it's 5:00 at cnbc global headquarters. here's your "five@5." stocks are keeping the rally alive. fed chair jay powell is back on capitol hill telling the central bank they're more and more concerned about the cooling labor market we're also looking at the record-breaking rally across the pacific. we dip into japanese stocks and whether they have more room to run. plus, there are a new batch

of stocks to hedge the ai bets. and again president biden meeting with nato after laying out a game plan and support for ukraine's war with russia. it's wednesday, july 10th, 2024, and you're watching "worldwide exchange" right here on cnbc. ♪ good morning. welcome to "worldwide exchange." thank you so much for being here with us. let's get you ready for the trading day ahead. we get a check on the u.s. stock futures. the s&p and nasdaq hitting record-highs. pretty close to flat when it comes to the dow and s&p. you know, s&p fractionally higher, the dow fractionally lower. the nasdaq is really seeing some gains right now in the premarket, and we're watching that action in the nasdaq 100 right now. look at the names. nvidia, up more than 1%.

baker hughes, 1%. tesla coming in at the number three spot. micron, another chip make, almost 1%. we're also looking a ts fed chair jerome powell returning to capitol hill. take a look at the benchmark right now at 4.28. pretty much the same level we saw it at yesterday. and energy, oil coming off its worst day in two weeks. seeing some gains. wti, the u.s. benchmark up almost a half a percent. brent crude almost a third. now we're going to get back to your top story and investors preparing for day two with fed chair powell on capitol hill. today talking to the house financial services committee. powell signaled yesterday in the senate that the fed is getting closer to cutting rates as it weighs the risk of elevated rates and lower employment

market. attention turns to the cpi report tomorrow. prices are expected to inch closer to the fed's 2% target, which could raise the odds of a soft landing for the u.s. economy. >> the economy has made considerable progress toward the fed's 2% inflation goal and labor markets have cooled while remaining strong. reflecting these developments, the risks to achieving our employment and inflation goals are coming into better balance. >> let's discuss what this means for the markets and your money with ro robert shein. good morning, great to see you. >> good to see you, frank. >> i want to get a bit began u l -- gran you lar with you. materials finished lower. what does that tell you about the market reaction and i want to get your reaction. >> what we can expect from not only powell's testimony today

but on the next quarter to come is this market rotation is going to continue. big tech has led the market for not only the last six months but the year, quite frankly. if we want to see the market broad now, which we expect to seeing big tech is going to have to sort of cool their jets right now, and then we're going to see a broad ping out of other sectors to fill the grab moving forward, which is a welcoming aspect to the overall broadening market. that's what we need to see. >> you're looking for some broadening, even though we saw two of those cyclicals close lower yesterday. i want to talk about cuts. we saw the chances for a cut coming up in september have increased in the last month. right now they say 70% -- just a month ago they were at 45%. where do you think we stand? how important is a cut this year in particular to the rally or just the fact that we're going to get a cut in the next move,

is that what you think is keeping this rahy going? >> what we heard from jay powell this morning is he lowered the landing gear. he set us up for a september cut and maybe a day after the election cut. we could probably see two cuts later this year, but definitely the balance cut or the balance conversation and inflation is not the only risk comment that he made, which was significant today. it means the balance in play with inflation, which we expect to come down tomorrow with the cpi, as well as unemployment, which is rising, the key is moving forward. that's the key, moving forward, for the fed, but it implies a rate cut. >> you came to us with a cpi trade. you gave us two picks.

moftd microsoft and eli lilly. but also berkshire hathaway. explain to us. >> warren buffett doubled down. you've got see's candy and coca-cola. you also have insurance. table economics, our insurance has gone up personally year over year. that is ooh going to feed into earnings for berkshire hathaway because it's 30% of their portfolio. we believe they're going to capitalize as a result of this. if you don't own it, you should consider owning it. and we believe the next quarter will be good for them. >> motor vehicle insurance increased 20% year over year. in your miemtd, is it smart to invest in insurance companies across the board? >> yeah. insurance companies year over year, it's sorts of a catch-up trade since covid. keep in mind for the first two years of covid no one did

