it is 5:00 a.m. here at cnbc global headquarters and here is your "five@5." we start with wall street picking up the pieces after the worst day since september. futures are fighting for gains ahead of the open. that after fed chair jay powell dashed hopes of a march interest rate cut. he says it is not the base case, not at this time. the regional bank reckoning strikes again after the shares of the new york community bank has the worst day since last year. and elon musk looking to reincorporate tesla outside of

delaware after the pay package was rejected we are getting set for super thursday with the biggest names prepare to report earnings it's thursday, february 1st, 2024 you're watching "worldwide exchange" right here on cnbc ♪ good morning and welcome to "worldwide exchange. i'm frank holland. let's start your day as we kickoff the hour and the first trading day of the new month with the look at u.s. stock futures. you are seeing the dow opening up 40 points higher. nasdaq .50% higher right now the action in the pre-market is after the fed's january surprise yesterday where jay powell and the fmoc shot down any hopes for an interest rate cut this march. >> based on the meeting today, i would tell you that i don't think it's likely that the committee will reach a level of confidence by the time of the march meeting to identify march

as the time to do that that's to be seen. >> jay powell's comments triggering a selloff yesterday which ended with the averages closing down sharply the s&p logging the worst day since late september the nasdaq down 2% the worst session since october. saving grace for the dow is boeing closing up 5% after pulling the full full-year guidance the nasdaq dragged down by alphabet closing down more than 7% also, we are looking at regional banks. risk has returned adding risks to equities overall. shares of new york community bank with the worst day since 1993 the product eribroader index coe worst day since march of last year the community bank had a fourth

quarter loss and slashed dividend to shore up capital it is setting aside millions for the commercial lending space new york community bank is on review for junk periodterritoryy moody's. we will talk more about this throughout the show. as you see, the benchmark below 4%. time to turn to washington with a news alert. the biden administration submitting the first ever proposal to drug companies to lower the price of ten pre-selected including drugs ait reducing costs for the government this is the first phase of the process before the final prices are set in september the administration is not publicly releasing the names of the specific drugs targeted.

the group includes for diabetes and stroke and kidney cancer and cardio disease those drugs cost $50.5 billion to medicare. we want to look at the middle east with the developing story. u.s. central command says u.s. forces conducted new striekes in one-way attack drones. officials were prepared to launch a war ship in the red sea after the cruise missile was shutdown at close range. we eve we are checking oil right now. brent crude is moving higher let's turn back to the top sto stories. following yesterday's massive selloff as the investors reassess the fed cuts after jay powell seemed to take march off the table and reiterating his concerns of cutting rates

prematurely and reversing progress on inflation. >> we're really in a risk management mode of managing the risk as i said managing the risk we move too soon and too late. i think to move which is where everyone on the committee is in favor of moving rates down this year, but the timing of that is linked to our gaining confidence that inflation is on a sustainable path down to 2%. >> joining me now with the impact on your markets is delano saporu great to have you here good morning >> good morning. thank you for having me. >> the market was pricing in five cuts. the market was really looking forward a march cut. where do you believe jay powell sees this on off the table >> i share that belief i think a couple of things powell mentioned the inflation mandate.

they have an unemployment mandate. looking at those two levers is the best way for investors to track the economy right now. we are looking at the levers and inflation has made a lot of progress the employment is still low. if you don't see either side of those moving in the direction the mandates are wanting, we won't see a rate cuts. i'm looking late spring or may or september to see the timing of that. it is much too early >> i think that's what jay powell was indicating to the market i know you are looking at the bond market for opportunities. listen to sound that was on cnbc yesterday. jeffery gundlach on "closing w bell." he likes the short curve >> if you want to buy bonds, buy treasury bonds two years or three years or five years or maybe out to ten years. i think bonds remain attractive

with the inflation rate stalling out in terms of the improvement. it is likely to stay lower we have a high real interest rate >> your take that is jeffrey gundlach he likes the two or five y-year bond >> i think patience is a smart play here for a couple of those reasons. if you look at it, the investors look at the short-term bond duration is best here. >> when it comes to the market, this is your quote, patient and neutral. are y you are looking for opportunities if the market pulls back 5% or 10% what areas will you put money in here >> if you are looking for growth

