it is 5:00 a.m. here at cnbc global headquarters and here is your "five@5." we start with stocks snapping a three-session win streak as another of the magnificent seven turns negative on the year. not hype here. the a.i. wave washing over wall street gets another fan. it is jpmorgan chase's jamie dimon. his comments to cnbc in a moment. also a $53 billion deal now in jeopardy as exxon makes moves to possibly break up the chevron takeover of the rival. and new report slamming the culture of safety and

accountability at boeing. then later, we get set for a second wave of consumer company results. names to watch coming up. it's tuesday, february 27th, 2024. you're watching "worldwide exchange" right here on cnbc. good morning and welcome to "worldwide exchange." i'm frank holland. let's get you head ready for the trading day ahead. the dow and s&p snapped three-day win streaks. the dow would open up 15 points higher. big focus on big tech and the magnificent seven. we are watching shares of alphabet after it turned lower on the year. the stock fell 4% yesterday on

concerns about its artificial intelligence offering. we are saying the stock is down lower for the year, but you see in the pre-market up 1%. alphabet joining tesla and meta in the red since the new year. you see the downside moves here. tesla is hardest hit down 20%. we are checking bond yields with the benchmark ten-year yield ticking up to 4.26. we are also looking at crypto. specifically bitcoin. that is up again this morning after popping past $54,000 for the first time since december of 2021. this morning, it is 4% higher. let's get back to the markets. despite pre-market weakness, stocks are breaking from the

trends this month notching solid gains for february. dow and s&p up 2.5% and 4%. nasdaq shining bright up 5% thanks to nvidia and that continued excitement around artificial intelligence. for more, let's bring in john wein at hennessy funds. >> good morning, frank. >> we're talking about the month of february, but if you look at the nasdaq, it is lower in five of the last six sessions. on the other side, the russell up three sessions in a row. is this an inflection point? >> it is possible. it seems like it should be. i think if something can't go on, it won't. we see it is picking up steam. it is good to see. it is natural. it makes sense to me. >> i know it makes sense to you. i was leading you a bit. you come on the show and a big

fan of the small caps. you think small caps are affordable. you see the s&p 400 mid-cap index trading 15 times forward earnings. lower at s&p trading 21 times forward earnings. small caps are still lagging. with rates higher, what is the argument to stick with small caps? >> i think some of it is re-balancing and all it takes is a few good weeks or bad weeks of the large cap tech stocks to roll over and people realizing that may be over. on the fundamental basis, it is the future of large cap stocks, but more so, a lot of cash on the sidelines. 7 trillion on the balance sheet of s&p companies. there's a case to be made at

this point in the cycle m&a may come back. buy growth. buy efficiency. that is something to keep in mind. >> you have a lot of company when it comes to the small cap. tom lee believes small caps will rally 50% this year. i want to talk about something else. you sent us notes. i want to make sure i'm reading it correctly. you think the fed may be near the end of the rate hikes? you think a hike is a possibility? >> no, no, no. i think i'm in the consensus. the market is pricing in three cuts by the end of the year. i think like many, there is one extra cut in there that is priced in that isn't going to happen. i think the fed is done. i think they like to have options. >> i think it is a phrasing thing. i was surprised.

you think they're near the hikes. with the cuts, the consensus is pushed back to june or july and does this put more emphasis on the pce report this week? >> you know, it is funny. it started to percolate more in my head. three or four months ago, we talked about the fed and earnings was an afterthought. i think this quarter strikes me with earnings being stronger than expected. 70% of companies are reported better than expected revenue and earnings. there is some measure of growth. i think the market is taking the bad news about rate cuts where we thought there would be six. now there will be three. they will start a lot later in may or june or june or july. they are looking at a back drop with growth and we see it in

companies like nvidia where there is truly real growth. also a strong quarter. investors are taking solace in that. >> you are saying the trend is your friend? >> yes. >> josh, thank you. time to get a check on the top corporate stories with silvana henao. silvana, good morning. >> frank, good morning. chevron is warning investors that the $53 billion all stock deal for hess could be in jeopardy. this is coming after exxonmobil and china's cnooc say they have a right to counter the offer for the hess stake in guyana. that is where it operates and has been described as one of the largest oil finds in years. much of the value of chevron offer for hess was tied to hess'

