it's 5:00 a.m. at your cnbc headquarters and here is your "five@5. the nasdaq does something for the first time in more than 20 years. this could be a good time for the investors and the next 11 months, but it's not all free and clear as the chairman takes center stage and powell delivers your eighth straight rate hike today. it's not just the fed. things are not looking any better at tech land as snapchat deliver as third straight disappointing earnings report. that's ahead of the open

plus, the worst is not over just yet for intel as it puts things on the chopping block to save a little bit of cash and snap is trying to fool the artificial intelligence it created. it's wednesday, february 1st, 2023 you're watching "worldwide exchange" right here on cnbc ♪ and good morning i'm frank holland in for brian sullivan thanks for waking up with us right now stock futures in the red a bit right now, fractionally lower the dow looks like it could open about 100 points lower, the nasdaq and s&p 500 down a quarter of a third percent the s&p 500 rose more than 6% last month, its best january in four years, but it's even better for the tech and the tech-heavy

nasdaq coming off a 10% monthly gain in its best january since 2001 names like warner brothers, discovery, paramount global, disney and meta, all up this past month and the best since 2002 when the cap bubble burst what a turn aushd from last year coming off its best january since 2013 when it was worth less than 20 buck as coin, big rise since then obviously. ove overseas, stocks doing well. arabile gumede has the wrap. are you guys partying like 1999 there? >> there's a lot of green today, even if it's only above the flat line

we did see earning news coming it of vodafone and gsk, how things should be better and they're hoping the send-off, spin-off should help them as much as possible the outlook in the month of january, europe has certainly posted some positive numbers and really, really good trading pictures here. italy being the biggest gain in the market picture, up since november 2020 is what that figure really, really doesn't tell the german dax at 8.4 or 8.6 has helped them also, the best month since norchlt the ftse 100 may have some leg room headed up from last year it was one of the better performers across global markets as well. now still leading up, even if it's a laggard, but still moving in that positive territory the market figure pointing

toward the positivity. the earnings picture helping quite a lot. what happens with the yields the ecb and barrack of england are going to be very interesting. still top of the agenda. >> big day for central banks thank you. also great to see you. let's get to this morning's top story and silvana henao with the latest. >> shares of snapchat are sinking after the first quarter. the real story, snap is warning its sales may drop by as much as 10% in the first quarter of this year as it continues to navigate new apple privacy policies that have totally upended its advertising models here's snap ceo evan spiegel on the call last night. >> it's not improved, but it's

not gotten worse our direct response business continued to grow in q4. it seems like our partners are manageling their spend very cautiously so they can react quickly to any changes in the environment. >> and, frank, it's not just revenue. snap is frafgt weekly and daily users. even without today let's move, snap shares are down 80% in the past 12 months weakness at snapchat dragging them down. meta is set to report results after the close today, frank so we'll be watching. >> something to really watch starting the year up more than 20%, meta. snapchat, we're seeing the big dive, but still up 10% certainly something to watch we'll see you later in the show. turning our attention to the

nation's capitol and the developing story as president biden gets set to host kevin mccarthy for a one-on-one meeting. brie jackson with more good morning, brie a lot of talk between these two through the media. what's on the agenda >> reporter: good morning, frairng. president biden says you show me your budget, i'll show you mine, while speaker mackay think says he's not interested in political games president biden prepared to meet with house speaker khem today, a clear message in mind in a memo white house officials reveal two critical questions biden will pose. will this group submit to not allowing the house to fall on its financial obligations and

what's the house budget plans? the gop is planning spending cuts to lift the debt limit but has yet to provide details he's coming to the white house to negotiate. >> i think we can find a lot of grounds and savings of the spending of government that can save americans their money and put them in a strong academic nomic position. >> they state they'd vote no on anies by to raise the nation's debts without cuts senator mitch mcconnell said he supported bar gagaining agreemes >> the president is not going to negotiate or allow the full faith and credit of the united states to default.