areas to be aggraggressive, loo the magnificent seven which is retrac retracing. we saw go google with earnings other day. some will have outlooks which are stronger than others those are the ones should be on your watch i think going forward, there will not be less tech used across consumers, but more that is why i would pick those in the magnificent seven and healthcare as well >> delano, thank you to see you after the fmoc decision. thank you very much. more to come on "worldwide exchange," including the one word that investors have to know today. first, mark zuckerberg's mea culpa in the hot seat during testimony on capitol hill. getting set for a super thursday as three of the magnificent seven prepare to report their numbers. later, more on powell's january pivot taking a march

hike off the table jpmorgan chase's head of global research joyce chang is here to weigh in stay with us more "worldwide exchange" coming up help. at ameriprise financial, more than 9 out of 10 of our clients are likely to recommend us. our neighbors, the garcía's, love working with you. because the advice we give is personalized, -hey, john reese, jr. -how's your father doing? to help reach your goals with confidence. my sister's told me so much about you. that's why it's more than advice worth listening to. it's advice worth talking about. ameriprise financial.

woelcome back to "worldwide exchange." look at the juniper network up 25% year to date nvidia is up there as well

moving 25% higher. we want to look at the laggards. top of the list is tesla we will talk more about tesla later in the show. followed by market access and archer-daniels-midland. let's look at the top corporate stories with silvana henao. silvana. >> frank, good morning elon musk's tesla will hold a shareholder vote to move the company's incorporation from delaware to texas. the move coming after a delaware judge voided musk's $56 billion pay package from 2018 calling it excessive and negotiated by the board who is beholden to him musk asking opinions on x. more than 87% of the 1.1 million votes were in favor of the move to texas musk has a large interest in the lone star state with spacex and the boring company have

operations there. nelson peltz is urging disney shareholders to reject two board members. the activist investor says they should withhold votes for the two who have sat on the board since 2015 and 2018. peltz has stepped up criticism over disney. it's a moment that is still resonating from washington to silicon valley meta ceo securities and exchange commission mark zuckerberg apologizing about the impact social media has on kids pressured by josh holley, zuckerberg stood up and turned around and addressed the parents. >> would you like to apologize for what you have done to these good people?

>> i'm sorry for everything. no one should have to on go through the things your families have suffered. this is why we invested so much. we will make sure that no one has to go through the things your families have suffered. >> zuckerberg declined to commit to senator holley's suggestion he set up a victims compensation fund >> silvana, thank you. time now for the big money movers we start with ch robinson under pressure the broker says profits fell in the fourth quarter with the low freight demand the company warns of similar chals i challenges in the year ahead and qualcomm tops earnings estimates. the ceo highlighting the stability as chip returns to

normal levels. >> if you step back and think about qualcomm mobile business, the smartphone business, a lot of stability with apple on the license and the chip supply contract, stability with samsung and growing in china we are very happy about where we are and the market has returned to normal. and align technology shares are up 12% it is on sales growing in europe it is showing increased revenues from systems and services. coming up on "worldwide exchange," we are kicking off e black heritage month we are back in judgst a moment. in real time. (jen) so we partner with verizon. their solution for us? a private 5g network. (ella) we now get more control of production, efficiencies, and greater agility.

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(guitar music) and bring a little disney i've struggled with weight my whole life. i'm sure you're like me and you've tried diet after diet. if you want to stop the insanity, try golo. welcome back to "worldwide exchange." we start the black heritage month today. a new report showing working conditions and education and quality of housing for black americans lags in many parts of the country. .1% of black americans live in a county with the same economic and educational and housing outcomes as white peers. joining me to discuss is the principle at private equity investor practice and head of mckenzie's black economic viability. >> good morning. frank. >> that report is available on

mckenzie.com i want to get your one big take from the report. >> frank, the take away and you hit one of them is around the idea that only .1% of black americans live in places where outcomes are on par with the white neighbors. if you look at the types of places, we did math which suggests it would take 300 years at the current pace of improvement for us to close the gaps and reach something more like parity. not in our children or grandchildren or great grandchildren's life times >> eye opening data there. that full report is available mckenzie.com the federal data this year released shows 70% hold stock. how meaningful is that looking at the latest stats, the

