers. where does it leave you with regard to walmart's valuation? i mean, it basically trades in line with the nasdaq 100 at, you know, 25 times forward earnings. it often has gotten a premium over the years but this is a pretty rich one. >> it definitely is. i mean, walmart's five-year average p/e is at about 23.5, and they're currently trading over that. so it's -- you know, on a historical basis it's not cheap.

so what we're watching is that they can continue their growth, and i think management has done an excellent job at pivoting the bulk of their revenue and their sales have been dependent on food and so it's moving away from being more of a traditional grocery provider into what they refer to as their fly wheel business so higher profit margins from these businesses you mentioned e-commerce, you know, things of that nature that can continue to boost external growth into the future, so that's really what we're watching for today. >> how do you think about the current inflation story when it comes to walmart obviously they've been kind of an instrument of disinflation over the years they try to do everyday low prices, but obviously their expense is up, and they were to some degree a beneficiary of higher grocery prices along the way. how does that shake out in the current environment? >> you know, i think the current environment still, you know, while inflationary trends are

trending lower, we had some really decent inflation numbers come out this week that tells us that, you know, some of that pricing pressure is beginning to -- you know, to be diminished on the consumer. what's really important is to watch where the consumer goes from here. so savings rates as pretty much everyone knows are down extremely low. what we're also seeing is because of the pressure from inflation, there really isn't a lot of discretionary spending left fortunately, enough the jobs portion of the market has stayed very strong, income levels have remained stable, and so the consumer is still being able to provide some discretionary spending and help with the retailers in this, but i think today is a critical insight into where we go. we're beginning to secret card delinquencies on the rise.

first it was in 30 days, 60 day, now we're seeing 90 day. that's nearing pre-pandemic -- or you know, pandemic levels so the consumer is definitely not as strong as it was in the first half of the year, and so we want to see some news that the consumer with the lower inflationary numbers are continuing to be able to be resilient into the future. >> yeah, walmart has probably the clearest read on all that. we'll be eager to have to say. thanks so much appreciate it. >> thanks so much for having me. >> let's get a check on some of this morning's top corporate stories. >> new developments in the united autoworkers strike against volvo owned mac trucks 3,500 members have ratified a new five-year contract in the u.s., improved retirement benefits and a reduction in time needed to get top pay. this contract endsed group's

39-day long strike and follows the rejection of an earlier deal in october. a win for paramount in its lawsuit with warner brothers discovery over streaming rights for the animated series "south park." a new york judge ruling paramount did not violate any state consumer protection laws when airing "south park" specials on its paramount plus platform warner brothers had alleged paramount deceptively withheld the specials and other south park content to bolster the pla platform's offerings warner paid paramount $500 million in 2019 for the rights to the back catalog of "south park. and all clear for takeoff at elon musk's spacex the faa giving the company the green light to launch its starship rocket for the second time during a two-hour window tomorrow morning the starship had first launched in april before exploding midair prompting an investigation by the faa over environmental and infrastructure concerns, mike.

>> silvana, thanks very much appreciate it. all right, turning to that highly anticipated sit-down between presidents biden and xi, the pair characterizing the meeting as their most productive today. while president biden touted progress, he also stood by previous comments calling xi a dictator >> we're in a competitive relationship, china and the united states, but my responsibility is to make it -- make this rational and manageable so it -- so it doesn't result in conflict here's a guy who runs a country that is a communist country based on a form of government that's totally different than ours. >> eunice yoon joins us now from beijing. so eunice, assuming leaders there may be not pleased with the remark, that last one that we heard from the president, though a lot of it is sort of reiterated from prior remarks.

