it is 5:00 a.m. here at cnbc global headquarters. i'm frank holland and here is your "five@5." tech hits a fresh all-time high as investors wait for the more than earnings report which is nvidia. and microsoft has a release for a.i. pcs. and a number of retail reports out today and later this week is headlined by target and lowe's. and musk taking issue with his pay package.

and call it identity theft as scarlett johansson calls out openai and sam altman. it's tuesday, may 21st, 2024. you're watching "worldwide exchange" right here on cnbc. ♪ good morning. welcome to thank you for being with us. let's look at the stock futures on this tuesday. a muted start right now. a bit mixed. nasdaq in the red. you see the dow opening up slightly higher. the s&p is essentially flat. let's stick with the nasdaq. we watch the tech trade with the fresh record ahead of the huge report from nvidia. before nvidia, investors get ready for the consumer. we have a lot of big reports. lowe's and macy's and urban j

outfitters. urban outfitters moving 1%- higher ahead of its report. we have fed speakers in the last 24 hours downplaying optimism over the cpi report last week. the benchmark at 4.42. the two-year yield is at 4.83. we also want to hit commodities. gold hitting an all-time high. it is pulling back a bit right now but, close to the all-time high. down .75%. year-to-date, up 17%. that's the set up. let's continue with the market theme with u.s. stocks trying to hold on to records. let's see how the day is shaping up in europe with carolin roth in london. carolin, a pull back after yesterday. absolutely. we're seeing softness across the board. i want to show you the indices. we are seeing red across the board.

that said, losses are limited. dax is off .50%. not too far away from the record highs. same for the cac 40 in france off 0.4%. we have corporate news, but let's get to economic data. we did get ppi numbers in germany. europe's biggest economy. they came in softer than expected. that's good news because that p paves the way for the ecb to start cutting rates in the month of june. the ftse mib is off 1%. the generali is weighing on that index. let's get back to the corporate news. astrazeneca aims to reach80 billion by 2030 amid the significant growth by pharma and rare disease portfolios. the pharma giant will expand the portfolio with 20 new medicines. shares are up 0.8%.

let's stay in the sector. gsk has reported positive results from the phase three trials. the drug maker has propjected that the drug which is not approved anywhere in the world could be a major growth driver by the end of the decade and peak annual sales of 3 billion pounds. gsk is off1.43% on the news. on that note, let's give it back to you, rank. >> carolin, thank you. turning our attention back stateside and stocks making moves ahead of the open. silvana is here with the big money movers. >> good morning, frank. we start with zoom. it is lower in the pre-market after the second quarter forecast came in below estimates. we are seeing losses of 1% right now. that's despite a more than upbeat longer-term outlook. the company says it is pushing to inn corporate artificial

intelligence and broad range of services has so far been successful. meanwhile, let's move to palo alto networks. sinking down 8.10%. forward guidance disappointing as companies pullback on cyber spending. the ceo on "mad money" last night saying there was nothing wrong the quarter. >> revenue was great. profitability was amazing. our free cash flow margins are great. i don't think there is anything wrong with the quarter. >> shares of peloton under pressure. down .70% in the pre-market. the company announcing global refinancing plans and including $275 million in convertible notes to buyback its debt and extend loan maturities. peloton is down 80% since the

start of the pandemic as it struggles can slowing sales. >> people just went back to the gym. that's what it comes down to. >> i stuck with my peloton. i did. >> i think a lot of people that i know have a really expensive clothing rack. silvana, thank you. we'll turn attention back to the broader market. the united states with a stock market rally as well as the 20 largest stock markets. 14 are testing new highs with the emerging markets and japan tri trading at fresh record highs. i'm joined by emma wahl. good morning. good to see you. >> good morning. >> we will talk about the global p ma ma markets in a minute.

trading at almost 21 times forward earnings. just under 18 times in the last ten years. considering the a.i. advancements, do you think that is expensive for the u.s. stocks? >> i'm going to federaudge this answer. yes and no. it is not the entire u.s. market. it has been driven by a narrow portion of the markets. you are still seeing a huge val nut ue in the market. there is still a single digit multiple. the answer is is the u.s. market expensive? it looks expensive. you may have overweights in the portfolio because of the rally you didn't have a couple of years ago if you have been passive in the asset allocation.

