it is 5:00 a.m. here at cnbc global h5eadquarters. here is your "five@5." looking to bounce back at the open. another rough week for big tech with the biggest names in the market falling from the highs. in china, crisis of confidence as the latest round of support fails to impress investors. bracing for jay powell and jackson hole later this week. later, tropical storm hilary makes landfall out west. we have a live report coming up.

it is monday, august 21st, 2023. you are watching "worldwide exchange" here on cnbc. good morning. welcome to "worldwide exchange." i'm frank holland. the dow coming off the worst week since march. the futures in the green across the board. s&p is higher. the nasdaq is higher. the dow jones industrial average would open up 90 points higher now. look aing at the yields. the 2-year treasury is creeping back to the 5% yield. something we continue to watch. we are watching energy. wt wti off the highs from early this morning. up .50%. same for brent crude. natural gas making a big move up 2.5%. that's the early picture

stateside. let's check on the action in europe and asia with julianna tatelbaum in the london newsroom. good morning. >> frank, good morning. we have a lot of action this side of the pond. let's see what is going in asia overnig overnight. we have had chinese composite pulling back. the hang seng down 1.8%. overnight, as you mentioned in the headlines, pboc disappointed expectations. they announced a cut in the one-year rate, but kept the five-year rate steady. defying the expectation that investors would cut both rates. not as much stimulus support as expected or hoped. the underperformance in hong kong with the property sector. country garden is due to be removed from the market in september. that company has been struggling to make payments and driving concerns of the property market.

japanese market is gaining 0.4%. in europe, we have a little bit more positive action taking place. green across the board. we have come off the highs, but we are still holding firm. ftse mib is out in front up 1.4%. you are seeing lagging gains in the uk market. ftse 100 is up .50%. basic resources up slightly. the home builders are selling of off sharply. you have 2% off. crest anynicholson is off 10%. home prices have fallen and crest anynicholson saying transaction levels across the industry have weakened in recent weeks. mortgage rates and costs are beginning to bite with higher interest rates and overall

elevated cost of living here in the uk. frank. >> julianna, thank you. back here on wall street, bracing for a busy week of data with housing and durable goods and reports from nvidia and gap and macy's and the comments from inflation and rates from jay powell in jackson hole this friday. this as the indices come off a losing week with the s&p 500 down 5% as we see a spike in treasury yields. let's talk more about the markets with linda dissoll. >> good morning. >> china did not cut that key benchmark five-year loan rate. we see an impact on the international markets right now. do you see that impacting the u.s. markets later today?

>> i think we have to remember we are still in august. august is the weakest month of the year. it is a low volume month historically. any little piece of information could pull down the market. as you mentioned, nvidia is the big tech name, the biggest magnificent seven which nimight disappoint this week. china is the second largest economy in the world. they have the weherewithal to gt the stimulus they need to get things going. we are not worried about that as an outsized risk, but it is still there as you mentioned. it is very important if they should fall into economic recession. u.s. is strong. we can't be the only country in the world that is strong. >> you mentioned earnings. if you look since july 31st, a big downturn in the markets for the month of august. how much of that is seasonality

and liquidity and trading and fitch downgrade of credit and other issues? >> i do think most of it is due to the month of august and when you have low volume trading, you can have moves exacerbated. september is one of the worst months of the year and it has been a strong year. you know, when we look at earnings, we look at the prize. the prize is earnings and the prize is the consumer and consumer is resilient. that is the word we have seen a lot in the last few months. you know, i think we still bear that in mind. the same for us at federated her mess -- her mes.

it has been quick. it has been a surprise to all of us at federated. >> you are focused with the consumer which continues to spend no matter what other negative information we get. what does it mean for the markets? you mentioned it is a difficult month for the markets. are there stocks that are buoyed by the consumer? >> we have a year-end target. that is a good upside. the breadth of the market which was widening is good and has pulled back, but can widen. we like everything except large cap growth. >> everything? >> just about everything. >> let's buy the dip. we are showing the month -to-dae action. s.p.y., go ahead and buy it?

