tv Worldwide Exchange CNBC June 13, 2023 5:00am-6:00am EDT
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it is 5:00 a.m. here at cnbc global headquarters of here is the "five@5. the s&p did something for the first time since april thanks to apple. and investor attention turning to the fed as the central bank kicks off the policy meeting today and some could say the first rate pause in 15 months. ahead of that, latest inflation report out at 8:30 a.m. eastern time. it could be one that is too hot for the central bank. tech under pressure on both
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sides of the atlantic. we price in the risk for the stocks involved. later on, all charged up tesla seeing the shares on a run of their lifetime. we breakdown the action. it is tuesday, june 13th, 2023 you are watching "worldwide exchange" here on cnbc good morning welcome to "worldwide exchange." i'm frank holland. let's kickoff the hour with the check on the stock futures after the s&p and nasdaq closed the highest level yesterday since last year. the nasdaq is up over .50% helping to lead the charge to the high is apple. coming off a record closing high less than nine days after revealing the $3,500 a.r. vision headset.
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speaking of record runs. tesla coming off 12 straight days of gains and longest win streak since going public more than a decade ago. this includes a pop from deals on chargers with ford and gm we want to look at the bond market ahead of the policy meeting. yields easing a bit. this morning, the 10-year treasury at 3.72 2-year treasury at 4.56. something we continue to watch we heard people yesterday saying this inversion may not be as big of a deal as we made it out to be we will talk about that later on as well. and oil coming off the lowest close since march. brent this morning with a slight rebound. wti crude up 1% trading at $67.85 brent crude is up 1.25%.
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natural gas is seeing a pop up 1 1.755. coming up, we will speak with francisco blanch about the oil moves. we move to the crypto board. that seems to be a key level a few months ago as well as ethereum up 1.25% below $2,000 time to get a check on the action in europe with joumanna bercetche who is standing by in the london newsroom. >> good morning, frank let's start with european markets. gains hunbehind me today with te exception of the spanish index ftse 100 is still shy of the 7,600 number we had strong wage data showing it at 7.2%
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it is putting pressure on the bank of england. investors are raising the probability of the 50 basis point hike at meeting next week. something to watch dax in germany up .25% gains of the tech names. no surprise with the price action on wall street. cac 40 in france up .40% switching to asia, we had major action from china with the central bank cutting the lending rate for the first time in months as it looks to reverse the stalling demand. it injected 2 billion yuan into the system that is a positive reaction for the shanghai composite a lot of focus on the nikkei it is above 33,000 this is a key level for the japanese market. the highest level in 33 years.
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strong gains for toyota up 5% there. definitely the nikkei kcontinue to be on investors minds joumanna, thank you very much live in the london thus room b -- london news room back here at home, will the fed pause the rate hike? one factor is a data driven decision the latest with the may cpi out before the opening bell this morning and expectations for a 4% gain year over year which is down from the previous reading and well off the 2% target for more, let's bring in jeremy schwartz from wisdomtree >> good to be with you >> we are looking at the fed watch tool in the office the question is will it be a pause that leaves the door open for more hikes down the line do you believe the cpi report being a deciding factor in the
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fed decision >> they telegraphed they are not doing anything at the meeting of the the question is the july meeting. some of the economics team has said the biggest data point this week is the fed or inflation, but jobless claims on thursday you saw a big tick up. is this the slowdown everybody has been waiting on? our view is they should stop we think it is a good chance they should tomorrow although the market is starting to price in a july hike again we believe they don't hike in july we see the trend down. you talk about commodities and headline cpi better than the core cpi the brand trend is down. the sensitive price is down. >> jeremy, i never want to question you or the professor of
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the tfed decision is this a possibility of the july hike? the fed decision is huge. >> the slowdown. is the slowdown here we have been be saying the fed is too tight you haven't seen a pickup -- you saw unemployment rise .30% at last report. if the trend is we are starting to see people getting laid off, they are worried about the pressure >> the fed in july, obviously. after the wednesday decision >> this meeting is locked in as a skip. >> you are locked in as a skip ahead of the decision, you are looking at diversification you are focusing on the dollar the dollar risen .75% in the second quarter how does that impact your domestic portfolio >> i think the dollar is what i call a cheat code for earnings if you look at the dollar in the
