have anyone putting their home on the market because of the percent. >> it's extremely challenging and costly. >> we can impose taxes on the very rich and big corporations allows us to cut the deficit over the next ten years. >> the fed will be cutting rates by october and crypto is going to be off to the races it is 5:00 a.m. at cnbc global headquarters and here are your "five@5." we're watching a turning tide on wall street as one forgotten part of the market finds a second wind win with some impressive gains as we launch into the month of june that is not injecting any sunshine into the forecast jeffly gundlach is doubling down on his grim outlook on the u.s. economy. in china the good will effort continues plus fans and sponsors still digesting a shocking merger

between the pga and saudi-backed liv golf tours >> later, tracking crypto crackdown and why binance is just the start this is wednesday, june 7th, 2023, and you're watching "worldwide exchange" on cnbc good morning and welcome to "worldwide exchange. hoping for clear skies out there today. boy, it's been smokes. i'm contessa brewer in for frank holland this morning we saw the s&p hit its highest intraday level of the year. futures are all in the red we've got the s&p 500 indicated down 4 points. the dow jones industrial average's indicated off by 37 points, and the nasdaq indicated down by 21 points. i also want to turn your attention to another part of the market here. the small caps in the russell

2000, if may was all about tech, june may be all about domestics. they're up 6%, just four trading days into the month. you can see it's up 2.5% here. in energy, oil snapping a three-day win streak yesterday mor morning, but wti is up about 5.1% brent is up and natgas up a percentage point. a new warning from jeffrey gunl gundlach saying it looks increasingly likely the u.s. will tip into a recession. leading the index of tennec nomic indicators and says it looks, quote, absolutely full on recessionary his words. that call is a stark difference from goldman sachs' updated call yesterday showing chances that the economy can avoid a recession are actually higher now that the banking crisis has largely passed let's bring in skyler montgomery

ko koenig it's good to see you, skylar yes, or no, do you think gunld lack is right or it might be a sunnier outlook than he's predicting >> economic data is declining very rapidly that's from very high levels you have something from both the bulls and the bears. unemployment is ticking up earlier this week we had the high numbers that were recessionary i think that's a reflection of the fact we are in a general business cycle have a war in ukraine and this dismount for demands of goods and services that's still correcting there's a lot of noise what's more important, high inflation regimes tend to be

more volatile. in our view, they lost momentum in the fourth quarter in 2022 and it will slow further into 2023 manufacturing is already clearly in trouble and has been for some time that's what the isn was also pointing to we expect a mild recession in 2023 so not extremely deep. we forecast a contraption of 0.6% the reason we think it will be mild is we've note had a true credit psych the last few years rather we've had an asset cycle to correct but it's more worrying for the average person because you will have an increase in unemployment to 5.5% by 2023. >> skylar, i'm wondering you're suggesting a cautious stance, but not an especially defensive one. can you be specific about how you walk that fine line? >> yeah. it's quite interesting because asset markets are pricing growth and recession woes are to

different degrees. commodities show the highest level of concern equities have been the remarkable concern but i think it's in part justified because we have this kind of balance between slowing earnings as well as contracting margins that are getting more worrying as well as there's actually more liquidity in terms of if you look at the six-month basis of the liquidity impulse if you aggregate the pcob and the fed and you look at the six-month rolling basis, it's turned more positive the fed turns more positive in mair as well on the svb crisis we've got this expectation of a fed pivot on one side and slowing earnings on the other. generally we're neutral in the equities where you have an advantage is the more fixed income. you've got a bit of an income

buffer. >> skylar montgomery koning. thank you so much for joining us. we have a lot more to come here on "worldwide exchange," including one word investors need to know today but first citi's jane fraser joins the goodwill bank in china as beijing tensions continue to sim jeer speaking of hina, a huge economic disappointment overnight and new signs that the country's post-covid recovery may be coming off the rails. and later, why the fed is playing zero part in the current ai euphoria despite its efforts to cool risky investor appetites. have by ur ausho still ahead when "worldwide exchange" returns. at morgan stanley, old school hard work meets bold new thinking. ♪♪ at 87 years old, we still see the world with the wonder of new eyes, helping you discover untapped possibilities

