the chest. i don't know how to get rid of the pain. i don't know how. it is 5:00 a.m. at cnbc global headquarters. here are the top fireve at 5:00 jay powell and company step up to the plate for the two-day policy meeting today. the crackdown in china with the industries it sees as a threat to the quality and financial stability and government. and crypto reversal. bitcoin and ethereum taken down a peg after amazon says it is diving head first into digital payments. tesla reporting blockbuster

results as profits sora. aintel's road map with amd and nvidia and others. it is tuesday, july 27th, 2021 you are watching "worldwide exchange" here on cnbc good morning i'm frank holland in for brian sullivan kicking off your tuesday with u.s. stock futures pointing at losses ahead of the opening bell the dow looks like it could open 150 points lower the nasdaq and s&p both down fractionally stocks coming off another record session with all three major averages trading in record territory and trying for the sixth straight day of gains. plenty of data to chew on.

durable goods. pay s&p out at 9:00 a.m. july consumer confidence at 10:00. the econ story is jay powell and the fed kicking off a two-day policy meeting today suggesting that tapering is still a way off pending data over the next several months and the stock of the day has to be tesla. quarterly profits soaring to a record $1.1 billion. the company now in the black for eight straight quarters. despite supply and production issues more on tesla coming up. europe's trading day is well under way. julianna tatelbaum is in the london newsroom with more. good morning, julianna >> reporter: frank, good morning. we are off to a weak start in europe the stoxx 600 opened lower.

now it is not as negative as the start of the session this follows a weak handover from asia. hang seng plunging overnight as china continues with the crackdown. sentiment in europe is hit by the worries with the regulatory crackdown. it is a big earnings day in europe a number of significant individual stock moves we have a look for you with the individual movers. we have seen significant moves to the down side in particular this morning i want to highlight two stocks in focus kicking off with lvmh. surged past expectations in the second quarter dior and fendi drove 80% in

revenue. the stock is trading higher in paris. a stellar quarter for lvmh different for the worst performing stock this morning at reckitt. narrowly missed sales targets for the quarter after shifting demand for products. a cautionary tale for investors. by and large, the earnings season has been strong that is the picture in europe. frank, back to you >> julianna, thanks for that louis vuitton? is thatpronunciation? >> i'm working on my french pronunciation. i have a way to go. >> turning our attention to the other top stories. the price of bitcoin and

cryptocurrency falling sharply after amazon denied the report it is looking into accepting bitcoin as a payment by the end of the year. bitcoin topped $40,000 yesterday for the first time since june. blackrock's larry fink and steve schwartzman are among a number of ceos writing a letter to congressional leaders urging them to push forward to pass the infrastructure bill. that letter signed by 140 executives as talks suffered a setback p yesterday. republicans rejected the offer meant to address all outstanding issues from the white house and democrats. calling into question goals of passing the $579 billion measure before the august recess. and beijing's broad based crackdown show knows signs of slowing down technology and education shares falling for a third state day. the five largest u.s. listed

constituents of the chinese etf, alibaba lost a combined $184 billion in market value since the start of the month this as s.e.c. officials are calling on chinese companies listed on u.s. stock exchanges to disclose the risks of the chinese government interference. let's head out to eunice yoon. eunice, beijing is trying to rein in any company it sees as a threat >> reporter: that is the concern. i'm in beijing right now it is known for the plethora of companies. it has a sign on it after it is after school here, but there are no kids here it is closed this is one of the many schools

that we visited in the area that have the same notices up saying that they are shut with no idea when they will resume classes. a lot of the schools we have been talking to that were open say they are in survival mode. what does that mean? one rebranded itself offering calligraphy classes. offering classes outside of the curriculum many offering online classes especially one-on-one private tutors teacher's who could teach at home or teach online and finally we found that there were some talking about switching to teach adults and working with corporations to try to switch into that line of business there were some of the bigger companies like tal which had classes here their centers and staff have not

