it is 5:00 a.m. here at cnbc global headquarters. here is the "five@5." st stocks starting in the red futures are under pressure. earnings are front and center for investors, but one says it could be different in a big way. in china, disappointing data again, but investors say they are not deterred. plus, microsoft all but free and clear to close the deal for activision-blizzard with one regulator standing in its way. later in the show, two years

late tesla truck rolls off the assembly line. it is monday, july 17th, 2023. you are watching "worldwide exchange" here on cnbc good morning welcome to "worldwide exchange." i'm frank holland. thank you for starting your monday with us let's kick it off with the check of the futures the dow with the best week since march. dow is the best performer this morning. the only one with of the indices up in the pre-market up .30%. the s&p and nasdaq up in pre-market excuse me. reversal from a minute ago the nasdaq is the best in the pre-market dow down 62. s&p down fractionally. we have seen a lot of movement in the bond market with the cooler cpi read. 10-year treasury at 3.79%.

2-year treasury at 4.73% in energy, oil under pressure in the early going so far this morning. wti and brent crude down 1%. wti is a tick above $74. brent crude at 78$78.50 upside with natural gas up 1%. the oil weakness is tied to data from china overnight beijing said the second largest economy slowed in the second quarter to 0.1% compared to 0.2% from january to march. the bureau of stats shows the unemployment is 21.3%. hong kong is closed for a holiday. the rest of asia is red across the board. shanghai is down 1%. time for the check of the corporate stories with pippa

stevens. >> good morning, frank the executives of intel and qualcomm are visiting washington to discuss the u.s. and china policy according to reports, the ceos plan to hold meetings with the u.s. officials are the focus on export controls and market conditions among other matters now no official word from the companies, but in a statement to cnbc, intel's ceo pat gel ssingr is in china this week. and twitter's cash flow company is negative according to elon musk due to the 50% drop of advertising revenue on top of the heavy debt load. the disclosure revealed that musk had fallen short of the prediction back in martch that

wits -- that twitter could reach cash flow positive in june. and the deal for united is for higher wages amid the post-pandemic travel boom for employees. it is still awaiting a vote by the members. >> thank you, pippa. back to the markets. the dow and s&p gaining 2% and the nasdaq up 3% now investors are pricing in a re-balance to reduce the c concentration of the magnificent seven stocks that powered the rally this year. that enthusiasm pushing the s&p to the highest level since april of last year the rally comes as the traders are pricing in a 95% chance of a fed rate hike this month opinions are mixed on the impact of that in the markets

research from wisdom tree states inflation is already at zero with the metrics we have jeremy schwartz joining me to explain the thesis jeremy, great to have you here. >> thanks for having me, frank >> we will show you the chart looking at headline inflation. according to your research, if you use alternative data tied to shelter prices, we are actually flat 0% inflation right now compared to what the fed would see. give us a sense of what it means for the markets in the third quarter and second half of the year what withdoes the potential hikn july mean for the markets? >> it is all about the shelter, frank. it is such a different look at the economy and our shelter number using real-time number is flat when the core numbers are

7.8% instead of inflation being a problem and continues hiking, it will slowdown the economy and more unemployment which is more headwind for the markets >> some headwinds in the market in your mind i want to look ahead to earnings season we saw the big banks kickoff last week on friday. what is the expectation for the earnings season? the forecast is a decline for the third straight quarter >> the energy is the key part of the decline. earnings were a lot higher last year that is why inflation is coming back down. oil and energy is be witlow whet was last year. the magnificent seven is on the revolution and boom for a.i. and will that convert to earnings? there is a lot of expectation in the tech sector with the a.i. boom and is that real? i'm worried that 30 times

earnings tech sector is high the higher, the more you have to deliver on the earnings. that is one of the key risks i'll watch >> a big risk, but what about the rest of the snmarket >> we show s&p without tech at the immemedian multiple. the tech is 40% of the market. it is not a significant section of the market. there are baskets. we have a high dividend basket there are cheap sections of the market it is tech >> jeremy, that was your pick. you are looking at dividend paying stocks right now. what is the argument for dividend paying stocks >> i think the s&p at 20 times earnings is a 5% earning yield

