it is 5:00 a.m. at cnbc global headquarters. here is your top five at 5:00. stocks set to sell after the friday market meltdown futures down sharply right now. investors still digesting the inflation report showing prices climbing at the highest level in 40 years. attention turning to powell and the fed meeting starting tomorrow. as stocks fall, bond yields are surging with one hitting the highest level in 15 years.

a reckoning for bitcoin as the crypto asset sinks to the lowest level in two years. if that were not enough, tech in trouble. the nasdaq falls deeper into bear market territory. could now be the time to scoop up a big sector at a big discount it is monday, june 13th, 2022 you are watching "worldwide exchange" here on cnbc good morning welcome to the show. i'm dominic chu in for brian sullivan on this monday morning. let's kickoff the hour with the markets and your money stock futures are sharply lower and looking to extend the big selloff. the dow implied lower by 6 00 points that is off the lows of the session right now. the s&p 500 implied lower by 95.

the nasdaq down by a whopping 350 points just at the opening bell, if these futures moves hold, into cash equities trading. ahead of the opening bell, dow and s&p and nasdaq coming off the worst weekly declines since late january five s&p 500 are trading in bear market including technology and financial and consumer discretionary. the 2-year treasury is trading above 3.1% that is its highest level since 2007 speaking of yields and that 2-year treasury, this morning, inverting with the 10-year treasury and another possible early recession indicator. that hasn't happened, the inve inversion, since april in the crude oil market, we are seeing prices move in response to what is happening overall wti crude is down nearly $2 a

barrel $1 $118.70. that sis a similar decline for ice brent crude. natural gas prices down as well trading at $8.62 prices have surged in the last week to a $5.01. the aaa average is $5.01 a gallon and then in cryptocurrency, we are seeing weakness across many parts of the space bitcoin is now around $24,000. remember, for the longest time, traders are looking at the $30,000 level. we are above and below that for weeks. we broken below. ethereum prices are down 20% to

$1,205 everywhere else in the cryptocurrency industry, smaller alt-coins are taking losses. it is not just here at home. markets around the world are under heavy selling pressure we have jp ong in singapore with the action in asia and julianna tatelbaum in london with the early trade on the european side jp, we will start with you >> good early morning, dom not the best start to the trading week for markets across the asia pacific investors are worried of two things as you recall, the cpi report last friday came after markets in asia closed today was the day when they reacted and reacted negatively stocks from tokyo to t'aipei to shanghai to singapore trading in the red this morning you see it hitting the shanghai falling by 0.9% at the close shenzhen closing flat to the

down side. the nikkei 225 and kospi and hang seng closing lower. on top of that, we have the concerns about the rising covid-19 infections in china beijing wrapping up restrictions with mass testing there. the city of shanghai has questions if we will see more restrictions and a resumption of the economic slowdown in the world's second largest economy see how this is hitting the economy. two examples from south korea and japan. the nikkei 225 falling 3% at the close. the japanese yen closing at 35 yen to the greenback like in the past, the yen bolstering the appeal of the japanese exporters, this time, yen at this level is raising concerns if rising input costs will hit the markets of the japanese companies and pull the

benchmark yen lower. kospi falling in the session there is another thing to watch out for in south korea truckers strike. it hit a number of major industrial companies like steel maker which had to stop industrial output or suspend because of the inventories are filling up and swelling stockpiles because the truckers are not taking inventory out and they had to cut back and suspend production the south korean yuan falling. the first ten days of june fell 10%. we want to look at the hang seng falling by the tech index. it fell 4% today one of the most challenging starts to the new trading week in asia in recent memory dom. >> jp ong, thank you very much let's get to julianna tatelbaum in london with latest on the europe trade

good morning, julianna >> dom, good morning we are seeing heavy selling in europe extending last week's losses stoxx 600 closed 4% lower for the week overall now we're seeing steep falls this morning more than 2% down for a number of the key indices we are seeing heavy selling in luxury names that is tied in part to the global economic story and higher interest rates on growth the china story with the covid situation and worsening of the covid situation there weighing on luxury stocks we are seeing investors sell the delivery names food delivery names. on the flip side, some performance in defense names and on fixed income, we see a march higher in yields here. european central bank cemented the plans to raise interest rates in july and september and beyond that. now in the wake of the stronger

