tv Worldwide Exchange CNBC January 29, 2020 5:00am-6:00am EST
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space as one major company says bye bye to beyond meat "worldwide exchange" begins right now. good morning and welcome, i'm courtney reagan in this morning for brian sullivan here is how stock futures are looking. dow futures indicated higher by about 66 points. s&p also indicated higher by about eight and nasdaq good for about 30 points at this moment the dow finally snapping that streak yesterday as investors turn from virus fears. more than30 names are set to report including tesla, mcdonalds, boeing and microsoft. apple set to open higher by 2%
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adding to that new york rise over the last year we'll get a quick check on the bond market. we see the 10-year well below that 1.7% at 1.62% the 2-year at 1.439. we'll go worldwide with a note that mainland china is still closed the rest of asian markets are open for business. we'll pay close attention to hong kong's hang seng index. playing a bit of catch up after being closed last week ending the day on constructirren territory. china-based etfs hovering near correction levels. on top of that list, large
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shares etf down more than 11% from the most recent 52-week high let's look at what is going on in europe in early action and see how things are responding slightly higher. france is up about 0.04% higher. the if i ftse 100 higher. apple stock is set to add to its record run after reporting revenue record income. the company achieving one of the biggest quarterly profits for any company in history up 11% to $22.2 billion for the quarter. high enough to surpass $20.1 billion record set two years ago. we'll go now to london thank you for being here what a quarter for apple >> reporter: it was a huge turn
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around from last year when apple had to revise down guidance. you see apple firing on all sill anders with the increase in iphone, you have seen revenues from service up 17% that is very important apple needs to mondetize that huge user base it is wearables like apple watch and air pods they brought in $10 billion worth of revenues. all eyes are on this revenue
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guidance for q2 which was very interesting. somewhere between $63 and $67 billion. that's a wider range than usual because of the uncertainty around the coronavirus spreading around the world which originated in china. it is believed some operations had been expected. some retail store s had been closed and manufacturing facilities had been hit because some workers couldn't get to work that is something we'll keep an eye on and risk for the next quarter. >> what drove that how did that happen? looking forward, how big of a risk is coronavirus to apple's business in china and production there as well?
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>> if we look at the 10 r, and 10 s, they got the pricing off on that. fast forward to the iphone 11, the cheapest range, apple cut the price and the premium was around 11% to 12%. i remember being in china in september when preorders were happening, the iphone11 cheape models were being ordered. they nailed that moving on to the coronavirus the government in china has issued regulations telling people not to go to work until at least february 10 that could be extended we have seen pictures out of china. malls empty. that will have an impact going into the second quarter as well. it will be interesting to see if
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this goes on for a long time given the fact of 15% revenues now. >> thank you, we'll have more apple through the hour as we continue forward we'll turn now to the latest on the wuhan coronavirus. china saying 132 people have died from the virus. this is up from 106 just 24 hours ago. the number of confirmed cases in main land china up 25% to more than 6,000 according to the national health commission as u.s. and global companies continue to respond to the growing threat starbucks will close half of its stores in china to help stem the spread toyota is halting production until early february british airways is stopping all flights to china and ab inbev is suspending production at the
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brewery in wuhan overnight, a chartered plane full of americans landed in alaska all passengers deplaned and have been screened for the virus. this comes as airports around the u.s. are stepping up checks for the virus. we have learned the white house is weighing a possible suspension of all china-u.s. flights amid the outbreak. back to the discussion of more, paul markum. thank you for joining us we've got the coronavirus. we have a fed meeting and a lot of important earnings results. we'll start quickly on the coronavirus. earlier in the week, it was really weighing on sentiment
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things have turned around yesterday. what do you think is going to be the impact today and going forward? are we too complacent that the coronavirus could really dent the world economy? >> good question most of the market is looking back to 2003 and back to the sars virus we've already exceeded a number of cases there are unknowns we don't know how long the incue base period is the question is the length of this period is able to be ascertained. if that's the case, we can take a judgement of when the number plateaus and how long that will go on.