anything and in 2022 everybody started moving. they said, oh, gosh, people are moving, so insurance goes up higher. that is ooh not fair, but they gave all of us a 30% increase as a result. that's going to feed into all of the insurance companies. warren buffett is going to profit on it as he always does. >> thank you very much. for more what's driving the markets and the day ahead head over to cnbc.com/pro for exclusive insights and analysis. we have a lot more on "worldwide exchange" including one word investors have to say. plus, the great wealth flight and how the wealthy moving from blue states could impact the november election. later, citi throws cold water on the ai trade and offers a new basket of ocstks. we have a busy day ahead when "worldwide exchange" return. stay with us.

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good morning. >> good morning, frank. we're seeing european forces trading in the green, reversing some of the losses we saw yesterday. just to give you an idea, the benchmark, the stoxx 600 ending the session down by almost 1%. now, some of this positive momentum is actually driven by what we heard yesterday, by jerome powell stateside saying what we're seeing in the labor market, if we see further cooling there, that that could be a problem. so investors are looking at that and interpreting it as a sign that the fed is getting ready to cut rates. with that in mind, i want to take you to the different sectors. a couple of important stories at this stage. in fact, we have real estate as the best performing sector at this stage by 1.3%, this in the way of the new labor government in the uk coming up with mandatory building targets that's boosting some of the momentum in this sector. telecoms also trading higher as

we are seeing actually some investors upgrading their ratings on some of these stocks. but let me take you to asia too. it was a very interesting session. also over in asia. what i was telling you earlier about how investors are digesting the comments from jerome powell also boosted some parts of the asia market. i want to take you to japan in more detail. they ended the session by about 0.6%. it actually rose to a record-high with some of the momentum also when it comes to chipmakers at this stage as well. but also when you think about the other -- the other indices in asia, some of those chinese shares did trade lower after some inflation figures this morning actually disappointed markets. so when you put it all together, frank, it was those comments from jerome powell, some data in china, also in europe, this is how we're trading so far in europe and how we traded in asia. back to you. >> silvia, thank you very much.

we're now going to stick with the rally and see if there's any opportunity left for investors on the sidelines. joining us now, our next guest. good morning. great to have you here. >> good morning. thanks for having me. >> last year becky quick went to japan and talked to warren buffett. nikkei ouper outperforming s&p. where do you see opportunities in the japanese markets? >> sure. i think you're right to point out that japanese equities have performed quite well, but actually on a u.s. dollar basis, perhaps it has more legs to go. in our review actually, a lot of the rally that we've been seeing so far has been sort of concentrated in the large cap names, and, of course, in the earlier segment we heard the

semiconductor names doing well. it's going to be a more broad-based rally as we see more of the smaller companies do quite well. we started to see signs of that in the june month as more and more global investors are anticipating a lower rate. there are high-quality names that are really in our view some hidden gems in this market. >> okay. so you're saying you're seeing some hidden gems in the mid caps and small caps. that sounds very similar to what people are saying here in the u.s. that thesis when it comes to the small and mid caps is generally based on idea we're going to get fed rate cuts sooner than later. a lot of variation. mid caps are trading at a discount, similar to here in the u.s. what's the thesis for the small and mid caps in japan because obviously they have a very different central bank situation. >> absolutely. look, from our standpoint, we think it's increasingly going to

be important even in this midcap space we're going to be invested selectively, especially for those companies that have the good p & l growth story and the balance sheet improvement story. the reason why i'm focusing on the two factors, it means that your return on equity will improve and that will in turn bode well for valuations going forward. in our view in japan there's a plethora of investment opportunities where the return on equity has been low for a very long time due to the low capital efficiency, and, of course, the macroeconomic situation that many of our viewers know. it's all changing and it's changing for the first time in over 30 years and this paradigm shift makes it an interesting opportunity to invest in this space not just large capital but small cap and mid space. i just came back with my colleague from north america and europe doing a road show where we met with over 70 clients in 30 cities, and i can assure you,