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last six months, it has huge implications for earnings six months into the future the earnings cycle the we came through, the dollar was strong six months ago you had a decline in erjsarning now. they have come off the highs i think going into later this year, you have an earnings tailwind boost to earnings. it comes to invest overseas, you heard japan is one of the hot markets. do you want to take the yen or do you think the dollar is a better diversifier given the dollar is a key risk to earnings i say you are hedging overseas. i say you shouldn't take the euro overseas. people take too much currency risk when they invest abroad. >> jeremy schwartz, great to have you here. thank you. time for the check on the top corporate stories with
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silvana henao. silvana, good morning. >> frank, good morning british chip maker a.r.m. is on the hunt for an investor to hike the ipo. intel is the number one contender. reports that the talks are in early stages and could still fall apart no word on the terms or size of the deal a a.r.m. filed for a u.s. ipo in april. this would make it the largest offering of the year no date has been set just yet. netflix is in talks to live stream a celebrity golf tournament featuring prof professional golfers and formula 1 drivers. the event will feature celebrities from its drive to survive and full swing series. it would be the first live
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streaming event. this will follow april's botched love in blind live stream back in april shares of oracle popping ahead of the open after posting a fourth quarter beat. also issuing up beat guidance by growing demand for the cloud offering, frank. >> oracle shares up% 84% in the pre-market thank you. more to come on "worldwide exchange," including the one word that investors have to know today. first, tech under assault on both sides of the atlantic the latest regulatory headwinds facing the sector and what it means for the stocks involved. tracking the fund flows and where investors are parking their cash ahead of the fed pau > d e. >>anwhy bank of america says there is more room to fall more still ahead when "worldwide exchange" returns.
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welcome back to "worldwide exchange." regulators and watch dogs on both sides of the atlantic stepping up assault on tech with big names in the cross-hairs we have steve kovach here with more >> reporter: good morning, frank. blocking the $69 billion purchase of activision the ftc says it believes on the
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reports that microsoft could move forward and close the transaction before the ftc lawsuit against the deal and working it through the courts. the date to close the deal is a month away from today. if the judge approves the ftc injunction request, it will stop microsoft from closing before the lawsuit plays out. the first naerhearing is not happening until august if the judge rejects the request, microsoft has a slam dunk and likely prevail in the lawsuit overall. that is why microsoft president brad smith sounded positive in the statement with the ftc action yesterday we believe accelerating the legal process in the u.s. will bring more choice and more competition to the market. they are ready to get in front of the federal judge microsoft in the middle of the appeal with the uk authority which rejected the deal.
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the appeals process playing out. let's go over to google with the advertising tech bloomberg reported that yesterday. the case is similar to the one against google in january of this year. the doj alleges google uses the advertising to control the bidding and selling and data collection on online ads the eu complaint against google is expected as as soon as wednesday. >> steve, a lot going on here with regulation. if there are fines, how big could the fines be >> reporter: in the eu, it is 10% in the google case they generated $280 billion in sales last year. do the math. $28 billion. most people think it will not be
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that high. they already wrapped up so many fines in the eu. $8 billion here and $6 billion here that is another one. >> steve, great to see you great reporting. steve kovach. sticking with tech, the market breadth appears to be widening, but a handful of stocks leading the s&p gains this year. with the regulatory push, when does the risk become too great for investors? joining me now is stefan slowinski from bnp paribas >> good morning. >> the tech is rallied by the stocks solid earnings the a.i. play in the pre-market amd moving higher in the pre-market i have to ask you with all of the risk, is it priced in? >> i think there are some stocks
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where certainly they benefit more from the a.i. move the last couple months. we still see value in areas. alphabet is one you talked about and trading on 18 times earnings for 2024 the google cloud business with the a.i. services is break even. you are getting that for free within the google valuation. you have regulatory headwinds, but that has happened for some time the discount allowed for that and that is reflected in the valuation. another area is the enterprise application of space oracle is continuing in high demand now we are seeing a.i. come through. i attended the salesforce a.i. event. they will have products out in june and starting to monetize it some of the back office spending demand is holding up near term and they will benefit near term.
