it is 5:00 a.m. here at cnbc global headquarters. i'm frank holland and here is your "five@5." fires are in the driver's seat. no shortage of bullish sentiment as stocks push deeper in record territory and more big banks drive the stocks. is there a catalyst to turn the melt up into a rally? and in the hot seat. dave calhoun set to testify before the senate committee today as the company struggles to find a new ceo. buying the dip with the investment of $173 million.

and are dividends moving the ne needle? and why pain is the gain with artificial intelligence and hardware. it's tuesday, june 18th, 2024. you're watching "worldwide exchange" right here on cnbc. ♪ good morning and welcome to "worldwide exchange." i'm frank holland. thank you for being with us on this tuesday morning. let's get you ready for the trading day ahead. we kickoff the hour with the s&p and nasdaq once again at fresh all-time highs. a muted start, but green across the board. the dow would open up slightly higher. the nasdaq doing better. we are check the pre-market action ahead of the open. it is all about chip stocks after a monster day for broadcom. at the top of the list. shares up 2.5%.

qualcomm up 2%. micron up 1.5%. lam research up 1.5%. a lot of chip stocks here in the pre-market gainers. we are checking the bond market with retail sales and a very busy day of fed speakers. the benchmark ticking up from the level we saw yesterday. still lower than levels we have seen in recent weeks. we will continue to watch bond yields throughout the day. we are looking at energy and oil off the highest close since late april. you can see red across the board. wti and brent crude both down .50%. that is the money set up. we turn our attention overseas after the mixed session yesterday. we are looking at the trading day with arabile gumede in the london newsroom with the early action. arabile, good to see you. >> good morning, frank. the fight for rebound still continues today. you are seeing a lot of green across the board. it is marginal when you compare

to the 6% loss of the cac 40 last week. they haven't made up any inroads in that decline. you have data crossing the wires. european cpi at 0.2% on the month on month basis. meet beating estimates which may give the central bank more leeway. the question was around the rate cut path and how many more could be in play. you didn't want to diffiverge t much across the states. the ftse 100 is up .30%. the election risk is still in play for the uk as well as france. overall in terms of sectors, we have the banks managing to move higher up .75%.

so, too, construction and material. the big gainer is travel and leisure up 1.5%. we are watching that sector stateside because of dave calhoun's testimony later today. that will be unpacked. on the down sside, you have household goods in the red. frank. >> arabile gumede live from the london newsroom. the s&p closed at a record high for the 30th time this year powered by apple. the market's gains is boosting year-end targets for the s&p. citi hiking the forecast to 5,600. he is joining goldman and ubs as well. we talked about evercore at 6,000 yesterday. adding fuel to the bullish fire on "closing bell," blackrock's

rick reiter spoke. >> it has been a profound move. when you boil it down and i hear discussion of the multiples turning too high, you still see historic dynamic. you see the buyback with the cal calendar. they are pretty powerful. >> joining me now is patrick armstrong. at patrick, great to have you here. >> good morning. >> agree or disagree with rick reider? >> i agree and disagree. multiples are at a level i'm comfortable with, but coming into the year, the big-cap tech stocks are attractive to me. i'm getting to the point wherei have to do a little bit of gymnastics with the numbers to

make sure the numbers come through. i think nvidia is a great example. last year, it was up 250%, but earnings estimates were up 1,000%. the multiple expansion is starting to drive the stock as well. >> patrick, you really do agree or disagree? i want to jump in for a second. you really do agree and disagree. you just trimmed nvidia. at the same time, you trimmed 10% of the position. is this profit taking or something else going on? why trim the stock that you say is the poster child for the argument that multiples don't really matter? >> i don't think they matter. i think we are in an environment similar to the '70s with the nifty fifty is the only game in the market. you have to own mcdonald's and american express and disney. just like now, you have to own

them. they are trading at lofty multiples. 5% weight in the index is vnvida today. i have a market weight in nvidia. i don't like massive stock specific risk. it's an incredible company trading at 43 times growth earnings. >> that is a fair argument. pretty rich valuation. again, big holding for you. it is the poster child. it is a nuanced position. we will talk about dividending l dividends later in the show. how important are dividends? how do you marry the two of the stocks to put in your portfolio? >> dividends are one component