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welcome back wall street is working to dial back the heat, trying to calm the tension between dc and beijing. citigroup ceo jane fraser is visiting the world's second largest economy and meeting with its top financial regulator and deputy bank governor fraser expressed confidence in the economic development and she's vowing to keep the citi's onshore operations in the country. her visit follows elon musk and jamie dimon. the latter caught up with capitol hill after meeting with house democrats and giving us a fresh take on the current situation between the u.s. and

china. >> america's in very good shape. they're not a ten-foot giant we have $75,000 gdp. they have 15 we made some mistakes in the past let's just fix it going forward. we have the most prosperous economy the world has ever seen. we've got all the food we need no war in north america, south america, we have the landing in the pacific, the world's laencht military, take a deep breath. antony blinken is set to pick up the baton from fraser and set to travel to china this month. he had a trip planned for january but it was canceled in response to the suspected chinese spy balloon event. overnight the country reported its exports contracted far more than expected last month. down 7.5% year over year economists were looking for a decline of 0.4%.

investors waiting on key inflation data tomorrow, but still the markets are taking it in stride. the shanghai composite closing in the green you've got the hang seng up 0.8% let's talk more about this with vivian lynn thurston vivian, good to see you this morning. thank you for being here. >> good morning. thank you for having me. >> how do you interpret the exports falling so dramatically? i should mention at the same time imports fell -- that came in at 4.5%, that was better than the 8.-- 8 percentage-point decline that people had anticipated here so you have kind of a better than/worse than story with exports and imports. >> yeah. so overall china macro data has been very much underweming since opening.

the consensus is expecting a digit decline. it definitely shows macro is facing sequential softness it could be challenging in the coming months. pmi dipped below the level and continued to stop. retail sales also continue to decelerate, although it's still up about 12.5% and profit sales also continue to be very weak. so overall china reopening has shown pretty underwhelming and soft kind of performance so far. >> what's behind it? >> the biggest reason behind this is the consumer and business confidence. so chinese consumer and the business community, actually

accounts for a 20-year low toward the end of last year. that was the result of more than three years' lockdown. this would take some time to repair the second reason is that the mass and the lower income population still face lower income situations. their incomes are not back to precovid level youth employment still has become very challenging. ton employment rate among the youth generation, population, actually hit record-high, about 20% right now. so those factors really are contributing to this pretty anemic kind of reopening path as we have seen in china. >> at the same time we're seeing pockets of stellar performance for instance, i cover gambling, and macau growth gaming numbers are soaring at this point. what we're hearing from companies on the earning calls is their very high end retail,

the margins are just busting at the seams. they've improved dramatically. when you're positioning your clients for this post-covid reopening in china, are there certain areas that you think, yes, that's where you want to be right now, given the uncertainty in the broader economy >> yeah. you're absolutely right. international travel definitely is a bright spot and after 3 1/2 years lockdown, china tourists start to able to travel again that's a very important theme. this would benefit not only macau gaming industry as we just alluded to, but global industry as chinese tend to purchase a lot on the trip. on the other hand as i mentioned, the lower income people, mass income people are still facing challenging so we're seeing this divergence among if more affluent consumers versus the lower income people in china we'll continue to see how this trend plays out.

there are bright spots for the global investors investing into those chinese travel, international travel-related companies, whether global luxury, cosmetics, or gaming companies could be a very good spot to be in. >> vivian lin thurston, thank you for joining us. >> thank you. >> that's the trend we've been seeing in the u.s. especially in las vegas, they've been way outperforming the broader consumer discretionary companies and sectors. >> ahead on "worldwide exchange," you've heard of green-washing. when it comes to the pga/live tour, it may be the latest example of sports-washing. >> when it comes to market uncertainty, hear what the wealthier are thinking and what they're doing with their cash in response rvilonre latest cnbc mliai suey coming up on "worldwide exchange." r e*trade's award-wing trading app makes trading easier. with its customizable options chain,

