it is 5:00 a.m. at cnbc global headquarters. here is your top "five@5." a roller coaster week for wall street as they are pulled with earnings and comments from central bank officials bankrupt ftx is looking to distance itself from the former ceo as sam bankman-fried tries to tell his side of the story in a tweet. and london putting

truss-o-nomics behind it. and wrapping up a wild week for retail after target's fourth quarter shocker yesterday and look ahead to macy's and gap today. and details as elon musk is exploring the idea of leadership changes at tesla and twitter it's thursday, november 17th, 2022 you are watching "worldwide exchange" here on cnbc good morning i'm dominic chu in for brian sullivan let's kickoff the hour with the equities mostly lower for wall street yesterday. we also saw the nasdaq fall 1.5% in yesterday's session right now, the dow implied lower by 56 points s&p lower 5 points flat for the nasdaq. checking the bond market

still in focus with the inflation data in the last few days right now, yields are ticking higher the 10-year treasury at 3.72%. 2-year treasury at 4.365%. in energy, oil prices are continuing a nearer term trend for the down side. wti is $85.16. off .50% .25% declines for brent crude futures which are $92.64 in cryptocurrency, bitcoin is feeling the pressure we have seen it for the last couple weeks now in the wake of the ftx bankruptcy bitcoin prices are lower at $16,504. ethereum prices down 1.5% at $1,191 around the world is red arrows in asia

you can see the nikkei and japan off .30% shanghai down .20% the down side pressure in the hang seng in hong kong down over 1% now the trading day ahead in europe is getting going so far today. the cac in france is off .50%. the ftse 100 in the uk d down .50%. the germany dax with gains up .25%. mostly red as you can see on the map of europe. let's get to the top corporate stories with silvana henao. >> dom, good morning amazon is offering buyouts to some employees as it looks for new ways to trim its head count and cut costs. according to documents viewed by cnbc, the voluntary offers included a lump sum payment to equal to three months of pay plus one week of salary for every six months of time at the company. the notices were sent out over

the past two days to divisions including human resources and employee services and follow the already massive 10,000 layoff plan. and netease sinking in trading overnight after the deal with activision blizzard to deliver world of war craft the deal could not be reached and netease is the largest company in china behind tencent. change could be happening at tesla and twitter. according to testimony from tesla board member, ceo musk in the last few months identified someone as a potential successor, but falling short of naming who this as musk said he will reduce time at twitter and find a new ceo to run the company, but not

right now. more fallout over taylor swift's ticket fiasco. activists and lawmakers are renewing calls to split ticketmaster and live nation some calling for the justice department to get involved live nation shares are down 40% this year. >> henao silvana henao with the headlines. thank you. the uk government looking to put liz truss and her failed fiscal policies in the rear-view mirror today we have arabile gumede with more arabile, this will replace the mini budget we saw from truss. how optimistic are britons over what this will lead to >> reporter: they certainly aren't as optimistic from some of the words we heard.

i got to speak to a treasury spokesperson not long ago, dom dominic. the budget today will prove how britons are paying for the past mistakes from the previous government it is essential for the growth of the uk economy. we are seeing cpi at 11.1% you saw growth go down which was negative 0.2% for the third quarter. that means we could see recession in the uk. the bank of england governor andrew bailey said we could have the longest recession on record. if that is the case, then jeremy hunt's statement will have to ease markets which may be the first call and then look how exactly you can stabilize the debt hole the government sits with the treasury spokesperson i spoke to said the fiscal hole

sits at 55 billion pounds. that is a massive hole to try to fill which will be done through spending cuts and tax hikes for 22 billion pounds. that means austere budget we will expect to hear from jeremy hunt who has been on the job for a month. we know what happened last time. >> arabile, you used the word austerity and trying to get your fiscal house in order. it is meant to bring confidence back to the government and finances and economy of the particular country in this case, the uk is there an idea that this new plan could bring back investor confidence to the uk >> reporter: that will be the first port of call by the sounds of it. the first thing that jeremy hunt will need to do, the finance