gives you the outlook for the next five years. 11 times earnings is cheaper and more defensive and doesn't have inflated expectations. the market is running on the a.i. hope. i think high dividendstocks is the way to protect and navigate the season better. >> we are looking at the wisdomtree ticker. hard not to notice it is negative for the year. what is the catalyst to turn this etf around? >> more expectexpectation. when the nasdaq was down .30%, there is a concern i think this is a fund that can protect you from the volatility and more reasonable multiple is the story. >> we will talk about valuation and multiples for the year jeremy schwartz, great to see you. thank you. >> thank you we are following breaking news here on "worldwide

exchange." the kremlin saying a short time ago that russia's halting the deal to export ukrainian grain that deal was aimed to alleviate a global food crisis we are taking a look at wheat right now following the news wheat prices up 3.5% we are watching oil prices saudi arabia saying it will extend the voluntary cut until the end of december next year. wti with the reverse from a few minutes ago. wti is up .75% climbing as we speak we are looking at brent crude. waiting for that chart to come up a reversal there saudi arabia saying it will extend its voluntary cuts until december of next year. brent up 1%. a lot more to come on

"worldwide exchange," including the one word investors need to know. and a truck finally rolls off the assembly line after a two-year delay and why people are bailing on cathie wo'sod fund. we have a very busy hour when "worldwide exchange" returns advanc future generations. ♪ welcome to a new era of flight. ♪ ♪ the biggest ideas inspire new ones. 30 years ago, state street created an etf that inspired the world to invest differently. it still does. what can you do with spy? ♪

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let's get a check of the trade in europe with joumanna

bercetche who is standing by in the london newsroom with more. joumanna, good morning >> good morning, frank the case of the mondays. let's take a look at how european markets are faring of the -- faring the sentiment is zousouring with the gdp numbers from china anything with basic resources and commodities and all of those under selling pressure it is a broad base with the exception of the spanish index up .20% with the election coming up this sunday one sector in particular is luxury we are seeing a major pullback in the likes of richemont today. down 9% after the jewelrymaker reported a 14% rise in the first quarter. it is behind cartier which is

strong in the asian-pacific region, but it is weakening in america. that is why we see a pullback with the luxury names. richemont down 9%. hermes and lvmh down 4% pulling down the french index. frank. >> joumanna, thank you turning attention to tech. microsoft and sony signing a ten-year deal to keep call of duty on playstation. that is alleviating the issues after the close of the $69 billion deal for activision-blizzard. this comes after the judge denied the bid by the ftc to delay the deal there is one regulattor in its path which extended the deadline to review the deal joining me to discuss is alex

kantrowitz good morning, alex >> good morning, frank >> what is your take on this deal we have seen a lot of twists and turns with the deal, including the last-minute bid by the ftc to brlock it. who knew "call of duty" would mean so much with the deal this size >> this is absolutely going through right now. the cma was watching the u.s. and ftc to see if it would have success here and it will stand with the ftc and say we will no let it good through. the ftc is out of the picture. this seems it will accelerate the deal to go through. >> you are feeling positive about that what does it mean for the stock to go through? do you mean everything is priced in including the twist and turns

and concessions the company has to ake >> i think it is priced in i think the markets have been watching what is going on and they come to the conclusion microsoft would win in the last few weeks. maybe you will see a small bump. let's see how activision adds to the microsoft gaming tools and actually might impact the business and bottom line when you put those two together, there is significant growth and some concerns people are bringing that microsoft might corner off the comepetition or xbox take exclusive ty to the games, that could happen once that happens, we could see something serious with the stock. >> shares of activision-blizzard up 3%. another story we're watching is the tesla truck plant in texas after the two-year production

delay. elon musk telling shareholders back in may that tesla would like to produce 250,000 trucks a year giving the company a leg up from ford and rivian that was the onlyriginal plan a lot of people say better late than never on this one we have seen a lot of pickup trucks and rivian is the best selling electric pickup in the u.s. >> i would say this is a massive hit for tesla. the truck looks great. people made fun of it when it came out people will want to drive it and park it. they will want to show affiliation to elon musk with it i think this can nestle right in there. >> this is an opinion. i think a lot of people think it looks strange. we are looking at it right now, alex it is not a typical vehicle. it will stand out.

