obal headqrters. hot streak. stks on real timeince 27.fothe rst ere is sti oneortest f the rkets. and big part of e rerd magnicent ven. we will yout the ralnd if it can strch into the w ar and ybe beyo. >>invest fatue. the onlyossible headnd to more ins befohe end of the year. rada hot spo on thader's

mome. o ur porolio in a anless tn a moh go the ce fhite hse is just tting stard. latein the sho alex rodrigz scorg g on wal it is mond, deceerh, 2023. u are watching "rldwide exchange" here on cnbc. good morning. welcome to "worldwide exchan." i'm frank holland. hope you had a great weekend. let's start the trading week with the kickoff on the check of the u.s. stock futures. after a mixed session friday, e dow added another record since 2017.estin seak we are seeing green across the bod. the dowould en umore than 50oints hier. p and sdaq botfirmly in are cckinthe bo

rket. the ten-year yield is low 4%. ok right now. 3.89% yid on t tenear yid. are lookit e oil ere rket rht now. $71 a barr. brent udis down .5. rbobas. a proxy r gas. it is wn.5%. at's t mey s up. let's sehow eupe ishaping up as the trading day gets uer way. umanna bercetche is live in the london newsroom withore. joumanna, good morning. good morning, frank. after five straight weeks of gains for the stoxx 600, tay, the open is lookinmixed. we are leaning toward the red for the stoxx 600. cac 40 is coming off the all-time recorhigh f the end

of last week. they are slipping in trading today. we see an undeperformance in real estate at the start of trade. ftse 100 here in the euk is we are keeping a close eye on the mmodits. we see t bouncgiven the red sea geopolitical events. that is ticking higher for the stocks exposed to those events. the dax is bouncing. at the bottom, we have autos. cac 40 in france is down40%. luxury declines this morning. let me bring you the latest fr oci. the dutch company. it is leading this morning to sell fertilizer to koc industries in the deal worth 3.6 billion euro. that stock is up 14%. it is one of the reasons why we e a bounce. vodafone up 7% in trading after iliad offered a merge of

the two companies ich would net a payment of 6.5 billion euro. good news this morning. frank. joumanna, thank you. we will talk about the red sea later in the show. the markets will try to keep up the positive momentum as we head into the final stretch of the year. several straight weeks of gains with the bulk coming after the fed decision on wednesday. there is one more big test before santa visits wall and broad streets. investors are looking for more information that inflation is easing and the fed is reining in price. core pce will rise by .10% for the month and 3.2% on the annual basis, which is down from 3.5%

in october. let's bring in ross mayfield. great to have you here. >> good morning. thanks for having me. >> give us a sense, ross. we see a big rally in the market. a bull market in recent days. how important is pce to that rally continuing and us having a santa claus rally? >> i think it is really important. this rally is predicated on the fed easing more than the market expected next year and the soft landing being on. you have the risk-on rally. you need every data point to confirm that otherwise the risk excuse to the down side. i don't see downside risk to the pce number. it is not just pce. it is every economic data pot in january and february has to confirm the soft landing is on and the fed has to confirm what the market took away from the wednesday meeting which is sing next year and possibly

earlier than expected. >> i want to talk about bond yields. we have lked about the decline after the fed decision. before, bonds were given a lot of competition. w it is not much of a case. a t of people saying risk-on which means people are willi to invest if rrisky assets. is there an area people are benefitting most? >> if the soft landing is the base case, is the cyclical stocks that have been a little beaten up in 2023. that can take the baton of leadership in 2024. th those are risky. if we are seeing the uptick in business activity and the fed easing rates and soft landing being on, those areas would be the ones to take the baton in 2024. financials and industrials and materials and energy. morally sensitive to

the economy. >> let's talk about the rally continuing. we will talk about the magnificent seven later in the show. i want to talk about the s&p 493. you are looking at the equal weighted index. that is out permanentforming. what do you advise clients? >> we nevebought into the idea of the narrow market rally is a harbinger of the beast. all things equal, we would like to see a broader and mor participation in the rally. the other 493, representation of the average stock, starting to rally and out perform in november is confirmation of the it is broadening out to beaten down sectors and value and cyclical sectors. to get the participation is a really good sign heading into