been noticed yet to shutdown that was much to the relief of the parents that we spoke to who have been frustrated with the policy because of the lack of clarity. some of them, although they say the policy, or goal to bring down costs is a noble one, but they are worried this is going to lead to less choice for them. in fact, some of the private schools were offering one-on-one classes for four times the price these parents would be able to pay for regular classes. you know, not only are parents worried, but investors are, too. we saw that in the stock market. education stocks got hammered today. property stocks, also. consumer names as well as medical names also got hammered. a lot of that is because investors here, frank, are just wondering which sector is going to be hit by beijing next. because of that uncertainty,

people were listening to rumors and getting nervous. >> eunice, it impacts people all over the world big question here. is china doing anything to help ease investor fears? >> reporter: it is interesting because today there were certain state media outlets attempting to reassure investors things will be fine one of the papers, "the security times" had a headline saying this is the time to buy on the dips there was a shanghai paper as well that said there is no systemic risk in china and finally "the securities daily" had a piece out of the fundment th fundamentals of the economy are sound. maybe one trying to reassure the

investors despite the crackdown and clamp downing whs are making people nervous >> thank you, eunice yoon. we appreciate that report. back home. futures certainly on edge amid the latest in china as the fed kicks off the policy meeting investors waiting for results from apple, alphabet and other big tech names joining me is the financial adviser delano thank you for waking up early with us. >> thank you, frank. >> i know you are bullish on mega cap tech names. we are looking at erarnings. we are looking at rising cases of the delta variant how do you look at the big tech names in the current environment? >> one, it is a great area to be in for the portfolio then as we saw last time during the worst stages of lockdown, it

was the place to be for the stay at home plays. i think for right now, we saw earnings which are strong for investors. that is what the market is banking on you mentioned tesla's earnings of $1 billion. i think that is the highest we have ever seen the high margin businesses that are tech enabled and shift to withstand a lot of things that may come to the market you mentioned the variants which are the biggest threats. >> delano, the tesla earnings. that was a blockbuster quarter for the electric vehicle maker above estimates. way better than people expected. we have a lot of other big cap tech names the last quarter or so, we have not seen great performance how big of a beat do we need to see to see the perp fperformanc from tesla

>> for all investors and general market, a lot of the expectation that we are seeing from analysts is companies are out doing this. investors are looking for a catalyst to drive forward. markets are at highs and valuations are stretched to see stocks rise a lot further based on different beats is difficult. we are pushing a lot of highs for a lot of companies around 60% or 70% in nasdaq you will see a lot of the different things and for generally markets are in great shape. to be able to shift and play defensive in areas you may need to combat certain things in the m market >> speaking of that, cryptocurrency is a stored value. i know you haveyounger customers. with all of the news with

cryptocurrency, first, amazon may take it and it jumps then wait a minute then it is down. ethereum is down 7.5%. what are you telling your clients about cryptocurrency and investing and holding and trading in this environment? >> great question. the one thing we are saying is, one, the way we approach is we are investing in things in tokens we researched and understand we invest in that area for the long-term and not trade that is anticipated for speculating different things you see in the market as you said, amazon pulled back and saying they are not accepting payments right now there were different things in that area. you want to look at the un underlying project and see if something is beyond the similar

trade. that is how we are doing it. a lot of clients are looking for the long-term hedge or a general bullishness on the use case and use as a payment network or different things with centralized apps with ethereum there is so much going on in the space. >> delano, thank you new street to wall street to the crypto cul-de-sac. thank you. when we he come back on "worldwide exchange. more on the crackdown from china as it perceive as a threat to its authority. and years after visiting the operating earth mine brian sullivan follows up to see what is the change in supply and what is the change in supply and the processing of th elements inned the world.

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welcome back time now for the big money movers four stock stories lucid motors shares jumping back after 11% yesterday. the first day they merged with a spac the companies announced the deal in february. lucid will launch the air later this year. next, the firm which helps manage and deliver apps across

businesses reporting better than expected results in the third quarter. that is all over the shift in to digital. stock number three is coinbase pulling back today after closing up 9% in yesterday's session moving higher and bitcoin rallied above 40,000 partly on the reports that amazon would accept payments this year which the company denied. and ameriprise financial record high clients flows in the market. and still on deck, elon musk looks to shake up earnings season in the months and years ahead. >> this is the -- i will no longer speak during these calls. obviously, the annual share a

holder meeting going forward, i will not likely be on earnings calls unless there is something really important that i need to say >> big announcement from elon musk what tim has to say about that and much more when "worldwide exchange" returns. >> announcer: today's big number, $4.4 billion that's how much block chain start-ups raised in the second quarter according to data from cb insights. a new record that's an increase of 50% from the ioquteprr arr. hey, son! no dad, it's a video call. you got to move the phone in front of you like..like it's a mirror, dad. you know? alright, okay. how's that? is that how you hold a mirror? [ding] power e*trade gives you an award-winning mobile app with powerful, easy-to-use tools and interactive charts to give you an edge, 24/7 support when you need it the most and $0 commissions