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♪ the l'or barista coffee and espresso system. a masterpiece in taste welcome back on this wednesday morning. stunning news from the sports world, and this morning professional golfers, fans, and sponsors are digesting the fact that pga tour is merging with saudi-backed rival liv golf. it ends a two-year battle with players, ratings, and revenue. it's just the latest effort to make a splash in professional courts

joining me now is sean zack. what a fun time for you to be on top of this story. i understand the players which normally have a hand and a say of how the business develops was sort of blind-sided by this. >> they were absolutely blind-sided, many of them taken aback. many of them finding out about the news on twitter.com, where you do not want to find out intimate business relating to you. they attended a meeting with pga tour commissioner jay monaghan frankly they raked him across the coals a little bit some called him a hypocrite. some stood up and called for his job. there was an extended group of players who stayed afterward with jay monahan to have their own little meeting to say how do you want to move forward with this the players want to allegedly run with this since it's a

player-run tour. i don't know what came of the extra meeting, but all i know is there will be more discussion between mon a hockeyan and the players. he thinks it's a win heal have to tell them why it's going to be a win. >> this is going to be a commercial venture, a business opportunity and in ways we may not have seen before and a chance forinvestors and sponsors to have a copacetic relationship can you talk about how this might impact contracts that players have for instance they took a stand, stood loyal with the bga they may look at what they gave up by not going to liv and are really regretting that now. >> exactly 12 months ago liv golf launched. it launched in the uk, near

london, and that week was a week of unease. in the 12 months that followed, basically that continued companies and brands that are used to sponsoring golfers, used to putting a patch on their shoulder or chest or the brichl of their hat, those brands weren't quite sure what to do with play whoers have committed to liv golf, players who have commit to the saudi investment sometimes that include d not including them in their commercials or brand websites. i'm talking about adidas that cut ties with dustin johnson, one of the best players in the world who took over $100 million. they cut ties with sergio garcia those are kinds of final decisions, believe that said, there are other brands that just stayed away

from making rash decisions they stayed quiet. and now that next year liv golfers will perceivably be on the pga tour once again, i think a lot of those discussions will start up again, and i think a lot of these original contracts might just can't we don't talk about that weird year that was 2022 into 2023. >> you i've got to wonder whether you have 911 families -- a f -- 9/11 families -- they're so angry and coming out and taking a stance against this, how the investors are going to feel about it i want to bring in my colleague robert frank robert, you cover a lot of sporting events where there are sponsorships i'm curious what your reaction is to this what do you anticipate you're going to see >> it's so early, contessa golf has a very high clientele,

well educated clientele, well educated clientele at the end of the day, contessa, as you know, sports is an entertainment business with emphasis on business, and commercially this looks like it's going to be a growing leyig a -- league and a growing business. >> there have been accusations that their efforts to get into the premier league and to sort of own soccer/a ball anywhere else in the world, to clean up their image or what's known as sports-washing what do you make of that >> that is the tune we have certainly been listening to and hearing people sing in the last 12 months in the golf world. it's attacked other worlds too it has gone through the boxing world, the f1 world.

this is nothing new to pro sports but it's certainly something golf has been dealing with that is an answer for jay monaghan i was talking to a player yesterday and i said, hey, jay monaghan is going to be doing press here in the next 15 minutes. are there any unanswered questions you have for him this is a player who lives near arizona. he said, yeah, what about the 9/11 families i was told to think about for the last 12 months or so, and they were supposed to impact my money and thoughts about them. what am i supposed to think about them now that's not a question jay monahan can answer yet. >> not specifically, but monahan did acknowledge he did an about-face like did you ever have to apologize for being a member of the pga tour he acknowledged he had to do this big flip.

