it is 5:00 a.m. here at cnbc global headquarters. here is the "five@5. stocks with the worst week since march and now looking at a new wall of worry. futures are higher in the pre-market. higher we are talking oil prices. pain at the pump is causing alarm at the white house we discuss. beijing is warning economists not to talk about the economic trends. what it means for businesses heavily exposed to the world's second largest economy. and higher interest rates and surging stocks helping

warren buffett and berkshire hathaway in a big way. and later in the show, a live stream update on the musk and zuckerberg cage match. it is monday, august 7th you are watching "worldwide exchange" here on cnbc good morning welcome to "worldwide exchange." i'm frank holland. let's get you ready for the day. we kick it off with the u.s. stock futures. green across the board nasdaq doing the best up .30%. at this hour, the dow would open up 70 points higher. this is after the poor showing last week with the s&p and nasdaq coming off four straight days of losses and the worst week since march 10th. you see the nasdaq down 3% s&p almost by 2.5% it was rough for the tech sector the sector coming off three

straight days of losses. the sharp decline down 1.5%. excuse me. 4.25%. the fitch downgrade is playing a factor it was dragged down by apple which had its worst week since 2023 we had a very busy week for fixed income and new long-term issuance yields here with the 10-year treasury at 4.09 yields back above 4% since that fitch downgrade. we have seen downside moves with the lower end of the curve 30-year treasury is down five points we are looking at energy wti is $82.25. down in the pre-market a similar story for brent crude at $85.75. natural gas is catching a bid up 1.5% now let's check on the top

corporate stories with silvana henao. s silvana. >> thank you, frank. warren buffett showing an increase with cash holdings jumping to nearly $150 billion due to underwriting and investment income. the company reporting a $26 billion gain from investment and stock like apple with berkshire betting on $180 billion. u.s. trucking giant yellow filing for bankruptcy over the weekend. more than 100,000 creditors. the move marks the end of a 100-year old company with failed contract negotiations with union workers. and federal reserve governor michelle bowman making the case for more rate hikes. bowman supports the recent hike

and expects that additional increases will be needed bo bowman added monetary policy is not on a preset course and data will drive future decisions. frank. >> thank you, silvana. we will talk more about michelle bowman coming up thank you. markets gearing up with 80 of s&p earnings out as investors look at fresh inflation data on thursday cpi is one of the things expected to be top of mind as wall street faces a wall of worry with the impact from fitch's downgrade of the u.s. credit rating and stretched stock valuations and reports from apple and other chip companies with the deflation risk in the economy. we have the latest from our economist here from hermes

the long wall of worry the fitch downgrade. which do you expect to have the biggest impact on wall street today and this week? >> it is yields. treasury yields. i don't think it is about fitch. i think what you saw with the bank of japan and loosening of the yield curve controls is pushing rates up more than the downgrade. when you think of the 4.25 level on the 10-year treasury, we haven't broken that. everybody thought we would be lower. i think that is something that could spook markets. we would be buyers. >> you are adding to the wall of worry. you are seeaying it is yields we saw the long end of the curve go down a bit after the fitch d downgrade. it had meaningful impacts on the

bond market. how does it shape your view on the fixed income are you buyers >> we have been long duration. 5% over the benchmark. we have not jumped in and added more we want to see where the yields settle in. not only in asia, but the inflation data coming in wheat prices are moving up a bit. oil isagain. >> we have not seen commodity prices tick up i want to talk about the fed you sent us notes. according to the cme, an 80% chance of pause at the september meeting. that is with voting member michelle bowman saying she thinks they need more hikes. how does that shape your view short term and long term >> we had a pullback we have come through that. that is typical with the fed

rate hike cycles these are good for stocks. 13% or 15% returns 20% max rally. i don't know we're in the pause yet o yet. i think we could see one more hike in september or november. that is the direction. it is hard to get big pullbacks with the fed on pause. >> let's get back to the wall of worry. morgan stanley telling investors pull your money out in days lackluster triggers a retreat. what impact do you see a pullout of the american investors in china? >> china is difficult. not only do you have the -- you can't stimulate china unless you stimulate the property market. they hcannot stimulate the property market because it is a dead market. in terms of the united states, you are seeing manufacturing construction gdp in the u.s. the highest in 30 years.