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>> i was at the salesforce event and i did not see you. one of the key things mentioned by marc benioff is the trust layer. they are trying to get ahead of the data and making sure that the data is not accessible to everybody. if you are thinking the valuations are lower because of the risk and you look at nvidia, is the risk still priced in with a forward pe of 51 times >> like i said, some stocks benefitted more than others. nvidia and microsoft have been the two early beneficiaribenefi. that is when we see strong near term nvidia is. microsoft, near term, is because of price increases coming through and the medium term story. >> i want to jump in most of them created a partnership with the a.i. startup.
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microsoft and open a.i. is the one we talk about most the top pick is alphabet why are you so bullish on alphabet they are the third biggest player with 6% market share. >> when we look at alphabet, they own the i.t. stack. everything from the large language models. google has been doing that longer with deep mine. they own that 100% microsoft is a minority owner at 49%. google down to the semiconductor layer and owning the proprietary semiconductor. it helps from the performance standpoint in optimizing the a.i. stack less than 10% market share we think that enterprises use
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a.i. more of a reason to move to the cloud, it helps the pitch. >> you are bullish on alphabet stefan, thank you very much. ahead on "worldwide exchange," china's latest efforts to grease the tracks on the uneven recovery. is this the broadestulr imus plan for the world economy we have a live report when we return ♪ we worked hard to build up the shop, save for college and our retirement. but we got there, thanks to our advisor and vanguard. now i see who all that hard work was for... it was always for you. seeing you carry on our legacy— i'm so proud. at vanguard, you're more than just an investor, you're an owner. setting up the future for the ones you love. that's the value of ownership. this is ge aerospace,
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welcome back to "worldwide exchange." china is seeing an uneven recovery from the strict covid-19 lock ydowns. the central bank is stepping up stimulus jp ong is joining us from singapore. >> reporter: good morning, frank. we saw stimulus, but when it comes to rate cuts, it wasn't much it was a foreign minister the p -- it was a rate cut. the pboc has a number of rates to try to provide stimulus this was the seven-day reverse rate where they trippemmed there were gains, but not really much look at the shanghai, it was
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touch and go until they ended in the green. you see the gains were meager. this stimulus could mean a trim for people who are holding loans, consumer and also corporate alike, which means it might be easier for consumers to borrow money and appetites for consumer demand may be stimulated many chinese are seeing the recovery which has been soft it will take a lot to convince consumers out of the zero poll t pollpoll -- policy, frank. >> what does it mean from the chinese leadership >> reporter: that is a great question for the last couple months, chinese leadership in beijing have been aware of the slow recovery coming out of the covid zero
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lockdowns in china, the recovery hasn't been as strong. we have seen new loans missing market expectations. there is a interest to pump the economy through stimulus there are a number of levers they can ease the tight property measures implemented in china which kept the property sector down and led to goldman sachs shadowing more pain or more headwinds for the property sector for the chinese economy that is why the promise of the potential stimulus moves future stimulus moves with the lowering of the short-term rate to help lift the property stocks take a look at the hang seng shares jumping 2.3% in the session of the supporting iron ore and copper in the base m
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meme metals space frank. >> jp ong, thank you very much. still ahead on "worldwide exchange," too far too fast. the new rating for the tech giant. if you miss "worldwide exchange," check us out on spotify or other podcast apps. and join the market economists at the summit this thursday, june 15th. scan the qr code on the scenre or visit cnbcevents.com. what ife , use a hybrid cloud solution to connect data across clouds, then analyze all that data with watson. okay, but this needs to meet our... security standards? yup. compliance standards? mm-hmm. so they get the insights they need... yup. in real time... check. ...to make quick decisions? check. aaaand check. that's the solution ibm and a global bank created.