maybe some people will want it as a status symbol of it looks different i know you like it is this the right pickup truck for mainstream america also, when you see rivian taking so much market share and the f-150 out there. what gives you confidence people will adopt this? >> i think in the u.s., people like to show value on the road people like cool cars. they like cutting edge i think there is something with elon musk. he has gotten a lot more political in the past few years. that will have a negative impact on the four-door cars. with the pickup truck, that will end it i think this is something people want to drive. it will look cool on the road. i can tell it is different. i would definitely get one if i

could park in new york city. >> we have one more for you, alex cathie wood's ark innovation investors pulling $717 million from the fund last summer. the etf which had $30 billion in assets under management has shrunk to $9 billion after the loss in nvidia cathie said she believes nvidia is still an incredible play. >> if you look at nvidia, it is one of the magnificent seven p it is an easy way to put money to work. the excitement around chatgpt. >> ark innovation is doing well this year. although people are taking money out of it. what is your take of investors

leaving the fund and putting money in other areas >> cathie said people are taking money out for profit you have that money come in when it was close to the high in 202 2021 the clip you played with cathie talking about nvidia being a natural stock foroinnovation i think nvidia has boomed this year it was not a good decision i don't think this is a moment where people are celebrating ark and taking profit. i think people are ready to move on. >> is that one miss that big of a deal we are looking at the chart. a arkk, is still out performing other parts of the market. >> i don't think the one miss is the problem. if you extend that chart back,

you will see it is a downward slope although it popped up this year i think if she held nvidia, that could have made up for the losses $6 billion in a quarter in 2021. a lot of investors are still in the red. holding nvidia could have made up for that a little bit. >> outflows with the arkk influence other stocks in your mind or are they losing confidence in this one fund? >> you have to look at the investor it is only a few hundred million out of arkk. that fund has gone down from arkk, a-r-k-k. that fund has gone down from $30 billion. you see the sizeable returns without that big drop. it is still under its all-time

highs. other options look more attractive >> alex kantrowitz, thank you. >> thank you. coming up, a heat wave testing the grid to the mostly cloudy skies -- grid to the max. we will take a look when "worldwide exchange" returns

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u.s. over the weekend. this is the north american electric reliable corporation warning with 2/3 of americans at risk of energy shortfalls as the temperatures soar. pippa stevens is here with more. >> frank, climate change is wrecking havoc on the grid this leads to an energy demand as people crank up the ac and extreme weather threatens the grid 70% of the u.s. transmission lines are more than 25 years old with the average cable between 35 and 40 years old. electricity demand is slated to grow by 30% by the end the decade with heat pumps and electric vehicles which is stressing the grid a lack of transmission infrastructure is a bottleneck as bank of america summed up,

cap x is requirement for the aging infrastructure lots of different companies stand to ben pbenefit. ubs says electric grid investment is entering a new phase of growth. companies like abb and siemens work on power distribution there are companies which make software solutions, frank, specifically for utility companies. >> really interesting stuff here, pippa, especially with the heat wave. you said it was too hot to leave the house this weekend apart from commitment upgrades, what are longer-term solutions for grid stability >> one is that sophisticated software companies have to understand the balance with supply and demand when it was fossil fuel generated, it was easier