stake in the exxon consortium. chinese fashion giant shein is considering the possibility of switching the initial public offering to london from new york on fears the s.e.c. may not approve the listing. shein was founded in china, but now headquartered in singapore and would have to file with new regulators if it switches to london, hong kong or elsewhere. according to the faa panel of experts, when it comes to safety culture at boeing, there is a quote disconnect with senior management, workers and some who fear retaliation for raising safety or production concerns. the panel adds changes in the safety procedures are leading to confusion among employees. frank, the findings are tied to the congressional order from back in 2020 aimed at reforming how the faa certifies new planes

and those two deadly 737 max crashes in 2018 and 2019. >> certainly a continuing story here with boeing trying to recover from major safety issues with planes. silvana, thank you. we have more to come here on "worldwide exchange," that includes the one word investors needs to know. someone leaked the cava quarterly results, but some are not complaining as the stock is moving high in the pre-market. and new pressure on the oil patch as opec is set to stick with the voluntary production cuts. rbc capital markets helima croft is here to weigh in. we have the latest on the world congress see minar with karen tcho. >> i'll have more after the break.

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welcome back to "worldwide exchange." u.s. futures are solidly in the green. let's see how europe is shaping up. carolin roth is in the london newsroom with the early action. carolin, it looks like the granola names are moving the market higher. >> we are not talk about the breakfast, frank, but the 11 biggest names in the stoxx 600 which is powering 50% of the

gains in the last 12 months. frank, the granolas outperformed the magnificent seven and the volatility is two times lower than that of the magnificent seven. i thought that was pre-matty remarkable. it is a patchy picture on the board. dax with another record high up 1%. we are seeing very modest declines for the cac 40 in france. holding on to the flat loine. we had a couple of earnings reports. puma and munich re in germany at the top of the stoxx 600. when it comes to the sectors, let me show you we are seeing the minors of the board. up 1.3%. this is on the back of stronger metal prices in the session.

autos and real estate trending to the upside. on the down side, media and healthcare and household goods. back to you, frank. carolin, thank you. we stick with the overseas action with day two of the are mobile world congress where they are taking center stage on a.i. and more. if you think all of the a.i. talk in almost everything is a sign of a bubble, jpmorgan chase's jamie dimon says think again. >> this is not hype. this is real. we had the internet bubble the first time around, that was hype. this is not hype. this is real. people are deploying at different speeds. it will handle a tremendous amount of stuff. it will get better, faster, smarter. bad guys will use it. we have to combat the bad guys. >> cnbc's karen tso is joining me from the conference floor in

barcelona. good morning, karen. >> reporter: frank, good morning. it is not just about a narrow set of a.i. bets is what we are learning at the conference here. microsoft has stretched its bets beyond openai and chatgpt. it is now teaming up with the french company called mistral. what does it mean for the french startup? they can use the super computing of microsoft which does provide some enthusiasm for the rest of the a.i. startups. for microsoft? it means it can monetize quicker. it can use the mistral products and offer them to the customers. think about the new model and it is called mass. models as a service. something similar, but means more money in microsoft's pockets now. i spoke to the president of microsoft, brad smith, and asked about the hype on markets. let's take a listen.

>> the market tends to get things right even if in the short term, never entirely knowns. what i think is this, a.i. is quite possibly the defining connect nolg technology of the decade if not the generation. >> mistra l has been talking to google as well. it is interesting to see this collaboration. one quick item on nvidia. we ask with the chip cycle. a lot of people are partnering with nvidia. that means there is a huge number of chips still to be ordered. >> karen, a lot of people are partnering with mistral. amazon and google. give us a sense, what is mistral offering that is so in demand?

>> reporter: it is another large language model. what does this is asay about th ability of the rivals? this is a company worth a couple hundred hl ymillion euro last y. it is the french play in a.i. it does tell you that there will be more of an a.i. story beyond silicon valley. st startups can come from everywhere. the usp has the technology that could take on the likesof gemini pro and it is meant to be as good as chatgpt 4. that is what we are learning. it is not just one or two companies that they are focusing on here, but more companies and quick competition in the a.i. equation. >> we will hear more about mistral going forward. eu lawmakers saying the

mistral-microsoft deal needs to be looked at there. karen, thank you. great to see you. coming up on "worldwide exchange," getting set for retail results and items on your shopping list. stay with us. more "worldwide exchange" coming up.