that is a sign of re-onshoring that is a theme for the u.s. >> a lot to watch. steve, thank you very much >> thank you more to come on "worldwide exchange," including the one word that investors have to know today, but first rising oil prices in saudi arabia's production cuts reportedly turning heads in the white house ahead of the key election year. staging the a.i. impact for healthcare and what could be a game changer for nurses and doctors and hospitals. and mega tech misstep. the sector responsible for so much of the market year to date gains. a very busy hour when "worldwide exchange" returns. stay with us ♪( please don't go by harry casey, richard raymond finch )♪ ( ♪ ♪ ) ♪ (please don't go) ♪ ♪ (please don't go) ♪ ♪ (please don't go) ♪ ♪ (please don't go) ♪

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welcome back wall street trying to bounce back after the rough week. let's see how london is shaping up with arabile gumede in the london newsroom. >> good morning, frank the markets did not take rest over the weekend because they are continuing the downward traj trajectory .30% weaker for the ibex in spain. the markets dipping off today as we follow on from earnings news. not much as we follow through toward china as well as the u.s. cpi print. those will be in keen focus.

on the earnings front, siemens stating they need to slowdown the amount of innovations they are bringing to market costs have been heavy for the entity and really denting a lot of the bottom line overall, as i said, downward trade on the european markets. following on from the number last week out of the jobs numbers from the united states and now the nikkei going up .20%. the rest of the asia trading picture is negative. more stimulus anticipated from the market as i spoke about earnings, early this morning, we saw saudi aramco post 40% plunge in second quarter net profit with lower oil prices and thinner refining margining coming into play for this one we are seeing that dip off in wti as well as brent crude oil impacted the profits significantly. the stock is down .50% in the

trading picture. things not necessarily doing too well for what is a large company. spending program and trying to bring out the largest spending program for aramco quickly, this is wti and brent crude dipped off significantly it is beginning to pick up as well going into august and the rest of the year that's the picture in europe frank. >> arabile gumede live in our london newsroom. turning to the energy market oil prices holding steady at four-month highs after saudi arabia and russia continue cuts for another month. saudis say it could extend beyond that or deepen the cuts wti and brent crude with the gains in the last four months,

although arabile mentioned they are down this morning. prices at the gas pump at a nine-month high which is sparking concerns notice white house as president biden promising to lower inflation let's talk to matt smith from kepler matt, thank you for being here >> hi. >> we showed the ft headline let's talk about the gas prices and oil with the political implications the biden administration is worried about the re-election campaign and the prices. $3.83 a gallon nationwide. do you see prices reaching $4 a gallon and when it becomes an issue for consumers? what does this mean for wti? >> frank, we have two scenarios here the immediate scenario is $3.83 here we are past the peak of summer

driving season we are exiting that and we will roll on to the next contract which is lower we are not going to get to $4 a gallon national average unle9$9 on wti which is unlikely the second thing in terms of the election, you will have that focus on the prices at the pump just because the biden administration knows if it gets above $4 a gallon, then the focus becomes on popularity drops as the prices rise that is something to worry about this time next year. >> got it. let's switch from the political implications to the global implications what does the saudi cuts do to the global markets >> you see with price, frank, we

know they are cutting in august. we know they are cutting in september. you are not seeing prices charging higher. that is what saudi arabia is doing. they are concerned of too much supply on the market here and as we get out of the period here in the year and move to the autumn and fall here, prices can come off and that's why they are trying to tighten the market let's be clear, they are doing so we see the crude exports dropping last month by 750,000 barrels per day month on month we also have russia on board with this russian exports may to july dropped the same. 800,000 barrels a day. you are having the barrels taken off the market that's why prices have rallied here frank, we have gone from $67 on wti in late june to now pushing to the $82 mark and straight to resifstance