you can ramp up the coal power plant. that is not the case of they have to understand how the overall picture looks. the other is transmission lines. we have to have the transmission infrastructure to carry it from arizona to the city distribution centers. >> i thought you were going to say a.i. pippa, great reporting thank you. let's talk about extreme weather. let's get a check of the headlines with frances rivera in new york frances, did you leave the house? was it too hot >> and the rain the next day little bit of everything, frank. we start this morning with a headline with authorities searching for two young children swept away by flash flooding in pennsylvania their mother is among five people killed by the sudden downpour. breaking overnight in the ukraine. reports of explosions at an

bridge that connects crimea to russia the traffic has been halted over an emergency without elaborating. two people were reportedly killed telegram channel associated with wagner says two strikes have been reported on the bridge in a comeback win, carlos alcaraz won his first wimbledon title over novak djokovic. for monday morning, frank, those are the news headlines. >> he did not seem happy he was not a good sport. >> nope. the throw down >> frances, good to see you. thank you. coming up here on "worldwide exchange," we will tell you why it is not just activision and

microsoft in regulator cross-hairs. more on "worldwide exchange" after this break

it is 5:30 a.m. in the new york city area there is more ahead here on "worldwide exchange. here's what's on deck. a big week of earnings looking to propel the markets higher futures are mixed.

tech stocks continuing to steal the spotlight. a number of well known names inching fresh highs. we will look at winners and see if now is the time to buy. and fresh off the efforts to block the microsoft activision dieh deal it is monday, july 17th. you are watching "worldwide exchange" here on cnbc welcome back to "worldwide exchange." i'm frank holland. thank you for starting your day with us. let's pick up the half hour check with the stock futures a bit of a mixed picture nasdaq higher. the dow looks like it would open 60 points lower. s&p is fractionally lower to flat we are looking at the bond market after the softer cpi print. 10-year treasury at 3.9%.

we want to look at oil saudi arabia saying earlier this hour, it will extend the output cut to december of next year wti crude now down 1.3%. a change from earlier. we are seeing the spike here when the news got announced, the prices were going down wti is trading $74.50 a barrel. the usual cast of characters with stocks is nvidia, google and tesla climbing between 4 4.54 4.5 and 8% e a number of others are hitting fresh highs this week. let's bring in malcolm ethridge.

malcolm, it is great to see you. let's start with the payment stocks h mastercard are you still buying into it? had. >> good morning, frank if we consider where the financials are right now, jpmorgan chase was a surprise with earnings report some banks have still yet to report here. we don't expect it to be great of all of the financials, i would prefer to own visa and mastercard they are not thought of as financials they are more fintech. these are wedged between every transaction that we make with our credit cards the trillions of dollars of payments that flow around the year, they earn a piece of that each time. it doesn't cost them more for each additional slice you or i make once they build out a network, every additional swipe we make

is more profit for these payment processors that is a great place to be and dare i say, a recession proof mo model. >> we are seeing credit card billions hitting $1 trillion the interest rate on credit cards hitting 22%. also a repcord also student loan payments starting again in the fall. >> it may decrease the amount of each transaction because their take is based on the percentage of the swipe i would say anybody bet against the americans' willingness to spend is outside the trade looking in i would not necessarily have a change of heart and see americans have less willingness to spend are there as many dollars available? that remains to be seen. >> let's go a bit faster

several home builders hitting fresh highs. dr horton mean 20-year highs of the wha-- highs. what is your take? >> the interest rate environment and still strong calls for recession among economists scare me with home builders. if i had to choose one, i would go with dr horton with the ability to build in all markets. entry level, custom or luxury, one price point is negatively impacted going forward and dr horton has the ability to make up for it. >> adobe has not seen trading a the level since last year. and sherwin williams trading do any of the names excite you >> of the names you listed,

adobe is the one i love to own here innstead off running with a.i., they are behind it the jo the a.i. firefly allows them to offer unique work to the creatives as more artists and creatives are protective overwork they are suing for ownership rights of the a.i. or large language models are trained on i think adobe is more valuable that will drive the price higher going forward. >> malcolm, stick with us for a second we want to get to china. another batch of bad economic data second quarter gdp sam baddas has that report >> china' economies grew 6.3% in

