it is 5:00 a.m. at cnbc global headquarters. here is the top five at 5:00 stocks looking to extend friday gains after doing something for the first time in a month. stock futures are higher this morning. easing off the accelerator a bit. new signals the fed may hold off on the 1 percentage point interest rate hike at next m meeting this month what changed elon musk firing back pushing back on the request for a speedy trial plus, big headlines for big

oil after friday's biden-saudi arabia sitdown in the crisis that is crushing europe. and later on, it is not over for the big banks as investors await results from bank of america and goldman sachs and many more. it is monday, july 18th, 2022. you are watching "worldwide exchange" here on cnbc good morning welcome to the show. i'm dominic chu in for brian sullivan here is where the markets stand at 5:01 a.m. eastern time. s&p higher by 42 nasdaq up by 161 dow up 300 this is after the dow and s&p snapped the five session losing

streak already the markets did end the overall week lower if you check on the bond market, where a lot of this catalyst is coming from now, we he see it tk higher the treasury yield is 2.95%. we are still inverted. that 2-year treasury sits above it at 3.15%. 30-year long bond. >> in the oil market, you have u.s. benchmark $99.44 that is up nearly 2% ice brent crude up $2.20 2% gains there nat gas price up 2.5%. rbob gasoline coming down in the sixth down week in a row you can see overall those trades

are playing out. gold metal l hitting the lowest level since august of 2021 $1,717 is the last trade there platinum is coming off the worst week since march 2020. in cryptocurrency, bitcoin and ethereum holding on or trying to hold on to key levels. bitcoin prices at 22,314 we have been eyeing the 20,000 leave for some time. 6% gain. ethereum up 10%. $1,478 is the last trade there let us get a check on the overseas transactions in europe with joumanna bercetche. >> good morning, dom green is the theme we have all of these indexes

opening in positive territory. a lot of the cyclicals reporting positive the ecb meeting to watch out for on thursday. they are expected to hike rates for the first time in 11 years a big event on thursday. we also have a big day on wednesday with the italian prime minister mario draghi addressing parliament last week, italian politics came to the floor again lots of questions if draghi decides to stay on as prime minister this is the picture for the italian index. up 1.2%. germany up 1%. the ftse in uk is up 1.4 let's switch and look at sectors. you can see every single the sector in europe trading in positive territory defensive stocks and telecom stocks up. basic resources is up 3.4% despite the china miss on gdp on

friday oil and gas with a strong day in that sector. that is boosting the oil stocks. finally, a quick look at banks up 2.4%. a lot of direction from here is depending on what the ecb announces thursday it is a big one for us dom. >> joumanna, green like your dress and green like my pocket square thank you. let's get a check of the other top stories. contessa brewer is here with those. >> dom, good to see you. australia and new zealand banking group is buying suncorp for $3.3 billion that boosts the footprint and increase assets in mortgages you can see suncorp in the negative and the world's biggest

gambling hub extended a lockdown of businesses in the fight in the worst outbreak since the pandemic began despite a fall in infections, it saw 27 new cases on sunday the city is more than 600,000 residents must stay home with all non-essential businesses shut until friday. by the way, bernstein put out a note estimates july revenue for macau of 2% of 2019 revenue. you see the chinese stocks holding up well. the world's biggest ev battery maker out of china is considering at least two locations in mexico near the texas border for a new manufacturing plant. the plant could supply automakers tesla and ford. according to bloomberg -- >> i think we just lost contessa

here we will see if we can get her back thank you, contessa. back to the markets overall. your money and the growing c consensus that the fed may hold off on the rate hikecycle into gear it will meet next week and opt for 75 basis point move. we have a rumor they will hold against the surge and likely to raises interest rates by .75 this month for the second straight meeting the headline from the wall street journal and the note from goldman sachs. the university of michigan consumer sentiment softening this is one reason we think they will not hike and deliver a 75