sean, thank you. >> contessa? >> go ahead, go ahead. >> the one thing i would add about sports-washing and the image, i think the bigger driver for the saudis is economic diversification. they want to diversify out of the oil economy that the pif fund is aiming toward a trillion dollar acquisition they need different places to put that money sports is a greeting area. so i think this is more about economic diversification than it is about image improvement. >> thank you for that, robert. i appreciate that. i kind of threw that -- i hope you don't mind we're really here to talk about the cnbc millionaire survey, which, you anyhow north korea we have higher rates, rumblings of a weaker economy >> you've got it take care. >> contessa, we're looking at key findings from the survey and millionaire investors are betting inflation is going to

stick around for at least another two years. the cnbc millionaire survey, that's where we poll people with investable assets. 52% of them say inflation is not going to fall to the fed target of 2% for at least two years about a third say it's going to take at least a year they also say interest rates will be higher for longer. nearly half say they're higher by the end of the year only 18% expect to cut rates by the end of 2023. inflation and rates starting to take a bite out of their spending, in fact. more than a third of millionaires surveyed have cut back on restaurants due to inflation. that was surprising to me. 18% have delayed the purchase of a car. one in four has already given less to charity due to inflation, and if inflation persists, a growing number plan to cancel their vacations. they're also borrowing less.

a third plan to borrow less due to higher rates. when we asked about threats to their wealth, inflation ranks second behind the stockmarket which nearly half think is headed lower this year you can read more about the survey findings including who they support in the presidential election for 2024 at cnbc.com/millionaire survey. >> now that is a tease you know, million dollars doesn't buy what it used to, so millionaire survey, it's no surprise here, robert, that everybody's feeling the pinch. thank you for joining us, getting up early. straight ahead, why the fed is playing zero part in the current ai euphoria despite its efforts to pool risky investor appetites. we'll be right back. is it possible? with comcast business...it is. is it possible to help keep our online platform safe from cyberthreats? so we can better protect our customer data?

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everybody. it's a smoky wednesday thanks to the california -- not california i'm so used to saying california wildfires -- the canada wildfires that so much of the united states is under smoke here we are. we're getting it, heating up "worldwide exchange. one beaten up part of the market is finding some fresh love in terrell days of the new trading month. one sector underperforming the broader markets, consumer staples, but with broader markets boosting the bottom line, the fed looking to stomp

out sticky inflation. the s.e.c. cracking down with fresh action of success tore giant binance this is wednesday, june 7th. and this is "worldwide exchange" on cnbc. welcome back, everybody. i'm contessa brewer in for frank holland this morning let's take a line look at that hazy new york city skyline i just mentioned the city is among a large part of the u.s. dealing with a dangerous air pollution situation as a result of smoke from the wildfires burning in canada, not california california's glad not to have the spotlight on this. we'll have more on this coming up. let's pick up the half hour with a check on u.s. stock futures after the s&p 500 hit its highest level for the year and the highest close since august right now you can see we're in the red across the board

s&p 500 indicated to open down two points dow jones indicated to open down 28 rk and the nasdaq off by 11.5 the bond market and investors are continuing try to read the economic tea leaves ahead of the fed's next rate decision the t10-year yield is low all of the stocks are low this morning. sticking to one part of the stocks that's not getting much love, consumer staples relatively flat year to date and underperforming the s&p 500 by more than 10%. a handful of consumer facing names report this week including jm smucker they had strong pricing power, especially in their food and the pet related brands a lot of brand there campbell soup reported, up 0.75%. what we're seeing is a

resilience and the fed's strong pricing power and stubborn sticky inflation joining us is the managing director at goldman sachs. jason, great to see you this morning. the big headline this morning really seems to be the input costs have gone down and yet the prices are staying where they are. so a lot of these consumer staple names, they have strong margins. >> that's exactly right. smirks reported results, up year on year. so the industry at large is hitting the inflection point right now where the cost core to your point has begun to moderate, yesterday the pricing increase is still spilling over. turning over this year, creating a nice surplus that's not only having a top line, this is a business that precovid was lucky to grow low single digits and

