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tv   Worldwide Exchange  CNBC  September 27, 2022 5:00am-6:00am EDT

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it is 5:00 a.m. at cnbc. here is the top "five@5. the selloff with the dow especially afentering bear markt territory. chicago fed president charles evans said the fed is not ready to take the gas off the pedal. and turning attention o overseas bank of england vowing to hike rates further with the plunge in the pound. we are live in london
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aggressive the bank of england will get. and a new wave of strikes by workers. and hurricane ian's impact in the u.s. as the storm forces oil producers in the gulf to shut operations. it is tuesday, september 27th. you are watching "worldwide exchange" here on cnbc good morning i'm frank holland in for brian sullivan let's check on the markets and your money stocks green across the board. the dow could open up more than 200 at the open. s&p and nasdaq 1% higher we want to check the bond market yields we are still seeing the inverted yield curve. the 2-year treasury above the 10-year treasury
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4.264% also important to note the 5 5-year above the current mark at 4% and brent crude is above $85 a barrel we saw it dip yesterday briefly. a look at cryptocurrency bitcoin right now. just above $20,000 mo moving higher in the pre-market. both up 40% in the past month. let's go worldwide with geoff cutmore with the trading action >> good morning, frank let's update you on where we are with a couple hours under our belt for europe equities we have a bounce back after what has been a volatile start to the week the dax and cac in germany and
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france are higher. in terms of sectors, it is auto, technology and travel stock among the biggest gainer ftse mib trading down .50% ftse 100 has been turning around from positive territory. the pound has managed to recover some ground, but still remains near a record low against the dollar both uk treasury and bank of england attempted to calm the volatility the central bank monitoring financial markets and will not hesitate to adjust interest rates if required here you can see the euro on the front foot at the moment against the greenback. asian stocks closing higher. pulled in the green by chinese equities which have been supported by the further easing
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of covid measures in places including hong kong and macau. back to you. >> geoff, thank you for the overseas action. let's check on the top stories with pippa stephens >> bp and chevron announcing shutting production at the oil plat p forms in the gulf of mexico the category 2 storm which is expected to intensify in the coming days is the first to disrupt oil and gas in the gulf. obje obje . and now a wave of protesters at the san francisco international airport launching an open-ended strike yesterday over staffing levels and wages flight attendants are expected to democrat straight at 21
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airports around the u.s. as well as in london today to draw attention to workplace problems made worse by under staffing neither of the strikes are expected to disrupt air travel, but there is a latest sign of upheaval in the transportation sector. and charles evans defending the string of rate hikes speaking with colleagues in europe, evans is looking out for another 75 or full 1 point rate hike >> i think we have been very clear in our communications and i'm a strong proponent of the communications and projections and indicate where we think the path should go to justify our projections. the timing of the path is less important than the fact we continue to get to the point where we think we ought to be. whether or not it is a larger
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increase at the next meet organize continued increase to get there before very long, you know, if you look at everybody's projections, we have all the same spot by march >> frank, evans added the concern for the fed is staying on top of tackling inflation back to you. >> pippa, thank you very much. see you later on. let's stay on the fed with the look at the delivering alpha investor survey ahead of the event tomorrow polling the nation's investors and strategists and cnbc contributors on the fed and central bank raising rates too fast more than half say they are comfortable with the current pace a third say it is time to slow down and the rest would like the fed to be more aggressive. let's get to anneka treon with more on this >> good morning, frank >> anneka, i know we are talking about rising rates causing issues for companies in the u.s. you are watching the rates,
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excuse me, the bond market you are saying people are going for yield and safety, but you are concerned about the liquidity and volatility of the bond can you explain? >> absolutely. essentially the bond market is the anchor pricing for virtually everything what you see is you see signals of the bond market to get unhinged you talk about liquidity we all have seen what happened last week. the liquidity levels in the bond market were as low as they were in the peak of the pandemic and ch that's when the fed had to rescue another factor in the bond market you see that is worrisome is apparent sort of decoupling between what are you seeing in yield action and what you are seeing in the real economy for example, ism retreating further and yield still keeping going up inflation expectation really starting to come down while
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yields still keep going up if that is the reference points for all pricing and that's the basis that market participants have been talking about, that can be a worrisome picture, frank. >> there is no alternative other than stocks. one of the things people have been talking about here on cnbc is the 2-year treasury with a 4% yield moreattractive you are also seeing company debt with the companies competing within themselves.incredible this is a world we are not used to it has been 2008 levels of corporate debt yields. we are talking about net cash balance sheet stocks for companies offering yields north of 3%. you compare that to the yield of
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the s&p dividend and there is no alternative which became no alter alternative. the alternative message doesn't work anymore that is why the equities have had such a tough time. >> we have been talking about the strong dollar trading in parity with the sterling and euro and how it impacts u.s. company earnings how is it impacting eurozone companies in the near term what does it mean for the long term >> it is very beneficial for the short-term in general, earnings expectations have held up in a resilient way. you are starting to see downward earnings in the u.s. equity space which is not surprising at all. this is not happening within the european union because the strong dollar is helpful that is temporary in nature. the year on year comparisons will only get tougher.