hike at the july fomc meeting. that is the word from the economist team there let's talk more with bechbn eams ben, let's talk about the changing narrative it changed quickly about a full percentage point hike and now back to the baseline 75 basis point. in your mind, what is the appropriate path >> that 75 seems locked. it is interesting. we had speculation of 1 basis point last week because it was bad and not a good number. it is about expectation. the michigan survey shows the fed message is getting through to consumers and that is changing the expectation same for the new york fed survey low to midterm expectation

declining. that is the comfort they don't have to slam the brakes and do 75 governor waller's view is huge with the big rate hike i think we are a look for 75 what matters is september and how restrictive it becomes the market is 3.5% of the fed fund rate by the fall. that seems right the data is important to watch we are in a slowdown it may change this fall. >> the timing is pretty good here what i mean by that is you have a meeting this month and then you have a break in august you come back for another meeting in september does that, in your mind, timing wise, give the fed more cushion in evaluating that data? they are data dependent what do they need to see

is there a possibility it could be less? >> so far, what we have is the indication that 75 is the message more about 50 or 75 for july that means 50 or 75 in september. the key, dom, the data itself is not just confidence data, but the cpi shows the first step to a slowdown the commodity prices will impact the price in august. that is the breathing room we he do don't have to continue on 75 the fed has some time here to evaluate the data from the last week which was not strong enough for 100 basis points we stay on the track from 75 and downshift to 50 by september then making policy and they will

assess how much it has on the economy and inflation. >> speaking of economy and inflation, we have an idea about the inflation picture here in america. i wonder what the story is like economically from the emerging market given what we have seen with the dollar value and its value versus just about everybody else out there is that dollar story not played out enough right now are we not talking about it enough is it a significant driver of not just what is happening here in the u.s. with our relative purchasing power, but what happens with the emerging markets and strength of the currencies and economies >> i think it is a major story, dom. we are seeing the effects from the strong dollar coming through. and it has now become a topic of discussion among policymakers. to one extent, the dollar can strength even. if it is too excessive, it can

too much on the borrowing. that strain as the dollar gets stronger is something that the fed will keep in mind. they are not oblivious to a strong dollar. at this point, the strength of the dollar has a dividend. we see it in the commodity market the dollar does have an impact there. it is about the economy that is not yet in recession the u.s. economy is not sliding right now in recession the strong dollar about fed policy and u.s. economy gives the market comfort we're not in a major contraction. >> ben eamons, thank you when we come back on the show, more on the markets and what investors can expect from the likes of bank of america and goldman sachs when they report

kbw's big bank adviser is here and elon musk is not going down without a fight with the twitter takeover deal. we are live from the farm borough international air show with exclusive interviews with phil lebeau sitting in front of planes he has something special for us next phil >> dom, i'm cooking in front of planes it's going to top 100 here in the uk we're going to talk with greg hayes. that interview is coming up next you do not want to miss what he has to say about the aviation market and commercial market and inflation. a lot of issues to discuss with at nt "rlid th'sexonwodwe exchange."

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the new xfinity video doorbell works with your xfinity home system for real time alerts no matter what's at the door. get off the car... it's a lease! jurassic world dominion, available now on xfinity. rule your home security with xfinity home. welcome back to "worldwide exchange." check on the markets dow jones industrial average implied higher by 285 appoinpoints trying to build on friday's solid gains although it was a losing week overall. we will keep an eye on that positive screen on sso far for futures. for the first time in years, the industry leaders are meeting at the farm farnborough air sho.