the second quarter missing the expectations of 7% headline growth was better than the first quarter, but heavily skewed by last year's lockdowns which weighed on productivity and consumption in shanghai. on the quarterly basis, the economy grew 0.8%. the base effects discotorting t economic activity given the pe pent-up demand last year retail sales miss at 3.1%, but on the quarterly basis, grew a smidge which is confirmation consumption remains weak with confidence low amid worries of jobs and income. that was highlighted by youth unemployment and the weakest showing all year showing the need for stimulus to spur consumption. there were bright shots. industrial outputs to the upside despite exports falling the most

in three years and business confidence at factories at thels >> i want to thank sam for that. let's bring malcolm back in. this is after the crane shares etf saw the best weekly performance last week. given all that, are you investing in china right now >> i wouldn't necessarily be investing in china right now specifically because if those are the numbers we are allowed to know about, i wonder what they actually are. the thing that i would point out more than anything is the youth unemployment number baked into the details which doesn't bode well for u.s. companies that depend on chinese labor to do business i would pay attention also to a starbucks, for example, which we know is dependent on china nike, for example. names like that stick out to me. >> a lot to think about with

china ongoing recovery and chinese equities and u.s. companies. malcolm, brightgreat to see you thank you. time for the check on the top corporate stories. pippa is back with those >> frank, it looks like video game makers are not the only thing on the s.e.c. radar. the regulator is taking a closer look at the $43 billion takeover for seagen the two companies first announced the deal back in march as a way to boost pfizer's pipeline to boost cancer therapies. an investigation is under way after a fire at the dow chemical facility south of baton rouge. dow is working with state agencies to respond to the incident and all personnel are

safe dow says air monitoring has not detected hazardous materials. the head of the teamsters union asked the white house not to intervene if u.p.s. workers end up on strike talks with the union are currently at a standstill with the july 31st deadline fast approaching. >> something to watch. the stock of u.p.s. and reporting on friday. a lot to watch >> certainly >> pippa, thank you. coming up here on "worldwide exchange," the morning briefing and headlines dominating trading desks around the world and the turkey president dealing with the cost of viling crisis. we're back in just a moment.

welcome back to "worldwide exchange." time for the "morning call sheet. we begin with jpmorgan chase upgrading progressive rating from neutral to overweight the results were poor, but they don't alter the long-term view of the earning power looking at shares of progressive down 1%. goldman raising the rate from

aggressive to buy for chewy. shares of chewy up 4.5%. and morgan stanley downgrading pepsi rating to equal weight after the strong second quarter means the company is valued. catalysts of the run now played out. shares of pepsi down 1% this morning. time for the "global bri briefing." now looking at headlines around the trading desks this morning the agreement of ukrainian grain to allow the grain blocked by russia over the conflict to be exported the price of wheat jumping on that news. britain signing off on the brexit deal to date yoi

the deal will receive parliament scrutiny in the uk and other members will complete their are you -- their review. and turkey's president is dealing with the cost of living crisis with the government hiking fuel taxes by 200% yesterday. ahead on "worldwide exchange," the one word that every investor needs to know today. markets getting ready for another week of results. greg branch says why he is not sold on the optimism permeating on investors if you miss "worldwide exchange," check us out on spotify or other podcast apps. more after this break.