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morning. zoom shares are up 12% after beating the fourth quarter estimates. sales growth would have been faster in the recent quarter if not for a sales team reorganization. shares up 12%. shares of unity sinking ahead of the open. the company offering a disan p po disappointing first quarter forecast. it will provide revenue guidance for the portfolio which includes its game engine and cloud units. sales were up 35% year over year. shares of cava are on fire. est sales beat estimates with the same store sales rose 11%. cava is set to release after the close today, but the output

published a day early. shares up almost 9%. let's check on the headlines with nbc's frances rivera in new york with the latest. frances, good morning. >> good morning, frank. we begin with the latest in the 2020 election where president biden is facing a test in michigan. the primary is being held today and the large arab american population is pushing for a cease-fire in the israel-hamas war. some will vote uncommitted instead of supporting president biden. health and human services secretary travels so alabama to hear from patients and doctors impacted by the state supreme court decision on ivf. the court said that frozen embryos count as people which led to several clinics halting ivf treatment. this has left malawmakers

scrambling for protection. and wendy's plans to start surge pricing when menu items will cost more when they are in h high demand. it could start next year according to the ceo. you are up to date. >> if the line is long, i have to pay more for a frosty? >> or go around the corner to mcdonald's. >> frances rivera, thank you. coming up "worldwide exchange," the wave of 2024 layoffs is not slowing down as one more takes an axe to the ranks. and if you miss us, check us out on your favorite podcast apps. more "wex" coming up after this.

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it is 5:30 a.m. in the new york city area. there's a lot more ahead on "worldwide exchange." here's what's on deck, stock in the red looking to shake off the stumble and get february solid gains back on track. what jim cramer is selling investors about the markets. retail earnings from lowe's and macy's all set to report and the concerning signs suggesting the consumer is losing steam. $53 billion deal at risk as exxon weighs throwing a wrench in the takeover of hess. it is tuesday, february 27th,

2024. you are watching "worldwide exchange" here on cnbc. welcome back to "worldwide exchange." i'm frank holland. we pick up the half hour check of the u.s. stock futures after the lower day for stocks with the dow and s&p snap three-session win streaks. look at futures right now. they are in the green across the board. the same level we saw a half hour ago. the big focus for the markets remains big tech and the magnificent seven. this morning, we are watching shares of alphabet after it turned lower on the year. the stock fell 4% yesterday on concerns about its artificial intelligence offering. you see the pre-market rebound up 1%. alphabet joined tesla and apple as the only magnificent seven in

the ref thid this year. we are checking on bond market yields. the ten-year yield at 4.26. a basis point higher than yesterday. also we look at cryptocurrency and specifically bitcoin which is open this morning after popping past $54,000 since december of 2021. bitcoin trades around the clock and up 4%. let's turn back to the markets and developing story with chevron warning investors that the $53 billion all stock deal for hess could be in jeopardy after exxonmobil and cnooc from china say they have a right to counter for the deal. t this is described as the largest oil find in years in guyana. this deal was tied to the exxon

led consortium. it is important to know that exxon and cnooc have not made a counter for the offer, but asserting they have the right to do so. hess shares are down 3.5% right now on the news. for more on what is an important and hotly contested oil reserve, let's bring in rbc capital markets helima croft who is a sflbs contrnbc contributor. helima, good morning. >> good morning, frank. >> we have seen reports that venezuela is lining up troops along the border. give us a sense. how important is this oil reserve in guyana which is reported to be $11 billion in gas and oil. >> guyana is the explosive growth story. five years ago, it was producing

zero barrels and now producing 650,000. it is a principle driver in the market. obviously, hugely important to exxon. the reason behind chevron's desire to acquire hess and part of the territory dispute. venezuela claims they have sovereignty over offshore acres. that is now contest in the international court of justice. venezuela has deployed thousands of troops to the border. the uk has sent a war ship down to the territory waters. we are watching this commercial story and a geopolitical story. >> geopolitical story. i have to ask about this find in this area, how is the rest of the oil producing world responding to the find? does it have potential to disrupt the paradigms we have with the oil market? >> certainly you can see the