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that is not one to rely on >> anneka treon. thank you. when we come back here on "worldwide exchange. more on hurricane ian as residents in florida brace for the first major storm this season. and two key pieces of housing data on deck as you deal with the impact of the rising rates and if that is finally starting to cool off. and later on, the rbi amid the quiet wins among all the selling. a very busy hour when "worldwide exchange" returns.
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welcome back to the developing story around hurricane ian churning in the gulf of mexico officials in florida declaring a state of emergency ahead of the storm's arrival. potentially making landfall as a category 4 storm let's get the latest from meteorologist michelle grossman. >> good morning. we are looking at a strong category 3 storm it made the first landfall in cuba we have heavy rainfall 20 inches of rain in central florida. let's look at the latest we are looking at 125-mile-an-hour winds we only need 130 to become a category 4 storm we are expecting that later on today. it is moving north at 12 miles
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per hour that is good speed it will slow down to walking pace as it enters the gulf of mexico it is pounding cuba with really heavy rainfall you could see up to 16 inches in spots and storm surge. that is a wall of water that moves on land. we are looking at hurricane-force winds. we will see a second landfall in the state of florida i'll show you the track in a minute 19 million penople at risk a hurricane warning or hurricane watch or tropical storm warning or tropical storm watch. that hurricane warning in red is including western texas -- florida, excuse me, and western cuba as we go throughout at that time, category 4 storm later tonight through tomorrow morning. it is close to becoming a category 4 storm look what happens as we go throughout time here it slows down. it slows down to a walking pace. see the lines as they get
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further? that is taking time to get through the gulf by thursday morning, this is where we expect the landfall early thursday morning this changed since the 5:00 adv advisory we thought it would become a category 1 storm, but now a category 3 storm storm surge up to 10 feet in spots and hurricane-force winds. back to you. >> winds at 125 miles per hour as a category 3. hard to imagine. this storm is called historic. i know it is the first of the season why historic >> that is one point the second point is the western portion of florida has not seen a hurricane in five years. specifically tampa where we see the landfall possibly. they have not seen a hurricane in a century we expect florida to be prepared for hurricanes, but this spot in florida has not seen that. storm surge. we have tampa bay and waters in there which is hard to get out we will see 10-foot walls of
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water moving onshore which will cause catastrophic problems. >> 10-foot high walls of water hard to imagine. michelle grossman, thank you for the latest still on deck, the bank of england vowing to intervene with the british pound. how far they will go to reassure the markets. >> anntoday's big number $45.6 billion. the number of fraudulent insurance claims made since the pan pandemic more than 1,000 people have been ard thris associated with unemployment fraud in that period reen. go wind turbines. go gorgeous reliable grid. go emerson software. go science people. go breakthrough meds and safe science. go space age welds for super silent cars. go big.