there are still good stock opportunities to be found particularly in the small-to-mid space. >> i want to look at the global markets. if you look at the index, the top developed markets around the world, that is up 8%. it is lagging the s&p. the s&p up 11%. when you see the markets trading higher similar to the s&p, is that confirmation there is more room to run or is that a sign of fr frothiness? >> you have to take each market as it comes. japan has reached all-time highs recently. don't forget, we had to wait 34 years for japan to do that. there are a lot of tailwinds in that market. there are currency reasons why investors outside of japan don't get the full benefit of that rally. looking across to the uk, uk, despite the all-time highs from

the ftse 100, are on a 45% discount to the u.s. and aggregate to other markets. in europe, euro stocks have done well in the recent years. particularly in the last 12 months. again, it has been a narrow part of the market. if you are looking across developed markets and we see the best value in the uk. you will accuse me of having a domestic rise there. looking at the ftse, for example, 45% discount to the u.s. you have international revenues and no leverage and we are expecting around 90 billion pounds of sterling to be paid out in this year. that's up 4% from last year. great buybacks. companies are looking cheap in the uk despite all-time highs. >> that is one of the reasons we are seeing the takeover bid for

anglo american. emma wall, thank you very much. for more on what is driving the day ahead, head to cnbc.com/pro. we have more coming up, including the one word investors have to know today and microsoft is turning up the heat on the a.i. pcs as the mother of all a.i. stocks gets set to report tomorrow. plus, real estate reality check for millions who may be stuck renting for years to come. the key retail reports before the open today. we have the number one number you need to watch when those veport earnings. a ry busy hour still ahead when "worldwide exchange" returns.

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switch to comcast business and get started for $49.99 a month. plus, ask how to get up to an $800 prepaid card. call today! welcome back to "worldwide exchange." huge week for a.i. as two are offering updates for investors. the microsoft conference starts today and ahead of that, the company is unveiling computer was copilot plus pcs. they will start at $1,000. they will include a number of other things. a a. a.i.-enabled features and a voice assistant. revenue is for to triple tfrom year ago. nvidia is responsible for one-third of the earnings growth in the s&p. joining me now is melissa otto. melissa, good morning. great to have you here.

>> good morning. great to be here. >> you are super awake, melissa. i like that. a lot of people are focused on data center revenue. the estimate for this your, you have a different number than the street. the estimate for this quarter is 398% year over year growth. last quarter, they had actually 409% growth. a year ago in q1, it was 14%. is this sustainable? let's say they get 370. is that a miss? these are incredible numbers. >> absolutely incredible numbers. we ran calculations back in december based on the consensus and looking at a couple years. we saw upward revision of over $150 billion. that was back in december. i thought, wow, this is starting to look long in the tooth. maybe a little priced in. then, boom, this year, we have seen yet another $50 billion in

upward revision coming into the fold. i think there's so much investment in cap ex coming from the cloud service providers that is really driving this. i think the number to beat based on consensus for q1 is $21.2 billion. looking ahead to q2, $23.3 billion. i think those numbers -- >> if you don't mind, it sounds like they may beat the estimate. you think it is not only sustainable, but exacceleratacc? >> it is just what we're seeing in the data. i'm speaking the facts. that's where it's at here. you went from $150 billion to r. that is the question with the stock. do we see another $100 billion

to $200 billion in the next couple years in upward revision? is that what keeps the momoment? >> the data center is the issue with the company. what does it mean for the rest of the chip stocks? >> it is a positive indicator. it definitely indicates the infrastructure and move toward accelerated computing for laying the ground work and foundation for generative a.i. are positive. it is moving in the right direction. >> i'll switch gears with you. we're talking about microsoft and the new a.i. pcs. everybody is talking about a.i. pcs. i want to bounce something off you as we await for the event to kickoff. a lot of people are citing the gardner stat that 22% of the pcs will be a.i. pcs this year. the integration of a.i. into pcs is not expected to drive

end-user spending beyond price increases. they will demand compelling reasons to invest. when we talk about the a.i. pcs is an enterprise story or a consumer story? >> it is an everything story. the pc -- maybe it is the pcs moment to shine. the compute power needed to really develop and run a lot of generative a.i. -- it operaties better on a laptop. one thing i'm looking for today and tomorrow is azure and chatgpt will simplify work flow and enhance productivity. that could potentially be a big story. >> melissa otto, thank you. shock and anger from