we look at. the share buyback to me is just as attractive as the dividend. boards stick with the dividends where they stop the buybacks. cash flow and ebitda earnings and more at the fringe are a nice cash flow you can count on. it is not the driver of what we look for. >> patrick armstrong, thank you very much. for more on the trading day ahead, go to cnbc pro for insight and analysis. we have more to come on "worldwide exchange," and what one word investors need to know today. also ahead, how dave calhoun is defending his company on capitol hill. and doubling down on warren buffett and what's next for him.

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so i had to show them. i've run this place for 20 years, but i still need to prove that i'm more than what you see on paper. today i'm the ceo of my own company. it's the way my mind works. i have a very mechanical brain. why are we not rethinking this? i am more... i'm more than who i am on paper. welcome back to "worldwide exchange." time for the check of the top corporate stories with silvana henao. silvana, good morning. >> good morning, frank. u.s. regulators are suing adobe over sub scscription plans for

company's products. two executives were riding the termination fee for the subscription plan and making it too difficult to cancel subscriptions. adobe is transparent with the terms and conditions and has a simple cancellation process. berkshire hathaway raising the stake in occidental petroleum bringing the stake in the oil producer to 29%. buffett has said he has no plans to acquire occidental. outgoing ceo dave tcalhoun will be in the hot seat today testifying before the senate following whistleblower allegations after the january door plug blowout. calhoun will tell lawmakers his company's culture is far from perfect, but he is taking action

and making progress. frank. >> silvana, thank you very much. we will have phil lebeau coming up to talk more about this. turning attention to the raise to the white house. voters in georgia and virginia will have their say as the battleground states hold the primary contest today. democrats doing the same with president biden two months from now. virginia and georgia could be among a handful of states that decide the november rematch between trump and biden set to take place in 140 days. for more on what investors need to watch in the 2024 race, let's bring in ryan gardner from stifel. good morning. >> good morning, frank. >> georgia will be a blue state. i want to focus on virginia for a second. virginia hasn't voted republican

in a presidential election since 2004. right now, there are signs it may be flipping from blue to red. why should investors being mindful of this? what could it mean for investors? >> if a state like virginia were to flip, it say sigis a signal broader republican wave. it is republicans running ahead of expectations and not that close of an election and probably congressional seats will go along with it which will give the republicans and a second trump administration a cushion. that is getting into the tax debate of 2025 and 2026 when the tax cuts of 2017 expire. the bigger the cushion the republicans have, the bigger the flexibility they have to extend the expiring provisions and avoid tough political choices. >> brian, you are saying a cushion. most of the polls i have seen

are neck and neck. it sounds like you think at this moment that former president trump may have a bit of a lead. if he does, on both sides, what policy shifts could this possibly lead to? >> so, there are a couple of things that the trump campaign is signaling for a second term. one, as i mentioned, is the tax debate. you have all of the provisions that expire within a year. the other is tariffs. obviously, the president imposed tariffs back in 2018. he wants to expand tariffs vis-a-vis china. he's also floated a broader and more global tariff regime with other trading partners. also on trade, in 2026, you have the review of the u.s. mca. the replacement for nafta. the trade agreement with mexico, u.s. and canada.

a huge trade debate and tax debate coming up in 2025 and 2026. >> what about just the economy right now? right now, the economy and the sentiment is not great, but is doing really well. unemployment is close to historic lows. i know we point out we're 140 days from the election. we have a way to go. ahead of the different conve conventions, how does that weigh into all this? >> i hear the narrative that the economy is doing well and i'm not here to dispute that, but voters have a different view. the base of the republican party, which has been more working class, is impacted by the inflation story of the past several years and while, you know, we can sit here and say inflation is cooling and normalizing, the fact of the matter, the working class voters which is a bigger part of the republican party, have less

