it is 5:00 a.m. here at cnbc global headquarters. here is the "five@5. impressive gains in tech, but the future is painting a different picture this morning. the reason the trifecta of troubles from amazon, pinterest and snap is sending shares lower ahead of the open. call it the end of the era the bank of japan policy decision overnight which could mean the end of ultra low rates and an accommodation. and the esg wave grows as

kansas adds its name to the list of banning public funds. we speak to the state treasurer. and the shift sentiment to avoid a government takeover. it is friday, april 28th, 2023 you are watching "worldwide exchange" here on cnbc good morning happy friday welcome to "worldwide exchange." i i'm frank holland. let's kickoff with breaking news with joumanna bercetche live in the london newsroom with more. >> that's right, frank breaking news coming from the eurozone here. the prelim nation flash q1 estimate is 0.1% quarter on dw quarter. we are looking at 1.3% annual

growth rate against the consensus number of 1.4. to give you more detail, the breakdown here with the numbers come out from all of the countries. italy and spain came in higher than expected. france at 2 points quarter on quarter, but germany is the one to watch that country clame in flat. we are going to get more details with the coming weeks of where the weakness is coming from. it tells you relative to expectations, eurozone gdp has disappointed in terms of reaction, you see the euro cross here. we are seeing a bit of reaction there to the downside. one with of the forecus is the i numbers coming out on may 2nd. because the hint of cpi to

disappoint to the downside, the yields have been rallying. germany bund down 9 points italian is down as well. a lot of data coming through this morning putting it together with the eurozone gdp in stagnation territory. >> we will continue to watch and look at the impact with the european markets joumanna bercetche in the london newsroom joumanna, thank you. turning attention back home to kickoff the trading day with the futures. the dow and sap posted the best day since early january. as you see, the futures right now are in the red dow looks like it would open more than 150 points lower we are seeing the s&p and nasdaq down .25%. all that investor enthusiasm boosted by meta. shares to a new 52-week high this morning we are seeing that impact when it comes from the futures on this name here

down .50% this morning a big jump after earnings report yesterday. up double digits yesterday we are checking the bond market. we continue to watch that market as we come closer and closer to the fed rate decision. 10-year treasury at 3.45 we are seeing the yield on the 2-year treasury back above 4%. a lot of investors going to the bond market for safety worried about the rising rates we are watching oil. wti is still below $80 a barrel. $74 a barrel brent crude at 7$77.70 natural gas is down 1.5% we are watching crypto we have seen movement in cryptocurrency bitcoin below the $30,000. the board is about to change ethereum also moving okay maybe not. we will move past it we are having technical difficulties

back to the top story. turning the tide after the quarterly reports. amazon and snapchat and pinterest ahead of the open. snap down 19%. pinterest down 14% amazon down 1% arjun is joining us with more from london. what are you seeing here >> what a week, frank. let's kickoff with amazon. they beat on revenue they beat on earnings. aws showed growth of 16% resilient in the difficult market on the macro side and cloud computing. ad business with strong growth with the macro concerns. issue is with the guidance that is why the company is guiding $127 billion to $130 billion in q2. the cfo is warning that companies are cutting spending on cloud business.

that could be bad news growth rate is lower than q1 moving on to snap. it was bad news all around for the company. it missed on user growth and revenue growth and missed on average revenue per user the second quarter internal guidance was revenue of $1.04 billion which was below what the market expected. secondly, pinterest was good, because it beat revenue. that guidance brought the share lower. below market expect tations for the second quarter the ad market is tough right now with biscuusiness cutting back d spend. amazon and meta remained resilient and gained growth in the tough macro environment. smaller players, snap and pinterest, are struggling and it

doesn't look like they are bullish on the current quarter frank. >> arjun, we heard from so many names this week. give us the scorecard with tech. >> let's start with the top perf performers microsoft and meta microsoft showing the cloud business strong, but slowing it is showing resilience meta showed core advertising business back on track even as the mixed reality metaverse division is piling up losses it is happy that the core ads on facebook and instagram is continuing to come back. what i put in the middle is alphabet it showed resilience in ads, but guidance said there could be some uncertainty going forward that is middle of the pack perhaps joining alphabet lower was amazon as i mentioned, it showed it continued to grow in cloud, but