the neyear. that broadening of the rally is healthy, all things considered. >> you are talking about the rotation in cyclicals. is there one area you think benefits? is it materials or industrials? what benefits in 2024 after the huge tech rally in 2023? >> i think all things equal, i like industrials the best of that group. they have everything we talked wh about. we have structure tailwinds in fiscal spending whether it is the infrastructure bill or i.r.a. defense is part of that sector. there's a lot to like in industrials. they have been prey firm this year. they have not been up there with a.i., t they held in. i think industrials have the potential to out perform next year and provide other reasons for optimism outside of hope for a cyclical rally with the soft landing. >> geolitical tension giving

boost to aerospace and defense. we will talk about tt later in the week. ross mayfield, thankou. coming up, a cck of the top corporate stories. dives fromrail aer t whh antiompe al to ti-comtitive sale to shedtstake igrai byhe mide ofexye. illumi agrd to the deal for ail backhis 20 sing it froner idiagnoicedicin in wasngton, aotenti deal on the funding for ukrae d israel alongith stnger u.s. bder protecons. speaking on "ste of e union" yesterday, joe manchin says a de could happen this week.

>> i think our necessitgotiats doing a good job a the white house is committed to getting this border under control. that's wt i'm really ver hopeful for. i think we wilsee sothing nexteek. donel stay until we get it his cments me aft to rch a framewo yesteay and still t to lea for holiday cess at thend of t shortstoalex rodriguez is anning tmerge with lk global cordintoloombe, the blank eck coanknown as slam cp gned a letter merge th lynk whis prite anlists the nasda company isxpecteto be vaed at no less than 8$800 milli. i can'temembethe la time wsaid spa

we he not ard anytng about it alex rriguezs broadening his ventures. thank you. pippa, thank you. coming up, more here on "worldwide exchange," including the one word that investors need to know today. first, developments in ukraine, israel and the red sea and the risk they pose to portfolios this montand the year ahead. plus, we are tracking the magnificent seven and the rally for the new year. we have a very busy hour ahead when "worldwide exchange" returns. 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, yr way.

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welcome back to "worldwide exchange." now to a developing story. we are tracking hot spots around the world with the potential to expand into the new year. we will begiwith russiand ukrae. reporting doze of attempted drone rikes inhe pt days. stris coming hours after the eu failed toass a esh $5 and u.s. stalks stalled.raine defense shot dow30 o31 d the drones launched overnight over 11 reegionof the cntry. thiss israel govnment ces fresh cafor a ase-fi or

rategy shift in gaza. the lls after a series of strikes ov the weekend, incling onexchan which saw the idf accideally kill three israeli hostages. is week, two top u.s. leads, includg lloyaustwill trav to tel aviv. the campgn spilling out to the red se h houthi attacks a pdging to not lent uil thesrael r with ha s is over. it will impacthe shippg lanes which accounts for 30% of obal shippintraffic. msc and maersk paused shipping together is tina fordham.

tina, good morning. >> good morning, frank. >> tina, let's begin with the last one. houthi rebels and the red sea. how big of a risk is this for investors andglobal supply chain and how should we view the visit by the defense secretary? >> these attacks are brazen. there are two u.s. carriers stationed in the mediterranean. that does not appear to be deterring the iran-bacd houthi rebels w claim they are atcking internationally flagged vessels tied to israel. that is not clear. defense secretary lloyd austin, we can expect to hear some strong words from him. for investors, what are the implications? this war is not shaping up to be like the 2006-2007 playbook in previous conflicts in the middle east which i warned of right

from the start. there are more moving pieces and stakes are higher. the fact is if you are an actor like the houthi rebels, now is an excellent time to press your case and see if the u.s. will put its money where its mouth is. i think this is significant provo provocation. >> you say significant provocation. i want to ask about the houthi rebels. some see them as a proxy for iran. do you believe their actions are dr directly linked to iran or are they acting on their own with iranian support? >> this is hard to parse. i almost think it is a limited utility to try to do so. what we see are efforts to undermine the u.s.-led global order. lots of people think that is a