>> reporter: there are serious consequences such as a recession, stockmarket crash, or putting social security at risk. >> brie, you just laid out some of the issues if this debt ceiling isn't reached. how long can it go on before the country defaults on our bills? >> reporter: treasury secretary janet yellen said the country will use extraordinary measures in order not to default paying the bills. the tools will only last until june 5th they'll have some time but have to act in the coming months. >> thanks, brie. great to see you as always. when we come back,er my northwest gect gives us the economic odds of a downturn next month. and intel looks to save a little bit of cash. >> and later much, much more on

inig's ugly outlook and why thgs mht not look good a very busy day ahead when "worldwide exchange" returns stay with us ll prescription-str? reduces inflammation? thank the gods. don't thank them too soon. kick pain in the aspercreme. ♪♪ i was having relationship issues with my old bank. it was just take, take, take. so i moved to sofi checking and savings. get up to 3.75% interest, and earn up to $250 when you set up direct deposit. sofi. get your money right. (woman 1) i just switched to verizon business unlimited. it's just right for my littlet. business. unlimited premium data. unlimited hotspot data. (woman 2) you know it's from the most reliable 5g network in america?

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talk to our switch squad at your local xfinity store today. market plans for you all tesla plans to put out more. the automaker plans to produce a weekly average of nearly 20,000

units at its shanghai factory in february and march according to a memo seen by reuters a reuters report saying they plan to increase production at their shanghai plant. futures down slightly. nasdaq opening a hundred points lower, it'll still very early. the federal reserve expecting to increase interest rates. it will hit just over 5% in april with just under half of those polled expecting the central bank to start cutting rates by the end of the year for more on the fed ee's decision, let's bring in palu

palumbo's. good to have you both here let's start with the fed rate decision coming up this afternoon. do you share the 25-point basis hike and do you agree no talk of a price of pivot -- do you still believe there might be a pivot phil, you can go first. >> investors believe he's in the end zone that's the problem i have and a major disconnect investors announce quantitative easing in the beginning of the year the problem is the fed and his colleagues continue to tell us the same thing, they they're going to continue to push along until we get what we get there's nothing there yet. until we get there, it's a bear market valley. >> beth ann, do you share that same sentiment

>> i'm expecting a 25-point basis rate hike. i don't think they're finished yet. i think they're going 5.25 and i think the fed market is acting a bit more sangin sanguine. >> while you're talking, we're showing results of the fed survey one thing i want to ask you about, what are the results of it has that sentiment changed we've seen relatively strong consumer spending, and the job market's obviously very tight. we're not seeing the caters of a possible recession right now. >> in our forecast we see a shallow recession. one of the reasons we think it's

going to be ashallow recession is partly the resilience in the u.s. economy partnerships and household businesses have shourd up their holdings in terms of cash and savings, and that's giving them wherewithal to continue to spend. that said, i do think the cumulative rate hikes that the fed is pushing -- the cure is more painful than the disease at this point will eventually push the u.s. into recession. we're already starting to see people say -- search for value, trade down for cheaper things, and with already saw some weakness in retail sales in december we think that will continue into the year. >> phil f we are on the brink of a possible recession, what stocks are we looking at that's a best play right now today? >> it's really getting challenging. if you look at what's getting done, you hook at all the

indicators and the regular playbook we're all used to, who would have thought today we'd be in a recession if not the next quarter or two the problem is when you have a tight labor market consumers have money to spend. it's very difficult to go into a recession. if we have a recession, that's an opportunity it's come in at a great price point. the multiple may be growing more than the s&p that's where the s&p 500 is right now. it's one of the most attractive yields i've seen in a very long time we know it's down because the advertising spend and that may continue in the short term, but as a long-term investor stepping in on google, i like that very much nike on a reopening trade of china, it has a pretty good yeechltd it's fantastic. right now it's trading below