venezuelan action is an indication it is a subject of dispute within the region. potential driver of instability. it also is shifting calculations of the group like opec. opec now has to contend with growth coming from the americas. the shell story was all about capital discipline. now we have other producers contending. brazil has seen extensive growth the past couple years. now we have brazil and we have the guyana story. if you are opec, you have to contend with growth coming from the americas when you set your production policies. >> helima, i want to turn to the crisis in the middle east for just a second. that has an impact on the oil market as well. president biden saying he is looking for a cease-fire between israel and hamas as soon as monday. we hear from the qatari foreign minister.

your reaction? >> this is the key issue we're watching. you need a cease-fire to see a deescalation. the houthi will s will continue target the shipping. we continue to highlight the risk if you see israeli ground offensive in lebanon which is a path to a wider conflict involving iran. president biden desperately wants some type of deescalation in the crisis. again, nothing to indicate we are approaching that yet. >> something crossing a short time ago. qatar saying there is no agreement with those sticking points. i want to talk about the oil market broadly. it seems oil is range bound. barely getting across the $80 mark with brent. give us a sense with what you are seeing other than opec

production cuts, is there anything else that can move the oil market higher? should investors be mindful of how range bound it has been? do you expect that to change? >> i think there is considerable wake-up risk from the war in the middle east. investors are saying we bet on supply disruption coming from the russia-ukraine war and russian exports are resilient. they are looking at the israel-ha mas war. we still have supply making it to the market. i would just say we need to continue to watch any signs this war spreads to iran. we are watching the situation closely in lebanon because iran is the principal backer of hezbollah. there is a real risk if this becomes a wider war with iran. that would put at risk supplies

in the straits of hormuz. >> helima croft, thank you for your time and insight. >> thank you. let's check on the top corporate stories with silvana henao. silvana. >> frank, good morning. president biden is set to meet with congressional leaders at the white house today as a deadline to fund the government moves closer. congress has a few days left to approve the first four bills to prevent a partial shutdown after march 1st with the second deadline coming a week later. the president is expected to push lawmakers to found a path forward on the senate approved aid package for ukraine, israel and others. expedia becoming the latest company to announce layoffs. in a regulatory filing, the platform revealing it is cutting 1,500 jobs as it works to recalibrate resources. expedia adding it expect between $80 million and $100 million in

pre-tax dollars this year associated with the restructuring. we see it slightly higher in the pre-market. a major executive shakeup at disney. sean bailey is stepping down after 15 years. the move comes after disney faced a rough 2023 at the box office, including the poor performance by "the haunted m mansion." he will be replaced by david greenbaum. he helped disney win the streaming rights for "taylor swift eras tour." >> silvana, thank you. turning back to earnings. the earnings parade is back on this week with the retailers reporting results. we will hear from lowe's, macy's and urbano outfitters. u.s. retail sales fell more than

expected in january following the strong holiday shopping season. consumers appear to be resilient, but they are selective about spending. walmart reporting shoppers spent less per trip. that is a sign prices are cooling. let's talk more about this with jessica ramirez. great to have you here. your most recent note is food inflation and food cost is weighing on consumer spending. juices is up 29% year over year. steaks up 11%. on the other side, eggs down 29%. a lot of different moves. overall, grocery prices are up 1% year over year. give us a sense. how does this impact consumers? >> when we see a lot of the pressures coming from food and housing pressure, you are looking at lower-income and

middle-income consumer. the first item to purchase is food. that is a priority. we are seeing the consumer spend on entertainment if it is food at restaurants. this is the priority for the con consumer. that leaves discretionary spend to be more cautious. is it where i'm spending? we look at wellness. if the category has function or falls within wellness, that's where we see the spend. >> this food inflation is impacting the middle-class consumer and working-class consumer. the higher-income consumer is not impacted? >> we have not seen as much on the previous weeks. the luxury sector has been performing differentlybecause they have different strategies going forward. some luxury companies are suffering. that customer is still spending. also entertainment.