expectations are high for travel demand later in the decade and beyond this is now where we find our own phil lebeau sitting in front of planes with the big interview. phil, over to you. >> thank you, dom. greg hayes we were just talking before we came on. it feels good to be back >> it does. >> three years since we had an air show like this >> incredible. >> when you look at the momentum out there and we expect big orders announced today and tomorrow, are you expecting one of the years like we saw in '17 or '18 where the airlines have to reposition fleets >> i don't think we will see the mega orders three or four years ago. the problem is they are sold out. boeing and airbus. if you want that aircraft, you are talking seven years before you see that the narrow body fleet is sold

out. maybe we will see orders for 77 777s >> you guys are going as fast as you can in terms of production as fast as you are doing, you notice the impact of the supply chain, whether the material side or not >> it is difficult we talked earlier in the year about the fact -- >> it's an air show. >> air show. the sound of freedom we talked earlier this year about the fact that prat it is -- pratt is struggling it is skilled labor which is hard to get. 3.6% unemployment looks great, but there is a skill labor

shortage >> how long does it remain like this when you look out and when do you expect it will be closer to a more normal environment for production across the board? are you saying it will be well into 2023 or 2024? >> we will not see the end of the supply chain and people challenges this year i think it is the end of 2023 and 2024 it takes time to develop the skills and hire the people and train them up and it doesn't happen overnight. >> airlines have long been finding or looking for the cheapest option when it comes to dealing with fuel prices nobody can control where they are, but for pratt, how much is the thirst for driving down the costs and driving demand >> that is driving demand for the a 320. we introduced that back in 2015.

it reduced noise 25% and emission by 50%. we have a next generation coming out. the advantage engine 1% of fuel burn. the airlines will have to migrate to the fuel efficient aircraft sooner than later that is driving demand >> it gets so much attention defense is a big part of the show as it is at paris as well what do you notice in terms of the posture from countries and customers who are saying i need to be better positioned given events in the world? >> what happened in ukraine is awful from the humanitarian standpoint and geopolitical standpoint it changed the dynamic completely nato was in disarray today, nato is united. with ratheon, we have great

products that the war fighter needs today and tomorrow. >> i want your thoughts on interest rates are they moving fast enough to slow down inflation? nobody wants higher interest rates. >> we see inflation rate at 9% last month year over year. we see it in the supply chain and commodities and labor. we have to slowdown the economy. that means higher rates. is it the 1980s with volcker we don't have to go to 17% it will not stop at 2%. >> greg hayes. thank you. guys, we'll be here all day long he will have at low of o lot ofs and well as more dom, back to you. >> greg hayes, thank you phil lebeau, thank you enjoy the air show. still on deck, the major energy market risks. my next guest says this could

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20% from the levels. still hovering around the so-called bear market territory that tratraders like to look at. if you look within the trade, technology has been a big part of the story with regard where people are looking for bigger bounces. i will point out that we have seen decent strength on shorter term basis with semiconductors we will see if we can build on the three-day winning streak for that part of the market in technology it is seen by traders and investors as a leading indicator of the overall tech trade. something to keep a close eye on that i pointed that out because if you look at other parts of tech technology cloud computing, that is down 11%, but cloud is down 42%

tech is down 30% vaneck is holding up well. over the last week, it has been out performing by a wide amount over cloud computing and tech stocks we will see if semi conductors can tell us about the trend for technology. let get a check of the headlines with phillip mena. breaking news in indiana police investigating a mass shooting near indianapolis a total of six people shot after the lone gunman started firing in the food court. four people were killed. a 12-year-old girl among those injured. a 22-year-old good samaritan shot and killed the gunman. a new report on the police

response to the uvalde school shooting the results of the preliminary investigation released by the texas statehouse of representatives found systemic failures and poor decision mak makeing by all agencies. they did not prioritize the safety of the victims over their own safety. europe gripped by a deadly heat wave. it is bad in the south part of the continent with france, spain and portugal and greece and italy suffering devastating wildfires. on top of that, uk is bracing for record-breaking temperatures this week. historic day at st andrews at the open championship cam smith started four strokes out of first the australian carved up the course smith shot an 8 under 64 in the final round pulling past rory

mcilroy and winning the open and first major championship he finished 20 below par for the championship tied for a record score at a major. that is it from here dom. >> i watched parts of all four rounds of the open it was amazing seeing the level of play there. cameron smith, for golfers out there, i don't know if you can put on a better putting exhibition phil >> i know rory was ahead cam smith tied a record. no one has done it better. >> great time for golf phil, thank you. despite a rough first half of 2022, david katz is here with the bull case for one beaten down name that could help your bottom line in the months ahead. that mystery chart revealed coming up later on in the show we're right back after this.