good thing in the u.s. which is overextended. others should do more. be it as it may, we have an active conflict and rogue actors testing u.s. resolve. at some point, the u.s. may and is more likely to respond now than during past provocaprovoca. 16,000 drone attacks. this by itself will not be enough to prompt u.s. action. if there are troop fatalities or it goes over a line, this is really part of what the military calls blown threshold action. iran can invoke plausible denia deniability. >> i want to touch on one more thing. the war in ukraine, the eu

failed to pass the aid package. the aid package in the u.s. is stalled. this conflict continues to go on and on. many people thought it would have some conclusion right now. >> anybody thought that was wrong. wars last a long time. that's like the falkans or granada. putin will not go to the negotiating table if he thinks he will have a new u.s. president in 11 months time. no incentive to do so. a war of attrition. a stalemate. those are good outcomes for putin. you can see the russian news presenters thanking the congressional republicans doing their work for them. i'm not sure they intended, but they pressed for immigration reform. the fact is we are at an inflection point. you know, we can't use those

words on television. but we need to blank around and find out. we are about to find out if we don't get our act together. chuck schumer insisted the senate stay a while longer. i think if congress is able to pass ukraine aid, that could help stave off what is otherwise looking like a tough period for volodymyr zelenskyy and ukraine. >> tina fordham, i wasn't expecting to hear that from you. when it comes to ukraine, blank around and find out. not what i was expecting. perhaps wise words. thank you very much. ahead on "worldwide exchange," it has been more than a year since the inflation a reductioned in law. we have one area which is still iting. weill ha more en "worldwide exchange" returns. stay with us. ♪ (captivating music) ♪

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are waking up without power. breaking late last night. a car crashed into president biden's motorcade. he was risked into an armored car and is safe. e accident is under vestigation. the secret service doesn expect foul play. on sunday night football, the ravens took their talents on the road. quarterback lamar jackson rushed for over 250 yards with the defense taking advantage of the mis miscues by the jags. the ravens are the first team to punch their ticked to the playoffs. frank, you are up to date with the news headlines. >> that was a good game. the cowboys lost. that's the important thing. >> they did. it was my son who was a huge bills fan. he was happy about that win as well. you know -- >> i'm an eagles fan.

i was part of the bills mafia. moving on to the energy sector. it has been more than a year since the inflation reduction act became law, but there is one sector that waiting. pippa is here with more. >> we are down to the wire here. the treasury department would issue guidance by the end of the year. it has been delayed because there are opinions on which projects should quality. the top programs with tens of billions of credits on the line means the debate is fierce. the debate focused around three key things. whether hydrogen is made with new resources added to the grid rather than diverting clean energy.

the second is whether the new renewable resources are in the same region with the hydrogen facility. finally, if the power production is counted for on an hourly or yearly businesses. some companies, including air products, believe the emissions standards should be as strict as possible. on the flip side is fossil fuel companies like bp and exxon, believes it will stifle the industry. if you make it too strict from the start, there is no way the industry will take off. on the flip side, environmentalists say needs those strict measures. based on leaked guidance from e treasury department, they are siding with the environmentalists and bein strict on the pillars. the treasury dartmenhas

declined to comment. the guidance ty gi and law they set is going to dictate if hydrogen takes off. the industry has been around for two cades. what treasury does will set the industry.ther it is an we are two weeks until the end of the year and a lot on the >> a lot of developments in 2024. pippa, thank you. coming up, a $6 trillion reason the 2023 rally has room to move in02 24. we have more coming up here on "worldwide exchange." stay with us.

it is 5:30 a.m. in the new york city area. there's a lot more ahead on "worldwide exchange." h here's what's on deck. investors hundred for holiday cheer. futures are pointing to a higher open. 2023 is the year that tech bounced back and left the rest of the market behind. can the magnificent seven keep up the momentum with fresh hurdles for the new year? we layout the state of the 2024 race and who wall street is putting its money behind. it is monday, december 18th, 2023. you are watching "worldwide exchge" he on cnbc.