that outlook was uncertain companies are cutting back on cloud spend. that could impact. on the bottom of the pile, the worst this season, snap is struggling with what is a difficult ad market at the moment and pinterest with similar expectations one thing i will say is expectations were low from the investors going into this. these companies just have to meet or beat earnings. i said at the start of the week, the key was going to be the guidance all of the companies, even the ones performing well, warned on some uncertainty and sort of belt tightening from businesses and spending from cloud and advertising going forward. it has been a rally in some names, investors are cautious given the outlook we heard from the companies going forward that the tech sector is not out of the woods, frank >> arjun, thank you very much. let's get the latest from

the corporate stories with bertha coombs. >> good morning, frank the bank of japan's chief announcing policy review in the first board meeting as the bank's governor. one to set the stage of the phaseout of the loose policies from his predecessor in terms of rate decisions, the bank is keeping decisions on rates on hold. tesla rival byd reporting more than a 400% jump in net income for the first quarter despite the ongoing ev price war. the report coming one day after byd overtook volkswagen as china's best selling car brand a title volkswagen has held for the last 15 years. change of heart at first republic the bank is now reportedly working on a private sector

solution with hopes of avoiding an fdic takeover far from the outlook three days ago when it said all options were on the table including a government shutdown. shares of first republic down more than 50% this week and set to open -- it looks like it is bouncing on that news, frank we will see if they avoid one of those horrible friday afternoon shutdowns. >> at least in the early trade, shares are up 10%. bertha coombs, see you later on. thank you. we have loohave a lot more n "worldwide exchange," including the word of the day. and a bpair of big oil companies reporting this morning. the keys from chevron and exxon. and investors don't seem to mind in the chip space we will talk about it later.

and esg investing requirements the kansas state treasure wilwill join us and say why his state is not on board with esg. we have a very busy hour on "worldwide exchange" when we return stay with us one i ed. for free. not bragging. (cecily) you're bragging. (neighbor) oh, he's bragging. (seth) who, me? never. oh, excuse me. hello, your royal highness, sir... (cecily) okay, that's a brag. (seth) hey, mom. i gotta call you back. (vo) switch and choose the phone you want, like the incredible iphone 14, on us. (cecily) on the network worth bragging about. verizon

well come back to "worldwide exchange." earnings season has been front and center, but two data points have an impact top of mind is personal

consumption price index or pce as the preferred inflation measure is expected to slow down, but not enough to stop the central bank to rise interest rates at next week's meeting this after gdp rose 1.1% rate in the first quarter which is below the estimate the new note from jpmorgan chase says the figures were cons const constructive let's talk about this with bill stone at glenview trust company. bill, great to see you. >> good morning. >> gdp was under consensus there. you say the headline is not as bad as suggested give us an explanation of that theory and how it impacts your portfolio. >> the quick answer is the u.s. consumer did well or spent a bit, i guess, in the first quarter. really increased the pace of spend relative to the previous quarter. what took away was the inventory

was drawn down it is a strange concept with gdp. we count core gdp when we build inventory or pull them down or use them up and that doesn't count as positive for inventory. the good news is we used up inventory in the first quarter which means we likely have to build those up again there is no guarantee it starts in the quarter that's why you paint a better picture for a future quarter when that happens. on the margin, a better number than it looks. i still say it leads me to the second quarter where i don't see the economy falling off the cliff. the problem is the second half of the year. >> and pce is coming up later today. expected to show a decline when it comes to inflation. however, when we look at the outlook on rate hike, 85% chance of .25% hike

what sector do you expect to be impacted by this >> we got the big picture and quarter number within the gdp for that pce we know it was on the whole a little hotter than expected. maybe not the month, but quarter. i think in terms of what it impacts is that a done deal we get another quarter hike next week you know, there is still a worry around the fact that inflation may be sticking around more. that is really, as you look through the portfolio, what you continue to worry about or focus on which is companies with the pricing power. inflation is probably sticking around a little bit more than most of us had hoped. >> what is the outlook on the banking system right now obviously, a key issue of concern. it will be a factor in that

decision whether they hike or not. the fed made it clear they are watching the banking sector closely. >> they should numbers last night came out and we get numbers on thursday night that tell us how much the banks have pulled down on the fed core facility we saw banks go to the discount window and also go to that facility where they can borrow against their portfolio of bonds. that's not really a good sign. we certainly have seen an uptick in the last two weeks in banks accessing the facility there is a yellow warning light. it may have to do with large outflows related to paying taxes. maybe it is not the biggest deal, but certainly bears watching we will get more numbers later today. >> a lot of people looking at the tax payment impact bill stone, thank you for being here coming up next here on "worldwide exchange," big earnings report due out in the