a lot of global investors also find this part of the market very, very interesting that okay. here in the united states, a lot of people are worried about frothiness, high concentrations in the market. are there any parts in the japanese market that you also think are frothy or opportunities have run out and the sectors around stocks have run their course? >> of course, this market is like the rest of the world where generative ai and the next generation, robotics, there are certain segments that have seen a bit of a run-up in the sure price. that's the case for semiconductor-related names. and, of course, the weak yen means there have been a few companies seen their share of prices experience a run-up, and especially exporters. if you look, you'll find great companies in specialty chemicals that supply the semiconductor

chipmakers or the testing equipment makers who continue to trade at very attractive valuations. though is are the companies, i think, are going to be the next star names if you will that will lead the gains as we see the broadening out effect of this market. >> kei, great to see you. coming up on "worldwide exchange," six days and a 13% pop. also some questions on whether this sudden uptick for this chip stock left out of the chip rally can last another day. we have your big meyon movers. they're coming up after this. stay with us. or... some-thing. [a.i. copilot] glad you called, j. [a.i. copilot] it's time for an upgrade. awesome. ♪♪ [inner monologue] i knew what i had to do. because they never stop. no time to waste. this isn't sci-fi. this is precision ai. ♪♪

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welcome back to "worldwide exchange." it's time for the big "money movers." we're gaining some ground after falling 7% yesterday. the company is laying off 10% of its work force. it previously lowered four-year revenue guidance. shares are up just about half a percent right now. legalzoom shares cut its full year forecast. its ceo is leaving. it's the right time to make that move. shares of legalzoom down more than 18%. and intel coming off its best five-day performance since nosh. the stock is up 10% over the past week. a very stark reversal from its 30% drop during the first half of this year. sentiment around intel still a bit mixed with a majority of

analysts giving the stock a hold rating, shares on stock up almost half a percent. this week, 11%. to a story we've been tracking on cnbc, the historic track of the wealthy in the united states and whether it's changing direction. our robert frank is here to answer that question and much, much more. robert, good to see you. >> frarpg, nk, good to see you. more than 52% moved out of california since 2022. that's the latest migration data from the irs. when they left, so did their tax revenue. california lost a net of $24 billion in income from that out migration that brings the total loss since the pandemic in california to over $136 billion. new york lost $14 billion in 2022, bringing its total over the period to $60 billion. the big winner was, yes, florida, which added 36 billion

dol in 2022. texas gained $10 billion and south carolina, $5 billion. this there is good news here. outmigration is slowing in the states. florida and new york, those were up, suggesting some may be coming back. but the taxpayers who are leaving are the high earners. the average income of those moving to florida were $182,000. in california, those earning $200,000 accounted for three-quarters of all the revenue loss. the lost tax dollars is one reason california is facing a budget deficit of $46 billion. now for more on where the wealthy are moving and where they're investing and spending, you can sign up for my inside wealth newsletter at c

cnbc.com/insidewealth. >> or grab the qr code. we've been talking so much about the impact on the markets. do you have a sense of the impact on the move of the wealthy from blue states, what that can mean for the election and their political lean moving forward? >> yeah, frank, this could be one of the big x factors, especially in the swing states. you look at georgia, nevada, arizona. a lot of these moves from the red states to the blue states happened since the 2020 election. initially there was a thought that maybe these blue state move-ins would turn more states purple. in fact, some of the early data suggest that those people leaving california, new york, chicago, were actually fleeing the policies in those states and were leaning republican. so it could even add to those swing states the republican vote. but sthis is going to be one of the big things to watch

especially in the swing states in this election. >> robert, also great to see you. coming up on "worldwide exchange," we're live in washington where president biden is meeting with nato leaders as he tries to put concerns over his candidacy on the back burner. if you haven't already, follow our podcast. if you miss us, check us out on spotify or other body cast apps. much more on "worldwide exchange" after this. and relentlessly work with you to make them real.