welce back"worldwide exchange." i'm frank holland. let's start the day as we u.s. stock futur after t e mixed session on friday with the longest win streak sce 2017. look rightow. it is grn across theoard the dow hitting e highest level of the morning. it would open up 75 points higher. s&.25% higher right no >>ahead of the open,he dow hit another record high on friday and the s&p witbeing the ssell e20 is ments ay from t a-time hi you wonder if wcan close e gap, look at t numbers fr the invtment instute. sidenehit a record o$5.9e

if t fed fecast for the w ar hol, expe t cash to ve back to the marke with that in mind, we are checng the bond markets the n-year yield ihovering below 4% at 3.89%. this is lower than week ago last monday. that was theetp. we look for the last two trading weeks of the year. the market narrative is mega cap tech. magnificent seven surging 75% this year as optimism over lower rates and artificial intelligence is fuelling that trade. magnificent seven represents 30% of the s&p mark value. that is nearing the highest share of the index for any seven stocks. the question for 2024 is can the

tell rally continue? steve kovach has more. >> the run for the magnificent seven is apple and microsoft and nvidia and tesla continue for 2024? here is something to expect in 2024. for apple, investors are desperate to return to sales growth after four straight quarters of declines. that could be boosted by renewed growth in the services segment. microsoft has the chat for business which went on sale in november. other companies using openai is a boost for the azure cloud business. and keep an eye on genemini ult for alphabet. and in china, it will keep it tough to accelerate in 2024, but

more come pe hpetition is comin amazon and google. a.i. is moving rapidly and who knows who will surprise us nex year? >> thanks, steve. let's dive into the tech playbook for 2024 and bring in sara kuntz. >> good morning. >> let's pick up where steve left off. i want to talk about nvidia. it is the story of 2023. it jumped, rose, rallied, which ever word you want to use, 20% year to date. the smh chip etf is the best since 2003. will chips continue to have the run in 2024? >> nvidia had the year of the lifetime this year. it will be hard to repeat that no matter what. the bigger problem is people have to use those chips. it is amazing they have the

capacity. the reality is a lot of these a.i. companies and companies that are spinning up a.i. lines of business are finding there is not a ton of demand. we are seeing that across the board. when there's not tons of demand, it means the chip demand is weaker. we have seen that with taiwan semiconductor. they are saying we are not getting the orders around the design of the chips that we would have usually seen. is nvidia going to have a bad year in the traditional sense? absolutely not. will it repeat this year? i highly doubt it. >> i think it would be difficult. 200% increase for another year? tough to repeat. if nvidia is not going to repeat, as you say is difficult, is there another stock in the magnificent seven? >> i think that is always really hard to retpredict. that run was hard to predict

because nvidia was hiding in plain sight for so long. you see intel and ibm with similarities. they are not the same businesses. i like alphabet next year. their a.i. business is wildly under valued. they don't have to launch a standalone product. they have gemini where you can plug that in if you use google at work and it works really, really well. i think they will see incremental revenue p comcome f a.i. into advertising and search. that will be a game changer. >> if you have this much confidence in alphabet's gemini, what about the microsoft a.i. assistant? >> the difficulty there is not that the products are super different. the bigger question is microsoft

wants to charge for it as a standalone product. that is a harder sell. it is a cool tool, but people are not using it every single day in the same way. i think that will be a more uphill battle. a lot of microsoft a.i. products are powered by openai and that company is a big question mark after the debackcle this year. >> we talk about the dominant players like the magnificent seven, but also the ipo market. are there big tech ipos coming up next year? >> shein filed. that is an ecommerce ipo which could be absolutely massive. to be determined on the timing of that one. that is meaningful for the biggest investors of tech. the other one we say every year is the stripe ipo. will that happen next year given

the experts they have are athe needs they have seems more likely. i think for the ipo window, you get into the binary window open. if it is closed, you will not see the companies go out. they can wait. they have cash. they can raise cash. they can raise more cash easier with the interest rates going down. we have to wait and see if ther. >> sarah kunst. thank you. returning to the 2024 presidential race. we are a month away from the first contest with the iowa caucus. republican hopefuls looking to strike early and get the delegations needed.