flexibility in their household economies. they feel the impact of inflation more than the wealthy do. the wealthy have the flexibility and buffer. the working class voter does not. the working class voter is moving in the direction of the republican party and while we can say, yes, there is still five months to go or four and a half months to go, it's getting late. the fact of the matter is we have two candidates really well known to voters. i'm not sure we will see a lot of the volatility between now and election day. as you mentioned, frank, it's a close race. >> virginia and georgia both have large military populations or people that did serve. geopolitical issues. does that matter when it comes to the primary races? >> i don't think in the primary races. i think it is a personality contest in primary races. i get your point that there

serves the country matters and it is important. i think when they go in the voting booth, it is more pocketbook. >> that's the one thing all americans have in common. we vote with our wallets and pocketbooks. brian gardner, thank you. coming up on "worldwide exchange," investing in change, plus your big money movers and the pandemic darling stock cut down by chatgpt and the artificial intelligence frenzy. stay with us. chorcongp.

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welcome back to "worldwide exchange." time for the big money movers. we start off with shares of l lennar. the forecast below the ex expec expectations. lennar says the average home selling price fell 5% year over year. different from ubs. shares of lennar down 3%. shares of la-z-boy tops estimates. despite the negative um pakt imm the housing market, they are mitigating any issues. shares of chegg rocketing

higher. now with a market cap below $300 million. announcing it is cutting work force by 23% and closing two offices outside the u.s. the company has been a clear victim of the a.i. boom with shares down 90% since the launch of chatgpt. right now, shares are up 19.5%. prior to that, chegg was a pandemic darling. this week's reorganization is the first move by its new ceo who took over earlier this month. we celebrate juneteenth tomorrow. the holiday that started as remember esprance of the end of slavery. here are a few ways you and the companies you spend with can invest to bring social change. >> one vehicle designed to drive

change is the naacp minority etf. the ticker is nacp. it focus on big companies withholdings like nvidia and microsoft and apple. >> my point is there is genius in the communities. >> operation hope is the largest non-profit dedicated to literacy. one of the initiatives is a bold plan to start and scale 1 million black businesses by 2030. today, it is more than halfway to that goal. >> when you do this, it is not about the business. it is not about how many sur vaf, per se. it is about the mindset. it is about shifting the brain to a can-do mindset to the glass is half full. >> big tech is pourinwering the stock market this year and one is calling on to connect the stock gains with social change.

the design systems works with nvidia on the artificial intelligence chips. it started a $50 million fund to help black families start businesses and buy homes. >> there is a wealth gap and information gap. where to get loans. >> the tech company is looking for corporate partners and pushing you to join the fun or start their own. >> if we get other companies contributing to a similar fund, they can use our footprint or use something of their own design, we think this can have a huge impact globally. >> as we see companies make social justice, there has been pushback. this month, an appeals court ruled it must be suspended while

the case is being litigated. coming up on "worldwide exchange," microsoft's pain is apple's gain. as we head to break, here is global creative director drew elliott. >> a career perspective and it is really important that you find a place that also nurtures and understands and that might be a difference, but it is celebrated as a strength. what can you bring using the queer experience, whether it is customers or whether it be media and how you can use that as a strength because it is part of who you are. ♪ there was a tree, down in the woods ♪ ♪ the prettiest tree, that you ever did see ♪ ♪ now the tree has roots that need water to grow ♪ ♪ grow jobs, grow skills, make the whole world go oh...♪ ♪ make the green grass grow all around, all around ♪

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exchange" here on cnbc. ♪ welcome to "worldwide exchange." i'm frank holland. let's get you ready for the trading day ahead. we pick up with the stock futures and the s&p and nasdaq once again hitting new records. take a look at futures in the green. the dow hitting the highs of the morning. looking to open up 30 points higher. the s&p is above flat. we are checking the bond market with retail sales and a busy day of fed speakers. 4.29 is the yield pulling back from the levels we have seen from recent weeks and days. that is the setup. we turn to sectornomics and the most important slice of the markets right now which is technology. dom chu is hear re with the clo