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two housing data points out today. home prices are expected to slow with the surge of mortgage rates forcing the housing market to enter a cool down period this is relief for renters with costs falling from record highs across the u.s. for the first time in nearly two years for more on the state of the housing market, let's bring in brad from cortland brad, new home sales coming out today. what are you expecting from the reports and what does that tell
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us >> the index, the last print was 18% expect that to slow. we might see something in the 16% year over year that is a slowdown, but strong year >> the housing market is strong. growth is slowing down not necessarily the housing market taking a turn to the down side >> we think of pricing and rent growth, that is the case look at new home sales a lot less attractive picture. the last print was 511,000 units. that will fall to 500,000 when the data comes out today to put that in context, that goes back to 2015 or 2016. we're rewinding the clock five or six years with the level of new home sales >> i want to touch on data
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points the u.s. housing market has a shortfall of 1 million houses. i know some would say 2 million or some say 4 million. your data has 1 million. we have 1.7 million houses under construction once those houses are completed, supply chain issues slowed construction once they are complete, the shortfall is over? >> that's a really great question we say houses, we should say housing units. any type if we are under built by 1 million and you have 1.7 million in the hopper, it is population growth look at what is happening in terms of legal i am grmmigratiod illegal immigration and how you align the housing we're making with the population graowth >> one of the things we have seen that is sticky with inflation is shelter inflation the prices people are paying to rent a home or apartment
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rents are up 15% year over year according to your data what does that mean for the housing market does that make multifamily construction more attractive and solve issues what is the result >> it makes new construction attractive on the flip side, you have the rate hikes fed funds rate up to 3.25. the terminal rate in the high 4 or low 5 that makes the cost of development go up as well. building is more attractive. financing costs have gone up significantly. as far as people moving in homeownership, we should look at renting and homeownership. people move with the life cycles we see fluctuations in this. those are determined by mortgage rates. when mortgage rates go down, you see a move out to own. move out of rented to own
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housing. you see that back fill that is going to run in reverse as mortgage affordability declines and people who otherwise would be an owner rent longer. >> brad, a lot of people are asking this question are home prices going to go down in the near future with rising rates, people can't afford to buy the house unless prices go down >> we will see listing prices adjust whether the shiller index ends of showing a negative print is questionable we have to see what happens with population growth and if the rate hikes slow down development. 1.7 million units under construction we have total starts at 1.5 million. when you compare that to population growth, we added 2 million people in the last two years. there may be another 2 million people in the illegal immigration front.
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that is the population of oregon in context this is a lot. housing construction and current construction >> a lot of moving parts brad, thank you very much. still on deck here on "worldwide exchange. stocks looking to stage a rebound as the selling intensifies. kari firestone is laying out the stocks where she is finding opportunities. amid the volatility, sign up for the powerful investment event of the year. delivering alpha returns tomorrow to register, scan the qr code on the screen or go to deliveringalpha.com. 29% saying stocks paying high dividends and 13% saying financials and 6% saying mega cap tech stocks. we're back in a moment
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a tuesday turn around taking shape as the s&p and dow looking to turn around and the pound rising off record lows. bank of england vowing action as it and central banks face the balancing act of tamping down inflation. the wave of selling in the markets wiping away trillions. robert frank tells us how bad it
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has been it is tuesday, september 27th. you are watching "worldwide exchange" here on cnbc welcome back i'm frank holland in for brian sullivan let's get right to the markets and your money look. we mentioned futures are green across the board of off highs of the session. dow could open up 150 points the s&p and nasdaq about 1% higher in the pre-market you have to continue to watch that moving on to other parts of the market this morning. including the oil market right now, excuse me the bond market first. the 10-year treasury at 3.848. still inverted yield curve now to the oil market. crude currently. sitting at -- up higher by 1%.
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wti at below $78 a barrel. let's get a check on the morning top stories. pipp pippa stevens has more >> ford is asking for a new trial after the georgia jury reached a settlement last month in the case of the fatal rollover sdaccident this was over a crash in 2014 that killed four people. the roof design of the truck faulty and prone to collapse in the rollover ford said it wasn't allowed to provide evidence showing the truck was safe and roof stronger than peers ford is challenging the damages. the justice department says biogen settled the whistleblower lawsuit. the suit accused the company of paying doctors kickbacks for ms.
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biogen did not speak out on the settlement ftx won the auction to but the lender voyager digital with the bid of $1.4 billion. the majority of that is for the estimated price of all voyager cryptocurrency inv the claims against cryptocurrency hedge fund will remain with the estate frank, crypto is on the move with bitcoin above 20,000. >> pippa, thank you. turning to the developing story of the british pound rebounding after hitting an all-time low against the dollar. bank of england vowing intervention joumanna bercetche is outside the boe in london with more on the story. good morning, joumanna what steps is the central bank weighing on this matter?