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it's 5:30 a.m. in the new york area. here is what is on deck. the big cpi report is coming out ahead of the open. the report coming as the central bank is kicking off the policy meeting investors seem to think a pause is baked in. will the fed hold off with the sticky inflation the a.i. race is heating up with amazon leaning on tech to find the right product it is tuesday, june 13th you are watching "worldwide exchange" here on cnbc welcome back to "worldwide
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exchange." i'm frank holland. let's pick up the half hour on the u.s. stock futures and s&p and nasdaq at the highest level since 2022 nasdaq is the best performer up .50%. the fed kicking off the latest policy meeting, but not only the central bank set to issue a decision this week we talked about china cutting the short-term rate and the fed decision tomorrow, we hear from the european central bank on thursday and bank of japan on friday ahead of the central bank decisions, let's check the bond market 10-year treasury at 3.72 easing from the level yesterday. still elevated yield on the 2-year treasury at 4.56. wes als also want to look at en and oil. wti off the lowest level since march. this morning, just a bit of a
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rebound. wti crude trading at 67$67.80 brent is up almost 1.5%. natural gas is up 1.5% this morning. coming up, we speak to francisco blanch and he will talk about the crude crush and why it is just getting started. now is the time to check on the top stories in the corporate world with silvana henao >> good morning. the biden administration is stepping into the efforts to secure a deal in the ongoing west coast port labor dispute. julie su has been speaking to management representatives of the sources tell cnbc that su has a long relationship with both sides and keeping communication open in the push for a final contract softbank is preparing for
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another round of layoffs the job cuts at the investment arm may impact 30% of the estimated 349 workers. if the cuts go through, they would follow the elimination of 150 jobs at the vision fund and softbank group international back in september. amazon is making a bigger push into a.i. in the bid to help customers find the right product. the company confirming it recently started testing a feature in the shopping app that uses a.i. to summarize reviews on products. the feature provides a brief o overview of what shoppers liked and disliked about the item. i like to read reviews. >> i'm not a review person i buy what i buy a.i. in just about everything. >> exactly >> silvana, thank you. turning back to the fed. it kicks off the latest policy meeting today with the decision
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out at 2:00 p.m. eastern time tomorrow ahead of that, 60% of traders are betting the central bank pauses the rate hiking campaign. more than half say they pick back up in july with the 25 basis point hike those views shared by the ceo of bank of america and ceo of goldman sachs. >> they can't say i'm done because they don't know because they need the next set of data >> i'm not referring to this week i think inflation is stickier. you know, i think in the distribution of outcomes, there is a chance rates go higher. i'm not saying they will go there, but you have to be prepared for that. >> before the fed makes any call on policy, economists are bracing for the key inflation report with the headline cpi figure to dip slightly from last month to a still high 4% joining me with more is jeanna
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smialek. >> thanks for having me. >> is the market reading the tea leaves right a pause or a skip or could the cpi report change that >> yes, i think it is really interesting to note there is a 25% chance in the market that they actually move interest rates up this month which is very unusual usually we have 100% market pricing from wherever is expected ahead of the meeting. the fed is diligent of broadcasting what it will do in advance. it is notable there are still some thinking the market could change this month. that has to tie back to the inflation report you know, if we get a blowout number and it is a surprise to the upside, you could see a world in which the fed does feel pressure to go and be more
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aggressive than it otherwise would or investors are betting that's the case. >> i think investors are betting on a few cases steve liesman said they are betting on a pause in july as well we were talking about the central banks and the pce report and the jobs report. in the between time, i know you are a person to see a pause, what is the report that we could see to give us insight into july >> i think the next jobs report is essential you know, a lot of the reason people think the fed will stop is hiring has been strong. we have seem jobless claims tick up if those are the signals of what is happening is the weakness in jobless claims, the fed will feel confident in this is not just a pause, we're done