look. dom. >> if you take a look overall, frank and what is happening with divi dividends, look at the sector. the best performing sector in the s&p this year. if you take a look at the way things are panning out, we have a number of companies paying dividends although they are not big. the sector pays rough by .23% of a dividend yield. if you look at the most important sector, 30% weighting in the s&p 500 for technology, look at the better dividend payers and not so because of the falling stock price. we looked at the s&p 500 tech sector and decided to screen for dividends. we looked at companies that pay a dividend and from there, we looked at positive price performance. from there, we looked at which

had the highest dividend yield. you see the overall screen and above average dividend yield. more than .23% of 1%. these are the standouts of dividend payers that still have price momentum. check out ibm which pays 4% dividend. cisco at 3.5%. also what is interesting, frank, this is a fun one. there are 65 stocks in the s&p 500 tech sector. 37 of them pay a dividend. which one has the lowest dividend yield, frank? >> if i had to guess, nvidia. >> it is nvidia. three basis points. 0.3% dividend yeeield. >> i think it is a penny. >> frank, back to you. >> dom, i think nvidia may be making up with the dividend with the price appreciation.

that's just me. dom chu with the sectornomics, thank you. we which bring in our next guest. hannah, good to see you. >> good morning. lovely to see you, frank. >> i want to start off where dom left us. how important are dividends? he mentioned nvidia has the lowest in the tech sector. price appreciation is pretty good there. >> it certainly is an interesting fact. i'm not sure it is all that important. what i think is really important and more so maybe in technology stocks is the ability of the company to generate free cash flow and return the free cash flow to shareholders. whether a company does that in the form of the dividend or not is not important. what we want is the company to grow the free cash flow over time and the share price would follow.

whether it is through share repurchasing or acquisition to generate growth, we want the free cash flow to grow over time. >> fair enough. everybody has an opinion about dividends. i want to talk about the broader markets right now. the overconcentration with tech showing so much leadership. five stocks leading to the gains on the s&p 500 this year which hit a fresh record high. how do you view the c concen concentration? you gave us a stat similar to what mike put in his weekend column. the borrowing index is well above the 50 day. what does that say to you? >> it tells us the narrow market is more prolific. if you look at it, it is concentrated within the tech sector. it is growing to be part of the u.s. market. if you look at the nasdaq, for

exam example, you have half of the companies below the peak of 2021. the higher interest rate environment is taking its toll on companies. the thing is, while it is a challenging environment, it is a really exciting environment. you have more companies trading at more reasonable valuations. if you are selective and invest in the right once, you can improve your return expectations. >> hannah, i have not heard whilst since i was in london. you say they are tech, but not really tech. one is pfizer and the other is transunion. give us the elevator pitch of them being tech, but not really tech. >> frank, these are high quality businesses. they have lots of data in them. that is the key with artificial intelligence. i know you are talking about the access to data.

for fiserv, they provide the tech to data to banks in the u.s. and provide point of sale solutions. they can see the consumer on the front end and back end on the consumer side. that has out performed the equity markets over the last two years up at 75% over the market and the last year. it has done well. it is still trading on a reasonable valuation which is 6% free cash yield. transunion is exciting. there is a lot of worry around the credit bureaus because of the environment, but if you think about the credit bureau, they have access to thousands of customers and the data they can monetize for income verification or fraud or risk management. they are exciting businesses

trading on close to 7% free cash yield. a huge economic moat for that business. >> hannah, hit tight. we want to get your take on something coming up. first, we go to steve kovach. microsoft is taking a clear lead on apple with artificial intelligence software. steve is joining us now with more on that story. steve, good morning. >> frank, good morning. we know about a.i. apps and we got done with the announcement from the biggest in the game. microsoft is kicking off the artificial intelligence hardware race launching a dozen models of computers months before apple turns on the a.i. features for mac and iphone. a big part of the pc push is saying they are out performing.