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so good. high protein. low sugar. mmm, birthday cake. pure protein. find our coupons in sunday's paper. welcome back representatives from the defense department went to the california desert yesterday to visit the rare earth mine for military use and the facility the u.s. government invested in. we still rely on china for important parts of the process and that is something president biden is hoping to cut down on our brian sullivan is there. >> frank, department of defense officials visiting the mine on monday they want to shore up the supply chain for critical rare earth minerals from this facility. the only facility of its kind operating now in the united states what they mine here ultimately

goes into magnets for use in military technology and teslas and renewable energy and mri machines you name it. it probably comes from the minerals mined here. what are these thanks? th tanks this is the processing facility. frank, they have to send the raw materials all the way to china which could be viewed and a security or supply chain risk and we asked the department of defense officials here on monday why the minerals in the mine like this are so critical to national security. >> magnets are embedded in military systems aircraft part of the many different subsystems the real importance of the magnets is because of the powerful magnetic properties, it allows for lightweight materials. if you replaced the air earth magnets with more classic iron based materials, it would be so he

heavy and bulky. >> to the air pods you walk around with, so much comes from the raw materials from this mine which is soon to have the facility opened up still a lot of challenges and money floating around on cnbc. we will talk about the challenges and opportunities and maybe the hidden winners of the rare earth renaissance >> that was "worldwide exchange's" brian sullivan let's get a check of the other headlines. we have frances rivera in new york with the latest >> frank, good morning we are hours away from the first hearing for the bipartisan house select committee to investigate the deadly january 6th insurrection at the u.s. capital. the police officers will first testify as they sought to protect the complex and lawmakers on that day. speaker nancy pelosi has appointed republican congress

member adam kinzinger to join liz cheney. as the delta variant fuels a surge in covid case, officials confirm booster shots could be needed for americans 65 and older and those with compromised immune systems and pfizer and moderna are expanding the size of the vaccine studies in children age 5 to 11. this is after the report of heart i nflammation in younger a t adults. and this fire ball across the sky may be part of the p perseid meteor shower expected next month back to you, frank.

thatnk you, frances rivera if you miss "worldwide exchange" check us out on apple or spotify or other podcast apps. we will be right back. ble as eag turkey hill chocolate peanut butter cup ice cream with real cocoa. well, that's the way the sandcastle crumbles. you can't beat turkey hill memories. ready to shine from the inside out? try nature's bounty hair, skin and nails gummies. the number one brand to support beautiful hair, glowing skin, and healthy nails. and introducing jelly beans with two times more biotin. ♪♪ it was my dream to be an entrepreneur based upon the examples that i had growing up. and that was important for me because you can't be what you can't see. the ey entrepreneurs access network has a tremendous impact on my business and

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we layout what is to happen with apple and microsoft. and crackdown from china beijing expands the scope of the regulatory ramp up it is tuesday, july 27th, 2021 you are watching" worldwide exchange" here on cnbc welcome back i'm frances k holland here in f brian sullivan stock futures pointing to loses ahead of the opening bell. the dow looks like it could open 180 points lower s&p and nasdaq in the red. the nasdaq down .25% stocks coming off another record session with all three major averages trading in record territory and trying at least for the sixth straight day of

gains. futures in the red the price of bitcoin pulling back sharply after amazon denied the report it is looking into accepting bitcoin as payment by the end of the year. bitcoin topped $40,000 yesterday for the first time since june on the report let's get to other top stories at the ready nearing a combination to take the company public the company would merge with mca and would value the tech company at $1 billion. this deal could come this week and would follow other companies going public as consumers spend more time online and brands place a bigger focus on digital advertising. facebook creating mark zuckerberg's vision to form a product team on the metaverse.