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futures popping as odds for a full percentage rate hike for jay powell fall further out of favor. investors embracing for big banks after the results last week the name kdw says is a buy. investors look to russia's european pipeline power play and what it could mean for global

energy markets and beyond. it is monday, july 18th, 2022. you are watching "worldwide exchange" here on cnbc welcome back to the show i'm dominic chu in for brian sullivan it is 5:32 a.m. eastern time on the east coast here is how the markets and your money is looking at this point in time. dow futures higher 268 a little bit of a lowdown in momentum still green. s&p 500 is up 37 nasdaq up 143. very the solid moves anticipated for now in the stock market trying to build on friday's gains. all this amid growing consensus that the federal reserve will balk at the 1 percentage point hike next week in a note from goldman sachs late yesterday, a pull back in inflation expectation is

reducing the impetus for the 100 basis point hike from the wall street journal, policymakers are leaning against increases. little commentary regard to the fed may be easing back on the interest rate hiking momentum. keeping the ball rolling, banks are in focus again this week goldman sachs and bank of america reporting before the opening bell today investors are hoping they will follow citigroup last week shares popped better than 13% on friday joining me now is david konrad at kbw which is a stiffel company. what exactly was it about the

investor attitude that sent shares moving? >> it was driven by the treasury business that is unique on the street that is part of the global franchise that moves pliend the world. it is a low pbar for citi it had big impact on the rally on friday. >> what would have to happen with results from bank of america and goldman sachs today? you could argue that both banks might have a bigger influence on the sentiment or sectortrade what needs to happen for those results to get the same kind of reaction we saw in investor enthusiasm for citi? >> i think that would be a bit challenging for today because of the investor sentiment going in. you know, bank of america is a

popular name we think they will have solid results. if you look at jpmorgan chase results, the chase business was strong yet, the investment banking business was weak. we will see strong from bank of america, but goldman sachs will be challenged. >> if you look at the way this overall season is shaping up right now, even with the results on citi last week, wells fargo reported around that same time period and they have more of a mixed picture. we saw a trade developing there as well. a bullish move for that stock despite the mixed commentary there. is it an indication, david, this financials trade might have momentum going forward after talked about for such a long time >> yeah. i think it has been oversold here if you look at the super

regional banks, they heare tradn 52% of s&p so what we see is good top line net interest income growth from that group we think that does performance lead through this week we are more positive on the regional banks m & t reporting on wednesday regions like 5/3rd will have liquidity on the balance street. >> reemg al regionals over the center david konrad, thank you. let's get to the top stories with contessa brewer >> dom, elon musk late friday filing a lawsuit opposing the expedited trial.

lawyers for musk filed documents in the delaware court. his first public response to the suit calling on the court to reject the unjustly request to expedite this. li highlighting risks from down turn and held in limbo by a buyer. jm smuckers approved a dividend hike to $1.02 a share set to be paid on august 12th. this is the 21st consecutive year of dividend growth. shares are flat on the year compared to the s&p 18% drop since january. apple is asking a federal court to throw out an injunction

developers to bypass the payment system and fees. apple calls it legally improper. it is part of the lawsuit with epic games insisting epic lost the initial trial last year because it presented a flawed argument >> contessa brewer, thank you. we have wti up more than 2%. weaker u.s. dollar and tight pl supplies are offsetting recession fears. this is happening as president biden returns home from the middle east this weekend as expected, his trip to saudi arabia and fist bump there failing to secure a pledge to bring down inflation the trip would result in oil producers taking quote/unquote,