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>> reporter: frank, the pound was eight points lower in the last couple days 10-year gilt up 100 basis points the eventual are important the reason why investors are picking on the uk is a combination of loose monetary policy and expansion fiscal. on thursday, we had the bank of england meeting. they opted for 50 basis points hike friday, the uk government comes in with the very expansive fiscal plan. it sent investors into a bit of a doom loop. they got concerned of the deterioration and public finances and started selling gilts. at some point, investors started
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thinking because we see huge moves, the bank of england might have to do something or come in for emergency rate hike. that did not happen. at 5:00 p.m., the bank said they are watching the market moves closely and they would not hesitate to act to bring inflation back to 2% the onus is on the next meeting in november at 165 basis points priced in. >> joumanna, is the bank of england facing criticism over how it handles the issue >> reporter: absolutely, frank the bank has been criticized for being slow to act when headline inflation is close to 10%. wage growth is 6%. the market wanted to see more aggressive policy. it hasn't happened equally, we know the government is pursuing this expansion stance the bank not only has to face
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the headline energy crisis, but also deal with picking up some of the economic slack from the fiscal output at a time when consumers will feel the pinch because of rising energy and utility bills and now add to that the mortgage costs going up because interest rates will peak at 6%. for many, this is unaffordable which means the tradeoff in the case is higher interest rates, but at the cost of the economy, potentially bringing forward the time of the recession. >> joumanna, we know you are staying on top of the story. let's stay on rising rates and global impact as the central bank scrambles to tamp down inflation and avoiding a hard recession. joining me now is rubeela farooqi. >> great to be here. >> everybody is looking for signs in the yeconomy. the yield curve is an indication you say what is going on with
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the consumer which here in the u.s. is 70% of the economy and looking at real wages. can you explain. >> what we are looking at with the economy is a rapid pace of interest rate increases. the fed is committed to doing what it needs to do to bring inflation down and keep inflation expectations contained. we are seeing the impact on the housing sector now we are looking at how is the consumer how are households responding to the rate increases the consumer has been resilient. we see real disposable incomes decline. con consumers have continued to spend. that train is decelerating we expect positive consumer spending in the third quarter at a slower pace. we also notice the strains consumers are relying more and
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more on credit card debt and revolving credit has gone up delinquency rates are still low, but we have seen a tick up for lower income households. if those strains become more broad based, that will have implications not only for consumer spending, but in general. >> let's talk more about that. i know that is something you are highlighting you are looking at delinquency rates. one thing research found is household debts increased $2 trillion from q4 of 2019, pre-p pre-pandemic what does that say about the direction of the economy and the direction of the consumer? >> that's what we are trying to figure out what is the staying power of the consumer how much strain are households under because they are paying more for food and rent what we are founding is we are seeing deceleration, but still
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positive you know, we are not seeing outright contraction what we see on the labor market side is positive still, you know, very strong job growth you know, restoring incomes although wages are not keeping up with inflation. overall, there's no indication yet that the consumer side of the economy which is what drives growth is about to collapse. you know, beyond september, we don't have a good handle on what the response will be as the fed continues to raise rates at a rapid pace and it wants to soften the labor market. that is something we are really trying to focus on to see what will happen in the coming quarters. >> we heard fed officials come out saying they plan to cut inflation may lead to job losses and dramatic economic slowdowns. what is the base case for the market if the fed stays on this path >> the continued volatility.