minister, will ease markets. there was turbulence felt in the september 23rd statement by the previous minister which roiled markets and they had to shore up the bond markets to make sure pensions were not hurt dramatically he said the governor of the bank of england, andrew bailey, said moments away from collapse from pension funds in the uk. clearly needing to step in the first call for rishi sunak and jeremy hunt is to ensure the market is a sense of calm and things will not escalate any further. that sense of calm means they forego growth. particularly in the long term because they focus to ensure they are looking fiscally responsible and able to cover up the debt pile and then on the other hand, look to how they can help uk citizens there is an energy issue which is still at play and they have to cover that up because the

fiscal plan for covering the debt pile on energy ends next year in april. what happens after that? you are correct, dom >> arabile gumede live in the united kingdom with the fiscal state of play. back here at home in the united states, changes coming to dc and the future of the biden economic agenda. nbc news projecting republicans will take control of the house brie jackson has more with what will happen with the new house and what it could mean for the biden administration >> reporter: winning the house is a powerful check on president biden with the white house likely to face a flurry of investigations >> republicans have secured a majority >> reporter: republicans cementing a takeover of the house of representatives. >> it is official. one party democrat rule in

washington is finished we have fired nancy pelosi >> reporter: kevin mccarthy is expected to replace speaker nancy pelosi he still has to win over skeptics within his own party. >> buckle up because kevin mccarthy or whoever else will have a very difficult time wrangling this group >> reporter: there are divisions within the gop after the predicted midterm red wave fi fizzled. >> some senators point the finger at trump. i think that is convenient for republicans to place the blame somewhere else >> we need to talk not about somebody in particular we need to talk about the american people in general >> reporter: mitch mcconnell is focused on narrowing the gap democrats with control ahead of the december runoff in georgia.

>> we will do all we can to get herschel walker elected. >> reporter: house republicans, each with the slim majority will have a powerful check on president biden and threatening congressional investigations ranging from his administration handling of covid to immigrants at the border. president biden congratulated the top house republican kevin mccarthy saying he is ready to work across the aisle to help working families dom. >> brie, with the republican takeover of the house of representatives, maybe some folks are wondering what nancy pelosi has to say about all of this she is not, in essence, fired as house speaker, because she no longer controls majority of the house. she is still a representative in congress what exactly is nancy pelosi's reaction to what just happened in the house >> reporter: you are absolutely

right. it is a shift in leadership position nancy pelosi is still a representative in the house. pelosi says she plans to address her political future later today. according to a tweet from her spokesperson she also said that democrats are going to help president biden with his agenda and move it forward although they no longer control the house. many will squestion will she sty or go? we hope to find out more >> brie jackson in washington, d.c. thank you very much. becomeack to the markets suggesting the central bank will slow the pace of rate hikes beginning in december. this is fed governor christopher waller he is open to raising rates by .50, but stresses inflation remains painfully high

>> the data of the past few weeks made me more comfortable considering stepping down to a 50 basis point hike. i won't make a judgment about that until i see more data including the next pce inflation report and the next jobs report. >> so let's talk more about this now with matt orton. chief strategist at raymond james. matt, you heard the comments from waller. they are hawkish, but not as hawkish as 75 that we have seen. what exactly do you make of this is this a softening of language or still focused on that so-called terminal rate or are where they end up? >> good morning, dom great to see you there was not a tremendous amount of good news there. we knew that 50 basis points was likely going to be what we saw

75 was essentially off the table. we didn't learn a tremendous amount there if anything, it is a reminder that the market has been pre-occupied on this pivot or slowdown in rate hikes we lost sight of the fact that the terminal rate is still 5% or 5.5% that is going to be challenging for some of the higher duration parts of the market. that rally hard off the bottom when i have been talking to clients, the main message is don't chase the market higher. let the market come to you there are sectors that continue to look attractive that we have been leaning into this year which is health care and energy and overall maintaining what i like to call a core defensive buy. leaning into higher quality. higher cash flow roe. stability and earnings growth. those are the types of companies you want to own going forward. i don't think the playbook has changed and had fed speak