>> i will say the market working off tremendous excess savings and you wonder the pockets of value and if you want to look at the pockets of value, look at the high quality dividend sectors of the market. we pulled back some of the marketplace, but areas of the market like staples of the you showed wti with the energy sector being weak after the last couple years. we like energy. real estate, communication sectors. these areas of the market have been very much left behind. anybody who is yield oriented has found serious yield and they are inexpeinexpensive. >> linda, great to have you here. thank you. time to check on the top corporate stories with silvana

henao. >> david solomon, ceo, breathing a sigh of relief with job security. goldman's borard of directors i firm of solomon despite the backlash of exits and negative media publicity. the dissent is expected to be discussed next month. dupont is nearing a deal to sell the delrin unit to the jordan company for $1.81 billion. according to bloomberg, the deal could be announced as soon as this week. the fund is bidding on the asset. meta platforms will launch a web version of threads this

week. m meta's head of instagram said the web version already is being tested internally. it is a little bit buggy right now, but you don't want it just yet, frank. i'm still not on threads. >> i think it might be over. it was a big thing. you never hear anybody posting. >> i don't hear about it. >> silvana, we'll see you later on. more to come on "worldwide exchange," as we track tropical storm mhilary. we have a live report coming up. and china misses out on a much-needed lifeline. eobiba yoon is in g ng thry w-- eunice yoon is in beijing with the latest on the important sector.

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welcome back to "worldwide exchange." china central bank cutting the one-year loan prime rate and leaving the five-year rate unchanged. that move disappointing investors who were expecting cuts to both key rates. let's talk more about this now with state of the economy and why beijing is taking it slow on measures for the economy. we have louise lui.

c they did not cut or change the rate for the five-year lending rate. what does it mean for the chinese economy and equities? >> i think the big thing to remember is because markets are disappointing from beijing with policy easing, but this adds to the nervousness over china will support the economy at the time when it needs support the most. i think the technicalities around today's lack of action, if you like, is perhaps less important over why it is not doing that. that is why the markets are focused on. we said for a long time that 10 bps or 20 bps move will not matter much in the grand scrhem of the economy.

that will lead to nervousness. >> the 10 basis point cut is not meaningful, but it would mean a lot for sentiment. >> exactly. you have to note from aside from the fact it hasn't moved today, but it has given plenty of guidance to banks and encourage lending. it guided banks to lowering existing mortgage rates. there is some stimulus there, but they are concerned over the fact that some of the blanket measures are not as effective as they once were. >> looking at the yuan over the dollar, it strengthened. how is that impacting the property sector and broader sentiment with chinese equities? >> we have been seeing when it comes to the currency at least, some of the measures by the

central bank in china to effectively stand the currency by having a stronger daily fix hasn't really worked. you have seen a lot of the weak sentiment across the asset classes in china which have been because of policy action and of the disappointing news we have been hearing not just on the macro side, but property side. con tagion risk is coming in no. that is starting to weigh on equity and especially on the currency going forward. >> go ahead. finish your thought. >> i was going to say given more monetary easing and the u.s. measures will be bigger with the pressure on the currency is to the downside. >> i want to circle the back to the property sector. do you believe we are hitting the bottom? the news from evergrand with the

restructuring. clearly distress there. is this close to the bottom of the real estate sector? >> it is a long correction process. that means i don't think we're near the bottom. i say that because if you look at what is happening with other countries, these were developers that were strong with backers. if you think of the longer-term property correction that the system needs over the years, you see we could see more defaults coming to us going forward. precisely because the property developers may not have the firepower to withstand the liquidity crunch the property sector could bring. that means we are likely to be nowhere near the bottom. >> louise loo, thank you for being here. we appreciate it.

>> thank you. >> beijing is failing to provide a lifeline. eunice yoon has more on the chinese economy. >> reporter: frank, investors should care about what happens in the market. not only because it is a big driver of growth for china, but also for the rest of the world. when you look at the numbers, they can be quite impressive. real estate he accounts for 25% of chinese gdp. it is a massive storer of wealth for the hmiddle class. 70% of wealth wrapped up in real estate. if there is a decline in the market, it will not only affect the property values directly, but have a wealth effect. people feel poorer. they don't spend as a result. it is a big deal for the financial sector. property accounts for 40% of collateral held by banks according to citi.

from the leadership per sspecti, they may not have options because of the debt. over xi jinping's time in office, the debt-to-gdp risen from 200% to nearly 300%. that kind of explains to you why we seem to be seeing these puzzling steps by the chinese leadership to manage the property crisis. >> a disappointment for investors. what are investors saying about the latest move? >> reporter: it is really interesting. people have been very much surprised. a lot of folks have been telling me that this could be because of downward pressure on the yuan. there is a big concern of capital flight.