copilot plus pc. that is a clever way to say they have artificial intelligence on the device instead of offever t internet. qualcomm is pushing their computer chips. microsoft will have some along with samsung and hp and dell and others you are familiar with. the hope here is a.i. pcs will help the market grow after the post-pandemic slump. microsoft expects pcs to ship this year. nearly 242 million pcs shipped in 2023. a.i. pcs are expected to be a small fraction this year. what is so special about them? they run a version of windows with more a.i. fee atures. microsoft had to remove its top feature, the a.i. feature named recall because of privacy

concerns. recall takes screen shots every few seconds from the pc to create a searchable database. what could go wrong there? you had to reverse course and launch these pcs ahead of apple, but missing the main a.i. feature. it is still not clear if a.i. pcs and phones and all of the hardware are good enough to spur upgrades. the same story with what apple announced last week. >> a lot of questions about a.i. pcs. it is not clear. hannah, back over to you. your take on steve's record and the idea of a.i.-enabled pcs. >> you have to think about the cost. no one is doubting the quality of either company as a phenomenal business. if you look at the capital expenditure of the company of

microsoft, we are looking at 3% of sales. now into the mid teens for next year. the level of spending and doing that to think about the demand in the future will have a period of digestion. the free cash yield for microsoft is looking expensive. i think we have to make sure that what they're spending ties up with what they're able to actually enhance their capabilities by and how is that actually processed into sales for the companies and how is that realized? how long will it take? >> it is a wait and see. hannah and steve, thank you. coming up here on "worldwide exchange," the slide in shares of gamestop are continuing this morning. what the company is doing little to reassure customers about the path forward.

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welcome back to "worldwide exchange." we have a market flash on broadcom. you see the stock is up 28% this week. this stock is the largest overtaking eli lilly. up 28% over the last week now. the eighthbiggest stock in the u.s. market. time for the global briefing. turning to australia. the central bank holding rates steady. the rba is not ruling out further rate hikes if needed to control inflation. toyota shareholders reelecting the board. the re-election as chairman was a focal point for two proxy advisers recommending a vote against him. chinese official slams eu evs.

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welcome back to "worldwide exchange." outgoing ceo dave calhoun is testifying before the senate sub committee over the safety of boeing airplanes and quality control measures. this comes following the report that the boeing search for the top spot has hit a snag. two declining the offer. phil lebeau is live in washington with the latest and what we can expect later today. phil. >> a long afternoon, frank, for dave calhoun on capitol hill. he knows it. it's going to be maybe two or two and a half hours of senators grilling him of where boeing is in terms of the safety culture and where the company is with improving the quality controls. he issued the prepared remarks. we got those yesterday. already, he is laying the ground

work for saying we can do better. when it comes to the culture, dave calhoun will say we heard the concerns loud and clear. we are taking action and making progress. we understand the gravity and we are committed to moving forward with transparency and accountability while elevating employee engagement. what is going on at boeing right now? quality controls will be in focus this afternoon. remember, the company submitted what you would call a new safety plan to the faa which outlines the steps that are being taken to improve quality controls to ensure all of the proper steps are being taken so that all aircraft are 100% where they should be when they roll off the assembly line. that also includes boeing having more faa inspectors. they have been added at the plant. the faa is limiting 737 max production. right now, it is limited to 38 per month. they are nowhere close to that.

they will not hit that production rate until later this year at the earliest. they have to sort out a number of things with spirit a owe sy a aerosystems. you will hear senators say why did this happen on your watch, mr. calhoun. they will scold him. they will give him a real beatdown on capitol hill about what's happened at boeing. at the end of the day, is anything going to change for boeing shareholders? nope. nothing changes until this company outlines where it's going in terms of the new ceo and can show progress with the steps that it has put in place for safety protocols. that's going to happen the next couple of months, frank. to a certain extent, this is a dog and pony show on capitol hill. nothing will really come out of this that will make you say, okay, now is the time to invest in boeing. >> wow. phil, i want to pick up two things that seem to be hanging right now. the search for the new ceo and

the purchase of spirit aerosystems. nobody is well sourced more than you are. where are we? >> spirit has a good chunk of business that involves airbus. boeing just can't buy spirit. it has to work out some way with spirit and with airbus where airbus would likely take control of that 20% of spirit aerosystems so then boeing can buy the rest of spirit. they have been working on this for a while. it is not as simple as how much do you want? we'll give it to you. it's complicated. as a result, it is taking a little bit longer than people expected. many are hoping they can have this worked out by maybe the end of junie or the end of july. that would be a big step. in terms of the ceo search? i would not put too much into