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new york area. here's what's still on deck. fed chair powell is sig nalging the fed is getting close to cut rates. powell returns to capitol hill. nvidia, the mega cap is helping to power markets as our jim cramer downplays a worry about a potential bubble. that's not stopping citi from offering alternatives of their own. and citi is trading near its highs, but there's another precious metal. it's wednesday, july 10th, 2024, and you're watching "worldwide exchange" right here on bc. cnbc. and welcome back to "worldwide exchange." i'm frank holland. really great to have you on board. we pick up the half hour with a check of the u.s. stock futures with the nasdaq and s&p trying to increase their trade.

the dow is turning green. it was fractionally negative just a few minutes ago. now you can see it's fractionally higher. it's really the nasdaq moving higher, up about a quarter of a percent. the s&p up fractionally right now. we're taking a look at the bond market with fed chair jay powell return to capitol hill after what saw some of as an eye-opening day in the senate. the bench marc, 4.28, basically the same level we saw yesterday. on capitol hill, powell telling lawmakers the central bank is increasingly aware of the potential risk to the rate market as it considers its first rate cut since 2020, but adding the job market is a key factor to achieving a soft landing. >> the economy has made considerable progress toward the fed's 2% inflation goal, and labor market conditions have cooled while remaining strong. reflecting these developments, the risk to achieving our

employment and inflation goals are coming into better balance. >> just to reminder, powell's testimony begins at 10:00 a.m. eastern time this today. we're watching oil, coming off its worst day in more than two weeks. wti up almost half a percent. bent crude, the international bench mac up about a third of a per sem. that's your morning setup. we want to turn to other big setups in d.c. besides jay powell and capitol hill. biden is kicking off the nato summit, kicking off his speech to talk about the border of ukraine and aid. the president is also working to ease democratic fears about the viability of his campaign against donald trump. our steve sedgwick joins us now from washington with much more on this story. steve. >> great to see you. when have we ever had a speech where we've analyzed how it was

delivered, not just the content. biden delivered his 13-minute speech. it was strong, it was forceful, well delivered in the main as well. of course, he has many, many audiences. it has nato as an audience, indicating that the u.s. has support for nato and ukraine. of course, the international foes, the russians and their allies, but it's the domestics who are looking for any signs of weakness from the president or strengths to alleviate the concerns from donors and allies alike. there was real content in there as well. he said a the majority of americans have bipartisan support for the americans and nato. there was some reit meat in the bones with the extra air defense systems from the u.s. and other allies for ukraine. let's listen in. >> today i'm announcing a

historic donation of defensive equipment for ukraine. the united states, germany, romania, and italy will provide ukraine with the equipment for five additional strategic air missile defense systems. >> so extra air defense systems for ukraine, which they've been crying out for, especially after the devastating attacks including the horrific one on monday at the children's hospital, frank. >> i know you've been talking to a lot of o different ministers and advisers on the ground. again, this is a nato meeting, but i have to imagine that's a lot of discussion about the upcoming election. what are you hearing? >> yeah. full credit to our cameraman who's been going from hotel to hotel setting up big cameras. by and large, the feeling is they doge want to interfere in american politics. that's the polite line. but there's no doubt about it, everybody is watching biden and

his alliance. they're looking forward with trepidation november as well. you have the poles who are spending more than anyone in nato on their defense, even their gdp getting to 4%, not just the 2% donald trump asked for back in 2018. then you have the hungarians who are saying donald trump is the right leader for the world, the u.s., and nato. they say, look, they made us take responsibility for ourselves. i did say maybe it was the war and not just that. orban is a pain in the side because he's going off on his own. very interesting that they're one of the few nations overtly backing donald trump. >> our steve sedgwick in d.c., i appreciate the largess.

we're going to stay in washington. we're looking to congress looking to play catch-up to the c.h.i.p.s. act and the semiconductor sector. while demand for the tech is at a fever pitch, tens of thousands of jobs still need to be filled. we're joined by emily with a plan to sofrl that problem. potential is the plan. >> good morning, frank. congress made the push to have more semi-con dumgtconductor fan the u.s. now they need more workers. they would spend more than $11 billion ensuring that those jobs are filled. most of the funding would be going to the national semiconductor took technology center and it would be used for research and development. a bill would also create a $200 billion grant program, using s

some of it from the chip slot to either establish or expand micro electronic programs. senator mark kelly of arizona, one of the responsible sores of the bill whose state is home to several of the new facilities said in the statement the u.s. has, quote, got to get more americans the skill and training they need to fill the great paying jobs being created. now, at this point, an estimated 67,000 jobs related to chip manufacturing risked going unfilled in 2020, which backs the legislation along with community colleges. back over to you, frank. >> so, emily, i do want to ask you, the initial c.h.i.p.s. act included some funding for work force training. why do we need a brand-new bill? >> so talking with folks on the hill about this, a number of them have pointed out that for a number of larger companies it, it's easy to try for the grants.