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a couple of other things, the mortality rate is lower with the coronavirus than sars. the authorities have reacted more quickly and are more open all of those things together means we are acting in a pretty sensitive way. given that the markets have run up more, the impoact could be greater. >> most are expecting the fed will maintain a neutral stance here what should we be looking for in a statement and the press conference we know powell has been zoned in a lot of action in the repo market making some investors a bit uneasy >> the fed has been pretty quick to dampen concerns over repo i think they'll continue to
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watch that closely from the point of view of the statement and the new board are going to achieve, i'm in agreement with previous guests on the show that there is unlikely to be significant i think they'll be watching closely to the impact of the coronavirus and the ability to keep rates in terms of inflation. they are looking at other economies on the world, it will be keep not to pull itself into the zero rate-style trap running things warmer in terms of inflation will not be averse. what we seen from the new components or members of the fed may have been seen as shifting slightly >> before we let you go, can you
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give investors an idea here. >> it started to show itself in the fourth quarter of 2019 which reversed into 2020 that may mean a shift of growth style into value. that hasn't happened in a long time and the growth has become valued something in terms of confidence that is the big question this year we saw valuations run up significantly. markets did much better. those things can hold up and justify. no reason, the markets could be weak >> thank you, paul, for joining us this morning on "worldwide exchange." when we come back, why netflix and nissan are reportedly trimming the fat when
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it comes to hate counts. and our next guest ses apple stock could rise another $100. boeing set to deliver latest results. key themes and what to expect from newly minted ceo. more ahead when "worldwide exchange" returns. while preventing cavities up to 70%. act anticavity rinse. for a confidant feeling in your oral health, stop imagining, start acting. now you can, with shipsticks.com! no more lugging your clubs through the airport or risk having your clubs lost or damaged by the airlines. sending your own clubs ahead with shipsticks.com makes it fast & easy to get to your golf destination. with just a few clicks or a phone call, we'll pick up and deliver your clubs on-time, guaranteed, for as low as $39.99. shipsticks.com saves you time and money.
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facebook upgraded to a strong buy with a target of $270. reporting after the bell today trading at 220 >> nissan is reportedly planning cost cutting measures as it grapples with unexpected slump in sales they are planning to cut at least 4,300 white collar jobs and shut down two plants part of a plan to boost the bottom line in the next three years and move away from the expansion plans by former chairman carlos ghosn. netflix also expected to cut jobs the company will cut 15 jobs from the marketing department. they are looking to get away
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from advertising individual movies and advertise the service as a whole >> the president is expected to be joined at a white house ceremony with guests such as workers, farmers and ceos. canada still has to pass the implementation and all three countries have to make regulatory changes but considered a win by him. we've heard him talk a lot about that during his campaign >> absolutely. coming up, stocks you need to watch including one chip maker finding itself under pressure despite third quarter results. >> announcer: today's big number, $1 trillion. that's how the u.s. budget deficit is on track to top in 2020 according to the congressional budget office.
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the first time to cross that level since 2012 focused on the . who look beyond the spreadsheets to understand companies, from breakroom to boardroom. who know the only way to get a 360 view is to go around the world to get it. can i rely on deep research to help make quality investment decisions? with capital group, i can. talk to your advisor or consultant for investment risks and information.
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forecast but fourth quarter outlook below estimates also planning to cut 7% of their work force. ebay's fourth quarter revenue fell but the number of active buyers rose 2% the amount of business on its platform dropped 5%. ebay issuing weak first quarter guidance shares lower by more than 5% coming up, the latest into the investigation of the deadly helicopter crash involving kobe bryant "worldwide exchange" is back in a moment
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welcome back to "worldwide exchange." looking at a live shot of washington, d.c. going to frances rivera with the latest it is time for q and a on capitol hill today as the next phase of the impeachment trial gets under way senators will now have 16 hours to ask questions about the case. here query must be written and
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given in saying the gop does not have the votes to block witnesses yet growing questions about the hospital crash that killed kobe bryant and his daughter. they say the chopper was not equipped with terrain awareness and warning system the ntsb is trying to figure out if there was equipment malfunction or if the pilot was disoriented flying into fog. the pentagon says 50 u.s. troops have suffered concussions and brain injuries the trump administration first reported there were no injuries in the attack but a spokesman says symptoms can develop later on still ahead, stocks look to
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rebound. the dow jones looking to be up 74 points. one stock to watch today, apple. the tech giant reporting stellar first quarter results. we'll break down the nbeumrs as "worldwide exchange" rolls on. memory support brand. you can find it in the vitamin aisle in stores everywhere. prevagen. healthier brain. better life.