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yeah, and dr. xichun even takes your sketchy insurance. xi-chun, xi-chun, xi-chun! you've got more options than you know. book now. glp-1 drugs used in weight loss treatments are a global blockbuster, even with unliked and inconvenient injections. more human study results for lexarias patented oral delivery technology are coming soon. lexaria bioscience. welcome back. sanofi is partnering with openai and b bio to accelerate the collaboration of new drugs.

joining me on cnbc is the sanofi chief executive officer. great to you have here. >> good morning. >> exciting news. you are making a lot of headlines. can i bottom line it? what will you use a.i. for? what is the number one use case for the company? >> i hope you will talk about it. it is all about ensuring we get to market faster with our drugs. there's plenty of patient needs with the a.i. tech-driven company with sanofi. >> let me ask you, you say it exaccelerates getting drugs to market. are you talking about the most profitable drugs or other drugs with great need? >> you know, we are not narrowing into the most

profitable drugs. it is about unmet needs. with generative a.i., you can map proteins and generate new proteins. i think the spectrum of the possibility is huge, frank. it is not just on specific drugs. it's a wide range of drugs. >> wide range of drugs. we have been doing research. this news just broke. i have been looking at the report from pwc. i know you said it is not just about the most profitable drugs. according to them, a.i. could increase your operating profit and your overall profitability. if your company becomes more profitable, does that change the drugs you developer widen the drugs you can possibly look to invest in here? >> it is a long and expensive process. what we aim with this is to shorten the process. reduce the cycle tof time from discovery to development. it is not an angle that is on popularity.

it is an angle of the art of the possible is what we will do with those. we have not narrowed it to anything at this stage. we are excited about the first class partnership. we are the firs tt to do that. we bring the expertise and data. >> you are the first one to do it. anytime you are the first, there is risk. i was reading a world health organization of a.i. on drug development just like you are planning to do. is there risk there with a.i.? we see false data and the idea that all of the data in there may not be the best data necessarily. is there a risk here? how do you mitigate that risk? we are talking about drugs that people are going to take. >> we would never go to a drug that has risks, but we use the human loop at every step of the way. technology helps us get there faster and there is a human in

the loop to ensure we follow the best ethical approach to using artificial intelligence. then we have a lot of simulations as well to prove our drug has the efficacy profile with the lowest possible profile. >> i know you said there will be human interaction there, but if i type something in my laptop, i trust the results. what are the safeguards you aringare and especially with openai with the safety council being dissolved. you mentioned ethical concerns, but what about the broader concerns with the company you are partnering with has unraveled the safeguards they have? >> that is a good question. we are the first ones to use the fine-tune models in the industry. it is not just openai on its own. it is the scientific of sanofi

with the expertise and the openai and experience. i feel like we have the right level of safety guards around it. >> great to have you here. we appreciate your time and insight. exciting news for the company. partnering can openai onning drug development. we have to have you come back. >> sounds good. thank you. coming up ether looking at 20% surge. details on what is exciting the crypto exchange when "worldwide exchange" returns.

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shipstation the #1 choice of online sellers go to shipstation.com/try and get 2 months free it is 5:30 a.m. in the new york city area. there is more ahead on "worldwide exchange." here what's on deck. the nasdaq is the latest to test new highs ahead of nvidia earnings. retail in focus this week with lowe's set to report in 30 minutes. what the home improvement chain may signal. and more trouble for elon musk as more shareholders pull the plug on his pay package. it's tuesday, may 21st, 2024. you are watching "worldwide exchange" here on cnbc.