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welcome back to "worldwide exchange." time for the three money movers. intel reporting the largest loss in company history sales of $11.7 billion which

topped estimates, but that was down 36% compared to a year ago. intel was forecasting sales to fall 30% low bar there. a loss of 4 cents. biggest net lost ever. data centers came in above estimate, but still down 40 cents compared to last year. shares of first solar under pressure after missing on the top and bottom lines sales of $550 million. down 50% from a year ago shares of cloud flare missing on the first quarter report a net loss of $38 million compared to the $41 million loss a year ago two more stocks we are watching this morning. chevron and exxonmobil set to report results before opening bell

stocks telling two stories for investors this year after massive rallies in 2022. exxon is up 2% from hitting the 52-week high one concern is recession and consumer demand slowdowns. joining me now is biraj borkhataria. good morning >> good morning, frank. >> let's talk oil prices we saw a bit of a spike in oil prices after opec production cuts spiked $10 a barrel from where we are right now it settled back to where we were before the spike how does it impact the two companies? >> there were fears on recession forces which drives lower demand and prices we are coming from a strong commodity price environment in 2022 energy performed well last year and exxon and chevron participated in that

this is a moderate environment that will weigh on earnings for this year. >> that spike does impact refinery business and margins. which one of the companies is more exposed to that >> so, exxon is the largest refiner among the global companies. over 4 million barrels a day two times the amount of chevron. that is the reason we upgraded the stock last year. q1 report which we will see in an hour should be strong as well as you look at the second quarter and beyond, it will moderate close to mid cycle levels. >> since the start of the ukraine war, natural gas was supposed to be a big story we have seen a warmer than expected winter here in the u.s. and in europe. looking at natural gas prices down 50% year to date. which of the names has more

exposure and more negatively impacted by that >> both have reasonable exposure to u.s. gas prices at the margin, exxon is higher as big oil producers, you tend to produce a lot of gas with that oil there is earnings as well. there is weakness in the international market lng prices have come down. that will impact exxon and chevron. overall, what we are looking at is from the very high base in terms of earnings strength both will moderate exxon is likely to moderate faster. >> biraj, between the two of them, before the earnings print, which is your pick >> i think expectations are high for both i think exxon, as you mentioned in the initial comments, is close to all-time highs. what you see so far through

reporting season is even the beats and strong results are sold off investors take the view that q1 is as good as it gets and earnings will fall the rest of the year it is tough to see in the short-term for these two push on from here. fundamentally, we prefer exxon over chevron because of the medium-and-long term growth. >> looking at both both flat ahead of the report. biraj, thank you for being here. darren woods will be on "squawk box" later this morning at 7:30 a.m. still nor come on "worldwide exchange," including amazon warning on cloud growth. one wall streeter says there is a silver lining. top trending stories and why you might thwant to wait a minu before you shred your bed bath &

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it is 5:30 a.m. in the new york city area we are just getting started on "worldwide exchange. here is what's on deck futures under pressure after stocks posted the best day since early january. what a key economic report today could mean for the markets and fed's move next week. a big week for big tech ending with a bust why shares of amazon, snap and one more name you know are trending lower ahead of the

company. anti-esg wave grows as kansas is the latest state to ban esg consideration when investing public funds exclusive with kansas state tr treasurer steven johnson coming up it is friday, april 28th, 2023 you are watching "worldwide exchange" on cnbc. happy friday let's pick up with the stock futures. futures are lower across the board. it looks like the dow would open up 100 points lower at this point. all three down .50%. very early still we have to talk about financials as a sector, it is the worst performer year to date banks are the biggest drag within the group leslie picker is joining us now with the deeper dive on returns. good morning, leslie