mizuho put out a statement saying this is the tight interesting margins and banks would not have the ability to support what the local media is saying by the commercial banks. oxford economics said the rate cuts may not be as effective because people are not necessarily making decisions on the mortgage rates. instead looking at other points. this is a signal which is the policy control. the main message i got from the talk today is there is not a lot of transparency with the beijing leadership thinks about the real estate market. >> eunice yoon live in beijing. thank you very much. coming up here on "worldwide exchange," "barbie" falls from number one and spanish soccer

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from santa clarita, california. 30 miles north of l.a. jay. >> reporter: frank, you hear the j j jackhammer off camera here. this gas line has ruptured. they are working to repair that and situations playing out across southern california right now. a place where they are used to wildfires and earthquakes, but they don't think much of hurricane season or they didn't until this weekend. across southern california, unprecedented full-on assault from mother nature. the entire region under tropical storm watches and regions for the first time ever. the effects stretches from the coast to the deserts. >> this event hasn't happened before with the tropical storm with that energy taking a direct hit into san diego county. >> reporter: hilary dumping

heavy rain too much too fast leading to fast flooding. >> i'm worried about the remote areas in the eastern part of the state and mountainous regions. >> reporter: this rock slide a result of soil washed away by rushing waters and in the middle of it all? a 5.1 magnitude earthquake in ventura county. the two events not connected. >> only an earthquake and hurricane storm and not to mention a 55-acre brush fire in santa barbara yesterday. what's next? >> reporter: hoping to return to california sunshine so they can start to clean up the mess hilary leaves behind. forecasters say things should

clear up midday. great news because it will allow teams like the one you hear to get into the harder hit areas and anssess the damage, frank. >> i want to ask when the rain stops, is that the end of the problems or are there other issues? >> reporter: you know, there are other issues because it will continue to come down out of the hillside. there are a lot of burn marks in the hill. you have the potential for m mudslides and rockslides. that is an issue for the next few days until things fully dry out with a soaking rain up through the night and now into the early morning. it will take a while for things to get dry here. >> wishing the best for everybody in southern california. jay, stay safe. jay gray in southern california. thank you. strayight ahead here on

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it's 5:30 a.m. in the new york city area. a lot ahead here on "worldwide exchange." here is what's on deck. stocks coming off the worst week since march, but looking to bounce back. not so magnificent. rough week for big tech as the

names in the market continue to fall from lofty highs. and closing in on 8%. the check of the u.s. mortgage markets with the rates the highest in decades. it is monday, august 21st, 2023 and you are watching "worldwide exchange" here on cnbc. welcome back to "worldwide exchange." i'm holfrank holland. we pick up on the board with green across the board. dow opening 120 points higher. we are looking at the bond market with the yields which are elevated. trading at monthly highs for the last couple months. the 10-year treasury at 4.28. 2-year treasury is close to the 5% yield. we also want to look at the energy market. we begin with wti.

trading higher at .75% higher. brent crude is up 2.5%. turning back to stocks. a rough picture for big tech. nasdaq on the longest losing streak since november. some names falling sharply from the highs. here are the names. apple, microsoft, nvidia, tesla and meta. five of the magnificent seven are down 10% from the recent 52-week highs. now trading in correction territory. joining me with the deeper dive in the sector is brad errickson. brad, the five of the magnificent seven in correction. is this higher rates?

>> a lot of activity in the last few weeks. in this case, you had the china data out last week around july retail sales and consumer. i think what was happening in some of the cases, some companies with meta being a great example with 10% of sales coming from china. people are baking in the weakness. secondly, as we head into the fall timeframe, you get into stronger consumers heading into the holiday. i think at the moment, there is a late summer malaise and the hedge of stokcks that come out quickly. >> i want to hit you with data. the market value of the magnificent seven, google, nvidia, et cetera, dropped $630 billion in august. >> yeah. >> 50% of the s&p loss this month. we have nvidia earnings coming up. does that have the potential to

reverse all of the negative downside momomentum? or is china's weakness or higher rates going to pull down the stocks? >> first, i can't speak for nvidia. i don't cover the stock. nvidia played the a.i. darling of the year. that has the potential if you have a.i. exposure. that is a lift. start there. secondly, a lot of the stocks in our coverage, google, meta, amazon are situations where the consumer is obviously driving that. so long as the consumer data is strong, we will see what happens. 8% interest rates on mortgages don't help. we have to see how that flows at this point. >> wasn't a.i. driving the nono market? >> i know you don't cover