resistance >> i want to talk about the dollar declining this year we have seen the weakness in the dollar if we continue to see that weakness, how does that impact the oil market and does that give us a bigger chance of reaching what some people are forecasting at $100 a barrel >> you have a relationship and not necessarily on a day-to-day basis, but longer-term period with the weakness in the dollar gives support to crude prices of the it is making it cheaper and other currencies that will with lend support to commodities and crude going forward here as we come out of this tightening cycle from the fed, we should see weakening dollar coming through as that happens, that will provide an amount of support >> you believe the ceiling is below $90 a barrel >> yes, exactly. yes. we have seen strong positions

around $81 for wti. we still can push through that this coming report wednesday will perhaps get a build we have headwinds for crude prices s prices >> a lot of headwinds. gas above $5 in california here. not a big political issue. it is coming full circle matt smith, thank you. >> thank you coming up on "worldwide exchange," another "barbie" milestone and still no mega millions winner and live streaming home for the musk-zuck cage match more to come on "worldwide exchange." stay with us

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now you've built something better for everyone. that's the sustainability solution ibm and a global real estate company created. what will you create? ibm. let's create. well come back to "worldwid exchange." family doctors say they are burned out a pain point is filling out medical records. now there is an a.i. app for that bertha coombs is looking at tech to help doctors in the office. bertha, good morning >> good morning, frank when you go to the doctor's appointment and you see them spending a lot of time typing into the electronic health record most finish up the notes later at home in what is commonly known as pajama time microsoft's unit has an a.i. app helping to put pajama time to

bed. dr. johnson starts patient visits by pulling out her phone. >> it listens in on the visit to pay more attention to you. are you comfortable? >> reporter: use this app has freed her from typing when seeing patients. the a.i. program writes the summary for her which freed her from >> pajama time which should be the time you are getting ready to wind down for bed we are charting and noting and doing things to enhance the life of the patient, but not our quality of life. >> reporter: at the baptist health, a.i. programs help doctors and nurses fight burnout. >> the economy of scale and economies of healthcare leveraging a.i you eliminate all of the administrative overhead and allow people to work >> reporter: a.i. to reduce tasks could help hospitals cut

costs 5% to 11% in the next few years. for physicians, up to 81%. the upfront investment isn't cheap cheap. >> it costs me x and i made my staff happier and more productive >> reporter: about the productivity the pracajama time is now reserd for family. >> this is quality of life we're people, too. >> the new version of the app using open a.i. technology actually writes the notes instantly. the version she is using takes a couple of hours. microsoft is working with epic, the nation's largest health records firm on taking the notes and leveraging the ehr some hospitals are using it for

follow-up notes. one doctor said the notes are nicer than her's she is sure the patient knows it is not her writing it. they do have a disclaimer. >> it makes it easier for health professional professionals. they were stressed, obviously, during the pandemic. how can a.i. complicate security for hospitals and doctors? >> that is one of the concerns obviously, people who are trying to hack a hospital can use a.i. as well to try to get through that system. we have seen even large systems like hca with a massive breach that has exposed millions of patients personal information. it is one of the things people are talking about and talking about in terms of building guardrails into this even as we're starting to roll it out. some people worry we might be

playing catch up. >> a lot to watch and a lot to consider with a.i. which is useful, but concerns bertha coombs, another great report thank you. time now for a check on more of the headlines with frances rivera in new york >> frank, good morning saudi arabia hosted the peace summit for ukraine over the weekend. there was a surprising movement on the diplomatic front. china joined the talks signaling a new approach to moscow the party is reporting to be in support of a third round of talks to finalize a ten-point peace plan endorsed by kyiv, but not the kremlin. the summit in jeddah hosted everyone but russia. and former president trump lashed out at jack smith calling him a maniac the judge in his election

interference case requested trump be blocked publicly on parts of the case. the legal team of trump is facing a deadline of today to respond to the request. the officials declared an emergency after part of the glacier broke along the lake the mendenhal river rose to 15 feet some were ordered to evacuate with the rising flood waters. and pups were wet at the world surfing championships. they competed for the golden surfie award you are up to date, frank. back to you. >> that looks like fun for the dogs i don't think my dog can surf. >> dogs and humans surfing four, not ten. hanging ten. >> that's a good one with.

frances rivera, great to see you. straight ahead on "worldwide exchange," a new contender looks to take on the competition on the high end if you haven't already, follow our podcast on apple or spotify or other podcastpp as. more "worldwide exchange" after this old i wouldn't qualify for the erc tax refund, so i called innovation refunds. their team of independent tax attorneys will work with your cpa to determine if your company is eligible. [whip sound] take the first step to see if your small business qualifies.