>> good morning, frank you are correct. financials are under performing the s&p by a whopping 12% in 2023 a gap that only widened with the first quarter results the last few weeks from banks as you see from the chart there the industry group is lacking the most is the banks. insurance also in the red with financial services, the catch-all for asset management and fintech is flat on the year. some non bank financials have been under pressure as well. simply because they tend to get grouped together in baskets publicly traded and sold off along with that concern over the banks. first republic with declines of 95% year to date is not just the worst within the financial secti sector, but the s&p as a whole the stock sold off this week as investors braced for asset sales

and regulatory action or intervention by larger banks all considered to shore up confidence the stock had a 9% gain yesterday and trading higher in the pre-market this morning on a report that potential rescue plan is, indeed, in the works for that name. beside first republic, the individual laggards within the sector is zion and key corp. on the flip side, there are financials in the green this year it is a mixed bag of fintech with fiserv and arre arch. all in the green this morning. >> leslie picker, thank you. let's check on the top corc corporate stories with bertha coombs >> frank, good morning oil prices steady this morning following the iranian military

seizure in theof oman. the seizure was condemned by the u.s. navy which said "advantage sweet" issued a distrees ss caln international waters it was loaded by chevron and had oil from kuwait. this is all over the tehran nuclear program. sony posts record sales with playstation 5 gaming console the sales for the year should remain flat compared to last year operating profit is expected to tick down slightly for the year, sony sold 19.1 million ps5 consoles beating the forecast of 18 million that number was up from 11.5 million last fiscal year when sony was facing supply chain

issues the imf is warning that european central banks should be wary of the economic and fiscal dangers if they stay the course with more interest rate hikes. inflation may mean more tightening due to the report, but banks need to stay nimble. similar to the turmoil in the u.s. financial is sector which crippled credit suisse frank. >> bertha, thank you turning attention back to the top story and trifecta of money movers amazon, snap and pinterest we start off with snap stock under selling pressure ahead of the open after the latest results reporting after the close yesterday. missing the market on a number of metrics revenue, guidance and daily global users and revenue per user similar story with pinterest under pressure despite beating on the top and bottom line

investors paying attention to the second quarter sales outlook, one the company says will grow in the low teens and amazon is set to open in the red despite strong shows for cloud and ad business. the cloud outlook is hurting the stock in the pre-market. the company cfo noting on the call last night that aws growth rates have yet to stabilize. >> given the ongoing economic uncertainty, customers of all sizes and industries continue to look for cost savings across businesses similar to what you have seen us doing at amazon. as expected, customers continue to evaluate ways to optimize cloud spending in the tough economic conditions in the first quarter. we are seeing these continue into the second quarter with april revenue growth rates of 500 basis points lower from q1 >> let's dive deeper into amazon results is nicholas jones from

jnp securities nick, great to have you here. >> good morning. >> let's start off with the comments from the cfo. it wasn't exciting you talked about the slowdown. 500 basis points what did you make of the comments and lack of the big headline with a.i. >> really, i think the challenge with aws is expectations were mixed. the focus was the deceleration while the first quarter beat exceeded, it was more concerning and analysts did not know what it meant for month by month. going into the quarter, people were looking for 9% year over year growth for q2. now expectations of 8 to 10. that was focus for aws disappointing.

i agree. a lot of analysts were looking for more clarity around aws in positions with azure and cloud you know, we think they are well positioned to compete here there wasn't a lot of fuzzy headlines in the release which is why we are seeing stock give up all of the post-market gains. now it is down pre-market. >> were you surprised about the strength of the ad business? high margin business for amazon. we heard a lot of people talk about weakness with ads. >> amazon is a powerful platform they take search from dpoog the t -- google they are at the end point with consumers. it is not surprising to us that the ad business is showing strength what is interesting is it is high margin. we think it is high margin from aws. as ad continues to perform, this

could be the expansion story investors are looking for. >> what about the ecommerce business it beat expectations we are expecting consumer slowdown what is the outlook with the consumer business and do you see it potentially grow? we heard it from other analysts. >> amazon is well positioned it can capture discretionary income and people purchase staples. it is one of the best plays out there if you want exposure to ecommerce. we expect it to be resilient >> before we let you go, what is the price target and rating after that call? a lot of people as you see are turning their nose up to amazon this morning. >> we think it is a great entry point to get into the stock. our price target is $140 we still like the stock.