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if, on the other hand, job gains continue and so vast and rapid and strong, then the fed will have a hard time saying this economy has slowed down and we could feel confident inflation can come down. >> we are talking about shelter and food, jeanna, and experience spending how does that impact the fed decision both tomorrow and in july >> this is a small portion of inflation. it is relevant portion of that super core index that the fed is watching closely the services excluding housing and excluding energy indexes i think the indexes are interesting because they have been part of the really big services inflation over the last year and a half. i think what they tie back to is the real pop in spending we saw
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in the wake of the pandemic. we saw revenge spending. people didn't go on vacations and flights were canceled and a lot of the things were happening in the summer of 2022. we see the inflation sources start to fade. i think if that continues, it could be good news we could see a situation where airfares and meals and hotels are less added to the inflation picture. we are seeing that develop that is a trend. >> jeanna, there is a camp that could see a cut this year. where do you see that? >> a lot of people think that camp is wrong. things can change. to believe that, you have to believe we're headed into the recession and that recession is imm imminent i don't think that is what the job market looks like right now. >> jeanna smialek, thank you turning back to wall street. a possible pause tomorrow doing
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little to ease appetites for the search for yields. dom chu is here with more. >> aside of savings and cds and money market funds, there is a renewed interest, interestingly enough, given the conversation you were just having about where interest rates stand and where they could be in the future. there is a lot more building interest going back into high yield or junk debt this is interesting. if you look at one of the etf that tracks the high yield market i-shares etf hyg, it is a sharp under forperformer. that gap is grown over the last year-to-date period. if you look at the interest rates are setting up and the reason why some folks are tuned to this because if there is a pause, what happens to the overall cash yield rates some people like to go into junk
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debt because it yields more in some cases than certain treasury indu notes. there are a certain number of etfs on high yields. it has gone to the ticker hyg i mentioned. look at the yields we are talking about the 3% to 4% range for cash yield on savings account. i-shares is yielding 6.2%. it goes from 5% to 6% for the major high yield bond etf. fra frank, as we look at the high yield picture, investors believe there is a pause or something else happening in the future, then the high yield etfs are more to focus on frank, back to you. >> dom chu, thank you very much. coming up here on "worldwide
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exchange," oil coming off the worst pull back in months. bank of america's francisco blanch is talking about the calls for triple digit crude still in play. a quick market flash as shares of man united are surging in the pre-market. up 20% on reports that qatari state media that the son of the former prime minister and one of the richest people in the country is set to be announced as the preferred bidder of the soccer club. so far no comments from manchester united. shares up almost 20% we're back right after this.
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it's not just possible. it's happening. welcome back time for the morning call sheet where we look at the upgrades and downgrades by firms you know and stocks you own ubs downgrading apple moving from buy to neutral. ubs citing soft iphone demand trends creating an unfavorable move for investors it is hiking the price target from 180 to 190. shares are trading off the all-time high. morgan stanley upgrading urban outfitters with the price target from $27 to $41 a share. it is naming the company on the de-risk for the year shares of urban outfitters up
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3.5% and jpmorgan chase downgrading first horizon rating to neutral after the period of not rating the stock. the earnings power for the bank is facing headwinds in the near term shares are up in the pre-market. coming up on the show, the one word that every investor needs to know today, plus jpmorgan chase laying out the likely market reaction to today's very big cpi report. what the reading could mean for the rally. and june is pride month. cnbc is celebrating stories of corporate leaders with you as we head to break, here is the portfolio manager and cnbc contributor julie beale. >> when i started my career on wall street, there was very little representation. you may know someone was gay privately, but it was not someone out or comfortable it did not leave a lot of room for anyone to feel safe to step
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welcome back live shots from around the world this morning london, hong kong and new york in just a moment right now is time for the wex wrap-up. we start with the big stock move with tesla the longest daily win streak since going public 13 years ago. the stock soared 36% netflix is in talks to live stream a celebrity golf tournament with golfers and formula 1 drivers.