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on their worries about the coronavirus. the growing outbreak prompting more companies to take more actions surrounding actions in china. boeing set to report quarterly results and show the impact the 737 max crisis is having on its bottom line. the second half of "worldwide exchange" starts now welcome back, i'm courtney reagan in for brian sullivan let's get you a quick check of stock futures. the dow jones is indicated higher by about 82 points, s&p by about 10 and nasdaq about 38 points we saw the dow almost snap that streak yesterday as investors turned to virus fears. more than 30 names are set to
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report today including tesla, mcdonalds, boeing and microsoft. it is apple giving markets a leg up that stock is set to open higher continuing the run higher indicated now by 2% we'll have much more on apple in a moment we want to give you a quick look at the bond market and what treasuries are doing as the yield on the 10-year is firmly at 1.625% and the 2-year at 1.441. we'll go worldwide we should note that mainland china is still closed. the rest of the asian markets are open for business. we are paying close attention to hong kong's hang seng. playing catch up after being closed last week ending the day in correction territory. on track for its worse month
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since august watching the number of china-based etfs the worst at the bottom of that list csi, china internet etf off from the interweek high which it just hit two weeks ago. in europe, with he saw things slightly higher going for the session there, which is where they remain. france is higher by about 0.03%. we'll get the latest now on the wuhan coronavirus virus. the death toll climbing overnight. china now saying 132 people have died, this is up from 106 just 24 hours ago the number of confirmed cases in china up 25% to more than 6,000. this is according to the china national health commission also as u.s. and global
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companies continue to respond to the threat starbucks announcing it will close half of the stores in china. toyota is halting production in china until early february british airways is suspending flights to china ab inbev is suspending production at the brewery in wuhan. we'll go to eunice yoon in beijing. we have the first look at markets this morning trading did resume in hong kong. it was not pretty. down about 3%. break down the trading there amid this crisis what is going on >> reporter: as you'd expect, consumer and travel related names were the most vulnerable dranking the hang seng down.
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macau casino names also down after china said it would stop issuing travel permits to the gambling center. the airliner cat hhay pacific scaling back in flight services, no amenities, no duty free sales and maeal services will be limited. tencent is one of those that specialize in online gaming. starbucks shut half stores here. apple is shutting one store. as for production, apple supplier foxconn said it has measures in place to meet all
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global manufacturing despite of the outbreak apple has a factory in wuhan and is considered one of the top five firms exporting to the united states from there apple said overnight it has alternatives even though it has some manufacturers in wuhan. >> we have been talking about manufacturing in china relying on it so much in wuhan and other regions. have we gotten any information about the manufacturing sector they want to keep employees safe >> we have been talking to manufacturers to see what they plan to do it is a mixed bag. some are really concerned about what they are seeing because
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they need the workers to return to production lines. it is different from services or tech companies where you can work remotely. other manufacturers have said because their order books don't usually fill up until the end of february, they are not too concerned as of right now. the situation is changing quickly. they are monitoring and hoping it is not going to get worse >> eunice, thank you for keeping us up to date. stay safe yourself a chartered plane carrying over 200 americans from wuhan landed in alaska to refuel all passengers deplaned and have been screened for the virus. this comes as airports around the u.s. are stepping up their checks for the virus the white house is weighing a possible suspension of all
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china/u.s. flights we'll bring in our reporter leslie josephs what have you been hearing >> the white house has not yet taken a step they are asking airline executives what would this look like is this a good idea? is it they are starting to consider these measures. united airlines yesterday has announced that they would cancel flights. they have the most exposure to china than any u.s. airline. >> it sounds like british airways are making suit as well. what did you understand about that >> this is just the preliminary stages of this airlines are starting to take these measures it is not just the issue of health but demand is falling business traveler demand has
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plummeted. you have companies saying we are going to follow cdc rules or guidelines of only essential travel those high-revenue passengers are not there. airlines are likely to cancel addition additional flights >> what about airline employees? i'm thinking flight attendants, pilots, those checking bags. >> flight attendant's union at united supports this move. they want to keep their employees safe there is not a lot that they can do barring just not flying flight attendant kits have sanitary wipes and things like that they aren't screening every single passenger that's up to health authorities to do that >> a lot of moving parts
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i know you'll be covering boeing for us later today we'll look at other top stories this morning rahel is back with us. >> jpmorgan chase planning to cut hundreds of jobs the bank will slash positions in the consumer unit. saying the cuts represent about 100 employees in the unit. including the deposit, credit card and auto lending businesses that contributes to over half of the firm's revenue the trader accused of the flash crash will face more jail time he admitted to using an automated trading program to manipulate the market saying his crimes were totally unmotivated by greed
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>> the unit looking to buy univision is looking to bring one investor on board. trying to recruit the overseer of cbs looking to bring experience to the helm of the spanish broadcaster. he has not decided whether to join the bid >> thank you coming up, the block buster report for apple as they smash revenues numbers a number of big names appearing first including goldman sach chairman david solomon "worldwide exchange" is back in a moment the pressures of today's world can make it tough to take care of yourself. but nature's bounty has innovative ways to help you maintain balance and help keep you active and well-rested. because hey, tomorrow's coming up fast.