>> nicholas jones, i appreciate it thank you for being here coming up here on "worldwide exchange," we have the exclusive interview with steven johnson and why his state is pushing back against esg investing. as we head to break, top trending stories don't toss out the bed bath & beyond coupons the container store announcing it is giving customers a 20% discount on any single item if they bring a bed bath & beyond coupon to any store location through may 31st big lots would exchange all expired bed bath & beyond coupons for 20% off a purchase of $50 or more through may 7th the offer is a one-time promotion. and chipdsotle is offering a

50 entree codes for the team which starts on may 19th wholesale egg prices with a rapid decline dropping to $1 for the first time since 2021. following a record high of $5 in december te egg-cellent news on the back ofhe peak demand of the winter holidays "worldwide exchange" is come bac - is coming back in a moment

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welcome back time for the morning call sheet. deutsche bank upgrading old dominion from hold to buy. an 11% upside from the price deutsche bank laying out the case for earnings of the company could double from current levels the next 12 months and beyond. guinea goldman sachs is positioned to emerge as a leader with the most compelling return of any stock coverage and upgrading from peer with a

$46 price target over to kansas and state lawmakers approving a bill designed to prevent environment decisions for social factors or esg. it will take effect on july 1st and that makes kentansas to enat anti-esg states which are pushing back against the investment trend the divisions within the kansas majority is keeping the measure softer than some conservatives wanted they rejected the proposal for private funds. joining me now to discuss in an exclusive is representative steven johnson, the kansas state treasurer.

he is one of 76 voters in support of this bill >> great to be with you. i'm the treasurer i am not currently in the house. >> an error on our part. you support the bill >> yes >> let's talk about it for a second you are a supporter. not a house of representatives member do you have concerns consideration were a barrier to get the best returns for public funds? >> correct it is that over time as you characterize the bill and mostly focused on a non or neutral esg world. we want to look at a case where we wit we don't discriminate. that was my case with financial services and building the models for the last 20 years for portfolios

your world is about the numbers. >> you are well versed in the world of finance people who generate financials have the fiduciary responsibility where is this concern coming from do you not trust the managers to fulfill their fiduciary responsibilities >> that is true as we look across market. every moment the market is open, it is working to determine the price with risk and return that is happening for decades and something we row lelied on as we add policy objectives, it doesn't make an objective right or wrong, but i cannot increase the return on the portfolio by adding constraints i can only add value along the chain at some point. as we look to how this impacts contracts and portfolios, we war want to make sure what is the greatest return that we can achieve for clients this year and over time and how do the

measures taken affect that value and how does that effect the way we are investing in the market that becomes important with the structure we apply to domestic equities >> the bill addresses any investing that may work against the interest of kansas based companies. why is that important in this bill >> it deals with proxy voting. the bill addresses two things that the legislature works to do there are a number of things that could be addressed. what lawmakers work to do is what are the key steps in kansas to address issues which were with contracting and proxy voting as we worked through that, when we look at the proxy votes, those need to be in the best interest of returns and second piece is if we are neutral on that, what is in the best interest of kansas and our dollar dollars? if we look at voting and the

exxon case, as a passive investor, fossil fuels are 9% of the russell 3,000. if we decrease the value of the stocks, we will hold them until they potentially go out of the system again, if we try to change that focus, it is hard to be efficient. it is hard to drive returns that our companies drive every day putting more difficulty on them makes it harder to achieve that. should that stock decrease in value or cease to exist, we need to change our strategy or vote shares in the manner that reflect the strategy and consider that before the position is taken. >> steven, if you don't mind, can we address the debt ceiling? how are you preparing for the possibility of a deal not reached? this is a contentious issue in d.c. >> very contentious issue in d.c. that affects us as we look to

pool money in the state's cash and trying to look at the timeframe. we are optimistic the deal will be reached it is often contentious. there is a lot of positioning in that process the key on handling the debt ceiling is looking at what do we allocate to start with we have to make sure the spending and revenue is in line. once we committed the dollars, we are committed to paying for it i hope lawmakers are able to work together and make it as seamless as possible so our economy and our companies and cash flow can continue to work >> steven johnson, thank you. >> great to be with you. ahead on "worldwide exchange," the one word every investor needs know today and why my next guest is telling client ahead of the key economic report due out today "worldwide exchange" is back after this