>> reporter: yeah, it was interesting because the foreign ministry today was asked about that comment about president xi being a dictator and even though the ministry spokesperson said that it was extremely wrong, what was interesting was that they didn't ascribe that comment to president biden, which suggests that china just wants to move forward and play this down a lot in fact, it's not being reported here at all in the state media, but what is being reported in the state media is that the san francisco meeting is, quote, a new starting point for stabilized u.s./china ties the narrative is that the great statesman, president xi had gone to meet with president biden, and that he was seeking peace. the two, as has been reported in the u.s. as well, were able to deliver on a few things. one, that they agreed to reestablish high level

communication, especially on military to military exchanges, which is something that president biden had wanted also, there was a crackdown, agreement on a crackdown on fentanyl ingredient exports from china, and then finally, the two are going to work together on ai regulation now, the pattern here, though, mike, is that we hear a lot of talk, but not necessarily a whole lot of action. so we're going to see whether or not president xi and his administration are going to be able to make some changes in order to try to rebuild trust and confidence among foreign investors. >> for sure, and that is a big piece of this whole meeting as well just exactly what that project is about in terms of xi meeting with ceos last night, trying to sort of reestablish china as an attractive place to invest and do business, and you know, what are the prospects that that's

going to change the tone of things at all? >> reporter: well, i thought it was interesting that president xi was able to directly pitch to a lot of the ceos, and he was -- he said that china is a partner and a friend he was selling the idea that chinese modernization is a massive opportunity for american businesses, and in fact, the state news agency has been quoting elon musk as saying that he's looking forward to the future of u.s./china relations and the development there. so there's a lot of rosiness around this, but it's sailtill a big question mark about whether or not he's going to be able to make changes that are actually seen as undermining the economy here, but also undermining investor sentiment that is, for example, the crackdown on private equity, the ramped up anti-espionage campaign, and also the increase of the tensions of foreign

executives, as well as private enterprise >> yeah, exactly i mean, getting a standing ovation is a start, but we'll see where it goes from there, e eunice thanks so much. coming up, we stick with china and fresh concerns around s economic struggles "worldwide exchange" is back right after this

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target it cites in part improving pc and data center picture for the company. you see the shares up just modestly about 6/10 of a percent. bank of america downgrading advanced autoparts rating moving it to underperform and $43 a share. b of a saying it believes the stock is unlikely to advance with a rocky road ahead in the medium term. shares off almost 2% after a rough time in recent months. and the downgrades continue for plug power this time from citi moving its rating to neutral, high risk citi saying there is a narrow way out of near-term issues including some liquidity problems, you see what's gone on with that stock there, it is off another 2 3/4 percent this morning. shares of seemans moving higher during its fiscal fourth quarter reaching a record high of more than $32 billion siemens expects a slowdown in

t 2024 due to destocking by customers. shares up 5% in china, new home prices falling for the fourth straight month as weakness in that sector continues to drag down the country's overall economy. the decline in prices hitting levels not seen since the pandemic, despite a number of attempts by the government to incentivize purchases including relaxing curves on home purchases and lowering borrowing costs. tiktok joining platforms in the fight against the eu's attempts to make online market more competitive challenging the block's decision to brand it a gate keeper under the digital markets act saying such a designation would hinder its ability to grow. tiktok arguing it does not meet the rekwquired criteria to fall under those rules. the one word every investor needs to know today, why our next guest says it's looking like a risk-on mentality as we

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with an immersive online education crafted just for traders. all so you can trade brilliantly. welcome back to "worldwide exchange." time now for your weeks wrap up. a stopgap funding bill now heading to president biden's desk for approval after passing the senate last night. the bill will keep the government open until after the holidays president biden and chinese leader xi jinping agreeing to resume high-level military communication after meeting for the first time in a year alongside this week's apec summit. morgan stanley's ceo james gorman saying inflation has been tackled. gorman saying there's still room for the fed to continue its fight, he sees a 3% target as acceptable compared to the central bank's 2% inflation goal watching shares of target on the back of yesterday's post-earnings rally where the stock jumped 18%

that was its best day in four years. backing off just slightly off 8/10 of a percent this morning the u.s. seizing the largest amount of fake designer handbags, shoes, and other items on record valued at more than a billion dollars. federal prosecutors also charged two people with trafficking counterfeit goods. and union workers at starbucks planning to launch their largest strike every today over stressful working conditions during promotion events like today's red cup day. starbucks has notoriously understaffed stores and is refusing to listen to workers. here's what to watch today we'll get several pieces of economic data including jobless claims, the philly fed survey, and homebuilder sentiment. several more retailers report earnings including walmart, macy's, gap and ross stores. we also get results from alibaba and applied materials. a number of fed officials are speaking throughout the day including john williams and fed governor christopher waller and don't miss cnbc's exclusive