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the fed is very clear and if the markets didn't get the message at jackson hole, they got it last week. we saw in the market, that they will raise rates and they will continue to do so at the rapid pace, but keep rates higher for longer that is what is needed they want to make sure they don't get to the point where inflation is low, but stays low. we are moving from the low interest rate environment to the new pre-financial crisis environment where rates will be higher and the fed and other central banks are not backing off. >> rubeela, thank you. coming up, your morning rbi and the bright spot in the choppy markets the names quietly grinding out wi wins and before we head to break,
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new worries around the nord stream pipeline. sweden and denmark looking into leaks with germany reporting a drop from pressure overnight. and eight states filing action against the crypto lending group over the product and its failure to register it as a security. and christie's announcing the department x will sell rare collectibles across music, fashion, art and sports history. "worldwide exchange" is back in a moment
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time now for something random but interesting for that we send it to brian sullivan. >> it is time for the rbi. sunshine in the stock market yes, sunshine. as bad it has been, not every company is sold off. many of the winners are names that are not quiet to you, "worldwide exchange" viewer. we talked about them in the past it has to do with the friday insider buying segment we ran through the data and check this out
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since we began tracking insider buys, we brought 217 different stocks that have shown significant insider buying that past week. we don't just track the stocks w we track how many times each appears on the list. many popped up two or more times. more on that in a second listen to this this quarter, since july 1st, there are 86 stocks of the 217 times we brought that are higher in the market. that's a 39% up rate compare that to 16% of stocks in the dow higher this quarter, it is a percent or two higher than the nasdaq 100 and s&p 500 as well here is where it gets really random but interesting a full 20% of the insider buying stocks we brought are up 10% this quarter that is more than double the percent of double digit gains inside the s&p 500 in the same time some of the biggest jumps this
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quarter? cano health. the software company, be careful here, the s.e.c. has been poking around that company. the stock took a hit on friday and gosamerbio here is an extra piece of information you want to mentally file away. a couple have shown up three times on the weekly list of buyers not many, but here they are. of the 217, aon, cotk, crown, gm and intel and sa rrrepta. this does not mean the stocks are going to go up no guarantees of anything. in this market, any edge, you may be able to find it insiders saw something
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interesting in their buy random but interesting for you >> brian with his morning rbi. let's stick with the markets. the selling over the course of september wiping wealth from americans' finances. robert frank has more with how much has been lost robert, a lot of people looking at the 401(k). >> that's right, frank in addition to 401(k), shareholders losing trillions of wealth from the decline. data from the federal reserve showing the value of holding of funds fell $9.2 trillion as of july 1st the decline brings it close to the $10 trillion mark. the top has lost the most since they own the most stock. top 10% of americans saw wealth drop by $8 trillion this year. the top 1% losing $5 trillion in
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stock. that is a drop of 20%. rising home prices have helped a bit. not enough to offset the stock wealth drop. real estate holding up $3 trillion this year that is less than one-third of the total losses in the stock market the question is when this negative wealth affect from stocks starts to effect the consumer spending of the we wealthy. the total wealth up $9 trillion. frank, that cushion for the top group is very large, but with the market declines, it is shrinking fast >> is there any sign that the market losses have affected the spending of the wealthiest people >> not yet, frank. when you look at the luxury space and travel and collectibles like art, wine, cars
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there hasn't been anynoticeabl slowdown when you look at luxury spending or spending from the top, it tends to shutdown very quickly like a light switch. it is not as gradual as the overall economy. when we see unemployment tick up, that spending to shutoff quickly. >> christie's is getting into the street business. that may be a sign they don't see anybody slowing down spending robert frank on the luxury beat and wealth beat. good to have you on. on deck, stocks looking to mount a turn around following five days of selling kari firestone has the latest coming up. and first with hispanic heritage month, we are focusing on the contributors. here is gina sanchez >> the benefits of being hispanic is it is a naturally
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inclusive culture. you can come from many racial backgrounds and be classed as hispanic the challenge to that is that it can create divisions in the lack of cohesion within the community. the hispanic voice sometimes comes out fractured or doesn't come out as strong in one direction or another as a community and people, we have to think about how we channel our voice and channel it toward so we can have the maxim pact
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welcome back to "worldwide exchange." a busy day ahead for traders economic reports of note is
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august durable goods at 8:30 a.m. and the home price index at 9:00 and home sales and consumer confidence at 10:00. president biden will talk about lowering health care costs and janet yellen will talk about climate investment a number of speeches by the fed reserve chairman jay powell at 7:30 a.m. eastern. the market will watch that closely followed by the san francisco fed president mary daly and st. louis fed president james bullard and then neel kashkari wraps up at 1:00 p.m. to the top stories hurricane ian impact felt in the energy space bp and chevron shut production plat p forms in the gulf of mex.