inflation report from the u.s. on friday, we are seeing yields continuing to move higher in europe dom. >> julianna tatelbaum with the latest in europe thank you very much. back here at home, u.s. stock futures are lower. sharply so again, off the worst levels of the session. let's bring in kevin simpson founder of capital wealth planning kevin, is this market one that is worrisome to you in the idea he this could be the beginning of the bigger pull back or is this the bottoming process taking hold? >> dom, i think it is worrisome. we cannot ignore it was a horrible week futures are telling us it will bleed through to this morning. markets are learning how to take a punch. in response to your question, we are closer to the bottom than the top. the problem is the bottoming process can take a long time

especially when we factor in the best case inflation narrative. this could go into the summer and into the fall and through the fall into the winter getting this under control is not going to be easy it will be a tough bottoming process, if we started that. we will not enjoy a v-bottom like we have seen in the last few years. >> if this is the case, does it change the calculus for how the fed meeting goes this week they've witnessed the volatility from last week they are watching what will happen early this week ahead of the big fed meeting. what has to happen, i guess, is the best way to put it for the fed to alter its approach with the economy or is the inflation data so pervasively bad that they have to stay on track no matter what? >> well, i think it is pervasively bad that they want to accelerate their tightening

process. this fed has been so careful about telegraphing what they're going to do and doing it i'm concerned that leaving that narrative on wednesday won't happen let's play on this thesis, dom raise rates 50 basis points. clearly the fed is a little bit behind the 8-ball and that's why the markets are selling off. the big news will be the post-game pressor where chairman powell can sound as hawkish as anybody on the planet. maybe he says this, we raised rates 50 basis points for june and 50, 75, 100. they are on the table for july and then september if we see the data indicating it is necessary, we may raise rates between meetings that type of communication, that type of messaging is what the fed will need to do to get us through this week. it will not help inflation day

one, but it may play into the market. >> kevin, quickly before we let you go what is your favorite part of the market given the down turn we've seen >> cash would be a sarcastic answer which i will not give you. there are opportunities in financials we have rock solid balance sheets the narrative the financials would do well in the rising interest rate environment hasn't played out you talked about it in the open. correction territory i look at the big banks and big tech which is selling off massively to create opportunities. it is not timing the market. it is using this opportunity over the next several months to accumulate positions in companies you want to own and continue to make sure they are cash on cash and pay dividends and i want to get paid while we wait for times to improve. >> kevin simpson says invest don't trade. to the top stories now widespread lockdowns and mass testing returning to the china's biggest cities as shanghai and

beijing attempt to stem the community spread of covid. both cities extending restrictions with beijing delaying reopening the schools and shanghai suspending in-person dining shanghai reported 37 cases and beijing reported 51. google agrees to pay $118 million saying it discriminated against women with pay and promotions this settlement covers 15,000 female employees who worked at dp google in california after september of 2013. according to lawyers in the case, in addition to the cash payment, the settlement dictates experts review the hiring practices and pay equity studies. tesla announcing late friday its planning a 3 for 1 stock split. we believe the split would help reset the market price of the

common stock so employees have more flexibility in managing their equity tesla announced a 5 for 1 stock split in august of 2020. when we come back on the show, more on the global market selloff as yields surge to the highest level in years we will speak with the co-head of rates at goldman sachs coming up next. plus, what friday's hotter than expected inflation report could mean for the fed policy meeting this week. michelle girard weighs in on the show we are back after this break another crazy day? of course—you're a cio in 2022. but you're ready. because you've got the next generation in global secure networking from comcast business. with fully integrated security solutions all in one place. so you're covered. on-premise and in the cloud. you can run things the way you want —your team, ours or a mix of both.