then with a gross margin expansion earning 30 percentage points these are robust results we've seen from smucker -- frankly that's a jump. >> smucker reported especially strong demand in its pet segment. petco, chewy, they're following suit pets, that's clearly an area where consumer staples can continue to grow and shine are there other areas as well that you think the growth in this sector comes from in. >> so smucker did have very good results in pet, however, it came with a negative response it was entirely price driven we think about four quarters from now the price card is not going to be there prices will follow price follows the cost curb. as we think about it it's about who are those who are going to be able to have sustainable and durable volume or mixed driven growth we're going to see a lot of

separation there we're going to see dispersion in the next few quarters. by the way, the dollar is no longer as painful as it has been beverages, energy, great example. in foods, snack foods, salty snacks consumers like their junk food, their salty snacks those are a couple of examples where we would expect to see emerging growth. >> you mentioned emerging markets we got data out of china, exports which disappointed in terms of falling 7.5% year on year. when we're looking at china -- and i guess asia more broadly, how much does that factor into where these consumer staple companies go for the next six months to a year >> depends on the individual company. if we're talking about a company like estee lauder, it's

critical a company like p&g, company like colgate, closer to four. it's a big enough number that matters. i haven't heard that statistic, but i would echo what we see in the results. the recovery in china has been slower than expected the real strength we're seeing in emerging markets is really in latin america where we're not only seeing it, but the underlying consumer demand is going to continueto be healthy that's natural that they extended their geographical footprint south. they'll have a lot more exposure there than they do china >> jason english, good to see you on this ens. with thank you. >> thank you. let's get a look at some of the top stories this morning silvana henao, good to see you. >> good to see you the eu is expecting to take fresh action against china's wowway officials are weighing a

mandatory ban on member states using companies that might pose a security risk in their 5g network including huawei it stems from certain international numbers drawing out, taking steps. reddit becoming the latest company to trim head count the online forum is cutting p 90 jobs that's about 5% of its positions. they'll slow hiring as part of its restructuring efforts. priceline becoming the latest company to jump into the ai chatbot craze. the booking holdings unit announcing a new partnership with google cloud tapping into its generative ai tools to allow travelers to chat with a chatbot in a conservational way when making online booking. ai will help customers make more thoughtful decisions on where

and when to travel and help commerce and employees speed up response times, contessa. a developing story and the ongoing s.e.c. crypto crackdown. just 48 hours after charging binance with securities fraud, the agency's now requesting a temporary freeze on assets linked to binance. it says the u.s. clients have $2.2 billion at what the agency called significant risk. of course, we saw yesterday a suit against rival exchange coinbase alleging it violated u.s. security law by failing to register as a broker cnbc arjun kharpal joins us. they've had a chance to digest the news from binance, and then

on top of it, we get the news from coinbase. >> yeah, look. there's a lot of caution toward crypto, companies telling us that some of their clients don't want to go near this after what's happened. we're looking at the future on this i'll focus on coinbase for a minute because it speaks to the broader issue. what happens next could define what happens with the broader u.s. there's a few things that could happen firstly they go to court with the s.e.c. and the s.e.c. wins and if that happens, there could be a number of results the first is that coinbase may have to look at a number of its businesses therefore, they'd have to register those coinbase can face billions of dollars worth of fines because the s.e.c. is seeing what it calls discouragement of what it calls ill-gotten gaines. effectively what inmeans is

coinbase would have to pay back what they call alleged securities that could total around $6 billion, but the bigger issue is what does it mean for the crypto markets. binance and coinbase are the two largest exchanges out there at the moment they account for 60% of the trading volume the regulating action has forced them to reduce the amount of business they do, reduced the amount of customers. that would have a lot of effect on the trading volumes in the crypto market which are already very thin because retail investors have not come back into the market. of course, that could create further volatility to the upside and downside i think the price action right now in bitcoin and the broader crypto markets is interesting. it's stable, and i think there's two reasons for that they argue that the court battle could be good. it could help us to get clarity on what exactly the rules are in the u.s. for crypto exchanges.

but secondly as i mentioned there's not a lot of retail in the market it's huge. that's why the price are relatively stable right now. clearly a lot of regulatory overhang right now in the market, contessa, and a lot of uncertainty about it in the future. >> arjun kharpal, thanks for ginning us from amsterdam. coming up, factoring into the ai boom and the fed strategy ithoe liesman lays out how the whe-t tech could influence the central bank's policy going forward. we'll be route back.