nvidia, but does that mean these stocks have more room to run? >> there are three components. the chips and semiconductors and the application layer. the first two are defined and understood those benefit from the trend. a lot of people haven't figured out what to do with a.i. yet on the application side. i don't know there will be followthrough. >> brad, that is interesting. we have gotten so excited about a.i., but we don't know what the transformation will be from the emerging technology we are always talking about. a lot of times we focus on the mega cap tech names. a lot of the names are in your coverage area. when we talk outside of the magnificent seven stocks, what are the topics picks for energy? >> if you are looking to build a web side, wix is a great

somsite. really under valued stock. more defensive play with the recurring revenue model. i would bring up zillow at this moment which is counterintuitive with interest rates. who doesn't realize the real estate market is basically at or toward the bottom, right? for zillow, you have a market share gain. we think they are raising price based on the research. that could benefit. >> great minds think alike. w wix ceo coming on the show tomorrow. you mentioned the top picks. are there some you would stay away from which are too vo volatile? >> the cloud is pointing better to next year.

the advertising stocks are ones we are watching only because advertising spend on small businesses has come back a lot over the last year. you recall when the war broke out last year, energy and inflation costs means advertisers cut quickly and those stocks got hit quickly. we are back to fuller levels. we are watching that. >> what names are you talking about? >> it is all the ad names. you certainly point to pinterest and snap. those are the types of names where they tend to be more brand focused and more easy to cut than meta or google. those are the stocks that we struggle with at this point. >> brad erickson, thank you. >> thank you. time for the check on the top corporate stories with silvana henao. silvana. >> frank, hedge fund capital management is rejecting a bid

from the group of rivals from big ackman. the bidder has not demonstrated committed funding for any of the bids. it fell short of identifying any specific suitors. this comes after rhythm capital agreed to buy sculptor for $11.15 a share. that deal is expected to close in the fourth quarter this year. and ceo jane fraser is breaking up the division. it would split the institutional client group for citi in three segments. investment and corporate banking and growth market services. the division is three quarters of profit in 2022.

and the gm cruise unit is cutting 50% in san francisco. the department of motor vehicles investigates incidents. this comes after autonomous vehicles were involved in crashes last week, including cars stalled in intersections and another colliding with a fire truck. frank. >> silvana, thank you. turning to mortgage rates which have been moving higher in the past month putting brakes on the housing market. the average rate on the 30-year fixed loan rising to 7.376%. the combination of the lack of listings could keep more buyers out of the market. sellers are also on the sidelines with 80% of homeowners have a rate lower than 5%.

we have our latest economist from zillow with us this morning. good morning. >> good morning. >> 7.37%. did we hit the peak or are we moving higher? >> it is nearly impossible to predict where marge rates are headed. a tight labor market is somewhat loose fiscal policy with the shrinking fed balance sheet point to higher for longer. demand is exceeding supply in the housing market. home values rebounded this spring. millennials, the largest gene generation, the u.s. opened the border. we had 1 million people come into the u.s. last year. you have all of the demand with buyers returning to spring, but existing home buyers sat on the side

sidelines. zillow research shows some plan to sell in the next three years. we have builders trying to pick up the slack. we have seen halmost a record number of homes being built. >> down the line, we may see relief. the markets will remain under pressure for now. you mentioned immigration and other factors. when we look at the available listings right now and the el r -- elevated rates, are we going to see the housing market slow down more? >> i think the housing market is returning to its pre-pandemic seasonal patterns. we are heading into the late summer slowdown. you are likely to see a little bit of less activity going into the end of the year.

i think with more units coming on the market, i think we will have a strong 2024. i think there's plenty of reason to be bullish with housing. as long demand is continuing to exceed supply, builders will be there to pick up the slack. >> they have the incentive to pick up the slack, but that's a longer-term solution. in the near term, what do you expect with the housing markets? i know you can't predict the rates. a lot of people think we are heading toward 8%. how does the year play out? >> we have 1.6 the million units under construction at a seasonally adjusted annual rate right now. those units coming on the market means builders will continue with incentives to get buyers through the door. builders have the ability to make the math work for home buyers. that leaves me very positive

about the near term. >> orphe divounguy, thank you very much. coming up on "worldwide exchange," jeffries is looking for a new best in class. that's coming up next. as we head to break, we have the top trending stories. call it a robo bust. san francisco launching a driverless bus service with seven stops connecting neighborhoods with stores and community centers. this comes less than a week after the regulators expanded the taxis. and move over "barbie." it's time for "blue beetle" which has brought in $1.2 billion globally. "barbie" is the highest grossing

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welcome back to "worldwide exchange." time for the morning call sheet.