a few more steps in terms of supply now shifting to russian gasp flows will resume by the nord stream 1 pipeline. maintenance is set to end on thursday separately, janet yellen had productive talks on a proposed price cap on the russian oil market at the meeting of the g20 finance minister let's talk about this with bjarne schieldrop. i wonder, we are starting to see signs of oil prices coming down and maybe demand impacted. is that something that has legs or is this just a tiny consolidation phase before the move back higher for oil >> i think we need to remember that we do have an overall

energy crisis globally look at coal prices in australia raid trading at 400 times normal. you know, we have more than $200 for natural gas in asia. you know, we are all focused on movement in the crude oil price. we still have super tight crude oil market with very strong liquidation, the strong price of the september and october contract has a premium of $4 over the other. and the real spot price for crude oil is trading at $108 per barrel it is super high we are focused on oil at the moment which is the issue at the

moment >> i wonder when the ukraine/russia war first kicked off and reaction from the international community came out, there was an understanding, right, that the energy markets would go higher because of the immense pressure put, sanctions wise, on russia. do you believe the russian energy story for crude oil and nat gas as everything else is the lynch pin, if you will, to the global energy markets? if something doesn't happen with russia, what happens to the energy markets as we approach the all important winter season? >> it is important to emphasize that russia is the world's biggest energy for fossil fuel exporter of oil, natural gas and coal together. they export 5 million of crude

and 3 million of refined products and 4 million barrels oil of natural gas and coal. this is the elephant in the world in terms of energy when you tamper with these exports, you know, you have an earthquake in the energy market as a consequence >> bjarne, let's bottom line this how bad could nat prices and crude oil prices get if something doesn't happen with regard to russia and ukraine >> i thinking something has already happened and we have a severe reduction of natural gas from russia to europe. reduction of 2 million barrels a day versus normally. we lost 5% or 6% of natural gas export from russia to europe when he tthe gas doesn't go to europe, it goes nowhere.

that means a massive reduction in energy supply to the world. if the flow stops to europe, then they he move into the market and buy lng and coal to come pepensate and creating a tt market of the fossil fuels russia is today in the proxy war with the u.s. and europe putin will not let ueurope and u.s. off the hook. russia has the upper hand because they are the biggest exporter in the world and they have the resources to export it or not they can decide to hold back if they want creating pain to europe and the u.s. consumers. >> massive pain. bjarne schieldrop, thank you.

coming up on the show, texas, utah and oklahoma in a massive heat wave with temperatures expected to remain in the 100s for the next several days extreme weather driving home climate change and necessities like food and electricity and natural gas. this goes beyond the human toll as agriculture to utilities struggle the to keep systems running smoothly we have that story coming up when "worldwide exchange" returns after this

welcome back a heat wave rocking the american southwest and beyond now voinvestors are taking note. kristina partsinevelos has the story. >> dom, you have parts of texas, kansas and oklahoma that could see the hottest or highest summer temperatures to datedict 110 degrees. it is overloading electricity grids and putting a strain on human lives. natural gas is a source to power electricity in texas and elsewhere. prices are soaring nearly 26% in the past two weeks alone that's why the state run power grid in texas ercot has asked people to conserve power twice this week. the heat is driving up electricity prices, but blackouts weigh on firms like

nrg and entergy and exelon you see the stocks here are negative month to date hot and aging. the department of energy found 7 70% of transmission lines are more than 25 years old lines typically have a 50-year life span. you can understand how old these systems are. you may wonder at home what about solar and wind >> although we brought on a lot of new capacity in the form of wind and solar, that is not always the most reliable source of energy because you really rely on the weather. if the weather is not perfect, you will lose out on the extra capacity >> solar power is still filling up a record share power generation in texas. many companies have been under pressure lately on u.s. solar