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welcome back to the show i'm dominic chu on "worldwide exchange." there's a lot of activity happening to the down side right now. one place that is not immune is the bond market. we are focused on interest rates with the treasury market that is having reverb rations throughout the credit industry one reason we are focusing on the 10-year treasury is we are going back to the highest levels going back to 2018 3.23% is the last trade. those yields surge to the levels, that means prices, the value of that debt for u.s. government debt has sunk to the

lowest level to 2018 if you take a look at where that is playing out, remember over the course of the last several months and years at this point, a lot of investors have been pouring into high yield and investment grade corporate debt because it yields more than treasury these stronger companies have been seen as decent in terms of return versus yield. they have stronger balance sheets and more credit worthy. people have been reaching for more income and yield in junk bonds or high yield debt for that reason, you can see over the last year, high yield corporate etfs hyg has out performed in the lqd ticker. we will focus in on this last month or so here let's take a look at the short-term basis

junk bonds and investment bonds. the orange line is investment corporate. the white line is high yield that under performance is more dramatic from the last week. 4% down side for the corporates. investment grade down 1.5% it is carrying through on the relative basis with the high yield debt which matched up against treasury bonds this etf the tlt over the last week is down not nearly as high yield corporate. that dynamic may be indicating a lit of fear in the marketplace as we head off to break, despite the sharp moves lower, it is not all red arrows look at the gainers in the session last week.

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(manny) yeah, that's what i do. (vo) with 5g ultra wideband in many more cities, you get up to 10 times the speed at no extra cost. get verizon business unlimited from the network businesses rely on. welcome back to "worldwide exchange." i'm frances rivera with the headlines. bipartisan group of senators may have finally ended the impasse over the gun laws.

ten democrats and ten republicans say they have a framework for a stricter set of safety laws. enhanced background checks for 18 to 21 gun buyers and states to enact red flag laws. a few hours away from the second round of the january 6th hearings the committee is focusing on the lies around the 2020 election and the president trump's claims of fraud they will have testimony from bill stepien and then chris stirewalt. the fda reviewed that the pfizer three-dose vaccine is safe for children under 5. the panel will vote if the shots are ready on wednesday for monday morning, dom, those are the headlines. >> thank you, frances rivera. as we head off to break, a look at the futures. the dow is down implied 525

points at the opening bell s&p down 85. nasdaq down a whopping 320 points our market coverage continues amid the fresh market volatility michelle girard on the red hot cpi report last week and the fed response this week richard kramer on the tech clobbering and sylvia jablonski and tiffany mcghee on the worldwide selling pressure "worldwide exchange" is back in a moment these are the bonds worth investing in. for over 50 years, pimco has reinvented fixed income to create opportunities for investors in every market environment. so, no matter what happens you can build the bonds that mean the most to you. pimco, a global leader in active fixed income. ♪

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a monday meltdown is sttakig shape. on the back of the cpi report set to bleed over. futures pointing to loses at the opening bell the red hot inflation read putting pressure on jay powell and the fed to act as it prepares for the latest policy meeting. a look at the central bank strategy might be changing. tech's rout getting worse as the sector falls deeper in bear market territory is now the time to pick off some of the lows? it is monday, june 13th. you are watching "worldwide exchange" on cnbc. bwelcome back to the show.

i'm dominic chu in for brian sullivan here is how your markets and money are looking. futures are extending the losses dow implied lower by 600 points. technology is a focus here we have comments from two investment banks first, morgan stanley's mike wilson saying given the growing evidence of slowing growth and risk to earnings, we think the s&p is headed toward 3,400 before the more tradeable low is in that would imply another 13% decline from this morning. also from goldman sachs, if the eps estimate for the s&p moves to $225, halfway to the

recession scenario of 200, a 14 times pe would bring the s&p to 3150 by year's end that would be a 19% move lower keep those in mind turning to the bond market which is driving the action in just about every asset class. you see the 10-year treasury is higher below 3.24%. 2-year treasury is 3.2%. we do see the inversion effect taking hold between two years and ten years. it waivers about we will keep an eye on that as they stick together. we will see how it plays out also what is happening with cryptocurrencies they are sharply lower this morning. bitcoin prices are no longer trying to hover around the 30,000 mark. just above $24,000 down 12% elsewhere in cryptocurrencies with the smaller tokens and

coins, ethereum prices down 17%. $1,234 if you look over the entirety of cryptocurrency, we are talking sharper losses for some of the smaller tokens from bitcoin and ethereum. let's get a look at the trade in europe. julianna tatelbaum is in the london newsroom with the latest. julianna >> dom, good morning here in europe, we are seeing continued heavy selling. stocks are down. bond yields are up in the magnitude of the moves lower, dak is down 2% right now. the french market is down about 2 2.25%. luxury names are weighing down the market the covid situation in china is weighing on the luxury goods we have the bank of england policy decision due on thursday. that is a focal point for the uk market