reemphasizes that. >> matt, i don't know if you can see it what we are showing viewers right now is a series of charts for the dow, s&p and nas ddaq. if you look at the dow chart, we are not far away from the highs from the past year it is a different story when it comes to the s&p and certainly the nasdaq composite you mention this idea that you can let the market come to you, but which chart are you supposed to look at right now, you could get a sense of fomo. fear of missing out if you look at the dow chart nasdaq and s&p says i didn't miss out thinks like bearish. >> dom, this is how the indices are constructed. nasdaq, it is too early to move into technology. this is an opportunity that looks a tttractive and krcurren

valuations the dow reemphasizes the higher quality companies that are out performing you have more healthcare you have aerospace working well. when you look at the totality of the charts, the take away to me is stock market itself indices telling one story, the market of stocks, the fact there is increased threat across the stock market and what is working, that is more positive longer term. i think you can take away optimism from that the main message is the indices overall will remain challenged and that's why you don't want to chase the market higher. the volatility we have seen in the past weeks is a reminder there is no need to do that. the market will give you the opportunity if you are looking to replace cash. >> matt orton with raymond james. see you soon. when we come back on the show, reversal as more rail unions push back on the biden brokered deal to avoid a strike

that could bring the u.s. economy to a strcreeching halt. psychotic behavior and manipulation those are choice words from binance ceo changpeng zhao over ftx and sam bankman-fried. his latest on the collapse after this commercial break. - [narrator] if your business kept on employees through the pandemic, getrefunds.com can qualify you for a payroll tax refund of up to $26,000 per employee,

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exchange." market flash for you this morning on the company you don't know a lot about it is called dlocal. the chart is a massive fall. it is a payment processing company based in uraguay red flags he found in the most recent accounts in 2020. dlocal responding saying in part, the money waters report contains inaccurate statements, groundless claims and speculation. now carson block unveiled the short idea at the conference in london yesterday on the heels of those comments and the stock fell 10% to 15%. in the aftermath of the cnbc interview yesterday, the stock continued to fall. we'll keep an eye on the dlocal

shares. the clock is ticking on the possible nationwide rail strike to bring the u.s. economy and the supply chain to a halt in time for the keyhole day shopping season. now customers are eyeing two key dates in the days ahead. lori ann larocco has more on the rails and what could happen. >> reporter: good morning, dom the first day is november 21st that is the unions announce vote on the tentative deal. if one of the two unions votes not to ratify, they could start striking december 9th following a mandatory cooling off period right now, if the two groups vote to ratify the deal, we are looking at a strike. why? because there are three unions that have already voted not to ratify the deal. as of december 5th, the dmwed. the brotherhood unions are set

to strike. the boilermakers union has voted not to ratify the deal and not given a start date to strike based on the timeline, railroads start to strike around november 28th the day the senate is back from thanksgiving now here is where it gets tricky if next week, the larger unios vote not to ratify, one will postpone the strike to december 9th. as of right now, the brs is not changing its timeline. it could still start the strike on december 5th. if the brs does decide to align with the larger union and the b pbmwed, that means they don't have to strike until december 1st. when you are slowing down rail trade, one day matters to

shippers ups is the largest rail customer and they tell me they encourage immediate resolution and they are flexing their logistics network to plan to move rail bound containers by other modes of transport dom. >> lori ann, what feedback are you hearing from rail customers? you mentioned u.p.s. as a big user of the system what else are you hearing? >> reporter: a lot, dom. american chemistry council which remembers 3m and dow and eli lilly. it could impact $2.8 billion of chemicals that move each week. and a strike would impact not only the holiday goods, but impact spring merchandise that retailers have already started to bring in. >> all right lori ann larocco, thank you.