welcome back to "worldwide exchange." i'm frank holland. we pick up the check of the stock futures with the nasdaq hitting a fresh record. yesterday, we saw the nasdaq lower. it is still fractionally lower. dow hitting the highs of the morning. the s&p is flat. we want to check the bond market with the number of fed speakers today and throwing a lot of cold water on the rate cut hopes. the benchmark ten-year yield is 4.12. gold is pulling back a little bit this morning. it is down .75%. it is an incredible run this year with gold up 17% for the year. that's the set up. now let's check on the top corporate stories. silvana, back to you. >> frank, you still have the london thing going on. love it. authorities are investigating the cause of the fire that broke

out at tesla's factory in fremont, california yesterday. the local fire department says the blaze apparently started in an oven used in vehicle manufacturing. no injuries have been reported. tesla's fremont factory has a history of fires, including one in 2019 and 2021. a group of tesla shar shareholders, including the new york city comptroller are calling are investors to vote against the musk's $56 the billion pay package. the board is too close to musk pushing back against the re-election of musk's brother kimbel and murdock to the board. the pay package was approved in 2018, but was struck down by the delaware court in january. a vote on the reproposed deal is set for next month. ether is extending its rally today after the crypto surged

20% yesterday. we're seeing it up more than 8.5% right now. the move is coming on renewed optimism the s.e.c. will approve spot etfs. the agency has asked for more documents from the issuers and exchange. and scarlett johansson is accusing openai of creating a voice for chatgpt that sounds eerily similar to her own. scarlett johansson was the a.i. assistant voice in the movie "her." she declined an offer given to her last year. the voice was done by a different actress, frank. i did listen to it, frank. it does sound similar. >> i thought you were going to tell me it is really her and they said it is somebody different? >> i don't thknow, frank.

>> scarlett johansson is fearless. she took on disney a while ago with "black widow." i'm staying away from scarlett johansson. silvana, thank you. turning back to the markets. nvidia's earnings report may be the headliner this week, but l lowe's is out with the earnings at the top of the hour. high mortgage rates are taking a bite from the home improvements. joining me now is scott muskin from rfi capital. scott, good morning. >> good morning, frank. >> i want to go to the price car get with lowe's. 208. you have a sell. everybody else with consensus is a buy. what are you seeing that is different when it comes to

lowe's especially after home depot had a better than expected report? >> it was better than expected on the bottom line, but the sales number was weak on the comps in the u.s. that is the expectation for lowe's. home equity lines are high, the rates on them. we are not seeing people do as much with the major remodels or minor remodels. spending is more toward services. we are to the point we worked off the extra spending from the pandemic. that's the good news. the bad news is rates are very high. just for instance, our capital research consulting firm, so we help lease cars to help people get the rates. we see 8% on the car loan. it is amazing. it is dampening down demand. >> i want to push back on

mortgage rates high. diana olick says the high in 2023 for a 30-year mortgage is 8.03%. some say it is a red hot housing market in fiphiladelphia. how mortgage rates high? people still need to buy houses. is that a tailwind for lowe's? people will buy houses. >> if you look at listings, they are still down a bit. i think it was 36% down from pre-pandemic levels. you are getting some turnover in the housing market. given the price appreciation and shortage of the houses on the market and high rates, af affordability is pretty low. lowe's and home depot -- things break. refrigerators break.

home heaters and water heaters break. you need to paint a fence. there is some underlying demand here. the story for the next year is going to be through 2024 is a tough environment. >> one thing about lowe's and home depot, lowe's is more for the do it yourself person and grills and patio furniture. is there a part of the report that you expect to be better than expected? >> not really. one thing that makes me nervous is the forecast for lowe's is different from home depot. we do a lot of consulting. we're out all over the country. i know walmart said they thought the low-end is hanging in and a couple of companies intimating the same thing. our research suggests that is not the case. it may be company specific. lowe's has a lot more exposure

to middle-income areas. not as much exposure to the pro. we think it makes it tougher for lowe's. >> your price target reflects that. $208. you have the sell on everybody else being a buy. scott keeping it real on lowe's. thank you. >> thank you. >> for more on the quarter, don't miss the interview with marvin ellison tonight on "mad money." we stay on the consumer and one thing many cannot afford. diana olick has the latest on the high home prices. "worldwide exchange" is back after this.