overall, dom, the market narrative is what you are seeing in the states. investors are questioning if policymakers have to move faster to control the high inflation figures. dom. >> selling pressure in europe picking up julianna tatelbaum, thank you very much. the global equity selloff coming on onfriday heels of the hotter than expected pace. that read adding to the pressure facing jay powell and the fed ahead of the policy decision questions about possible changes to the rate hike strategy. joining me now is michelle girard mic michelle, it is no surprise that markets are reacting to hotter than inflation prints. they have been happening for some time. that leads to a question if we are near, at, close to or peak in some way. do you feel we are getting there? >> well, i think in terms of

inflation, we are getting there. although, certainly what we saw from last friday, we have not gotten there yet i'll be honest we thought the peak might be in. the surprise in food and energy that we know has actually continued into june means we're probably a couple of months away from the headline number showing a peak i was disappointed for those of us who are hopefully beginning to turn a corner i don't mean to say i think inflation is coming down quickly. i thought we might be seeing a peak and gradual easing. the breadth of the gains on friday wasn't just food and energy which is important and likely to persist, but across all of the underlining categories from cars to rent and app apparel, it was broad based.

a sign that it is more likely to be more persistent than fed policymakers would hope to see at this point in the cycle. >> michelle, did it change the fed's thinking did it change it as though they have to approach the policy meeting this week or is it one thing where they communicated what they will do and they don't want to roil markets further >> that is the box that jay powell putted fed in taking 75 point increases off the table. you signalled 50 basis points in june and then in july is the likely path. it is difficult, i think, for the fed to make a larger move. not impossible their hands are a little bit tied by the signal that i don't think was necessary last month our best guess is they go half a percent this week.

they use the projections of where the funds rate is headed that is updated in this week's meeting. they use that to perhaps signal they only went 50 basis points this week in june and they are more likely and expecting they end up having to raise the funds rate higher than they thought ultimately a month ago >> michelle, traders and investors have the ability to bet or forecast or wager on where they think the terminal rate or where this goes in terms of the possible rate hike cycle for the fed. over the course of the past week, it has gone up considerably by 50 basis points in a week alone. now we are closer to .75% for the tightening cycle is that now priced into the market because we're seeing that in the fed funds futures or do you think the markets elsewhere have to catch up to that >> that's a good point, dom.

a lot has been priced into the markets in terms of fed rate hike expectation between now and year end, the market is pricing almost 240 basis points 2.5% more of rate hikes between now and year end as you said, the terminal rate, the market is bracing for 3.5% or 3.75% that is a lot of fed tightening. it makes you hope in terms of the bond and the stock market that a lot of the weakness we have seen reflects that and maybe that will start to come to a close. the problem is we just don't know next month's numbers on inflation are likely to remain high i think the market will continue to second guess itself and be unsettled here until we get more indications that inflation is peaking or the down side or worst case for the fed is you don't have signs of inflation

peaking, but start to see signs of the economy slowing down and then the fed will really be in a bind with what to prioritize the markets are worried that it is priced in and it will not prove enough to get to 4% to get inflation all the way back down to the fed's 2% target >> michelle girard from natwest markets. thank you. bonds markets are looking to scramble rate hikes following the cpi report the yield on the 2-year treasury is topping the highest level since 2007 rising needs are pushing the dollar up. the yen falling toy a multidecae low. the gap between hawkish central banks and dovish banks start to

widen. let's talk about this with kamakshya trivedi at goldman sachs. this is one of the situations where when the going gets tough, the tough get going to the u.s. dollar i'm not sure if that is necessarily a positive thing given what is happening right now. what do you think this says about where the markets go from here and capital flow given the u.s. situation and inflation and narrative we are weaving >> the dollar is in place and it is benefitting not just from the interest rate hikes that the fed is going to deliver and is delivering, but also the broader risk off sentiment you see an cross global markets equity markets feel the most pain when they feel that central banks are forced to tighten into the slowdown we have a little bit of that

flavor in global markets today in the environment, the dollar benefits from the rate hike cycle and dmomestic inflation dynamics you have a risk off scenario with the flows going into the u.s. in the safe haven asset it is premature given the environment we're in. >> it seems interesting. you want to buy u.s. assets, sovereign bonds, aka treasury bonds, or equities, whether or not tesla or microsoft, you have to find it the dollar is strengthening and that is not going to sovereign bonds or equity markets. what exactly does that say about investors? are they sitting on the cash despite the highest levels in 40