black family has one h-sixth of wealth of the white family >> no doubt that the ol indicaasset allocation is critical with the stock portfolio. you see younger americans get involved in the stock market that is spurred by changes in technology and mobile investment apps and some changed by the fee structure and making it cheaper to invest in stocks. it is a positive trend >> another trend is artificial intelligence you put out research a few weeks ago. explain this according to the research, you say a.i. could grow the overall racial growth gap by $45 billion in the next 20 years according to duke, the gap stands at 14 trillion. you say a.i. will help grow black wealth explain what is going on here. >> i think the notion is that

this is a real opportunity and we know that when there is big technical leaps, there are often economic events for folks. we estimate that in the hundreds of billions of dollars in the coming years we look at current rates with startups if we don't increase our rate as the black community, we will lose out to the tune of tens of billions of dollars. if we are pro-active about who participates, it can be an oppor opportunity. >> right now, it is earnings season here on wall street you have a number of consumer and retail names reporting next week according to the research, you say the companies are missing out on a $300 billion annual opportunity if they tailor more to the black chommunity what are you talking about here? the companies want to sell to

everybody. >> many of the companies are, but our premise is by having a deeper and more focused effort and including diverse folks in your market research as you develop your products, you can really get to a place that meets these needs in a different way black consumers are formidable $1.7 trillion of spend is in the economy for black communities. they are faster than the general population >> shelley stewart from mckinsey thank you. have a great day coming up on "worldwide exchange," the house signing off on the tax package we have a live report omfr d.c. right after this break stay with us

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it is before 5:30 a.m. in the new york city area here is what's still on deck on "worldwide exchange. jay powell working to reset expec expectations. stocks looking to shake off the remarks after closing january in the red futures are suggesting a positive start to the month. fresh matbatch of earnings.

the key numbers to watch it is tuesday, february 1st, 2024 you are watching "worldwide exc exchange" here on cnbc welcome back to "worldwide exchange." i'm frank holland. let's start your day as we pick up the check on the u.s. stock futures after the fed policy decision, jay powell diminishing hopes for a march cut. you are looking at futures across the board dow opening up 45 points higher and nasdaq up .50% powell's remarks triggered a selloff yesterday. the dow down 2%. the s&p down 1.5%. we will check the bond market on the fed decision yields are moving lower. benchmark at 3.94%

we want to check oil following the strikes by the u.s. on houthi targets inside yemen. we are seeing the oil market move higher. wti crude is hitting the highs of the day up 1% similar for brent crude. let's look at the international markets. nikkei ending in the red kospi jumping 2% on the strong export data. the trade in europe on the back of the fresh inflation data. eurozone down 2.8% in january. look at the european markets ftse 100 up 1.5% the mib down 1%. the dax is down .25% that's the set up for the u.s. and international markets let's turn to washington the house signing off on the multibillion tax package offering benefits to businesses as well as parents emily wilkins is joining us now

with more on the story emily, good morning. >> reporter: good morning, frank. that $78 billion tax package with the benefits for businesses passed the house last night with strong bipartisan support despite having some opposition from both republicans and democrats. this proposal would allow for full expensing for research and development and immediate deductions for capital expansion. these provisions were part of the 2017 tax law, but they expired in recent years. this would allow companies to claim those deductions on the 2023 filings it also expands the child tax credit, not to the level during the pandemic, but it will allow for a fundable tax credits to help poorest families. business round tables are pushing lawmakers to pass the legislation as soon as possible to help small businesses that didn't realize the tax benefits

lapsed republican blake moore saying not bringing the breaks back would hurt small businesses. >> never have i seen neighbors of mine say this is killer for my small business. losing the r&d tax credit has destroyed the ability to grow my small business >> reporter: now the bill will be moving on to the senate you know you have seen similar opposition in the house and the senate with opposition from democrats who think the child tax credit does not go far enough, but you have seen resistance from republicans who have said it actually goes too far. you heard a debate where some have called it welfare you have concerns over what this means for the overall debt although it is paid for by ending the pandemic tax credits. concerns are trying to be addressed. you have chuck schumer who said yesterday that he is working