it is 5:30 a.m. in the new york area.

there is more ahead on "worldwide exchange. futures are looking to bounce back after a rough week for stocks and tech as investors look to scale a new wall of worry. sticking with tech, a closer look at mixed earnings for the most important names in the market and any downside could mean for the portfolio. and the war on the word deflation in china it is monday, august 7th, 2023 you are watching "worldwide exchange" here on cnbc welcome back to "worldwide exchange." i'm frank holland. let's pick up the half hour with the check on the u.s. stock futures in the green across the board. off the highs from earlier today. the dow would open up 60 poin poinpoints higher the bond market is where people are paying attention including steve chiavarone

now at 4.10 with the treasuries. we are also looking at the energy markets specifically oil following saudi arabia saying it might deepen cuts wti crude at $82.19 a barrel brent crude at $85.60. down the same amount natural gas moving up 1.5% hitting highs of the morning this as investors kickoff a trading week with a fresh wall of worry demand warnings from apple and qualcomm and the u.s. rating downgrade. we will watch those in the wall of worry let's check on the top corporate stories with silvana henao who is back with those silvana, good morning again. good morning, frank. high-end ev maker lucid is

cutting price forforces for ther demand amid rising competition in the u.s. and price cwar kickd off by tesla the base price is down from $87,400. the grand touring starts at 95$95,000 and $125,000 the offer is valid as long as supplies last. president biden is expected to announce curbing investments in china it is expected to target u.s. private equity and joint venture investment in china in semiconductors and computering n a.i. and credit card users are carrying more debt than ever

before it is up from 39% from december of 2021. the survey responses blame emergency expenses for the high month-to-month balances, but say higher interest rates make it hard to pay downt the smallest debt, frank. >> it is pressure. >> people continue to see the raising interest rates it is something to keep an eye on >> the trends for the consumer that is something we talk about here on cnbc silvana, thank you turning to earnings. apple coming off the worst day so far in 2023 and largest lost since last september after the third straight quarter of falling sales. similar for alphabet and meta and microsoft losing between 2% and 3% amazon earnded the week in the

green. it has been a positive season for mega cap tech. all five beating on revenue and earnings microsoft missing on the forecast and apple has not provided guidance since 2020, but giving indications of another soft quarter of sales. joining me is richard kramer >> good morning, frank. >> i want to touch on the intro right there. we saw revenue and earnings beats from five of the magnificent seven. did these reports justify the lost valuations of the names amazon is 79 times forward earnings alphabet a 22 times. the s&p trades at 20 times >> one thing across big tech is the companies were harvesting the cost savings at the end of last year and this year. records at apple and recovery at google and earnings swing at

amazon in the market where there is not a lot of growth to find in the consumer, based on the ref segment, credit card debt and other things weighing on the consumer, this is all to control the cost which you have seen in earnings when you look at the 5% decline on apple on friday, you have that offset of 50% gain this year in the chart. an an annualizing that gain is punchy. >> fair enough you didn't answer the question are there's justified? a lot of people talk about stretch valuations in the wall of worry can you see the justification like amazon to be 79 or 880 tims forward snerngs. >> -- forward earnings >> you see that justified by the duration of forward earnings it stretches out a decade where

people will continue to buy the products if you look at amazon and compare with the other ecommerce companies, they are looking to grow and continue to bring in new sales. growing advertising business which is a $40 billion run rate at 20% the cloud business is growing in double digits. they cannot do much about the consumer, but the duration of earnings at these companies and microsoft is another great example. the embedded position in enterprises with stabilization in software trends >> sounds like a long yes. you feel it is justified >> yes >> i want to get to the markets overall. market cap tech makes up 1/3 of the market cap if we with see a pull back in stocks, what does it mean for the overall rally? >> i think what i would would be more concerned about is the second tier companies. it is clear they are losing