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its record run for both revenue and income shares up in quarterly trading post the the net profit up 11% to $22.2 billion for the quarter. high enough to surface the $20.1 billion record two years ago. they got a boost from devices and services such as i cloud and apple tv plus. i'm joined by dan ives, managing director he upped his price target for this stock we know they don't report the iphone numbers purely anymore. they want to focus on services that revenue is very impressive. >> it was eye popping. in terms of iphone, really rock of gibraltar coming in well above expectations i think the drum roll to a 5g
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super cycle is second act. the iphone 11 continues to be rebust even the bulls thinking a billion and a half beat. this is much more of the expectation. >> when you look at wearables, home and accessories, bigger than the mac revenue is that significant? >> it is look at air pods, they've hit a home run right now, we are projecting 85 to 90 million for air pods it shows skeptics. air pods will be 5% of revenue you go back a year ago towards where apple was. look where they are today. it is one of the most historic come backs of any company i've
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seen in years. >> even though there is uncertainty going forward. >> china is fuelling the engine right now. you look at 60 or 70 million iphones. they'll convert about half of those. china guidance is strong when you look at the coronavirus, we'll see a higher, wider range but better than expectations right now, despite the noise, it is a big part of our thesis. the bulls continue to aggressive they go back higher in the move. >> what goes back in production in china if the virus continues to get worse will that impact apple production >> that's a good question. right now, it's pretty
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contained. foxconn overall manufacturing, it will have some impact i quantify that to maybe 3% is sort of revenues that can move around from quarter to quarter from production standpoint, i think bark is worse than bite. if you look at that guidance and how they handled that call, that was a masterpiece of how cook given some of the worries about coronavirus in china >> you are bullish >> about 400 you are looking at a bull case i think $2 trillion by the end of 2021. look at the numbers. haters are going to hate but those numbers val date the bull thesis. >> thank you you'll have a busy day boeing will report results with the first report under the
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new ceo. the giant is expected to report a hefty lost as it follows the third quarter with no deliveries of the 737 max it has been rocky three months trading under 52-week lows joining us today she'll a kahyaoglu. still a lot of questions it is the first time truly investors and analysts will be able to hear from and speak with ceo dave calhoun what should we be looking out for today? >> caller: thank you, i feel like we are wear apple was a year ago a different picture for boeing it is not going to be a good
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quarter. it is not going to be pretty we have about $5.5 billion and aircraft given no delivery of the max. a year ago, they were almost 16% margin a very dim picture of q4 what we are expecting is concessions to the airlines reporting today. we are expecting $11 billion and additional charges they'll take for inefficiencies for the production halt. we are expecting that at $5.4 billion they've already taken $3 billion in charges >> mr. ka hecalhoun is new to t role seems there have been forward discussions with government officials. what are you most interested in hearing from him when it comes to the time line of the recertification of the max do you want to not know unless
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he's really certain that time is gloing to be met >> caller: i think it is fair to say nobody would predict this would las almost a year. the company is given lose gierd enmidyear on ungrounding and return to service. i would prefer there is no more time associated with that. that communication message has caused multiple degrade aition for obvious reasons. i think executing and getting that aircraft off the ground and getting inventory out there is the main message >> what is the bigger picture plan for boeing if passengers are weary of getting on the plane. they can't scrap it. it is too late to start over what happens if you get passengers that just won't fly
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on it? >> caller: it is right these take a decade. you really can't go back it will take time for passengers to get on. there will be pricing discounts. as they get back off the ground and flying for six months to a year, it will become less of a point. there has been airbus crashes during development that had accidents. this is not common and should not be, i think over time as the safety record gets better, it should be okay for the customers. i think this process with the faa has gone on quite some time making the aircraft safer.