fair market value, 15, 20% i like that as well. >> so i want to ask both of you this beth ann, if you don't mind answering this first, it's aways away as they continue to at least try to battle inflation, what do you think jerome powell can say today that will give the markets some comfort we know there's a decision at 2:00, but after that, what will give people the confidence to put their money back into equities the. >> i think the fed's job is to stabilize prices i would go back to the point about the jobs market. indeed it is very tight. it's providing resilience for the u.s. economy, however, that's causing problems for the fed. if you look at wage gains, they were at 4.6% in december maybe they'll say that

that is double what the historic rate is for average gains year over year, particularly for inflation. i think what the fed's going to say is that, well, we're going to stick with it for the long haul, and i think what they're -- i think chair powell is going to say we plan to get to the exit rate and stay there for some time. seems to be where the interest rate is. >> is there anything that jay powell can say >> listen, powell wants the jobs market to go lower that doesn't help with bringing the goal of inflation down to 2% overall this is healthy to the economy. getting back to a normalization. if we go into a difficult period with the economy, then the fed has room to bring rates down

so, you know, this is welcoming. everything the fed is doing. this is the point, i think, everybody is missing. >> phil palumbo, beth ann bow s bovino, we always preesh yacht you being here. a celestial sighting, 50 years in the making. and their own ai the top trending stories when "worldwide exchange" returns stay with us

welcome back to "worldwide exchange." time now for your big money movers the video game maker announcing they're delaying a new title and killing off the bubble versions of two popular games, which is expected to result in layoffs. next up, western digital, the chip maker as you can see right now, down about 5% they beat revenue esty mats but fell short of earnings that included $100 million in changes related to hard drives the chief executive telling shareholders it's continuing cloud inventory digestion. and lastly match group, the shares sliding after the company revealed an earnings miss. noting the first quarter revenue will be lighter than expected.

they did make correct" challenges and feel they'll be gaining momentum in 2023. we get another check on headlines. check in with frances rivera. >> the nation will mourn with memphis. the funeral for tyre nichols is scheduled for later this morning. his violent death has lead to grief and outrage across the nation he died because of his injuries. reverend al sharpton will be presenting the eulogy and vice president kamala harris will be attending. at least three people were killed in bad weather. 3,000 flights were grounded tuesday and so far 2,000 are already canceled more winter weather is on the way. all eyes reason on the ba as lebron james pulls closer to making history

james moved within 100 opponents of the all-time career record set by kareem abdul-jabbar he he's points away his next chance to inch closer to jamar is tomorrow those are your headlines. as we head to break, watching shares of the one-time buy now pay later giant affirm t stock down 70% in the last year. you can see, down a half aer percent this morning its contract with amazon expired yesterday, inviegd more competition in checkout. the firm will continue to offer services to amazonnt uil at least 2025 we have much more w.e.x. stay with us i'm bill lockwood, current caretaker and owner. when covid hit, we had some challenges like a lot of businesses did.

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gearing up as we kick off a new trading month. the central bank excelling another obvious scaled back rate hike shows features lower. we dive into the results and what they could signal for meta as it prepares its report. and seeking a sloogs to the debt ceiling dilemma president biden speaking with kevin mccarthy it's wednesday, february 1st, and you're watching "worldwide exchange" right here on cnbc ♪

and good morning i'm frank holland in for brian sul vachblt's around 5:30 on the east coast here's how stock futures are shaping up this hour the s&p and nasdaq down a third of a percent lower, this after a record-setting start to 2023 the s&p rising more than 6% last month and vegas its best january in four years and it's better for the tech coming off a 10% monthly gain since 2001 following the tech bubble bursting we're seeing the nasdaq chart here i also want to take a look at the bond market ahead of the fed's policy meeting we're seeing the benchmark ten year about 3.77. that's about 40 basis points at the start of the year.

we want to hit oil it's sitting at 79 buck as barrel brent crude, 85 bucks a barrel latest inflate rates showing a drop for a third straight month but showing a stubborn rate high of 85. let's check in with silvana henao. >> intel has made broad cuts to all midlevel employees as well as expectation stiv pay. the move comes a week after intel issues a lower than expected forecast to rivals and a pc market downturn ceo pat gelsinger will take a