ground to mega cap big tech. what we see coming with a.i., as you talked about, is a battle for resource the mega cap tech companies are going to have the money to spend on the compute infrastructure that everyone wants to use for a.i. and they are propping up the market right now you cannot divorce the wider market from big cap tech, but you would be more concerned with the second tier companies. a lot of them, frankly, are more expensive than big cap >> you are talking about cloud names and names in the arkk etf. we saw a sharp pullback when rates went above 4%. 4.01% on the 10-year treasury. if we see the rate pressure, mega cap tech trend to the upside, but will we see a

selloff with risky areas of tech >> absolutely. you will see the companies that are moving just from losses into profitability with uber and spotify as they need to be judged like real companies now you see a cadre of other companies that have not crossed the rubicon into profitability with mega cap tech with the exception of amazon, they are sitting on huge cash these companies can continue spending in an environment where capital gets more scarce and widen the lead they have over some of the smaller companies which are relying on the market to prop up what are clearly punchy valuations relative to big tech. >> richard kramer, thank you good to have you here. coming up here on "worldwide exchange," mum is the word with deflation risk in china.

my next guest says that is bad news for the fortunes tied to beijing. first as we head to break, top trending stories the sport of the summer coming to an x near you the in-person cage fight will be streaming on x, formerly known as twitter, and all proceeds will go to charity. and another disappointment mega millions ending without a winner top prize increasing to $1.5 billion for the next drawing tomorrow night marking the 31st straight session without a winner. and it is a "barbie" world surpassing $1 billion at the box office over the weekend making it the fourth u.s. movie directed by a woman to cross the $1 billion mark and first $1 billion film for warner bros. since the 2022 merger.

welcome back time now for the morning call sheet. we start with piper upgrading monster beverage to underswait the company's strong -- underweight. shares of monster up 3.5%. now ubs upgrading to a buy for davita the firm says it sees an inflection point of growth into

2024 ub ubs adds it should serve as a catalyst for the stock shares this morning are flat in the pre-market and guggenheim with a $70 price target for fortinet. the company position is strong shares up 3% in the pre-market take a look at monster we did not see the ticker. up 3.5%. time now for the global briefing looking at wheat prices climbing higher on the supply from ukraine after another round of drone strikes against the russian naval vessel and oil tanker this coming weeks after moscow exited the grain agreement to allow ukraine to ship across the globe.

foxconn consumer electronics segment with double digit growth as apple gears up for product launches this year fox chinese authorities putting pr pr pressure on the economytors arew the economic trends in a positive light this as beijing reveals daily stimulus measures. what does this message mean nfo investors? jo joining me now is dewardric mcneal >> thank you, frank.

>> chinese authorities are trying to tamp down talk of the inflation and stimulus what does this mean for foreign investors, specifically u.s. investors in china >> frank, we are seeing control of the chinese communist party this is bad for businesses, because if, in fact, they are told this about the chinese economy, it will make it difficult to get accurate and timely information about with the macro economy and various sectors, particularly those that the government feels is necessary for their development and individual companies we have seen cap vision with off offices raided this environment, frank, is difficult for businesses to on

the -- to operate in it continues to trend and really need to be cautious of the risk of being in china. >> you see concerns of investing in china morgan stanley out with the message. cash out now in case lackluster stimulus triggers retreat. when you are morgan stanley, how do you see this impact the long-term outlook? in the short term, we see concerns you see trends of people pulling money out and they find other places to put it to work >> that's a good question, frank. i want to be very clear here that even capital outflows for china is difficult, as you know, there are capital flow controls on the amount of money you can get out over a certain period of time the advice given is wise, but i would say you have to move quickly and cautiously to do

that you know, i don't know where this money is going to go. china was supposed to be, as he k -- as you know, was the growth engine to rise the boats here in 2023 and that hasn't happened. we have to keep an eye on this i'm not saying everyone should run for the exits. my message is about being aware of the risks in the short-term you know, china could turn this around so far, the policy measures have been lackluster. >> they could turn it around which is your opinion of stress. what wdoes this mean with u.s. companies and foreign companies leveraged to china if you are invested, what would this mean? >> i think the hope here is -- first of all, the deflation issue. part of propping up the economy,

some economists are using the term disinflation as opposed to deflation. most people are looking at this fairly there are deflationary pressures in china this is a situation where you will get pressure to try to do things to keep jobs in place and try to help thegovernment boos what they are looking to do on the spending side. i think businesses should be prepared to hear from the chinese government about how they can help pull this together i don't think the government, by itself, has a near-term answer >> dewardric mcnaeal, thank you coming up on "worldwide exchange," one word every investor needs to know today my next guest says the sector is prime for a buy.