years? >> we have seen cash managers and funds go up. that is part of the story. remember, this is a relative gain for the dollar to move lower, you need something else to be more en vogue. you need a central bank out hiking the fed or need to see stronger growth in the rest of the world which is attracting risk assets. you don't have that right now. pretty much the entire world is facing the same challenges of higher inflation that the fed is facing if anything, the fed seems more front footed in addressing that relative to say perhaps we have the bank of england which is struggling with the same challenge and anything moving in smaller increments the bank of japan with yield curve control under a long time.

the dollar/yen is moving higher. it is not just what is happening in the u.s., but also what is happening in the rest of the world. >> generally speaking, kamakshya, before we let you go, when you look at the world of credit versus sovereign bonds, do you believe the kind of selling pressure that we've seen in many benchmark sovereign bonds, including here in the u.s., created more of an opportunity on a relative basis to pick up incoming yields for sovereign debt or corporate debt what is the better bargain these days >> i think with corporate debt, you have to take into account the risk for yield, but also concerns around potential recession and what that does going forward. we don't think you are pricing in any sort of recession risk in

a range of assets. that is true of corporate bonds and commodities if you are really going into recession, we expect to see very different price profile in the fed fund we don't think that is quite done at some point if inflation peaks and the fed is no longer ratcheting up the extent of the hikes, sovereign bonds might become a good value proposition. once again as a hedge to the equity portfolio when it comes to the dollar and rates, it feels pre-hmature to a that is now. >> kamakshya trivedi, thank you. coming up, tech getting worse. we layout if it is time to get back in on the tech trade and which names we like. "worldwide exchange" is back after this

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welcome back to "worldwide exchange." another difficult trading day taking shape

sharper losses at the opening bell dow down implied 2%. s&p down 2.5%. the nasdaq down implied 3% at opening bell tech's continued hammering after the tough week nasdaq shed 3% on friday alone finishing the week down 5.5% the index for the nasdaq is down more than 27% so far this year for more on the rout and if a bottom could be near let's bring in richard kramer. richard, this has been a question for weeks if not months since november of last year when we saw the peaks in the nasdaq what would signal in your mind a possible bottoming taking hold in technology? >> so, i think what is happening right now with the companies is that while we see the reaction in the stock market being rapid, the companies are in the process of shifting from pursuing growth to conserving cash

you see that in the news about hiring freezes and you see that in companies quietly pulling back from potential m & a they are looking at and generally it will take more time until the companies readjust outlooks and business models. the buy side anticipated further cuts than the sell side is slow to price in. >> if that is the case, if that dynamic is in play, are there certain places within that technology and communications services trade that are perhaps closer toward that pbottoming process given the information gap given certain parts of the market are viewing certain stocks >> absolutely. you are seeing something you did not see in the run-up last year. that differentiatdifferentiatio.

you see companies sell off less hard they have the luxury of large cash pools google with $120 billion of cash they won't be onlybliged to pull back from the issues they have they are not looking at hiring freezes like others. google and apple and microsoft are out performing thmc has a phenomenal franchise which is going down less than the wider market there are other places you can look at across tech with a good secular outlook. the auto market is not anywhere near supply/demand balance with softer demand, it will take a long time for supply to catch up that rout you are referring to is not across the board. there is more differentiation

right now. that brings back the notion of adding value from stock picking. >> differentiation means options. you look at the couple of names there. what is the most attractive at current levels knowing we are going to be down today >> we will see more down side in a lot of names we are seeing something unusual for us and since we're independent and a large number of sell notes for the last year or two, we are starting to see companies like uber where we pretty much have been sellers or neutral since ipo. we put a buy on it if the company doesn't generate cash by the end of the year, they will have serious management challenges. you likely see management changes and reconstitution of the business and the pressure's on the other companies we're looking at and for potential rebound, but you want to see the shape of 2023 come out

for example, we have a good outlook on intel where we're bu buyers con send s we think as they start goat their house in order, that is a stock that looks right now to be at record low valuations that might be interest of rebound in 2023 for the near term, numbers get cut and continued concerns about the impact of inflation on consumer spend and that flows through a large sector of the market. >> intel and uber among richard kramer's picks thank you. on deck for the new trading week you can see the market pound laying out the market going forward for the week "worldwide exchange" is back after this