>> you say the retailer we need to watch is tjx. they have more ability to adjust inventory. when we get the result from tjx, what do we look for here with the consumers? >> we could see how home is doing. we started seeing green shoots with soft home. it is tough with housing means we could see a spend with small items to decorate. not the big tickets. we will see that with home items this quarter. you can see spending more with beauty. tjx can flex. they expand the beauty category with skin care. >> i want to ask about something else. in the retail world, you call it hard lines. we had the whirlpool ceo on

yesterday on cnbc. he talked about housing impacting consumer spending. take a listen. >> we are strongly growing which is a result of what we talked about with covid and post-covid usage higher. replacement is strong and it remains strong for a couple of years. it is the discretionary side with consumer sentiment ever since the mortgage rates increased. >> interest rates are impacting the discretionary spend. in your mind, when we get the fed cuts, what makes a big change with the retail sector? >> the way we look at it in simple terms is it we are moving houses, we need big ticket items. if you are not moving houses, we stay safe. you hear from home depot and we will hear it from lowe's as well. do it yourself. if it is a big project, that

project is put on hold. what i like about home depot and lowe's and broader retail strategy with a lot of retailers, they become strategic with inventory and operation. the moment that kicks back up, i think they are well positioned. >> jessica, thank you. coming up here on "worldwide exchange," not out of the woods yet. the comments from one fed official in the central bank's inflation fight. first, a few more big money movers. shares dropping on cargurus. the online auto market expects first quarter revenue to come in about 11% below estimates. you see shares are down 14%. shares of hims & hers are up more than 19%. the wellness site expects to be profitable this year and is moving fpast full-year sales.

it is in the early stages of weight loss drugs and could be a one-stop-shop for managing obesity. shares up 19%. workday under pressure. the fourth quarter profit beating forecasts on strong demand for the cloud services. revenue was in line. the company was sticking to the guidance for the subscription revenue as it expects macro concerns to continue this year. you see shares are down 7%. much more "worldwide exchange" coming up in a moment.

welcome back to "worldwide exchange." take a look at futures. we are fractionally higher across the board. dow would open up slightly higher. let's look at movers in the nasdaq 100. palo alto networks up 6%. micron and then american electric up as well. time for the morning call sheet. morgan stanley out with a cut on rivian. the ev maker needs a overhaul with the focus on cost and capital discipline and collaboration. shares in the pre-market are up 2%. a price target increase on eli lilly from berenberg.

it has a strong growth profile driven by obesity and diabetes drugs. piper sandler upgrading unity software which is raising the rating to neutral despite the first quarter forecast. piper saying the rating is a more balanced risk/reward system. shares down 16%. it is time for the global briefing. japanese markets rising to an all-time high despite inflation slowing for the third straight month in january. it could complicate the pat h o the bank of japan to stop negative interest rates. and li auto shares surging on the earnings. li auto reporting the first ever full-year profit.

shares up 25.5%. microsoft coming under scrutiny in europe and eu lawmakers saying the deal with the mis ttral a.i. should be investigated. microsoft woill make the models available and it is investing in mistral and holds no equity stake. that appears to be raising eye b brows in brussels. coming up on "worldwide exchange," the one word every investor needs to know today and our jim cramer is saying it should be optimistic about the markets and our next guest may not agagree. as we head to break, we have sharon epperson with the company disclosures for black heritage month. >> according to just capital, only 11% of russell 1,000 companies disclose 2024 race and

ethnicity diversity targets. up that up 9% from 2023. celebrating black heritage, i'm sharon epperson. (grunting) at morgan stanley, old school hard work meets bold new thinking. (laughter) at 88 years old, we still see the world with the wonder of new eyes, helping you discover untapped possibilities and relentlessly working with you to make them real. old school grit. new world ideas. morgan stanley.

welcome back to "worldwide exchange." time for the "wex wrap-up." shein is looking to move from

new york to london because the s.e.c. may not approve the listing. faa panel deeming there appears to be a disconnect with the safety at boeing with management and workers for raising safety or production concerns. the panel adds changes in the boeing safety procedures are leading to confusion among employees. shares of zoom are taking off after the beat on the top and bottom lines. the cfo said the growth would be faster during that period if not for a sales reorganization. sales up 12%. shares of altice after surging 36% yesterday after the commu company considering buying the broadband company. talk a look at shares of altice up 3%.