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♪ welcome back to "worldwide exchange." time for the "wex wrap-up. berkshire hathaway with cash holdings up to $150 billion due to investment income. and michelle bowman states the fed may need to raise rates higher saudi oil giant aramco with

a 32% drop in q2 the company says the results align with the overall drop in production across the country. daimler trucking company cfo died in a tragic accident. the u.s. dispatching war ships for the chinese patrol that operated off the coast of alaska last week this is the largest inn sstance foreign ships approaching america on record. and yellow filing for bankruptcy after 100 years in business the shutdown will lead to the loss of 30,000 jobs and could have wide ranging impact on the u.s. supply chain. and here is what to watch on t the week ahead the first anniversary since the inflation reduction act. we have results from u.p.s. and

under armour we get data from china and the first anniversary of the u.s. chips act. thursday has alibaba reporting the week rounds out with ppi and consumer sentiment we have the s&p and nasdaq with the worst performance since march. there are issues for investors to consider in the days ahead. the biggest reports this week are inflation data and cpi and ppi. let's bring in katrina dudley. >> thank you, frank. >> the fitch downgrade is a fact factor here. what do you expect to see? >> i think what we are seeing is a real interesting balance with short term the ceos were concerned about the short term in the economy

you look at the fed and michelle bowman talking about the resilience that is a strong positive. people are keeping their jobs. you have the housing market as well that will offset the concerns you are speaking about with the short term the positives can overcome the negative >> interesting you don't see another down day in the market. you see a rebound from the fitch downgrade? >> exactly the fitch downgrade with one that happened means that we don't think it will be really derail the positive momentum in the market we have been in the camp for a long period of time that if we have a recession, it may be mild and we may not notice. >> a lot of people changing the recession outlook in recent days i want to go to the sector of the healthcare mystery chart you are looking at health care, but healthcare services. >> healthcare services is a

company that provides insurance. when you go to the doctor and hand over the card, there is an assurance behind that. what we see is the earns ings i the quarter. these are the companies that missed estimates one of the good things of the health insurance sector is you can correct your mistakes. you get to re-price your contracts on a yearly basis. we think this is a temporary moment >> you don't often hear a strategist say a miss on earnings is a good thing give us names. actionable names for today >> you are talking about cvs health by brought down guidance. negative earnings. the stock was up on the day and that is reflective in the package of the valuation is priced in. they are calling out the headwinds on the costs, but have been telling the market that we can handle it and price for it

even though they did not have a great day into the print, the stock is cheap and we like cvs health that is one we would buy today >> human an and -- humana and element. would you buy into that weakness today? >> i think that when you look at it, it is balance between valuation and obviously earnings one of the things we are encouraged with the market is the fact that earnings estimates, particularly for 2025, have gone up 5% to 10% on the back of upgrades due to the chips act and i.r.a. >> it sounds like a yes. >> it does. >> we have to leave it there thank you for being here in the studio thanks for watching "worldwide exchange. we have "squawk box" coming up next have a great day

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good morning stock futures pointing to a slightly higher open after last week's pullback. wit we get you ready for the numbers this week. "barbie" reaching the $1 billion mark in 17 days. and musk versus zuck musk is ready for the cage match, but zuckhe may require surgery. it is monday, august 7th, 2023 "squawk box" begins right now.

good morning welcome to "squawk box" here on cnbc i'm andrew ross sorkin with kelly evans and mike santoli we have a lot going on with the u.s. equities. the musk and zuck drama. >> zuckerberg is out flexing -- what is the latest he was doing? >> combat sports i don't know >> yeah. no surprise. musk is saying wait a minute i wasn't that serious. >> no, i think musk is the one who was serious and zuck said if you are coming at me, i'm not backing down here. then musk kept going that's my read on this, no >> i hope it happens i do i'm rooting for it >> do