with the chairman of the senate financial services committee at the same time, you have the top republican on the committee with serious concerns about the bill saying that the overall premise is good, but there is still an additional tweak he wants to make. the senate has a lot on its plate. it may be an uphill climb. >> a lot in d.c. i want to focus on the bill. $78 billion tax package heading to the senate. what steps are lawmakers making with the messaging on this bill? >> reporter: for a lot of republicans who support this pac package, they are trying to note this is an extension of tax credits initially approved under former president donald trump. they are trying to tie it back to him there are some concerns that this would wind up being a win for biden in a key election year you heard senator grassly

talking about this yesterday it has bipartisan support and backing to it. we will see how this plays out in the next couple weeks >> emily wilkins live in d.c you have the latest. great to see you. turning back to the top story and jay powell resetting the hopes of a cut in march. holding the rates steady for a third straight meeting yesterday. >> today, i would tell you that i don't think it's likely that the committee will reach a level of confidence by the march meeting to identify march as the time to do that. that's to be seen. >> following powell's comments, interest rate traders tracked by the cme see a 30% chance of a rate cut in march compared to 40% chance a week ago. joining me with reaction to this

is joyce chang from jp morgan. joyce, good morning. great to have you here. >> great to be with you. >> we are looking at the interest rate traders and what they are pricing in. 36%. did they hear what jay powell said yesterday it seems like he said it will not happen. >> look, this is what we expected march is off the table he did open the door to may. we still have june in our forecast he took out the tightening bias. talked about normalization he made it very clear that most of the committee feels this is something that should play out over the course of the year. he came back to what we really have been looking at which is we still see core cpi at 3% the services piece of inflation still remains 2% above where it was before the pandemic. that is really where we had been focused. it is too early to declare victory on inflation >> too early to declare victory.

do you believe we're on a path to a soft landing in. >> i believe we are on a path to a soft landing this year what we see is a slowdown in growth the focus is not on the growth story, but inflation story the disinflation story for goods is tapering off. you still have on the services side not where we need to be the geopolitical risks do matter >> i was going to ask about that jay powell admitted there is a risk for moving too soon or too late there are a lot of geopolitical risks with the war in ukraine and in the middle east the oil prices have not moved much how does that impact the risk and now the new york community bank risk? why not just cut

why would they take a risk the making the cut late? >> let's talk about the geopolitical risk related to the red sea and panama canal the numbers that our economists looked at, we think it could add .70% to good inflation the trend we saw over the course of last year could be coming to an end with core inflation there is not a resolution coming up with the war. that does have an impact on the commodities side, we are looking at oil going into the 80s. that is more driven by the supply and the demand factors. not so much by the geopolitical risk we have seen the market right now with suez putting in a geopolitical risk there. >> i want to talk about the bond market jeff gundlach flagged the two-year bond and five-year

bond he said the fmoc will talk about qt in the march meeting. >> we believe they will give guidance at the next meeting they signal the runoff will be cut in half from 60 billion to 30 billion we like the five years and we still like steepeners. we feel there is a scope for it to come down that will play out over a period of time. i think higher for longer over the medium term is here to stay. that really comes back to the fiscal debt and many of the secular drivers for yields going forward. >> this is a big week on wall street earnings season. we have mega cap names reporting today. we have the jobs report tomorrow and then more inflation reports after. that means this is the one you don't have to worry about. we look at every single tone asa

possible market mover. which one do we need to look at here >> i was in asia last week i was in tokyo, singapore, hong kong and ta'aipei as well earnings revisions are coming down more than what we are seeing in the u.s. i think what we have seen is even where earnings have come in relatively strong, the market hasn't rallied that much i do think there's reason to think that some of the momentum that we saw and also with the fed basically signaling it is not march because that's the message we took away means you have to be more selective here i do think that the u.s. still continues to benefit because of the growth story is looking better >> before i let you go, when do we get the cut and how many? >> we think it is june there is a possibility for may the door is open for may >> crack the door. >> 100 to 125 5 basis points of

cuts this year may is a possibility i think the message is march is off the table. >> march is off the table. joyce, thank you for your time coming up here on "worldwide exchange," we are getting ready for earnings from the magnificent seven names. the numbers you need to watch from apple, amazon and meta. to check on overseas big money movers volvo shares are moving higher after the announcement it will stop funding polestar auto the ceo telling cnbc it is the right time to reduce the position in polestar and the company to look for funding outside of volvo shares of volvo up over 22%. bnp is under pressure. the bank slashing the 2025 sdw outlook. it is completing the sale of the

bank of west last year deutsche bank popping after fourth quarter earnings beat expectations that was despite the dip in profit the company announcing a 50% increase in share buybacks and dividends. it plans to cut 3,500 jobs as part of the efficiency program shares up 4%. shell posting a 29% drop in profit from last year, but still beating full-year expectations the oil giant is buying back $3.5 billion in shares it reflects strong lng trading and optimization of margins. ar u3% more "wex" coming up after this. stay with us