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♪♪ ♪♪ welcome back to "worldwide exchange." bad news for anyone in the market looking for a house. a lot of us would expect high home prices creating a lot of unexpected prices in u.s. history. diana olick is joining us more. good morning. >> good morning, frank. when you combine higher home prices with higher mortgage rates, the sum total is a lot of pain for potential home buyers, especially for those who want to buy new construction. home prices overall nationally are 46% higher than they were at the start of the pandemic in 2020. that is new and existing homes. the average rate on the 30-year fixed is 7% after hitting record

low of 2.6% in 2021. 65 million americans can the not cannot afford a $250,000 home today. 1 in 3 can the not afford a new of $495,000. that is 82% of households. if you raise that price by $1,000, additional 106,000 buyers would be priced out. it is that bad. if you compare that to the same metric in 2021 at the record lows, that 103 million drops to 75 million households unable to afford a new home. nearly 30 million potential buyers have been priced out in three years. the home builders have been buying down mortgage rates in order to get more buyers in the door, but that is eating into their margin.

as rates move higher last month, that was more difficult to do. builder sentiment dropped in negative territory for the first time since february. 25% have cut home prices in may. that ended four months of consecutive declines. everybody trying to get buyers in the door, frank, but it is really difficult right now. >> diana, i'm tearing up. 2.676%. i'm getting emotional. that seemed it was forever ago. it was just 2021. we were talking about lowe's. you said it is above 7%. last year, we saw it above 8%. it has gone down 1%, isn't that a bit of a tailwind? is that a extrajectory? >> no. the short answer is no. the 30-year fixed hit 8% in october for a nanosecond.

we saw rates at 6%. we are a full percentage point higher than a year ago. anything over 7% in comparison, that 8% was brief and the market shutdown in october. it came back a bit. we are seeing more inventory. the 7% change is difficult for buyers. especially as you compare to the record low in the two handle. >> 2.67%. thank you. coming up on "worldwide exchange," shaking up the rental party more. what another trump presidency could mean for the policies and your money. and cnbc is celebrating aanhpi month. here is deidra bosa with the c-suite representation. >> representation for the asian americans in the work force decreases the higher level of

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welcome back to "worldwide exchange." we're five months away from election day and a lot's on the line with the economy. another trump term in the white house could mark another big shift for republican party policies and moving further away from conservative platform points of the past. eamon javers has a deeper look at the new conservative economics. eamon, good morning. >> good morning, frank. the first trump presidency shattered ideology on republican party's approach to free markets and tariffs, but the second trump presidency could shatter it on everything else in economic policy because the 2024 presidential election is taking place in a dramatically different economic and political context. conservative thinkers have spent years constructing an intellectual and policy framework around trump's economic populist message. what they have come up with is a worker first and anti-corporate

package that is popular in the party and trump economic circles. folks at american compass have been churning out white papers and proposals to reset the thinking on the republican party. it is not sure how much clout the second administration would have, but robert lightheiser sits on the board of directors of american compass. the movement rejects the idea that tax cuts are always the best policy and embraces unions. that's designed to tstop with te new economic suite. republican critics say it results in higher taxes and inflation. one dismissed it to me as big

governmen corporate conservaconservatism. it will look more like the approach of the last several generations of republican p pol politics. frank, back to you. >> you are already on 2025. i want to talk about the trump tax cuts. what does this mean for the possibility of renewing the tax cuts in 2025? >> i think if you talk to the economic populists, and i spoke to warren kass, he said tax cuts are not on the top of the economic priority list. he doesn't see them as vitally important as past republicans have seen. he says it looks like trump will renew the trump tax cuts from 2017 if he is reelected in 2024. the reason is because they have his name on them. they are important to donald trump politically. the question is whether or not the corporate rate gets thrown into this debate. in 2017, they lowered the taxes on individuals and on

corpo corporations. the corporate rate was made permanent. in theory, that is not up for renewal in 2025. if the rest of the package is up for renewal, this could be on the table with some others saying this is a pay-for to lower taxes on everybody else. we need to raise revenue somewhere. why should we defend the corporate elites? disney stuff and woke stuff and lgbt stuff that we don't call c culturely like. that is not something you heard in the republican party before. it is new and different and comes from the culture wars. >> a long way away from the election day. we will talk more about this. eamon javers, great to see you. thank you very much. coming up on "worldwide exchange," the one word every investor needs to know today and the signals the option market is

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welcome back to "worldwide exchange." time for the "wex wrap-up." shares of zoom are lower for the second quarter. the company expecting the a.i. integration efforts to pay off.