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investors looking to put target's terrible day behind them with the new batch of results set to hit the tape in an hour. we will breakdown what's at stake. i think only a psychopath can write that tweet >> strong words from the ceo of binance as he looks to distance himself from ftx and sam

bankman-fried. and bracing for a flurry of fed speak as they look for any signs of easing from the central bank it is thursday, november 17th, 2022 and you are watching "worldwide exchange" here on cnbc welcome back to the show i'm dominic chu in for brian sullivan it is 5:31 here on the east coast. here is how stock futures are looking. dow down implied 35 points s&p down 2 points. nasdaq higher by 7 mixed picture. if you take a look at overall what is going on, the markets are still trying to recover from the losses yesterday to a developing story and the latest around the collapse of ftx. the bankrupt crypto exchange is trying to distance itself from sam bankman-fried. he has no affiliation with the

firm this after sam bankman-fried tries to explain his side of the story with one tweet at a time he and ftx became overconfident and careless his words in a tweet dan murphy joins us with the new comments from another major player in the space who is also making waves in recent days. dan, this is a big name. >> reporter: indeed, dom the binance ceo. he has likened this to a madoff moment for the crypto space. he did not mix his words in abu dhabi today. he said the only way to correct this is for regulators to understand what happened behind closed doors at ftx. he took a swipe at the fallen rival sam bankman-fried calling him a psychopath he wished he had known earlier about the state of ftx

>> he tweets about a sparring partner and when his house is burning -- when reall of this is happening, he is losing focus. i didn't know this problem existed in ftx otherwise we would have sold tokens earlier >> reporter: and investors are questioning now if they can trust any of the major players left as for what's next for sam bankman-fried? cz said this should be handled by the authorities >> i do know there have been lies to his employees and to his investors and regulators and to his users and there has been misappropriation of user funds i think all of those things happened in my definition, that's fraud

ho that is up to the law enforcement agencies >> reporter: and binance is trying to withstand a bank run cz says he has enough in reserve to survive a potential liquidity crisis he released a statement in the past few minutes saying he is committed to the binance clients. this comes from the critic this week who was speaking to me on stage this week. he said binance is a walking time bomb. that's an allegation that cz strongly denied on stage, dom. >> dan, you can't help but understand why folks are skeptical about the entire industry given what happened with ftx i wonder from cz's standpoint in

the past about regulation needing to legitimize cryptocurrency how much is this a case of a national or a global framework for cryptocurrency >> reporter: he would certainly be a proponent of it when i asked about the future prospects for regulation in the space. he said he would like to see trading houses and some of the businesses being overseen. for investors, it comes back to the ultimate question of when you look at the trading houses, are liabilities covered by assets in storage? do they have reserves? where are they located and who has the actual capacity to regulate something that so few people actually understand many, many questions remain to be answered unfolding from the collapse of ftx, dom you get the sense the story has further to run

>> dan muryurphy with the latesn changpeng zhao we will hear more from cz later on when he joins "squawk box" at the 7:00 a.m. hour maybe he will tell us more about the psychopath comments he made in the milken institute stage remarks. to retail now and a wild week for the sector. walmart and home depot topping estimates and raising fourth quarter guidance target bucked the trend warning of the soft holiday quarter as the core customers pull back on spending the stock taking a 10% tumble this week alone. this is coming as investors await results from macy's and gap and kohl's to name a few as you see on the calendar. joining me now is katie thomas

from the kearney consumer institute. thank you for joining us, katie. i wonder if the state of play for the consumer is one where they are truly weak or is this one where retailers are working through their own execution issues in that the consumer is only the bigger part of the macro story? >> i think you are spot on, dominic. some of the inventory challenges retailers face and there is nothing the consumer can do about that it is not their problem to due when the behavior changed. we see from the consumer side is they are focused on good value and competitive prices we talked to consumers about the impact of inflation and they are feeling it in food groceries and day-to-day of gas. that is where you see benefits of walmart because over 50% of their revenue comes from the grocery sector

other discretionary spend in the third quarter took a hit holiday season may look differently. >> katie, can you take us through in your expert opinion what the difference is between target and walmart we heard people try to explain it this is very much a company specific issue with regard to target and then one with walmart as well. >> yeah. you know, that's where walmart ben pefitted from bringing folk in the door. we heard it where they were bringing in higher income consumers. you see it in discount stores as well dollar stores. high end consumers are cross shopping and making sure on the day-to-day essentials and getting the best price they can so they can evaluate where to spend elsewhere. you think of a store that is more of a treasure hunt and i go in for a few items and spend way