fo former president trump holding a commanding lead in the state with more than half of the republican voters in iowa saying they would vote for the former president. let's bring in jimmy peth pethokoukis. jimmy p., good morning. >> good morning. >> what should we make of the early polling for iowa? how do you take that? how indicative of this is how the rest of the race is going to play out? >> i think the way the rest of the race will play out will not depend on iowa. i think it will depend on iowa and new hampshire. i think if a republican candidate wants to breakthrough, they need to breakthrough in one of those two places. iowa is looking tough. it needs to be new hampshire. if nikki haley, who has momentum, could win new hampshire and polls show she is doing better and better there and then go on to win south carolina, her home said, then

former president trump doesn't look unbeatable. they need to draw one of the other candidates, ron desantis or nikki haley needs to draw up a lot in the contest or it will be a short primary. >> that may be an uphill challenge in iowa. trump with 52%. desantis with 22% and haley with 16%. you mentioned how important hugh hefner inew hampshire is. in your mind, which one of the candidates may be aligned with wall street and investor interest? >> you know, that is an interesting question. i think particularly for wall street, they will not like a populist presidential candidate. that is an anti-bank sentiment. you have wall street executives and executives more broadly, if they are leaning republican, they are worried that donald

trump is the only republican that president biden could beat. nikki haley winning by a large margin. they are worried about the trump agenda. particularly trade and immigration. a lot of business executives don't want that. you know, the global economy is building on free trade and labor moving around. i think there are executives, whether leaning republican or not, are worried about the democracy and the january 6th insurrecti and the justice department. all of tse comments make business peopl republican leaning or not, worry. >> we talk about home depot founder putting support behind nikki haley. do you expt see more donors being cal about the support for nikki haley going forward? >> i think it will be more vocal

up until the point where former president trump wins these first two states. he has unstoppable momentum that the other candidates have not dropped out. that is the key. somebody needs to get donald trump one-on-one. that doesn't seem to be happening. if that happens, it will not matter how much moy they put into the super pac for nikki haley or ron desantis. maybe they turn to a third-party candidate. talk of joe manchin running. that could be a possibility. if we are here in six weeks and donald trump has handily won the caucus andew hampshire primary, it looks like he will be the republican nominee. >> iowa caucus with a lot of meanin new hampshire is the one to watch. very much.okoukis, thank you great to see you. >> thanks. coming up on "worldwide

exchange," the latest in china and the issues they face with apple. first, a few of the toll trending stories. travis kelce not just winning on the football field or with taylor swift. he is the champion of game-day advertising. appearing in 375 commercials during the nfl season. more than any other actor or athlete. including jake from state farm. a scottish couple completing the first ever drive from the north to the south pole with a nissan ev. and speaking of christmas, egg nog has competition. a brewery in oregon brewing blue

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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 ter, your way. welcome back to "worldwide exchange." time for the morning call sheet. downgrading roku moving it to neutral and $75 a share.

the streaming platform advertising growth is facing challenges from disney plus. shares down 2% in the pre-market. morgan stanley raising the target of $5.50 a share. netflix is up this morning. and jnp believes shopify's profit margin is down. and time for therowth briefing. we begin with watching shares of applthis morning. down .75 under pressure as the li of chinese agcies bning iphone use amonthe staff contues to grow. multiple state firms and departments ross eht emplees to only carry locally

br branded phones to work. and w at an all-ti low. trading shares are down 11% rit now in down over 10% inhe lt ek. is folwing t dea of e -f the mpany s target of a short seller report and placed on a u.s. trade black list in 2019 from doing business with sensetime. software methods and stream set according tohe comny, the dealarks big blue's latest push into e cloud and a.i. tech. the transaction is set to close in the second quter of next year. e sharesf ibm e flat right now. comi up here on "worldwide exchange," the one word every

investor needs to know today. plus, stockis looking for a sana claurally. at our next guest says could be a holly jolly end of th year. more "worldwide exchange" coming up after this. 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, yr way.