it involves the creation of digital worlds that multiple people can inhabit at the same time facebook joins apple and google and microsoft with the focus on vr and ar technology. intel is vowing to regain the role as lead chip maker with a strategy by 2025 it will measure progress and chip production. the current system gives some companies an unfair advantage. intel signed up qualcomm as a customer along with amazon. tesla topping expectations with the second quarter results. the company reporting more than $1 billion in income for the first time the company's investment in bitcoin with a $23 million impairment dragging on the operating income let's dive into the results with

tim at granite advisers. >> thanks for having me. >> we will dig into the tesla results. let's talk about the results and news from the call elon musk will step back from the earnings calls in the future unless he has big news we saw great numbers, but we are seeing something else that is a driving force for tesla. elon musk taking a step back how will that impact the stock going forward? >> it is interesting when we see a founder step back, we see more robust data. elon is a wild card and created volatility in the stock. if you you want good long-term shareholders, creating a more stable earnings environment is a bad start. tweeting in the past has gotten him in trouble as well >> we see income increase by ten. what does that say because the growth came from sales of lower priced products that were sold

with the price increase. >> i think we are seeing from tesla is we are past the long stage of existential risk for the company that is doing something different in the automotive business. that will draw investors as they feel some of the risk is gone. it is always been their goal to make cheaper cars and be the electric car for everybody we are not surprised more and more of the revenue is coming from the less expensive cars in a period of time when cars are in such short supply, you are able to get a premium and sell more of the premium vehicles higher priced cars cheap which is good. >> 20% higher than the last four quarters news on the call that i thought was interesting. i covered the logistics sector with the trucking the way it is, do you see it as a good move because they are having success

with the passenger cars or negative move forward as demand pick ps up >> continue to make more is not a bad thing to do. as you add more and more complexity in a lower volume business that semis, semis are trying to change the world not be that profitable not that many semis are sold >> obviously blockbuster earnings yesterday shares up in pre-market. a lot of factors today the delta variant. the fed's two-day meeting. we could hear commentary of them th thinking of tapering does that impact tesla stock today? >> certainly big tech stocks are affected by higher rates

i think that it will affect companies like tesla in the long run, if you continue to have those margins, you continue to see that cash flow, you really are not going to be so worried about whether or not we're at 1.25% or 2% by year end. >> tim, let's switch gears and talk about big tech earnings a lot to talk about. apple. out after the bell the company hasn't issued formal guidance for a year. how do you see the guidance situation and what do you want to hear about shipments and 5g or other highlights that you are expecting in. >> you hit it on there es tichlt estimates have been low for a year companies are beating on revenues handily i don't see that continuing.

what we are looking at is what does the -- how much of that was demand pulled forward? will they give us guidance particularly on the mac and ipad side it has been an interesting demand environment for the non iphone products. iphone, you don't have a significant new technology coming this year because they came out with the 5g phone last year there is rumor they ordered a significant number of iphones for iphone 13 as they expect high demand. apple does a good job of who needs to upgrade the future outlook is going to be very important and overlay that with the global chip shortage nobody controls the supply chain the way apple does they have a lot of supply on hand the attempt that shortage starts to hurt them will be news for the stock. we will look for little hints

today. >> tim, you hit on points that i found interesting. we have seen the reports that apple is ramping up iphone production you mentioned the phones were out last year. does the reopening, sense of expansion of reopening and people getting back out, as a driver for increased mobile phone sales? our iphones are a chance to show off. if we are stuck in the house, we can't show off. >> right the other thing is people are talking about how maybe some areas of the business are affected by reopening because people are not sitting home. the phone has become something that people do not leave home without. they will continue to have the latest and greatest. apple does suffer or benefit from the fact they really have the high-end phone where people do care to have the latest version versus the android environment. and taking pictures and

traveling. those are important aspects of phones that ten years ago you didn't think the camera was going to matter as much as it does i expect they will continue to see strong command for iphones and it has become an integral part of the our lives, i don't see that changing until someone sees a different type of communications device. >> the camera may be the most important factor when i'm choosing a phone personally. you can talk and watch movies on all of them. >> all that consumer content everywhere it does that very well in the 5g environment. >> the camera is a difference. let's talk about the other two tech stocks. alphabet and microsoft cloud revenue is a key number to watch for both companies microsoft is the focus of a lot of attacks of cyber attacks that have been hit. what are you seeing with these companies with the cloud business >> well, certainly the cloud business is the growth driver for microsoft. they have been in the process of