bank of america upgrading xpeng after the cooperation with volkswagen. they expect xpeng to bring a property in 2025. the shares up more than 5% in the pre-market. more calls on nvidia ahead of the earnings this week. baird named it the top chip maker and price target from $280 to $780. hsbc sees ss strong demand out pacing supply. shares of nvidia up 2%. jeff ries says the brands

behind foot joy and titleist with the upgrade. time for the global briefing. china's central bank is cutting the one-year prime loan rate and leaving the five-year rate unchanged in the bid to boost economic activity. this move disappointing to investors. the uk government is in talks with nvidia and amd about buying equipment for national a.i. research. the government set aside $127 million. sellers in the uk are cutting prices are residential homes according to data from right move. overall, home prices are down 2% for the month.

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programming will benefit his campaign. david solomon breathing a sigh of relief over job security. the board of directors of goldman is in firm support of solomon despite the backlash and negative media. and dupont is nearing a deal to sell to delrin unit for $1.8 billion. meta will launch a web version of tolhreads posing a threat to elon musk. the web version is already being tested internally. rolls-royce is revealing a coupe for $30 million. the first roaming the streets and more likely gracing a california garage right now. beautiful car right there o. hard to find.

$30 million price tag. we will hear from macy's and toll brothers and gap. home sales and durable goods and consumer sentiment numbers are out this week. we have the fed chairman jay powell at the symposium in jackson hole this friday. an immedmimmediate -- ahead of we are seeing green across the board. the dow would open up 125 points higher. on that note, joeining me is peter bookmar. peter, we are seeing the futures bounce higher. what do you make of the rebound for the start of the week? >> it comes after the surprise rate move on the bonk -- rate

move on the bank rate. we are now seeing a bounce. unless rates fall notably, we question any sustainability on the upside and more focused on the potential downside. i think markets got comfortable with the downward trajectory of trading and the fed the almost keen on raising interest rates. the long-end rise in yields caught many by surprise and changes that calculation and shakes up that complacency. >> i want to focus on today, peter. you see another difficult day in the markets. the 10-year is 4.28. does that continue to weigh on the markets with technology or other areas being impacted? >> i think there is a follow through with rising rates with other asset classes. stocks can rally today for sure

after nvidia reporting on wednesday. i think in order to get a sustained rally from here, you need a fall back in rates, particularly in the longer end. longer end rates remain sticky above 4%, i think the equity move higher is tough. we now price at a high valuation. 20 times earnings with rising interest rates and very mediocre earnings growth, if that, where we are seeing earnings recession which is not the cocktail for a big move higher in stocks. there is more risk to the down side. >> peter, you are seeing softness in the market right now. with that in mind, what is your "wex word of the day" here? >> rates. >> we said it 20 times. >> the rate move higher on the longer end which is market driven is the main factor here. it is not necessarily happening

for all good reason. i think the big influence has been the bank of japan widening yield control and the same time fed conducting qt. a lot of central banks conducting qt and the lack of foreign central bank buying. mostly buying shorter term treasuries. it is not because we see the sudden exacceleration of econom growth. some people are comfortable that we don't go into recession any time soon. >> let me jump in. there is a big story in china not cutting rates on the key lending rate there. it impacts the property market. how does that make you look at the property market and other chinese equities today? is there more downside pain to come? would buy the dip or stay away from chinese equities? >> china real estate distress on the developer side is a

multiyear process. cutting interest rates for them may help slightly on the margin in incentivizing demanded for the consumers to buy excess supply. we get to the point where they are pushing on a string and tweaks here is not going to do anything. >> peter, i'm almost out of time. is there a sector you would put money into today? >> we are bullish on long energy stocks. i think oil prices, while they had a nice move higher in the 80s, but they will go higher the next 6 to 12 months. >> peter boockvar, great to see you. fr appreciate the time. >> thanks. futures are moving higher. the dwow would open 120 appointmepoints

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good morning. it's that time again. central bankers preparing for the annual symposium in jackson hole. steve liesman is here. we'll get you ready for jay powell's big speech. tension is building. excitement and anticipation. stock futures pointing to a higher open. including shares of palo alto

with the quain quarterly report and tropical storm hilary slamming california. we will take you there live. it is monday, august 21st, 2023. "squawk box" begins right now. good morning. welcome to "squawk box" here on cnbc live from the nasdaq market site in sdtimes square. i'm scott wapner alongside joe kernen and steve liesman. >> we have to come up with three names. three men and a baby? m manny, moe and