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shares of toyota popping in asia the company will introduce a new line up of electric vehicles with next generation batteries capable of 600 miles on a single charge and a.r.m. is looking for a u.s. ipo. reports suggesting talks are in the early stanges. and oracle beating on the top and bottom line. the stock is set to open at an all-time high. and occupancy in new york city crossed 50% for the first time since the pandemic building occupancy in new york and metro area hit 50.5% of pre-pandemic levels in the weew week ending june 7th
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trader remain cautious ahead of rate decisions by the fed and other central banks this week. wti closing at the lowest level since march. wore ries growth in china is offsetting the boost in prices over the pledge by saudi arabia to cut 1 million barrels per day in july. to discuss this more, let's bring in francisco blanch. great to have you here >> thank you for having me >> you had a great note you put out. you said the oil market is a battle royale. what is the money doing here >> that's right. the balattle the with the speculators and allocators between those looking at the fundamentals saying the inventory will decline in the
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next six months and those looking at the macro economy and saying the fed is going to hike rates. the right position to be on short commodities. that's the big macro back drop the assets allocators, the big money managers and asset funds and asset holders, as we call them, against those in the micro markets looking for better conditions in the second half of the year. >> we heard the saudi energy minister talking about people shorting the energy market that is a factor there >> i think it is a natural position to be in for pension funds and an assets. the fed is going to increase interest rates until inflation
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comes down why be on the long side in the trade when the money markets and fed is the more powerful -- >> francisco, you are leading me to my next question. how big of a factor is the fed decision tomorrow and china actually easing the monetary policy >> i think this is an important factor driving the markets going into the second half of the year, we will get back to $80 a barrel i think the underlining cuts that opec is putting in place will support the market. i think the fed is close to peak rates. maybe we see one more hike or two more hikes we have to see we are getting close ngs i inflation is coming down in that sense, we are winning
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the inflation battle china, simultaneously, has been shy with stimulus. it is finally getting back to push the economy on a stronger direction going forward. those two factors, the fed stops hiking and china starts easing could be positive. this morning, we are seeing oil rebound from the lows with better prospects ahead china reopening will probably start to kick in for the second half of the year into 2024 >> if we see a hawkish pause and another hike in july, what will that do to the market? >> it will keep a lid on oil we do need to see the emerging markets getting better and obviously it is difficult for emerging markets to ease policy if the fed doesn't stop hiking we have seen cuts by emerging markets. at the end of the day, the fed continues to drain liquidity
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which is slowing the economies around the world i think that is the challenge we are facing trying to the cool off the u.s. labor market is harder than and it participated. i think -- harder than anticipated. i think the more positive rebound. >> wti and brent is up thank you for being here, fran francisco. getting ready for the trading day ahead. the cpi report and the policy meeting with the decision set for tomorrow afternoon also today, treasury secretary janet yellen is speaking on the international financial system ahead of the busy day on wall st street, we have a game plan for stocks based on the headline cpi figures and the most likely
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scenario is the headline inflation read leading to the climb of .75 .75% or 1.25%. let's discuss this with victori greene good morning thanks for being here. >> good morning, frank >> what do you think about tha note right there >> i think they might. it gives the fed the ammunition to pause we are focused on a pause or a skip or a pause-pause. the expectation is the data to come in softer 4.1 or 5.2 for core. that is due to the base effects. if you look at cpi last year, we were at 8% some of the numbers are
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misleading you should see intraday. especially with the prient on th 4 side how sustainable is the rally and overbought territory and where will the rally go? that is the question investors should focus on. >> i'll call you cautiously optimistic what is the wex word of the day? >> it is ornithology is it hawkish or dovish? cpi has more to do with the fed than the actual print number i think everybody is going to be bird-watching. i think the hawks might win out a little bit powell will temper expectations and leave the door open and flexibility on the table as you get cpi in line and it looks like goods are in a disinflation environment it is about the services sector and how good are rents and gas
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coming down? it is the softer print i think we will be eager to see the hawks and doves on wednesday. >> you know, give us the top pick for today that you put money into >> you can't deny oracle was solid. we are looking at adobe this week names on the a.i. over nvidia. i like a very overlooked stock in the health sector the drug pipeline and newly approved in the u.s. the pain medication for animal care is huge $1 billion drug for them the pipeline is overlooked and how much more we are spending on companion animals. if you look at the companion care and the amount americans are spending on pets is something you cannot overlook in zoetis >> victoria greene, thank you.
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one last look at the futures off the highs. nasdaq declining a bit still solidly green across the board. that is it for "worldwide exchange." quk bo"sawx" is coming up next thank you for watching 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. all on the most reliable 5g network,
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conference ted decker spoke to becky about the growth plans and inflation and something we all try to do combating shrinkage. it is tuesday, june 13th, 2023 and "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. waiting for news this morning. let's look at what is happening with the u.s. equities at this hour you will see right now there are green arrows across the board. modest with the dow and s&p. dow up 10. s&p up 8.5 the nasdaq is the big winn
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