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we have reuters usissuing a correction over the oi production cuts from saudi arabia reuters says it was a repeat of the news on june 4th you see the green line up. a pop of oil prices. oil prices now back in the red now down 1.75% of time for the "wex wrap-up. the financial times stating microsoft is facing probe by the eu it will focus on claims of the app with the software. and richemont reported a surprise drop in revenue from the americas in the latest quarterly report the chief executives of qualcomm and intel will visit

washington, d.c. to discuss china. two years later and the first tesla cyber truck rolled off the assembly line. "mission:impossible" taking in a disappointing 5$56.2 millio in the american debut. estimates were closer to $75 million. the rare iphone auctioned off for $175,000 the original sale price of the first is $499. we are getting ready for the week ahead at we get ready for results from bank of america and morgan stanley and goldman sachs and tesla and ibm and american airlines and johnson & johnson that is just scratching the

surfac surface. many expect the week could be a catalyst for the market, but it may not be as big as some people ubs argue that instead of a buying opportunity, the next few weeks could be a sell for stocks if it happens, it makes the earnings season unusual. analysis from deutsche bank shows the s&p logged a gain of 2% during the four-week peak of earnings season. stocks have seen a median gain of 1.7% for the quarter. for more on that, let's bring in greg branch. greg, good morning. >> good morning, frank. >> greg, how do you see earnings season is this a possible catalyst for the run from the first half to continue >> i do expect this to come in better than expected better than the negative 7.2% for the same reason we saw the first quarter come in better than expected.

we have lots of stimulus in the first and second quarter from the bank loans and the treasury. i think that is starting to rev reverse. i think we are starting to see the cracks in the treasury i think the fed has a problem and the market is reacting to the native i think this will look a lot like it did last year where the fed comes out and reasserts the narrative it wants the market to have a great second quarter. then you can't get to the numbers. >> a bit of reversal from you. you expect things to be better than expected. that is not normally your thing. you say the market has its narrative. we want your narrative what is your "wex word of the day" here? >> the word of the day is financials it is a tale of two woes

the big banks are the winner after silicon valley bank. we have not heard from the losers of the those deposits of the th-- deposits. even with the winners, we saw net interest margins down. we saw profits decline i'm waiting. >> we are waiting to see how you play this week we are waiting stay how the consumer is strengthening. credit card rates at 22% kind of pointing to a stretch c ced consumer what does it mean for your analysis >> i would look at the couple of weeks where we reached the highs

of 2023 and then take profit and hang out at the short end of the curve. wait for the opportunity after the market reviews the fed narrative. that is a buying opportunity and hopefully i can shed this bear skin once and for all. >> futures are pointing to the red. where would you sell where would you look to trim right now especially ahead of the fed decision later this month? >> i think investors will seek safety with double digit earnings growth of i don't think multiples will matter the argument against the mega tech trade is valuation. i don't think it will matter for a number of months health care will get double digit earnings growth. we saw that in inflation with healthcare services.

look there look where you have margin protection >> i'm not going to let you off the hook everybody says that. the yields are elevated. when you say the short end, one month or two months. what is the opportunity to buy >> we see lots of plos which attract the interest rate. also on the treasuryies means we are prepared to buy the companies off that tailwind sdptailwind >> you are buying clo etf? >> yeah. they pay the prevailing interest rate there's now higher yield

instruments in the market. >> greg branch, kind of bearish. it seems like you see light at the end of the tunnel. a shift for you. always great to see you. before we let you go, we look at the futures again. a flat picture dow opening up 50 points lower generally red across the board we look at oil prices after the reuters missed report of error. wti down almost 2% same story for brent crude we are looking at wheat after the kremlin will no longer allow the grain shipments go through they allowed them to continue to go through a year ago despite the conflict wheat up 3% right now.

that does for us on "worldwide exchange." we have "squawk box" coming up next thanks for watching.

good morning futures slightly lower this morning following a strong week for stocks the market is now gearing up for earnings and a trickle of banks last week. now they will chart for the next several weeks. up to speed on what you should watch. united and pilots union agreeing to a labor deal after months of negotiations what it means for the nation's airlines tesla building its first cyber truck after a two-year production delay

the latest details on the carmaker's demand. it is monday, july 17th, 2023. tom lee is here. "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 with joe kernen and andrew ross sorkin >> the gang is here. >> oui oui there are red arrows dow futures are down 93. nasdaq down by 10. last week was an up week for the markets. the dow an