it. everybody i talked with are expecting it not to happen until the fall until the earliest. you heard the two who came out and said i do not want to be considered for the ceo position. this is the normal cadence of how things happen. there are other candidates, as well, frank, that are possible and possibly people we haven't heard about whether will likely be into the mix as we get further into the summer. >> a lot of questions remaining. very important company here in the u.s. and globeally. phil lebeau, thank you. coming up here on "worldwide exchange," markets are working to breakthrough to fresh records again. we have the key number out today that our next guest says could get us to the new heights. stay with "worldwide exchange." we'll be back in a moment.

well come back to "worldwid exchange." time for the "wex wrap-up." berkshire hathaway buying more occidental. shares of gamestop under pressure after falling 12%

yesterday around the shareholder meeting with management not offering any details about the strategy. tesla is mulling stock option plan. fisker has filed for bankruptcy. it had previously been in talks with an automaker with an investment and joint manufacturing deal in hopes of staying afloat. merck getting approval for the next vaccine for an immune response of all 21 variations of the bacteria. and the celtics take home the 18th championship. boston's jalen brown named the finals mvp. moving on. we look to build on yesterday's gains with the s&p and nasdaq both close at fresh record highs. leading investors to worry again

about overconcentration by the mega cap tech names. last night on "fast money," dan niles said earnings is a key to a move higher. >> in the few weeks, we are in a come to jesus moment. not every company is nvidia and it is a very short list of names that are adding estimates go up. the stocks might be going up, but the numbers are not necessarily going higher. that's the trigger which is earnings. >> let's bring in victoria greene, founder at g squared private wealth. she is also a maverick and also apri a winner in my book. good morning, victoria. >> good morning, frank. >> people have been worrying

about it. do you agree? >> i agree. when you look at it and say where is the profit growth coming from and you look at it right now with the estimates, top ten is expected to grow 9% versus 5% on the rest of the market. they are a top ten for a reason. i don't think we should hate on them. they have improved the ability to grow earnings and beat high bars and continue to set new expectations and raise guidance. i look at it and sometimes you can't hate on it. they are number one for a reason. >> this is "worldwide exchange." we don't do any hating. i want to focus on the day ahead. >> except on boston. my wex word of the day is doldrums. we're in the summer and light winds. not everything is moving. the doldrums is a sailing term which refers to the storms that pop up unexpectedly.

i think we are very slow and quiet. we will get excited about retail sales today. everybody is waiting on pce next friday. right now, the catalysts are light. you can see knee jerk storms come through because we will o overanalyze. >> is this a mentaningful econoc data? >> we will get two fed rate cuts. the consumer is breaking. if it comes in strong, people say great. the consumer is strong. this supports. i think regardless of how it comes in, the narrative is bullish. >> i need the elevator pitch. kkr. why is it the right time to buy? >> they call it alts. they are figuring out more ways to get to non-traditional

clients. they are finding ways to get in front of the mom and pop clients. that marketplace is huge and growing. the expectation of the growth in private credit and other opportunities out there. managers are able to bring something in. >> that will do it for "worldwide exchange." "squawk box" will do it right now. good morning. the s&p 500 and nasdaq both closed at new highs and indicated they will continue that this morning if they open where the futures are right now. the dow broke a four-day losing streak. today, we get retail sales data later this morning. boeing's outgoing ceo dave calhoun will be in the hot seat on capitol hill to address safety and the manufacturing process. and apple cutting its buy

now pay later program and instead allow third parties to offer installment loans through its apple pay platform. it's tuesday, june 18th, 2024. it's tuesday, but i believe tomorrow's a holiday. >> it is. >> juneteenth. "squawk box" begins right now. good morning, everybody. 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. andrew is off today. say that three times fast. apple play platform. >> you can't even say it once. >> apple pay platform. >> apple pay. it is hard.