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occidental petroleum moving facilities in the region airports deal with a wave of protests from workers and cashiers and baristas. they launched a strike yesterday over staffing levels and wages flight attendants at united and southwest are expected to demonstrate in 20 airports in the united states to draw attention to workplace problems in the u.s neither strike is expected to disrupt ail trr travel chicago fed president charles evans speaking with our colleagues in europe evans was pressed if the central bank and needs to carry out another basis point rate hike.
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something caught in my throat. markets looking to bounce back to the september slide. futures right now in the green the dow looks like it could open up150 points higher. let's bring in kari firestone. she is also a cnbc contributor kari, thank you for being here good morning >> frank, hi >> you are watching the moves in the market you are testing the june lows. you need to look at a trading range in the market and look at a new bottom possibly. >> we have been saying for some time that the market was trading in a range the bottom of the range is one we went through yesterday. 3666 the market will bounce today market doesn't care about hard numbers. top of the range is back up over 4,300 where we had been.
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i think the news from the fed and determination means that the market could go a little lower on the other hand, at this point, we are down 24% from the beginning of the year. that discounts a lot of bad news we still think there is a good chance we can have a rally here. we're at 16 times 2023 earnings. 15 times 2024 earnings a lot of stocks have had their own recession and bear market for months and months now. if not over a year that's part of the reason that we are feeling more optimistic where stocks can go at this point. >> kari, we have pce coming out this week. that is the fed preferred inflation gauge. the question is pce will change the fed's mind wilber than expected pc report change the market and make people more bullish? >> oh, definitely.
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we know that if it is worse, the market will not be happy look what happened when we were at 8.3% versus 8.1%. the market lost 10% of the value. anything better to some extent a requirement for the market to hold here. we believe there will be some improvement in the numbers i think people are looking for something better than 6.3% we know oil prices have gone down there is some affect that the housing market is seeing not a lot of houses are moving we will know more about housing this week. we will see something about the price level. if houses don't move at a certain point, the sellers do lower their selling price if they really need to move that house off the market there should be improvement there. there is commodity prices gone
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down there is discounting at retail there should be an effect. the fed has raised rates enough so people are feeling the pain in the housing market on mortgages and on loans for cars and large appliances yes, there should be some effect and the market today would be anticipating that we think >> kari, we have to get to your stock picks. paypal paypal is a stock you want to buy right now? >> exactly paypal is one of the worst performing names if you look at the last year and a half in the s&p. it has fallen tremendously over 70%. that was a huge beneficial during covid now selling 17 times forward earnings there's a lot of cost control. there's an activist investor in the elliott management this is the time to accelerate
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the sales growth they said so in the last call. sales growth going forward in the next year should be at mid teens and this is an attractive stock. it is a value stock although it has been a growth name for the past five years. >> almost out of time. if you want to give us one or would of the picks one that caught my ear is o'reilly >> it has held up well a good stock this year people have not bought as many new cars because they are not available. they fixed up their old cars and o'reilly benefits from that because that's the business they're in they increase market share stores have been busy. this is a name we think people feel comfortable with. >> kari firestone, we have to leave the conversation there we appreciate you being here. >> thank you that does it for us on "worldwide exchange. dow up 200 points in the pre-market
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we toss it to "squawk box" coming up next
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good morning stocks set to bounce at least at this point well off their early morning highs. after yesterday's losses pushed the dow in the bear market territory since the early days of the pandemic. we'll show you what is moving. bank of england struggling with a so-called doom loop we take you live to london for the latest. and hurricane ian is heading toward florida it's tuesday, september 27th,
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2022 and "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc i'm andrew ross sorkin here from washington, d.c. joe kernen is live in teams square becky is off it is just the boys, joe >> it is remote >> a hell of a market. >> how is the audio? you hear me instantly? >> instantaneously >> okay. that's good. it's like we're -- >> it's like we're sitting right next to each other. >> i don't have a jacket guess who sent me a jacket dan amos of affleck. he sent me that. would you feel comfortable if i join you >> every time i'm in d.c. with the back drop behind me -- >>

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