25% pay cut. it makes up a significant part of top executive in overall pay. it's shares popping ahead of the open amd did stress it expect revenue for the current quarter to fall below analysts' estimates, warning of a 10% decline in year-over-year sales. the justice department is looking at deals struck between visa and pay paul. the deal by bloomberg's antitrust division is centered around an agreement the two companies struck two years ago they were able to stop people paying with their checking accounts and the uk formally laying out plans to increase really ligs.

some of the practices that lead to the collapse of ftx the government poseded a brings the businesses in line with more financial firms. >> silvana, thank you very much. turning our attention now to social media stocks and shares of snap. they're plunging on the heels of yesterday's earning, the company beating on earnings but missing on daily revenues due to what the company says is the rapid deceleration of advertising and digital growth the next quarter not looking any more promises with the forecast of $382 million and $384 missing anal analysts'le amount snap sinking other son-in-law stocks in the premarket including meta platforms

joining me now to discuss is the see senior urban analyst and sara coombs. good morning to both of you. >> sara, if you don't mind, let's begin with you of course, we're seeing snap fall double digits after a disappointing earnings, but year to date we've seen a lot of confidence still up, 10%. you look at meta, up 20% to start the year what's giving them so much confident in the global stocks do you see that changing the landscape? >> the reality is that social media has changed and snap has not been able to catch a break a lot of the problems, advertising aside, is they

haven't stayed super relevant. the oiler customers are using instagram. the younger people are using tiktok they're trying a subscription buzz, but that's tiny. i don't see how they're going to finding any love any time soon. >> is there anything that could save snap at this point? because she's bringing up some great points so many offers from tiktok. >> i think snap is going to have to transition its business more effectively as we think about the next part of the social media evolution. they need to improve their tools

for advertisers so on that side of the platform, there's value to be realized cutting costs is a cyclical factor, but it's going to need to articulate its parts and look at experience to see a rebunld in gluchlkt will probably take a little bit of time. >> daniel, you're mentioning innovation le we've seen meta be hit, not this year, but last year when it comes to ai. >> i think we'll see the user numbers remain quite healthy overall. that i could be impacted by system of the cyclical head wynns everyone is facing i think the bigger story in terms of trying to leverage artificial intelligence both in their core social platform to drive better user experiences in areas like short form video and

for advertisers on the other side to drive a better signal so advertisers get better value the bigger story or longer term story around this shift to the metaverse and really with ar and br devices that's going to take time and require a shift in the business model. >> sara, what do you think about the chief investment officer blogging just a bit? do you think they're focused the right areas, or do they need to focus in different areas >> the reality is they barely have legs. people want to see the street, and vas at meta, they want to see what they do well.

they want to see them creating social network products that allow people to connect with their friends and not sort of runningaround, building copy cap features like reels. they tried that with snap and everything they're always copy catting and not focused in the face of an increasingle at the end of the day tharngs's their core business, building a product people want to be on yeah, there's some technical rallies after the losses of last year, u but i just think that earnings are really going to tell the story, are they co focusing on the fact they were once the best in the world >> where do you see

opportunities when it comes to stock and tech >> i see opportunities in the broader internet if you look at google, it's durable. youtube, we'll see improving gract later this year. i like amazon. we think the amazon web services, their cloud platform remains a very attractive asset i'll round it up where we see a lot of growth over the next several years as ai is applied to hello kaf a lot to like in the technology pham tofr in our view. what do you like >> caller: i like paolo al toe cybers also because of layoffs. they can cause a lot of

approach that's the name i'm watching if other is microsoft. we'll see what happens with the activision deal, but i think the coo is make smart moves. it's the same, and that's not easy to say right now. >> thank you so much. still ahead here on w.e.x., coming to the table for a potential solution on the debt ceiling, our kayla tausche joins us for a preview of the table meeting and whether a doctor can or cannot get done. amazon announces soccer. am striked the 10-year deal in streaming games which previously aired on fox. the maker of chat generated

by artificial technology amid concerns the technology will be used by cheaters and others. and don't worry. call it a stellar scene. it will appear right after mind. "worldwide exchange" will exchange in a moment