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welcome back to "worldwide exchange." time for the "wex wrap-up. the intel with the fifth straight quarter of losses and the bank of japan lays ground work for a phase out off the policies and stimulus program. the federal reserve is overseeing discussion was banks and private equity to rescue first republic down more than 50% this week shares of meta coming off a banner day after first quarters results that blew past expectations shares are lower right now after rising 14% yesterday. tesla rival byd out with the earnings release

a more than 400% jump in net income for the first quarter despite the ongoing ev war. and the baltimore agreeing on a deal to make lamar jackson the highest paid playing in nfl history. and data on march personal income and ckconsumer spending n april chicago pmi outping the bf earnings with exxon and colgate among businesses reporting back to the key data point with the pce expected to show a slowdown with the price increases with the gdp

figures rose slower than expected let's dive into what it means with lizzie evans. great to see you >> good morning, frank >> we ask the one word of the day. >> my wex word of the day is patience that may be my word of the year u. >> you have to plain this one. why are you patient in particular >> i think that certainly we're focused on the report this morning to see where pce is. i expect we see our last read on inflation before the fed meets in may i expect that the next month that the fed will raise 25 basis points this is what the fed will do in june it is welcome to be in a fed blackout period to not have the volatility associated with fed

speak. in general, as an investor, it is a year you need to be patient. that was true in 2022. >> does that mean you have money on the sidelines i want to note the 2-year treasury above 4%. does patience also mean you are putting money back in bonds as opposed to the market? >> no, no. right now, if you look at the market longer term, across the board, fund managers have 5.5% of cash. you see the s&p and 50-day moving average above the 200 day. across the board, asset the allocations are heavier to bonds and lighter on equities. for all of those reasons, that's a good long h-term buy signal o the s&p. if you think about the great quote, frank, i love from warren buffett. i love it because i love fi

fishing. it is never test the depth of the river with both of your feet what does that mean? we are starting to see the fed indicating they are not going to raise rates aggressively as they previously stated. we are seeing inflation start to cool we are in the middle of the e season which is not as doom and gloom as expected. now is not the time to make drastic tshifts you need to stay balanced. you need to stay patient it is a stock picker's market. >> if you had to make a move today, you are eyeing the chip sector >> yes semiconductors are facing macroeconomics headwinds if you look at semis and in particular broadcom. it is executing better than any of the pieers

they are achieving a cheap multi. it is 50 times forward pe. you compare that to the industry at 25 times and the market at 19 times and those are great numbers. they have a dividend yield of 3% management boosted that dividend in december by 22% they have another $12 billion in authorize share buybacks >> lizzie, i want to talk about intel. declines up 4% this morning why broadcom as opposed to intel? >> if you look at broadcom -- we talked about the fundamentals and shareholder model. you think about a.i. we are in the early stages with a.i. and broadcom chip if you look at the spending and

global spend on a.i. in 2023 is expected to be $150 billion. compare that to last year which is up 27%. fast forward to that and that is $300 billion we are in early stages there broadcom has a diversified business model they have the best profit margins and at 73% gross profit margin >> okay. keeping an eye on intel. down 51% pat gelsinger said the company hit the bottom down one-third across the board. we toss it to "squawk bo wchx"hi is coming up next. have a great weekend thank you for watching

good morning

tech stocks on the move. intel rising -- we'll tell you about that report. amazon falling that seemed pretty good. except for the slowdown in aws snap and pinterest plunging. details on all of the earnings straight ahead. more on deck we are expecting quarterly results from chevron and exxonmobil big oil in the next 30 minutes we have a first on cnbc interview with exxon ceo darren woods. first republic bank is looking for a solution to avoid a shutdown it is friday, april 28th, 2023 29th, 30th monday is may? >> yup >> "squawk box" begins right now.