transitioning install base of software or subscription service. they continue to push through that it is a business which is profitable and recurring that as the azure is a high cost business, it is a tremendous margin for them. they are the ones that provide the communications side of business here we are communicating with one another on one of their products people use them every day cross platform the most important thing for microsoft is they realize they need to deliver all of the services cross platform. it is happening everywhere doesn't matter with a mac or windows machine. you are still using a cloud-based product with microsoft. it expanded the possibilities for microsoft. on the alphabet side, it is largely driven by advertising.

you know, before the piece, you were talking about spacs facebook in the advertising market that is what drives all of the free services. we're in a period of worry about inflation. food inflation, energy inflation. most of the technology services we use, we get for free. they really are subject to the pressures s of inflation >> tim, i appreciate it. the extra early wake up. you are out skiing in park city. we appreciate it have a great day >> take care. china's crackdown on big tech and beyond. taking a toll on stocks in the overall markets there. we pull back the curtain on what is driving beijing to bring down the titans and facebook is working to work out the oculus to sync data of calories burned during a

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find our coupon in sunday's paper. chinese tech stock under pressure for the third straight session. alibaba and tencent are among them as reactions from beijing impacting from apps and food delivery platforms and for profit education tencent is down after wechat suspends registration of new users to go through a technical upgrade to align with regulations and laws and hang seng is down today. the biggest one day drop since it launched last year. let's talk about this with our cnbc contributor dewardric, thanks for being here >> good to be here.

>> some are scratching our heads a little bit can you talk about the issue about the chinese regulators and the impact in the u.s. data privacy >> good question, frank. when this started in november of 2020, most people thought that this was a jack ma issue if you recall, regulators called in two dozen companies for tea, as they call it. they wanted to focus on how the companies are run at home. they were large consumer protection usuaissue s. what we have seen since november is data security is important to the chinese government they are concerned, frank, about the holding foreign companies accountable act. the chinese fear that data, once these companies have to open up books, under this particular u.s. law, that somehow sensitive

data will fall through the hands. no reasons to believe that this will happen, frank, but the chinese are fearful of that. finally, i would say that these companies have become so ubiquitous in the lives of chinese citizens, so much so, some in the communist party believe this could rival the party and that will not happy under xi jinping >> one thing i think we can relate to in the u.s. is from the government, inflation concerns can you talk about how concerns about inn applicflation and incg prices in china are fuelling the crackdown? >> yeah. on this point, frank, i want to focus on the crackdown on the education sector here, price becomes a real prohibitive factor for parents who are looking to educate their kids in a very, very tough education environment in china

many of these companies are price gouging on the services. some questions of the value of these services the chinese government has a goal, as you know, frank, to increase the population and have more families having kids. this was just not going to happen with the price of housing and the price of education the government, in addition to those other reasons they are cracking down on other tech companies, focused on this sector because of price inflation and gouging. >> one of the things i thought was interesting from your research is the chinese government is concerned about the companies becoming too powerful and rivaling the power of the chinese government. at the same time, they are trying to rival the u.s. with economic power with tech how is the chinese communist party trying to balance the conflicting goals? >> yeah. that's a very good question.

a lot of people have made the calculation that because of the tech war and pending tech war and competition with the u.s. and china, that regulators will only go so far with some of the companies. i say that's not how we should look at this the chinese believe that they have to do whatever they need to do to get these tech companies under their control so they can be prepared for a long-term struggle with the u.s. in this space. a lot of the companies are dependent on the u.s. capital markets. that is a concern for beijing. we should expect there will be vigorous comepetition in the teh sector that will beat to the communist party drum that is what we are seeing happen >> we will see chinese tech stocks take a dip over the last week dewardric, thank you on deck, turning attention to the policy meeting.

morgan stanley is talking about whether or not it is on the chairm'sinan md. if you haven't done so yet, follow us on the podcast apps. we'll be right back. and earn cash back rewards, all in one app. that's how you get your money right with sofi. ready to shine from the inside out? try nature's bounty hair, skin and nails gummies. the number one brand to support beautiful hair, glowing skin, and healthy nails. and introducing jelly beans with two times more biotin. ♪ someone once told me, that i should get used to people staring.