interview with cleveland fed president, loretta mester today at 1:30 p.m. eastern time. another busy day on tap. let's get a check on how stocks are shaping up futures have firmed just a bit modest losses turning to a flat line performance after a good run of about 10% in three weeks in the s&p 500 joining me now is, brian lev visit, global market strategist for north america at invesco good morning intell you, a lot of it especially with the benefit of a little hindsight, looks pretty textbook you know, we got the weak seasonal period, market at a high august, september, october, late october low off of a correction. bond yields come down, retrace some of their gains. where does that leave us right now? because a lot of the complaints about this market going into this space was it's too top heavy, it's only a few stocks working. can the economy handle yields at this level where are we now >> it was too top heavy, and what you're seeing now is a market that's broadening out and will likely continue to broaden

out. the reality is we're in a nice patch here, which is inflation's come down, and the unemployment rate has stayed low. you look at a misery index, it's interesting, a lot of americans aren't feeling good about the economy or about the direction of the country, but the reality is the misery index at 7%, which is unemployment rate plus inflation is quite low this is a market that's likely to move higher and it's going to be more of a risk-on environment than what we saw during that time of a top heavy market. >> it seems as if -- you mention t mentioned this kind of window it's in now, after the fed has done what it's going to do on interest rates unemployment still low usually there is a little bit of a period where markets can perform pretty well in there, although this market, this cycle hasn't always con foformed to ts rules. also, it still leaves us, though with that persistent aren't we in the latter part of the cycle,

aren't we waiting on the lag effects to work on the economy and therefore corporate earnings >> yeah, amout some point the economy's going to slow. it's been more resilient than some people expected but even in a slowdown in the economy, equity markets tend to do well. so as you think about 2024, the way we're thinking about it is we're expecting to come in with a market that's broadening, leadership in value, smaller caps, international, things that hadn't worked well recently, and then as the economy starts to slow, you tend to want to shift into more quality equities again. but to me, what i come back to is the principle, but it's time you get to peak inflation, which we had already 15 months ago, and peak tightening, you tend to see markets do well over the subsequent years so even if we have some hiccup around the economy call it, late 2024, early 2025, history

suggests that markets do well after inflation has peaked and come down, and that's over two three, four years. >> and unprompted you did say your word of the day, which is peak. >> peak. >> across the board, you're seeing that the markets kind of feast off of all that. just quickly, where does it leave you with regard to those very large stocks that have gotten that quality premium in the nasdaq that have driven the gains this year? >> yeah, i don't think it means that those stocks do poorly. i think it means that they underperform on a relative basis, which means you want to diversify. if you're an investor right now, and you're sitting in money markets, which a lot of investors are, and you're sitting in growth stocks, when the money markets move out and lock in some of those yields, go into corporate municipal bonds >> diversification has been rep repealed brian lev visit, thanks a lot.

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good morning, president biden hailing what he's calling productive talks with president xi of china, but showing some limits in the push to ease the ongoing tensions we'll bring you the highlights another busy day on wall street today we're talking about, yesterday was pretty busy on the docket, jobs and trade data and more major retailers are going to report. and overnight in washington, the senate went skmaeahead and d that bill to avert a government shutdown, kicking the can on major spending fights in congress to early next year. so you know, got a couple of

weeks. it's thursday, november 16th, 2023, and "squawk box" begins right now. ♪ good morning, and welcome to "squawk box" right here on cnbc. we're live from the nasdaq mark site in times square i'm becky quick along with joe terranova -- joe kernen. dow features down by about a point, s&p is only down fractionally and the nasdaq is off by 13. it comes after more gains we saw in yesterday's session for the major averages after a second straight day of softer inflation data first you had the cpi two days ago and yesterday was the ppi. both those numbers weaker than expect