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for consumers that think it is less safe. >> thank you for starting the day with us on "worldwide exchange." coming up, new boeing ceo david calhoun will join "squawk box" at 8:00 a.m. eastern time still on deck, investors are preparing for the latest federal reserve decision we'll break down the moves they may have you can always watch ulis ve or on the go on the cnbc app. back in a moment with more than 85 years of experience over multiple market cycles. with portfolio managers who are encouraged to do what's right over what's popular. focused on helping me achieve my investors' unique goals. can i find an investment firm that gets long term the way i do? with capital group, i can. talk to your advisor or consultant
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personal challenges. a tornado hit her home town of dallas and she underwent surgery last week. tim hortons has pulled beyond meat products from stores in ontario and british columbia. they cut the items from its menu from the rest of canada in september. saying it, quote, wasn't embraced by customers as they thought it would be. shares are down. starbucks forecast beat expectations a warning from the hit of the coronavirus as it closed about half its stores in china and is adjusting operating hours in the fastest growing market kevin johnson will be on a live interview at 9:30 eastern time let's look at futures.
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we had been indicated higher most of the morning. we'll see if we can pull through that opening bell. indicated higher by about 98 points more than 11, nasdaq higher by more than 40 points. investors monitor the latest on the coronavirus and will keep a close watch on jay powell and the fed today. the central bank is said to wrap the first policy meeting of the year going to our guest from morgan stanley. a busy day and news cycle. >> fed day >> we think we know what the fed will do. what should we be looking for? >> i think tgs eait is easy to t they won't make a move investors are concerned about the draw down of the fed's balance sheet. then they were concerned when
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they started adding back that it would step again here we are again wondering when we would stop the purchases. anymore detail from chairman powell will be helpful there anything that a lays these fears and we'll draw down purchasing gradually and not just pull the rug out from under adding to our balance sheet. investors right now believe that has been pushing up risk assets. they are afraid when that stops, possibly in april, that would stop that flow into risk assets. it has created a lot of volatility >> that has been focused on lack thereof if it is not hitting around that 2% rate. what are we expecting to hear
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from him about that? >> he'll continue to express the concern. a host of factors that are driving it lower, depressing inflation. it is a little bit of a gift at this point because it is not pressuring them to do anything they've given criteria for raising rates and cutting rates. a near impossible hurdle that will move back to and above its 2% goal. that is a very tough ask in order to cut rates, it is anything that creates a material reassessment of we've seen the last several days and on the back of the coronavirus, assuming the fed may be cutting rates rather than just holding steady clearly, investors are saying you have given aus a high bar to
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move but it is a little lower there. >> you mention the coronavirus some saying we've hit 5,000 cases of the coronavirus faster than we hit that in the sars virus. maybe this is going to be more serious than we thought. do you think chairman powell will mention that? >> no. i think the economists have to be careful of not doing ot job of the w.h.o that's not our specialty as you were talking about starbucks. restaurants have to shut stores, services are shut down when you get beyond the peek rate of the virus, then you start to see a rebound in activity we never know how long that's going to take. the chairman has to be careful to not make prognosis on what's going to happen here
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he can say if he thinks they are sitting on a good outlook. many unknown factors remain. you can chalk up the coronavirus as one of those. it is just too early to make a judgement on how you build that into your forecast >> that is interesting even if you are not going to a starbucks because it is closed or the movies because it is closed, presumably you are not going to make up those sales later. >> right when those factories open back up, in terms of the u.s. in the spi spillover effect of those, that is about 4% of china's manufacturing. it is not expected exports will drop our factories will still get what they need how much does this last? how much do those start to get
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affected and we see more and more cases in the u.s. you do have to understand, there is a rebound on the other side of it. >> interesting stuff here. thank you for joining us that's it for "worldwide exchange" this morning "squawk box" begins right now. good morning, hong kong stocks plunging on coronavirus fears. the death toll rising overnight. apple shares rising on revenue from the holiday quarter. we'll see what tim cook says and boeing set to report this morning we'll bring in the numbers a first on cnbc interview with new ceo dave calhoun it is wednesday, january 29, 2020
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>> good morning. we are live from the marketsite in time square let's look at u.s. equity futures. dow was up 187 points. that came after the decline the day before apple and goldman sach led the way. s&p up the nasdaq's biggest gain since september 5. dow futures indicated up 112, a lot of that because of apple s&p indicated up before 13 and nasdaq bup 67. looking at the 10-year
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