all right. a live look at new york city right now. we're all here gearing up for a big day on wall street a couple miles south from rockefeller center as you've looking at it right now. we have an economic outlook. we have manufacturing data and the latest j.o.l.t.s. report the committee meeting begins in a few minutes and we're keeping an eye on the fed with its first policy decision of 2023 at 2:00 p.m. eastern. on deck, keeping the markets strong to start the year creditic swees's patrick paltry joining us to talk about keeping the momentum going this year follow our podcast check us out on apple, spotify, and other apps

w.e.x. will be right back. stay with us

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all right. welcome back time now for your w.e.x. wrap-up. six stories you may have missed before we close in on the 6:00 hour more than 1 million people are protesting as macron wants pension reform calling it critical. cathie wood's arc etf posts the best month since 2014 after plunging 67% in 2022 wood will be on "squawk box" at 7:30 in a first cnbc interview. tesla plans to boost output at its shanghai facility and shares of electronic arts drops on disappointing forecast. killing off mobile verngss of two popular games. chip maker western digital

falling after the company beat on revenue but fell short on earnings it tempered expectations for the current quarter. and bitcoin posting the best since 2013, gaining 40%. i guess the crypto winner may be over. looking at action coming out of the white house where president trump will welcome kevin mccarthy later today our kayla tausche joins us now from washington to tell us what we can expect out of today's pretty big meeting. >> president biden and house speaker kevin mccarthy will host their first of what will be many meetings over the debt creeling, which will be oh facially breached of the summer president biden will be seeking two assurances from mccarthy,

one that m mccarthy's party won flirt with default what mccarthy wants is a commitment from president biden to negotiate and hiscommitment in march will be a guide president biden led negotiations for six-plus months during the debt ceiling crisis. then he was able too secure an immediate $400 billion borrowing increase followed by a dollar for dollar-increase in exchange for more than $900 billion in cost cuts. eric cantor said the talks then were production tissue saying the solution produced over 1.6 million dollars in savings later they ended up paying for

some of it ultimately the talks fell apart, forcing a debt downgrarkd a drop in consumer confidence and a spike in interest rates leaves son obama-era supporters to say that wasn't worth it. >> you mentioned back in 2011 he broke negotiations then. is there anything different then and the meetings that are going to follow in. >> frank, for starters, the debt was over $14 trillion. now it's twice than that two thing in particular are influencing the stance one is the slim majority in the house and the half times that the republicans have raised the ceiling in recent years. taking the issue to the bring has also had a cost. the 20 1 you up grade has cost the u.s. an additional $19 billion in interest. so trying to avoid that this time ago. >> we also got breaking news crossing us a short time ago

that the biden administration is taking steps to limit fees you do have any idea what they're targeting? >> this time around, they're targeting late fees on credit card payments. previously they had tackled over draft fees and trying to cut down on what they said were junk fees banks were too frequently issues these overdraft fees they sacred it card companies are taking sim already action. if a consumer or bow o'er is hours late in paying their bills, they could get hit with a $450 late fee. they want a rule to cap it at $8 a significant discount you can imagine the financial companies don't like this.

frank? >> i would imagine. wall street hit the trifecta the santa claus rally and the january barometer, all of them logging gains. the s&p 500 gained 4.8% which includes the last trading days in december and first two trading days in january. the index up, which can signal continued bullishness for the rest of the year the january barometer or as goes january goes the year means if the s&p rises for the month, it may predict a positive for pfor the next 11 months the fed's still on inflation watch. let's brick in patrick palfrey patrick, thanks for being here.