for some of smaller companies, that's a little more difficult to do. they don't necessarily have the resources. so this would allow them to partner with the community colleges, o'training programs, and make sure they're closing that gap and the thousands of workers who will be needed. obviously a big selling point was getting more americans jobs, getting more employed, giving them more opportunities. so i think this is really congress tries to come through, now that the bill's been out there for a couple of years and the funding has been out there for a couple of years, this is some of the feedback they're hearing and they're trying to make sure they meet the need before they have a gap in the labor work force. coming up on "worldwide exchange," could this be the next goal? we're going to show you the precious metal that's digging in. stay with us when "worldwide exchange" returns.

welcome back to "worldwide exchange." time now for your global briefingle we're going to look at shares of taiwan semi-conductors, blowing past estimates, contributing to 40% sales growth. a number of analysts lifting their price targets for tsmc. yokohama is looking at buying goodyear. bloomberg says the japanese manufacturer is most likely the

buyer after other businesses have dropped out. they're looking to combat slowing domestic growth. and samsung workers are extending the strike. the union says it will go on an unprecedented and indefinite strike until its demand for wage increases and wage transparency are met. samsung says it's not disrupted chip production. we're going to turn our attention now to precious metals. gold is up nearly 15% so far this year. there's one other metal that's shining even brighter. our pippa stevens joins us now with that story. good morning. >> good morning, frank. we're talking about silver, that's almost doubled gold gains this year. the two precious metals are related. buyers have shifted toward the comparatively cheaper silver, but the biggest driver is the industrial demand for silver is growing. it makes up roughly 50% overall

of demand compared to 10% for gold. silver is also key for many energy transition technologies. demand from solar panels jumped f 3% year over year in 2023 and it's forecast to keep growing. silver is also used in evs and wind power as well as electrical equipment to power data centers. unlike gold silver still hasn'tet taken out its record-high. but i was told they do not see a tra palacic surge in selling and the market will remain firmly in deficit for the next five years. the largest miner is mezno. the global ex-silver miners ctx offers silver, up almost 30% on

the year. >> how do you see the supply side responding? >> well, in the absolute medial term, we actually haven't seen a supply side response and that's because supply is relatively inelastic. it's actually mined as a by-product of other metals. think of copper, lady, zinc, and even gold. the supply side doesn't always respond. we saw this in the opposite direction back in 2011. prices peaking then. but we didn't see mine supply come down until 2017. it's very slow moving given the massive amounts of capital investments required for these projects. for the time being, they're not expecting a big demand on the supply side and we could see more price gains ahead. >> pippa stevens live at the na nasdaq. coming up on "worldwide exchange," we have the one word

every investor needs to know today, plus taking some money off the table around artificial intelligence. the stock tealrnatives offering real value. we're going to show you some of those names when we come back. stay with us.

all right. welcome back to "worldwide exchange." the s&p and nasdaq closing at fresh records once again with the ai trade playing a big roelg in both of those moves. nvidia in both indedis disease

chlts /*. >> some say it reminds them of the dot-com bubble, jim cramer says there really is a big difference. >> unlike the leaders of the dot-com bubble, these are insanely profitable companies i'm talking about, and they keep innovating and keep giving you reasons to buy, and they're rational reasons. sure, i don't want people to simply pay more for the same business over and over. that's called multiple expansion. i document like it. these companies are pivtsoting constantly. >> citi's out with a new note saying it may be time to take some profits in these high-flying ai stoxcks. dro joining me now, drew petty. great to have you here. >> i have to laugh.