we are watching shares of kroger and albertson's after the block of the merger after it would result in higher prices for shoppers and lower wages for workers. not out of the woods yet. that is the outlook on the fed inflation fight from kansas city president jeff schmid. stressing patience when it comes to rate cuts. here is what to watch today on the economic front is durable goods and economic figures and the s&p shiller home prices. we get results from lowe's and macy's as well as e-bay. stocks are looking to share off the trading week. stocks are in the green across the board. the dowwould open up higher

right now. on "mad money" last night, jim cramer said there are reasons to be on thptimistic with the quary rules. >> these are all signs emblematic, not a bubble. stocks are going up on rationale experience. they are not going up on the dreaded multiple expansion where people keep paying more for the same earnings. >> for more on this and the trading day ahead, let's bring in jenny harrington from gilman hill. >> good morning, frank. i'm doing my homework up until the end. >> you have to get ready for the spot. what do you think of what cramer had to say with the investors nudge to stay optimistic. >> it is funny.

i listened to him driving home last night. cramer is a more positive guy than i am. i'm into dividend and income strategy. i look at everything in a more subdued light. i'm pre-freflecting back on it. i have a more subdued view on it. i think people saw share buybacks with uber and meta. people thought that was great. i hear that and i think why do companies buyback shares and put a dividend in place? the reason they do that is the future growth is less than the past growth. i'm looking at earnings in a more subdued light. >> subdued. >> to -- >> let me jump in. right now, you are holding 10% cash. you are subdued, but you are

waiting for an opportunity. where do you see the opportunity coming in? >> i see it because i think the market is stretched. at 21 times earnings on the s&p 500, that's just a bit too much. my portfolio and dividend income trading at 21 times forward earnings and what i know is the relation in the market is tremendous. even though in theory, dividend stocks and value stocks and midcap and small cap shouldn't trade in line with the s&p 500 500. if the s&p 500 backs off, the rest will back off. i don't think that earnings that we need to be at the price the s&p 500 is right now, i don't think that is locked up for the year. if the market backs off, i get into the stocks cheaper. >> jenny, you are all about the dividend stocks. it lagged the broader market. you gave us a big.

crown castle ticker cci. the dividend is close to what you get on a one-year treasury or in the money market fund. what is the argument for the dividend stocks when you are not getting the price appreciation and the dividend is close to the money market or bond? >> in a money market fund, you can be certain that is yielding 5.3%. if you believe interest rates are coming down, which i believe everybody does, your money market yields will go down. with the bond, if you lock in the 5.3% until maturity, that is all you get. if you buy crown castle, it has a long history of increasing dividend. now it is flat. in a couple of arof years, it s resume. the shares are unvalued. if you use a dividend discount mo model, it would suggest shares would be $127 a share now.

not $106. you have capital appreciation and future dividend growth. crown castle has an ordinary income tax on the dividend, but with most other stocks, you have favorable taxation. if you get in a money market fund or taxable bond, you are getting ordinary income tax. >> jenny, we have to leave it there. your pick today for us is crown castle. thank you for being here. that will the do it for us on "worldwide exchange." "squawk box" is coming up next. have a great day.

good morning. $53 billion merger between chevron and hess could be in jeopardy because exxon is considering exercising some rights in a joint venture with hess that would disrupt the deal. we'll tell you how it could play out. a lot of retailer earnings are on tap. we hear from lowe's in the next minute. macy's which was important yesterday at 7:00 a.m. a new survey says people find personal finance harder to discuss than religion, politics

or death and nearly as tough to talk about as sex. it's tuesday, february 27th. two moredays to go in february. "squawk box" begins right now. good morning. welcome to "squawk box" here on cnbc. we are live from the nasdaq market site in times square. i'm andrew ross sorkin along with joe kernen. becky is off today. look at u.s. equities. three and a half hours set to go. we are looking set to open higher. dow up 24. nasdaq up 42. s&p up 5 points. treasury yields with the ten-year yield and two-year yield. ten-year yield at 4.270. th