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welcome back futures indicating a sharp selloff at opening bell. dow implied lower 2% s&p down 2.5%. nasdaq down by 3%. let's bring in sylvia jablonski and tiffany mcghee both cnbc contributors ladies, thank you. sylvia, you have and run etf products where are people putting their money or are they pulling it out? >> good morning, dom great to see you i think the problem right now is people aren't putting their money to work. what you see going on in the market after last week's cpi read and two days of 5% pull

back coupled with the data with the 2-year treasury and 10-year treasury put calls back at aat .89% level. there is some panic about the conditions these are great opportunities as we always say it is hard to call the bottom you have the check boxes and these are great opportunities to get into etfs or growth names at lower valuations to lock up cash for a while. >> tiffany, do you agree with sylvia maybe there is stuff i can buy on the cheap or wait for it to get cheaper from here? >> dom, there is someone somewhere in every market looking to make money. listen, there is no eloquent way

to put this. last week was horrible most of us got down, but we think about the tstrategy going forward. you can buy, sell or hold. i can make a case for two. if you look at the case to hold and i know investors are sitting home and panicking here is why you should not panic. if you kept your money in the market, look at the past 15 years with a $10,000 investment from december 31, 2006 to 2021, you would have had $45,000 if you panicked and took your money out and missed ten of the best trading days of that time period, you would have $20,000 almost less than half. it really is time in the market and not timing the market. there are opportunities to buy it is just a matter of what you

want to do going forward sdpforward. >> tiffany, what is the advice what you are putting clients into right now >> that is the question. with so many stocks going down and declining, of course, there are opportunities to buy and things you love and conviction around with a better price we like companies with strong balance sheets we like yield, but also companies in positive territory. i'll give you two quick ones pxd. it is an energy company. the dividend for this year is 9.8% that is a lot of yield 59% up year to date. abbv a health care company. i'll take that 5% also the estimate is 3.9%

dividend >> two different industries. abbvie in health care versus energy we know the momentum in energy sylvia, is energy in your mind sk still a buy or has that 50% run in the market made this an expensive place to be? >> i think in the near term, energy is going to look like a decent place to be tiffany is going to get the yields and and the price of crude and commodities and inflation is favorable to the companies. i think in the near term, it is a decent trade longer term, if you are a young person and allocating to a 401(k) plan and the ability to dollar cost average. you can buy broad based and s&p because they are bear market territory in 20% to 30%. you can buy growth stocks.

i know that is a dirty word. valuations are far down. you have apple and amazon and microsoft and google with loads of cash on the balance sheet and quality companies. they are part of every secular trend. you have to have that understanding this is not going to look pretty for months and years to come. i think that when you look at this type of market, these are the markets you wish you would have seized in equities. tiffany said if you are heavily invested in the market, holding is key it is a mistake to take your money out and lose 20% to 30%. these do come back it is part of investing in today's world. >> tiffany, just a couple of moments left you get the last word. does the fed worry you this week >> no. i'm a long-term investor this, too, shall pass. sylvia mentioned if you are a

long-term investor, these fed moves and anxiously awaiting what they will do -- we know what the fed will do it is part of the game. >> sylvia and tiffany. thank you. that does it for us on "worldwide exchange. the markets are in selloff mode. "squawk box" picks up coverage next see you tomorrow mornings are our time, and i couldn't let stiff joints slow me down. so i started taking osteo bi-flex every day because it has joint shield... ...clinically shown to improve joint comfort within 7 days. osteo bi-flex - available at your local retailer and club.

good morning batton down the hatches. market selloffs continue with the big drop at the open after friday's meltdown and followed the bad day on thursday. we will show you what is moving now. including carnage in bitcoin. it is above 24 again more than $200 billion wiped out

from the cryptocurrency market over the weekend it all has to do with the hot inflation numbers taking a toll the average price of gas topping $5 the first time. now we have new grocery data on the price increases of key household staples. it is monday, june 13th, 2022. "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm rebecca quick along with joe kernen and andrew ross sorkin. we are focused on the equities dow futures are down by 560 points this is