i do agree with cramer on one thing, but i can't agree with him on the eagles. >> drew, you know i'm from philadelphia. i'm a big eagles fan, so we're getting off to a bad start. no, i'm just joking. what part do you agree with. you say it's time to take money off the table. he's saying the exact opposite. >> we've got the internet bears on the ai report from yesterday, but we're like teddy bears. with ai, we think the theme is real, we see the momentum. we like the story, but we think you should play it a different way and take profits on the high flyers as they surge. some of these stocks seem parabolic. i don't think if you're on the buy side you can store these names. you have to own names like nvidia, microsoft, apple. but how overweight can these be

in your portfolio. >> you say trim slightly. by the way, you're coming in hot. eagles, teddy bear, i like your style. it sounds like you want to trim a little bit. it's not a complete shift in the trade. >> no, no. it remains one of our top themes for the year. it's just the one thing that is getting similar to the dot-com bubble, the expectations to sustain that price move gets higher and higher and higher. for the ai high flyers to really continue to outperform and sustain these levels, move further, they have to beat rates. they can't just post good quarters. they have to post good quarters and have you move next year and the year after and five years down the road what free earnings and cash flow can be. >> i have to interrupt. let's go from your teddy bear thesis over to what you actually do like.

one thing you do like are insurance docs. a couple of names that made your list, hartford financial services, chubb, and allstate. what's the case outside of a rise in premiums? >> here's where using ai really benefits some bulky organizations with a lot of complexity. so financials, look, banks, insurance companies, while they're not the direct early winners of ai, it's going to help you, a, reduce head count or limit head count growth as you expand your businesses. i think that's really, really healthy for the companies and gives you operating leverage going forward. >> you include stable stocks like heinz and others, including mcdonald's. right now the consumer is under a lot of pressure. let's put pressure on these stocks, but how is that necessarily a hedge? >> it's a hedge because they're actually really negative will i correlated with what's happening in the ai trade.

these stocks, again, like you said, under pressure, there's not a ton of demand there, which is the opposite of a lot of the ai enablers where we see tons and tons of demand. i think if the ai trade cracks, you're going to see people move back and the staples fit right in there. >> exxonmobil's on this list as well, oil stock. just yesterday we had somebody come on and say exxonmobil and other oil companies are in ai play, but also how are they a hedge in your mind? >> see, i think everything -- every company's probably going to tell you they're ai play. it's not really true. >> they say the increased energy for data centers, they saw oil companies and overall the sectors in play. i just want to clarify. >> no, i actually completely understand the logic. i just think that's a little too far for markets to say energy companies are oil plays right now. i think this is going to trade more on something like

geopolitics, other drivers of oil prices, regulation and so on. ai is so distant to this name, and because it's such an aggressively valued name, it actually becomes an anti-or ai hedge type of trade. >> i have one last question for you. what happens if the ai trade moves higher? you're missing out on the increase? if that happen, won't it move lowerer, according to your thesis at least? >> it will. again, this is not or kour thesis. the ai hedge baskets are for people who are more bearish. again, i'm em a teddy bear. >> we've got to leash it there. great to have you. sorry to cut you off. i don't know what team you're a fan of. i'm not rooting for them at all, but i'm rooting to have you come back on the show. coming up, the broader markets an one stock with the group atth our next guest says

is a buy. we'll be right back after this break. but it's not the critic who counts. with every swing and block, your game plan never changed. ♪♪ some still call it luck. let them. because you know what it's always been. inevitable. ♪♪ ♪♪

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and welcome back to "worldwide exchange." time now for your w.e.x. wrap-up. fed chair jay powell is back on capitol hill to testify before the house services committee. yesterday he highlighted the

considerable progress with the 2% inflation but added keeping t it for too long poses a risk. microsoft faces more antitrust scrutiny from the eu. they say their seat is no longer needed because there's been significant progress on the ai. and vc buys thousands of ai chips to help with deals. the information says vc has rented to chips to many of its portfolio companies and plans to own more than 20,000. taiwan's sales are up on record demand for ai data centers, contributing to 40% sales growth and china's consumer prices rising. prices have increased for five straight months but haven't done much to ease consumer spending. >> s&p and nasdaq pushing again.