policies in the housing market sun power on the screen is down 22% last month the ishares global etf had the worst week since march down 5% since last monday. it is a balancing act with natural gas, wind and coal for utility firms and dangerous heat levels testing power grids like nee needle with wind and the crypto mining side. i bring it up because we talked a lot how much energy it takes to mine the crypto promise is >> the fact crypto miners in texas. a lot of them over there because electricity is cheaper they have been asked to shutdown or really conserve energy. that created a drop in mining. that affected gpu prices

that is one problem. the other problem is the wind. the heat is so heavy, a lack of wind and the power grids are unable to rely on wind which is a resource for them. same for solar the products expanding and you need the manpower to fix the solar panels it is not always reliable despite alternative resources to natural gas. >> all right pra kristina partsinevelos thank you. on deck for the show stock picking with david katz and beaten down names on the shopping list that mig thturn the corner in 2022 that story when we come back

welcome back what you see is a busy week for traders and investors as earnings season kicks in goldman sachs and boa.

ibm later on today johnson & johnson and netflix and halliburton. tesla and united thursday is travelers and american friday is american express and verizon and twitter. that should be an interesting one. a busy week ahead. now to the trading day amid that framing. you have futures poised for solid gains at opening bell. dow implied higher by 245. we have david katz here with us. david, did you feel better on friday with what you saw does that make you feel you want to put a shopping list to work >> friday was a nice indication. you had earnings season with the banks. banks generally okay to mixed. the market focused on the positives. the hope is the earnings season is not blockbuster, but the market take it in stride

if that is the case, we feel good we would buy any weakness. we would not chase days like today, but we think a year from now, stocks are significantly higher now is a time to look at playing offense. >> if it is offense rather than defense, where is the offense you want to play and are those offensive parts of the market you want to buy into contingent upon fed policy? >> we think inflation is starting to break. the fed is not going to talk about changing policy or less hawkish next year yet. commodity prices coming down real estate prices are slowing walmart and target discounting because they have the excess inventory in apparel and home goods. that will allow the fed to be less hawkish next year you want to buy stocks six months in advance to see the numbers turn we think that time is about now.

>> that is 6 to 12 months timeframe lends itself to what trade? technology and media and communication services or stick with what has been working-ish >> we are expecting rotation things like consumer staples which has done well. we would put money into financials and technology and communication services that you just mentioned select mixed technology companies. what you want to look at is companies with good long-term growth and earnings, but selling under 15 times earnings. you can take the longer term perspective and able to buy great businesses and attractive prices that is a formula for success. >> david, that begs the question you open the door. what is on the shopping list what types of stocks

>> they are a reopening play the company is down with the nasdaq selloff the stock sells 14 times earnings air products you get that at an attractive price at a 3% yield. fedex with a good earnings update a week or two ago stock selling under ten times earni earnings you have medtronic selling at 14 or 15 times earning with a 3% yield. if you look at the companies, they are really good businesses and outlooks and attractive prices we like the banks. truist with a 4% yield >> good shopping list there from david katz thank you very much. have a great day, sir. >> thanks a lot. that does it for us on "worldwide exchange. check out the futures market pointing to solid gains at

opening deal dow higher by 250 points s&p higher 35. nasdaq higher by 141 see if the gains from friday can be built on. keep it here "squawk box" picks up coverage coming up next

good morning earnings season rolls on we hear from bank of america and goldman sachs ahead of opening bell. odds for a full percentage point rate hike pulling back after inflation data spooked the markets. and uk hosting the first major air show since the pandemic began we have a big lineup including the ceo of air lease corp and qatar and boeing.

it is monday, july 18th, 2022. "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc we are live at the nasdaq market site i'm andrew ross sorkin along with joe kernen. becky is have green on the scre. dow will power back up >> we did have a tumble. >> what do you think friday was? >> what do you mean? >> am i crazy? have i lost my brain >> yes huge day friday. >> back up sorry. i lost my brain. >> we had a great week the week