>> thanks for having me. >> we laid out the historic precedence, the barometer. of course, these things were established in the pandemic. in the post pandemic world does this mean we're on a strong track for 2023 >> i think 2023 and for that matter october through the end of 2022 were an incredibly strong period for stocks what that reflects is the expectation that inflation is going to continue to fall and the fed is going to pivot. the flavor of the rally has shifted. what i'm looking at is companies that were the most sold off going through the start of the year have had the strongest reb rebounds that profile is one of a speck la tish move forward in the market and one we typically see p in '09, '02, '01

i think longer term it's more problematic for this to continue given a lot of the headwind mentioned before and instill ig inflags on the rise. this comes off of a really strong january what's changing sentiment all of a sudden what a difference a day makes? is it simply in anticipation of the fed meeting later today? >> i think it's a refresher from the fed. what the fed is going to remind us is they're going to stay engaged. it's interesting we've had a mantra, don't fight the fed. the fed wants to fight inflangs. it's going from 12% this time last year tole 3%. that said the wage inflation

remains problematic and the labor market remains really tight. i think the fed is going to account they're going to remain engaged until they see something much lower than what we have here the market is not ready for that after the month we've seen in january. >> so you're saying the market's not ready. we've seen a strong january but a lot of after hengs intention and pause even though the fed hasn't given any signals what do you think is going to be the response is that already priced in? >> yeah. so when you look at what the market's expecting they're expecting 25 basis points they're expecting another 25-basis-point hike. i expect that's priced into the move itself. i don't think it's going to be all that surprising. i think they remain data dependent, so they'regoing to slow as inflation slows. what i think is going to happen, we're going toreach a point

later in the year probably closer to the end where inflation remains sticky so right now inflation is falling. goods inflation is falling the price of oil, everything that we purchased at the grocery store or other items but surface inflation remains sticky part of that is driven by labor. that remains problematic as we get to the back half of the year, probably perhaps into october, we're going to see a dilemma that the fed is going to face can they or have they solved wang inflation if not it's going to be problematic for stocks. >> all right patrick. you know i like to keep score. what's your price target and how much has it changed in the last 40, 50 months? >> we think the rally we have right now is going to increase the volatility is falling.

an environmental is really favorable and the market has responded favorably to it. i think the concern that the fed may need to re-engage in the latter part of the year or the fact that i think a lot of people are calling for a soft landing. i think they're going to be the headwind for the market and as a result, we think we're lower. >> patrick, i want to run something by you we got a tweet from jeff gundlach he said, i suspect fed messaging tomorrow will push back against the pivot narrative and thereby current bond market pricing should be interesting. i have to correct myself it came in late last night i'll read it one more time right now. what's your opinion on jeffrey gundlach's take?

>> i think i largely agree with jeffrey gundlach any ground that they give in that conversation could just first fuel inflation it's a very delicate balancing act because it's something that gets in the ether, in the water. they need to walk the line until the moment they stop and they even indicated they're not stopping like i said, when ever we're going to see a problem for the fed town the road. >> before we let you go, i want to take one last look at stock futures right now. they're in the red the dow could up 100 points. that's going to do it for us now on "worldwide exchange."

"squawk box" coming up thanks for watching. what if you were a global energy company? with operations in scotland, technologists in india, and customers all on different systems. you need to pull it together. so you call in ibm and red hat to create an open hybrid cloud platform. now data is available anywhere, securely. and your digital transformation is helping find new ways to unlock energy around the world.

good morning and welcome to fed day. we're going to get you the fed's interest rate decision and what it means for your money. and snap shares are plunging as digital ad revenues continue. we're going to take a close lyric at the quarter straight ah ahead. and the white house blasting exxon profits. we're going to dig into the big oil backlash that's next. it's wednesday, february 1st, 2023, and "squawk box" begins right now. ♪

good morning and welcome to bks right here on cnbc i'm andrew ross sorkin along with kelly evans and mike santoli. joe and becky are off. it's nice to see everybody i haven't seen you in a very, long time. >> it is early. >> it's early. 6:01 in the morning. we've got a lot to do. about 3 1/2 hours before the market opens let's see where the futures stand as we await. what is the fed going to do? that is really the question. the dow looks like we opened about 147 points nasdaq off about 41 points s&p 500 off by 17 points the s&p 500 rose by 6 opinion 2% and the nasdaq rose by 10.7% but meantime take a look at treasury