for more on the trading day ahead, let's bring in cordny garcia, senior wealth adviser and a cnbc contributor. good morning. good to see you. >> good morning, frank. >> we're coming off record closes and two days of jay powell testimony. how's today shaping up? what's your w.e.x. word of the day? >> the word of the day is melt-up. the reason being all eyes have been on the fed and when interest rates are go going to come down. there's so much money sitting in cash right now. there's $6 trillion. the idea is at some time you're going to see the money come back into the markets once the interest rates coming down. with the fed testifying this week, you're seeing it's more and more likely interest rates are going to come down sooner than latering and all of that is likely going back into the momentum trade. this is not what we're chasing right now. investors are putting more and more money into the mag 7 and

into the large tech cap funds which are heavily skewed toward that mag 7. so people continue to chase that, and i think you're going to see that more and more as the expectation comes in, and the interest rates are going to come down in the near future. >> that's interesting. you believe if we get a rate cut sooner than later, that's going to put more money into mega cap tech. but all are saying before you get to rate cuts, it's going to go into the cyclical trade. >> that's what they're doing. you want to be putting your money to the places that are going to be doing -- well not necessarily right here in the here and now, but what it's going to be doing better next year. you're going to do the earnings expectations that will have really significant improvements when you look at 2025, 2026. when we're allocating capital we're looking at things like materials, energy. short item, i don't think it's going away. long term, you're exactly right. you want to be adding money to

other things in the market. i want to focus on 2024, specifically the upcoming election. i know you've been getting a lot of calls from your clients about the election. are you suggesting milwaukee any changes depending on the outlook and who's going to be the candidate? >> we're not. this could be a really dangerous game. historically speaking, the presidential election does not have as much of an impact on the stockmarkets as really the news wajs you to believe. it really can be a dangerous game of trying to trade one thing for another. you're seeing a lot of things especially post debate where there are different categories, think of energy and health care where if trump was going to be in office, the betting markets say he's going to be, there would be less regulation. i would not be chasing some of those trades, but i do think some of those theses work regardless of who's in office. as you see the data centers that

are needed, the manufacturing reshoring, all of that is going to be positive for the energy trades regard lgs of who's in office. i would look at that as opposed to who's in office. we don't know who it's going to be and it could be a dangerous game with regard to investing around that. >> i want to go back to your thesis. you're looking at one area, the material sector, big laggard. the stock you like in that area is freeport mack-mcmoran. why do you like materials right now? >> it's one of the sectors when you're looking at earnings expectations, that's one that's going to continually lag the rest of the market this year but have a big bump you're looking at double-digit increases for 2025. that's what we're talking about. you're looking at what's happening tomorrow, not today. reshoring, you're seeing a lot of money going into infrastructure. a lot of that is going to benefits your materials.

this is something happens tomorrow and something you want to invest in today before that trend happens. >> courtney garcia, thank yos very much. that's going to do it for us here on "worldwide exchange." one more look at the futures. in the green across the board. looks like we're on track for fresh records for the s&p and nasdaq. "squawk box" starts right now. thanks for joining us. good morning, apple has overtaken microsoft as the most valuable company on the plan its in april, melissa. it's now almost $230. is that only two or three months? really unbelievable. i guess it wasn't good enough for ai. i guess people have reevaluated its ai strategy. it's cranking. president biden appears to have stemmed democratic defections as he insists he

won't quit the 2024 race. we'll bring you the latest from washington. plus, vc firm and horwitz has reportedly stockpiled nvidia ai chips in an effort to win deals for ai startups. that's a good idea. it's wednesday, july 10th, 2024. "squawk box" begins right now. ♪ good morning and welcome to "squawk box" here on cbc. we're live at the nasdaq market site in times square. i'm melissa lee along with joe kernen. becky and andrew are off today. the dow pulled back by 53 points. that comes after fed chair jay powell warjed about the dangers of keeping interest rates high for too long. u.s. equity futures at this hour