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light work! ♪♪ next victims. ♪♪ you ready for this? ♪pump up the jam pump it up♪ welcome back to "worldwide exchange." ifoe iphone and instagram are reporting after the bell today we have the items you should be focused on in the results. we have julia boorstin and kate rooney, but we start with steve kovach >> the thing to watch is will it return to top line revenue growth after deliclining sales. apple is expected to report flat sales for thie fourth quarter

china especially has been a problem thanks to the slower reopening the economy coupled with competition from huawei which started making phones again after a hiatus for a couple of years. beyond that, pay attention to apple's earnings call. that's when the company will give guidance on the current march quarter. many are sour on the march quarter. the analyst reported that apple expects to ship 15% fewer iphones this year. we will find out if apple has anything to say about that >> the big thing to watch is the revenue growth analysts are expecting the social media giant to report 22% revenue growth which is down a hair from the 23% growth the company reported in the third quarter. this will be a key indicator of

whether meta's investment in a.i. is paying off to make the ads more valuable. growth could reflect the ads spending of temu and shein the stock has been on a tear which is up 165% in the past 12 months analysts are still bullish despite the stock's run. 81% have a buy and 16% have a hold bank of america saying we remain constructive on meta and see tailwinds eat aiding the stock with a.i. and machine learning likely to boost usausage. we will see if mark zuckerberg comments on the testimony on child online safety and the impact any potential regulation could have >> amazon's cloud business is set to dominate the earnings discussion in conversation as wall street anticipates a return

to growth. amazon web services used to be in the 30% growth range, but it has been stuck at 12%. analysts are looking for a growth in aws for the fourth quarter. that aws cloud business is amazon's crown jewel and more profitable than the online shopping business. the bar is high after azure saw 30% growth in the third quarter. watch for spending on artificial intelligence this will come through in capital ex google and microsoft called out cap ex material and other called notable. amazon has been perceived by some as a laggard in the a.i. race expect executives to be on offense and look to paint a clear picture in the arms race right now when it comes to a.i.

and how they monetize it investors are hoping for margin improvement after the inflation cut into the profitability the advertising business is seen with a lot of upside as amazon gears up for ads in prime video. frank. >> that is the set up. we are looking at growth in cloud services and devices and ad spending for the companies when they report later today let's talk about apple, meta and amazon with jason ware jason, good morning. >> good morning, frank >> let's talk about amazon aws is in the forefront with the stock. that is the growth driver for amazon are you looking for a.i. commentary >> i think that is the theme for most of tech so far and likely continue to be the theme for tech in the quarter as everyone wants to see that for amazon and

other companies. a couple of quarter where is a.i. has been in focus ever since chatgpt came into the lexicon. it will be a focus on cloud especially with what happened with microsoft and google with the reacceleration also with amazon, this is not as talked about as much, is the idea of cap ex amazon with the big cap ex spend after covid. profits are expected to swell. we may be in a situation with a.i. as these companies inn ve invest >> now it is possibly on servers. apple. are we expecting any a.i. comments with apple? when you look at the device business and china, are you worried about those two areas? >> we are not expecting much in the way of a.i. commentary

we all would like to get a little bit more color with tim cook and kcupertino. not much to be expected there. we look at what is happening on iphone and a broader situation in china which is the second largest market you reported that market share in china is good for apple there is a lot of hand wringing with china sales we expect re-acceleration in the next year or two in china with the apple growth that is a positive for the story. >> last, but not least, meta they kicked off the year of efficiency now spending has to accelerate how are you viewing that spending and ad business >> full disclosure we don't own meta. we don't own it for our clients. w we own alphabet. amazon is in digital advertising

and doesn't get a lot of oxygen. there was a bit of re-acceleration for google the read for meta is we may see positive results with core digital ad spend looking broadly at the company outside of that where everyone wants to talk about meta everyone is seeing as an a.i. out front company. we will see what they have cooking there. ray ban glasses and what not not a lot of comments. we don't own it. >> jason, thank you. great to see you coming up on "worldwide exchange," we have the one word every investor needs to know today and the health player that has the massive growth potential and our next guest is buying around that. more "wex" coming up after this. "what should we do with it?"