more, that is more concerning from the consumer point of view as they are trying to weigh their options and where they can get the best bang for their buck truly. >> as we approach thanksgiving next week, we can't help but think of black friday and cyber monday as a consumer, katie, this is anecdotal with my experience many of the places that i would tend to shop have already put out black friday promotions about two to three weeks ago i got to tell you, i'll confess, probably 80% of my christmas shopping is now done for the season and it's not even black friday how will that skew the numbers if at all this time around given the fact that supply chain issues have made con ssumers li me take what they can get. >> there is a longer holiday season happening that is why you saw the lift in the october retail numbers you saw retailers start the

sales in october now the interesting part is consumers said they were largely shopping for themselves. at least in october. they weren't necessarily into holiday sales yet. i agree with you pretty much all black friday sales are on now we iwill see a bit of a pull forward. the holidays is an interesting time consumers do tend to want to spend in the holidays. estimates are still strong there is concern and inflation in the back of their minds, they tend to want to lean into gifts and home decor >> katie, before we let you go, let's put news you can use out there. we typically see more discounting happening as we get closer to the middle of december and beyond can we expect that same thing this time around given inconinventor status across the industry >> absolutely. heavier discounting this year. last year, the supply chain issues we faced actually allowed

retailers to not discount as much as they had in years past now we're seeing the reverse some way, like we talked about at first, it is some things that consumers are not necessarily looking for. it depends on how particular people are going to be about the products they want of we do anticipate the discounts to persist through december and allow consumers options for great deals. >> a possible promotional environment. katie thomas, thank you very m much. coming up, the morning's rbi and ongoing fraud that could make ftx and enron look like small potatoes. as we head to break, some of the big money movers bath & body works soaring. 23% upside pre-market after better than expected third quarter results and hiked profit guidance for the year. that company says it remains disciplined in cost and inventory management speaking of heading into the

holidays and nvidia offset a 50% decline in the sales of the video game business. a flood of products are unloaded by people who use them in crypto mining activities which may dent demand for the products. it is projecting $6 million. nvidia shares up 2% in pre-market. and sonos is posting a fourth quarter loss, but revenues beat forecast trends in the business have recently stabilized and it is encouraging heading into the quarter and holiday shopping period shares up 2.5% pre-market. "worlddexcng ibaafwi ehae"s ck ter this ot this. we got this. we got this. we got this. life is for living. we got this. let's partner for all of it. edward jones

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♪ finally? this is financial security. and lincoln financial solutions will help you get there. as you plan, protect and retire. ♪ welcome back now time for the sectornomics feature. health care is the second sector behind technology in the s&p it has out performed the broader index with specific names that have done well two of the top performers are cardinal health and hessen elsewhere in the industry, vertex is among the big leaders in the sector. all three of those names, by the way, are less than 10% from

highs they notched earlier this month. real momentum there as well. it is not all smooth sailing align technology is on pace for the worst year on record amid of sharp decline in sales the two companies in delivery and page ack packages in the inr the worst performing. time for random but interesting. for that we go to brian sullivan >> the morning rbi is back today is on a sece serious topic this is with fraud it has to do with your tax dollars. the new york state comptroller's office of improper payments the state made in the last two

years. the numbers are staggering this report finds during the pandemic, the state of new york may have paid out $2 billion of improper or fraudulent payments. in 2020, fraud payments surged 530% as bad as it is, you can understand the lockdowns and chaos, but it did not get better last year or this year bad payments rose 330% again in 2021 coming into early this year add it up, it is over $2 billion sent out erroneously or people committing fraud on the state and taxpayers. no one seems to know how it happened in the report, they note that state officials had no ability to actually explain how it all happened listen to this directly from the report they note that state labor department officials seemed

unfamiliar with certain areas of audit such as basic security controls and were not able to produce records and documentation. something that should have been retrieva retrievable. they failed to provide it. stunning remember, just one state new york how bad is it nationally if you add all of the states? here is the bottom line. hundreds of billions of ppp loan fraud or payments, combined total fraud over the past two years from states and washington, d.c. could easily be a few hundred billion or a half a trillion dollars your tax dollars this is your money it is likely to increase taxes for the cost of unemployment insurance on everyone and every business all in, it makes ftx or enron look like small potatoes

random but sad >> staggering numbers. brian sullivan, thank you. still on deck for the show bracing for a flurry of fed speak. we sift through the noise with victoria fer mafernandez. if you miss our show, check us out on apple or spotify or your podcast app of choice we'll be right back. >> announcer: sectornomics is sponsored by spdr.