welcome back to "worldwide exchange." breaking news. the report that the japanese steelmaker nippon is buying u.s. steel. shares up 1.5%. nippon steel set to buy u.s. steel for $7 billion according to reports. we will follow the story

throughout the morning. time for the wrap up. we start with illumina will divest itself after the court fined the deal. it will shed the stake in grail by the middle of next year. shares of illumina up 3.5%. and returning billions of dollars to customers and creditors. the plan of ftx does not tell how much customers will ge back. and a house judiciary committee reviewing documents provided by ackrock and state street. and southwest airlines agreeing to pay a penalty v resolve a probe over the holiday

meltdown last year. $90 million will gto customers who dealt with delay robinhood will offer a match as it lookto attract wealthier clients. a sweet start for "wonka" which scored $39 million in the opening weekend. he is what to watch in the final full trading week of 202 general milland niken, weave existingome saan nehomeales and durab on fday, wgepce. were kping an on the centrabanks ound t wld inuding moneta policy

decisions from the bank of japan and people's bank of china let's get a . let's take a look at the markets. green across the board. the dow off the highs from earlier. the s&p and nasdaq in the green. joining me now is brian levitt at invesco. >> good morning. thank you. >> we are coming off a mixed day on friday. a rally when it comes to the markets. how do you see this final full trading week of the year? what is your "wex" word of the day? >> the final trading day is positive. it is a market that is increasingly evnthused about th soft landing. if we get markets to moderate, that is great. my word of the day is normalization. we are getting any normalized policy area.

we will normalize the yield curve. it has been quite good for risk assets. >> does normalation mean broadening? we see a broadening in the market. we have seen others outside of the magnificent seven up 75% year to date. we see other areas catch a bit. >> absolutely. it is similar to the trade from the middle of october of 2022 through february when sill icon valley bank failed. it w a broader market because the expectation was for a soft landing. once the bank started to fail and coincidenoincidentally, it period of hot economic data. the banks were under pressure and the federal reserve will since we havseen inflation down, more participation. >> you are looking at the small caps. russell 2000 trading at 25 times

forward earnings compared to the average of 35 times forward earnings. you are saying this is an attractive entry point for small caps? >> it is. valuation in small cap and international have been cheap for a while. you need the catalyst. that catalyst is coming in t form of exctation of rate cuts. that is the steepeningin of the yield curve. that has been good for smaller cap indices. >> outside of the u.s., msci trading at the historical average. msci minus the u.s. at a discount? >> old country world index is also cheap compared to the u.s. again, we haven't had a catalyst for a while. what that catalyst is emerging is the end of fed policy. >> brian, great to see you.

thank you very much. thank you for wahitcng. "sawk box" is coming up next. have a great day. to transform , accelerate growth, predict trends, you need to begin with trust. introducing watsonx governance. helping you govern any ai, as data, models, and policies change, so you can scale it responsibly. let's create ai that begins with trust, with watsonx governance. ibm. let's create. i'm a little anxious, i'm a little excited. i'm gonna be emotional, she's gonna be emotional, but it's gonna be so worth it. i love that i can give back to one of our customers. i hope you enjoy these amazing gifts. oh my goodness. oh, you guys. i know you like wrestling, so we got you some vip tickets. you have made an impact. so have you. for you guys to be out here doing something like this,

it restores a lot of faith in humanity.

good morning. stock futures pointing to slight gains ahead of t open. what is with this graphics? what? we'll get you ready for th trading week ahead. department of transportation has fined southwest airles $140illion for the disruption st december. we talk to transportation secretary pete buttigieg. and illumina has agreed to divest the blood testing start

up grail. december 18th, 2023.it is wet, "squawk box" begins right now. good morning. welcome to "squawk box" right here on cnbc. i'm becky quick along with joe kernen. andrew is out today. joe and i are coming to you from wherever the heck we can get on air. this was a wet and wild ride this morning. good morning, joe. >> i like these things. i don't mind. >> you know how many times i got verted before i wound up here? >> i like the graphics. >> the graphics. yeah. >> i had no issues. zero. >> are you serious? >> dead serious. >>