exchange." let's get your morning call sheet. we're checking on the biggest upgrades and downgrades and stocks you probably own. jpmorgan is raising netflix. jpm predicts netflix's password-sharing crackdown has the potential to substantially add to the bottom line and a price increase from amazon coming from piper sandler, raising it from $130 to $150 per share if points to the ai surge and strong early interest in ai offerings from aws. well, the investment boom and artificial intelligence is creating a modern-day gold rush of sorts it is creating something of a conundrum for jay powell and the

fed looking to discourage risky behavior and speculation steve liesman is joining us with that and more. steven, what are you sighing >> good morning, contessa. it might not be well remembered, but netscape, it launched its story as an ipo in 1995 a few months after the fed finished up crank up interest rates. you can see right around to where they are today all that raises a question, is that a similar tech bubble and the impact it could have on new investment of ai is this a bubble the fed should be leaning against i talked to justin wolfers he said if i was jay powell, i would have a whole unit in place right now thinking about this stuff. it would last a half decade and

culminate in great economic conquests. hedge fund investor glen hutchins says real technology for companies and investors, but when it comes to the impact of higher interest rates on ai investment, hutchins tells me it's a big cycle now he says for the moment, hype tro trump higher rates confusing effects from ai. it could be more demand for capital and investment that means higher rate, short term, depending on whether they're really that capital-intensive. productivity would increase over time higher stock prices could happen as we've seen immediately creating a wealth effect the fed might want to lean against the fed should be paying attention to the stockmarkets, an actual tangible investment.

this is part of a broader l loosening. finally i asked bing's chat software what effect ai would have on interest rates and what effect it could have on ai he said they could go up, go down, or there could be mixed effects. when i asked which answer did it like best, it said the mixed answer, spoken like a true economist. contessa, what's interesting here, i asked this question of chat at the end of the reporting process. i talked to about a dozen people and it came back with all the same arguments the people had given me the way it got its answers is from a bunch of stories and articles and opinion pieces that had been written from it if we don't do the story, ai is not there to give us the answer. >> basically you're telling me

artificial intelligence is based on the answer on probably the reporting that you've done. >> right some other folks have written some interesting pieces on this, a bunch of economists and things like that. i think the old thing, garbage in, garbage out. whatever's there, they don't have the answer unless we do the reporting and start asking the questions. so it's a very strange kind of, i don't know, chickinen or egg stuff. what do you need me for? but the economists and reporters are the ones that ai is spitting back. >> steve's already done the work of the robot in the face of taking over. i want to get back to part of this, steve. >> yes. >> what's your sense that jay powell is concerned about the speculation around ai? >> you know, i think they're watching it. i don't know that it's at a level that reaches their

particular thing, but the other problems they have right now, inflation is the proximate concern and risk right now that they're taking care of they're watching the economy and the recession. this is something, you know, contessa, if this is as big as the proponents of it believe it to be, it's going to be a major economic factor. the big issue -- i didn't quote him in the piece -- he said the old lean or clean. the issue is this. do you lean against a bubble like this in interest rates or do you let it play out and just clean up afterward that was alan greenspan's idea when he watched the tech bubble. he said, i don't know what a tech bubble is i'm not sure how to handle it. but what i can do is if it bursts, come in later. lean or clean. >> steve liesman, thank you. ahead, the one word every investor needs to know today plus rbc capital's amy wu

silverman lays out how dominant tech might be. we're back after this. not just a weekend retreat, but an everyday getaway right in your backyard. newage makes it possible with beautiful all-weather cabinetry, grills and appliances that transform your backyard into a complete outdoor kitchen. visit newageproducts.com to book a free design consultation and create the outdoor living space you've always wanted. ♪♪ at morgan stanley, old school hard work meets bold new thinking. ♪♪ partnering to unlock new ideas, to create new legacies, to transform a company, industry, economy, generation. because grit and vision working in lockstep puts you on the path to your full potential. old school grit. new world ideas. morgan stanley.