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you have caterpillar and microsoft is down as well as apple down pre-market. merck is down. coca-cola is up .30% let's get a check of the day ahead. weekly jobless claims are out at 8:30 a.m. as are october housing starts and the philly fed survey alibaba reports along with macy's and bj's and kohl's and c gap out after the close. a half dozen fed officials speak today. atlanta fed president bostic and then bullard and then loretta mess after and neel kashkari and then phil jefferson this morning. then chairman jay powell gives a toast to charles evans who is

retiring next year a lot of fed speak let's talk about the markets and what it all means with the markets coming off the second negative session in the past three. let's bring in victoria fernandez. victoria, i reeled off fed speakers and earnings reports. what is the most important thing in the market for you right now? >> i think you could have a busy day, dom, if you do nothing but listen to fed speak. you will hear the same story over and over. the fed is telling you that, yes, cpi was a positive number for them it is telling you inflation has probably peaked. you look at longer term inflation expectation which are well anchored. you look at import prices that are declining and supply chains are doing better all of these things tell us inflation has peaked on the whole. i think there are elements

within the reports that will continue to be higher, especially when you look at food services i think what we will hear from the fed is that, yes, things are looking better we are nowhere near where we want to be nowhere near the 2% fed target they will continue to do the story we are continuing to hike rates. 50 basis points in december. they are not done hiking you combine that with the earnings reports that we're getting that say for the most part, the consumer is still strong, but we expect earnings to come down the next couple quarters you have to weigh the hard data against what you hear from the fed and for us, that means you have continued volatility in the market >> continued volatility also implies that maybe we haven't hit bottom yet and there is still an economic story that has to play out before markets can hit that bottom. you mentioned the peaking idea of inflation let's assume that's the case

nobody knows for sure yet. what does that say about recessionary prospects in the coming year? >> i hate to be the party pooper here i think we will see recession around middle of next year i expect it to be short and shallow. like i mentioned, the fed is not done the terminal rate is still important. if that terminal rate is still around 5%, we have a way to go here the lag effect usually start nine months after the first rate hike they just now starting to work through the economy. i think we'll probably see that continue to drag into next year and continue to see one more rate hike next year and possibly two with 25 basis point level which means a small recession. the consumer is keeping that a

shallow recession. >> victoria, consumer and tech are under performers right now there are opportunities there? are you sticking with the cyclical industrial value oriented sector? >> dom, we had been more defensive so far this year we were adding cyclicality, but trimming names we like trimming mastercard and valero. we added waste management in there as well. i think you want to have cyclical exposure. the market will be volatile and you want to participate in the bear market rallies going on you still need to have the defensive posture. i think most importantly take a step back and look at what allocations make sense global equity with dividends covered call strategy. neutral strategies with long and short positions. these are the areas you need to

look at in order to take advantage of the volatile market >> victoria fernandez, thank you. that does it for us here on "worldwide exchange. futures lower. dow implied lower by 130 points. "squawk box" picks up coverage we'll see you tomorrow ♪♪ ♪♪ be ready for any market with a liquid etf. get in and out with dia. these days, our households depend on the internet more and more. families grow, houses get smarter, and our demands on the internet increase. that's why we just boosted speeds for over 20 million xfinity customers, on us.

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good morning nbc news projects republicans secure the house and kevin mccarthy becoming one step closer to speaker. earnings alert we hear from macy's and kohl's a day after the target sparked a 13% selloff in shares. more fallout from the

collapse of ftx. we have a live interview with the ceo of binance two initials cz it's thursday, november 17th, 2022 and "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc we're live from the nasdaq market site in times square. i'm rebecca quick along with joe kernen and andrew ross sorkin. we see things turning around dow futures off 163 points nasdaq off by 62 s&p down 21 points this comes after the down day yesterday. retail sales numbers yesterday were better than had been expected from the government that has some people questioning whether the fed will be able to pivot or