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client needs and get the data they need to quickly design coverage for each one. businesses that want personalization and speed are going with a smarter hybrid cloud using the technology and expertise of ibm. nice bumping into you. welcome back investors gearing up for economic reports this morning. this is the federal reserve kicks off the latest policy meeting among the economic threat presented by the delta variant. let's bring in morgan stanley's chief economist. >> good to be here. >> we have to look ahead to the fed meeting today.

what are you expecting how much or any talk are you forecasting when it comes to tapering will the fed talk about tapering or any insight or acknowledgment of tapering? does that lead to a taper tantrum or doing you see anything else? >> i think they are walking us to the expectation they are going to have that more robust discussion about the balance sheet and about when and how they might begin to taper their asset purchases. i think it is a surprise tomorrow with the press conference if he said we did not talk about it. i think that would be a dovish surprise, if you will. i don't expect him to give anymor anymore granular details

we have not made any decisions yet and continue to discuss them in the coming months and meetings >> ellen, we continue to see impact of the delta variant with the public health standpoint rising hospital cases. a lot of concern of whether or not people vaccinated will be protected from the variant with the market, the impact is muted. the worst day in nine months last month is the delta variant a variable to influence the fed decision? >> if it were to create a surge in hospitalizations or death rates or state or local governments talk about rolling back the opening up. in particular, if there was talk we are not reopening schools fully. i think that would be a concern for the outlook. i would be concerned and the fed

would be concerned we are not there yet in the statement itself from the fmoc, they stayed that the outlook depends on the path of the virus and remains a risk to the outlook. i think that very general statement is appropriate and something chair powell will remind folks in questions that covid is already a risk. you talk about markets i do think that if you look at the 10-year yield today, we believe markets are not as optimistic in the outlook or more worried about hits to the outlook with the delta variant than the fed is currently. that seems to be a bit overdone. >> the 10-year has fallen from a month ago. the yield was 1.48 this morning it is down 20 basis points how much of the fed's decision

today do you see impacting the 10-year bond yield do you have a price target for that yield by the end of the year knowing what we know today >> our rate strategists are expecting 1.80 by the end of the year they do believe that the drop in the 10-year yield reflects the market being too pessimistic on the outlook and the market is starting to discount any action by congress later this year in terms of the infrastructure package. we still believe that package is coming there is too much pessimism built into the market. what i expect from the fmoc tomorrow is an optimistic take on the conditions of the economy. the beige book documents prepared ahead of the meeting laying out the current conditions it describes the economy as robust it has been some time since the

beige book described the economy as robust. that will be optimistic in the statement. chair powell will remain optimistic on the outlook. including the hope he still holds out that we get a bump in labor supply as we go into the fall >> ellen, we're almost out of time i have to ask about inflation. are you still of the opinion it is transitory? we saw jumps in the cpi not long ago. do you believe inflation is transitory and are we on track of meeting 2%? >> i think a good amount of it, not all of it, a good amount is transitory we are still looking at the underlying pickup in pressures we think most of it is transitory i think with the fed's new framework to delay mondetary actions gives them the best chance to reach the 2% goal they are looking for. >> ellen, we appreciate the insight. thanks for being here.

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good morning tesla shares taking off as the company tops $1 billion in profit china tech stocks slammed ag again. hang seng down 8% in two days. bitcoin back under pressure after amazon denies reports it will accept cryptocurrency for payments by the end of the year. it is tuesday, july 27th, 2021 "squawk box" begins right now.

good morning welcome to "squawk box" here on cnbc i'm andrew ross sorkin and morgan brennan here with joe kernen we have a big show on hand we'll talk tesla earnings in a second futures here the dow opening off 148 appoin points. n nasdaq down. the s&p 500 looking to open down 13.5 points. treasury yields for the moment the 10-year note standing at 1.256. go get yourself a mortgage or refinance if you can we are watching the markets in asia that's weighing on us here