pal o alto network shares offer a forecast miss after the revenue growth of 15% in the recent quarter. peloton sinking on refinancing plans after extending dead and loan maturities. astrazeneca says it expects $80 billion of revenue by 2030 with the launch of 20 new medicines in the portfolio. it will build a $1.5 billion manufacturing facility in singapore. here is what to watch today. we get philly fed non-manufacturing data and earnings from lowe's and macy's and ulta. fed governor christopher waller speaks with cnbc at 1:00 p.m.

let check on the nvidia earnings. it is seen as the most impactful report on the s&p 500 responsible for one-third of the first quarter earnings growth. there are expectations for big swings when it comes to the stock. nvidia options data suggests a 9% move in either direction. that 9% move would translate to a market cap move of $200 billion to the upside or down side. that is bigger than the market cap of 90% of the companies in the s&p 500. for more, let's bring in amy wu silverman at rbc capital markets. amy, good morning. >> good morning, frank. >> loot to talk about here. i want to get your take. we talked about the data letter wit alert. the 9% swing. are investors preparing for that move? what steps are they taking?

>> they absolutely are. we have seen better breadth in the market, frank. we know if tech goes, the market goes and all eyes on nvidia with the concentration and what it means for the a.i. wave. the super interesting thing is the way options investors are positioned right now is different from past cycles where they simply were long calls. we don't see as much of that. we see it more even. you don't see that exuberant sentiment like past earnings cycles that kicked off the a.i. frenzy. >> that is interesting. i think of you as the oracle of options. amy, how do you see today shaping up as we await nvidia's report? what is your wex word of the day? >> anticipation. anticipation of the fed speak that is going on and of nvidia tomorrow. what will happen in the next few days is investors are really going to be pre-positioning.

partly because we are seeing on the market structure level that people are just positioning shorter and shorter. you see that with the rise of zero data options. i think a lot of people are putting on the trades for the fed speak and for nvidia today and tomorrow. you could see larger swings as we head into the events. >> you know what else i want to talk about? opportunity costs. right now, there's actually an opportunity to are protect yourself from wild swings in the options market and the cost is low. what does that tell us? >> you know, i've started to go around saying that options protection is laughably inexpensive. we go down historical lows and they go down more. the volatility is the vix which crashed to the lowest levels we have seen recently. we continue to trade at sub-13 handles on the vix number. i think what it tells you is the

truth is the last few geopolitical events we had have been nothing burgers in the market. the market ignored it. the short-term memory is fresh in investors minds. there are points in time where '07 or '08 where they point to. >> is there any area of the market where you see higher opt options activity? >> it is interesting. one area we talk about is dispersion. the volatility is really, really low, but you see the activity on the single tstocks. one is because it is a concentra concentrated breadth market. if we get some correlated move, frank, because of u.s. elections or geopolitical event, it will move the index level. that part is complacent. that part, i think, people are under protected on. >> i have to ask you, you have

so much experience with all this and with markets trading at all-time highs, and what you are hearing from clients, is this abnormal? how would you phrase it? >> i would say that the post-covid world has been very different from the volatility regime perspective. a lot of relationships we have come to expect, the idea if spot prices go up, volatility goes down. that is holding. partly is the reason of a.i. and the chase of momentum. when the factors start to change and the market is no longer on fomo because everyone is long and everyone jumped in the pool and we risk the other side becoming more relevant. >> a lot of money in money markets. i don't think those people like to swim too much. amy wu silverman, thank you. before we go, a look at the

futures. all three indices close to flat. nasdaq slightly lower. that will do it for us on "worldwide exchange." "squawk box" is starting right now. ♪ ♪ good morning. retail reports are on deck. we will hear from lowe's and macy's in the next hour. the numbers and instant reaction straight ahead. crypto surging on new optimism that spot ether etfs could gain regulatory approval. and scarlett johansson threatening legal action against openai. she says the company's chat bot copied her voice after she declined an offer to be the voice of the technology. it's tuesday, may 21st, 2024 and "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 becky quick along with joe kernen and andrew ross sorkin is reporting live from paris. he's got the back drop to die for. it is gorgeous. andrew, why don't you explain what you have coming up for us today. wow. take this shot full because it is really nice. >> becky, it is really nice. i'm live in paris this morning at the champs elysées. technology and business conference brings together thousands of tech companies. ceos from all around the world traveling here