' welcome back to "worldwide exchange" and your wrap-up your six stories we're following. longtime diageo ceo ivan men easy zes passes away at 63. china's exports plunged by 7.5% in may far more than expected due to seasonality. tesla's model three now qualifies for full tax credit. that brings the total models eligible for 2022. shares of casey's general stores falls after a miss on earnings expectations with revenue coming in at 5$56.1

million compared to $58.9 million. jpmorgan says he expresses confidence in china. citigroup as expresses confidence in china, vowing to continue operations in that country. new york city's air pollution topped the list of the world's worst as smoke from canada's wildfires travel to the northeast, really all across the eastern half of the united states, prompting air quality alerts for tens of millions of people as far south as the carolinas and as far west as ohio smoggy and changing the describe to crazy colors. back to the markets now. with the s&p 500 sitting at its highest level of the year, the nasdaq's run still going strong, but four days into the month and at least trading days, and one beaten down sector is starting to gain momentum small caps

the ross 2000 already up 6%. with a fed pause looking more than likely, could the tide be turning for some beaten down domestic names joining me now is amy wu silverman. talk to me first, amy. i appreciate you being here. talk to me a little bit about small caps and why we're seeing this run early in june. >> yeah, good morning. i think, look, when it comes to small caps, this is something i can tell you from many conversations with clients that folks have had a button on this trade for a while. what's interesting when you think in terms of factors, it's always small caps versus large caps or value versus growth. what's interesting about the narrative and the market right now is i think we really could have a situation where you still have mega cap tech rallying but also small caps because they're sort of this ai secular story

going on that i do think will continue to keep it big. so it's not necessarily going to be a rotation. it may just be one is much more economically driven on the small caps side and the other is driven by the stories. i think it will be interesting to play out. >> we're seeing so much for the mega tech companies right now. what do you think is going to happen as we move forward? is the momentum here still strong enough for even the late-comers to take advantage? >> yeah. you know, one thing when we look historically at just the cycles of momentum, one thing we do see is momentum bee gets momentum, and part of what happens is fomo but on a much more real scale. if you think about who has been underallocated, contessa, to these mega cap stocks, it's a lot of your mega cap community the issue is you're sitting here

now and there's a little bit of soul searching if you think it's going continue, it drags against the benchmark. it could continue to run as folks are allocating and sitting back and thinking, one, do i need to be getting on this train, and, two, what's the best way to do it. >> amy, your word of the day, de-hedging explain why. >> so the reason it's de-hedging, we actually got a lot of hedging going into the debt ceiling you know, the best way to describe what happened is kind of wop-wop in 2011 where we saw the vix. it was are a very fractious debt ceiling and we didn't get that at all it was pricing an easier solution i guess you can agree you can never bet congress will make nice, but in some ways that is what happens we saw a lot of hedges roll off.

also because, you know, we might be getting this fed paused all of this in combination is making investors dehedge, and i don't know if we'll see the rehedging soon. >> amy, thanks very much for joining us that does it for me on "worldwide exchange"hi ts morning. i'll send you to "squawk box" next have a great wednesday as a business owner, your bottom line is always top of mind. so start saving by switching to the mobile service designed for small business: comcast business mobile. flexible data plans mean you can get unlimited data or pay by the gig.

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good morning, crypto crackdown. boeing, delaying deliveries now, again, of its 787 dreamliners after discovering a new defect, nonconforming part phil lebeau has more on that.

and an abrupt and kind of stunning end of the schism of golf in the pga tour who now plans to merge with liv golf reaction from the sports world. and the business world is straight ahead it's wednesday, june 7th, 2023 "squawk box" begins right now. ♪ good morning welcome to "squawk box" here on cnbc we are live from the heart of the most polluted city in the world rightguys. thanks to the canadian wildfires, we've seen the worst air quality than anywhere in the world, beijing. >> we don't have toxic chemicals. >> pollutants in the air. >> it's not sulfur