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welcome back to "worldwide exchange." time for the "wex wrap-up. we start with ancora holdings taking a $1 billion stake in norfolk southern and nominating others to the board. amer sports selling shares

at $13 each in the public debut. the second ipo to trade below the range in a week. they targeted 16. the biden administration submitting the proposal to drug companies to lower the price of ten selected drugs to lower medicare costs for seniors and the government. nelson peltz urging disney shareholders to reject two board members at the next annual meeting. he wants to elect himself and one other to the board. moody's looking to downgrade new york community bank to junk territory after slashing dividend look at the shares which are up in the pre-market, but had a drop yesterday elon musk says tesla will hold a vote to move the corporation from delaware to texas after the delaware judge voided musk's $56 billion pay

page from 2018. and mark zuckerberg apologizing in the senate hearing yesterday over the social media impact on kids. he said meta will continue to invest and protect more families from suffering. earnings set to be the key driver for markets today with the focus on the latest mega cap tech figures we mentioned numbers are in the green with the dow hitting the highs along with the nasdaq in the remapre-market let's bring in tiffany mcghee with more. tiffany, looking at the futures, solidly in the green following jay powell saying march cuts are off the table. what do you make of that >> well, what i make is the market is actually catching up with what the fed is saying. looking at my notes yesterday that i sent to the show and i said that march rate cut is unlikely we think it is more closer to june

that makes perfect sense we have inflation moderating and fourth quarter gdp for 2023 growth was higher than expected. pmi for services and manufacturing is in expansion territory. we still have solid employment growth the fed will take their time they will not cut rapidly. they will cut gradually. we think it will start around june >> jay powell got his message across you believe the market is responding positively. what is your "wex" word of the day? >> diversification investors should be looking at three things number one, locking in the long-term treasury bonds i'm in favor of short-to-medium term for treasuries. diversifying in assets with etfs on the equity side, focus on high margin and high growth companies. >> coming up later today, ism manufacturing is giving another

economic read. if we get a better number than expected, are we in a situation with good news is bad news or is good news good news again? >> good news is always good news listen, in terms of the fed and inflation and all of these levers that have to be in line for the fed to start cutting, it really is a multiprong approach. >> i want to get your picks. your picks are in the healthcare space. >> the glp-1 drugs are positioned to revolutionize pharma, but the healthcare industry potentially $100 billion industry worldwide with estimates with higherer margin businesses there are two companies leading

that charge right now. three that i like. two positioned to capture 80% of the market novo nordisk which makes wegovy and ozempic. eli lily which makes zepbound. amgen has a phase one drug with less frequent administration >> tiffany, we have to leave it there. great to see you thank you very much. one more quick look at futures in the green across the bod.ar that will do it for us "squawk box" is up next. [innogue] another destination wedding? why can't they use my backyard?! with empower, we get all of our financial questions answered. so we don't have to worry. empower what's next.

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good morning events in washington impacting the world of business this morning. we will talk about fed chairman jay powell taking a march rate cut off the table. the futures rebounding somewhat after yesterday's selloff. we breakdown the fed speak. social media ceos grilled on the hill lawmakers slamming them for the harm they have on kids a surprise apology from mark zuckerberg we'll show it to you. and taxing times on the hill with the $78 billion package

gets the grown een light from te house. it's thursday, february 1st, 2024 and "squawk box" begins right now. good morning welcome back to "squawk box" here on cnbc we are live at the nasdaq market site in times square i'm andrew ross sorkin along with melissa lee and mike santoli. let's show you where things stand after the comments from jay powell nasdaq is up 117 points. this follows the selloff after jay powell signalled a march rate cut was unlikely. >> based on the meeting today, i