it is 5:00 a.m. at cnbc global headquarters. here is your top "five@5." investors bidding farewell to the summer and gearing up for the fall trading season as the ongoing rally in stocks faces a potential spooky path forward. data from china and europe weighing on this morning's futures. goldman sachs giving an optimistic outlook on the changes the u.s. will enter recession and the factors it is citing on the recessionary outlook improving.

and china's country garden appearing to avoid default and making payments on its debt. in washington, d.c., lawmakers are set to return to work with a very lengthy to-do list. and president biden weighing in on a potential strike by u.s. auto workers. the positive prognosis he is giving. it is the day after labor day and everyone is back to work. you are watching "worldwide exchange" here on cnbc. good morning. welcome to "worldwide exchange." i'm cdominic chu in for frank holland. let's check on the futures following the long holiday weekend. we are off a bit. dow jones industrial average implied lower 50 points.

s&p lower by 11. nasdaq down 71. checking in on the bond market right now, yields in focus here. relatively steady around the 4.2% for the 10-year treasury note. currently 4.216% for the 2-year treasury. in energy, oil prices are stubbornly high, but off a bit this morning. west texas intermediate is off 18 cents. brent crude futures are d down .23%. nat gas prices off 5% right now at $2.62. let's see how the overseas markets are shaping up on the back of the economic data out of europe and china. dp arabile gumede is in the london newsroom with the action in

europe. >> good morning, dom. what we are seeing is the down day across europe. it does follow on from the economic data you pointed to with eurozone business activity dropping by the steepest level in three years for the month of august. if you take away the pandemic, it is the steepest contraction since 2013. that pmi coming in at 46.7. the composite figure against the 47 figure we had seen and had preliminary reading of. a down day across with the cac 40 and french market with the worst loser. it is a good day for novo nordisk. they are the biggest company in europe then empopowering past t lvmh with the wegovy release

today in europe. ov over on to asia, we have interesting pmi for august at 51.8. the chinese services sector seeing the slowest expansion since december of 2002. nikkei gaining .13%. weak data with the bank of australia holding rates for the third month in a row. >> arabile gumede, thank you very much. let's talk more about this with bill stone. chief investment officer at glenview trust. bill, there is weakness coming back from labor day weekend. in your mind, is the rally going to stay in tact for the final four months of the year?

>> i'm going to say i'm cautiously optimistic. there are a lot of good things going on. when you look at what we see from payroll and other places, you know, we are getting the best you could expect in terms of some softening in labor markets, but not too soft. people coming back into the labor pool. all of those things are good. the hard part is the good news is priced in. you are up close to 19% total return for the year. i do think you have to be a little more cautious on the margin here although there has been good news, but you have to push recession worries out to next year now. >> if the recessionary picture is the issue with a rough month for stocks ahead and the u.s. stock market reaching $989 the

billion last week. you have data from refinitiv showing money put into the u.s. funds has been dipping for the last five weeks. the longest losing streak since the regional banking crisis. you have bearish sentiment on stocks hovering at 34.5%. that is above the 11-week average which is below historical average. you have all of the sentiment and economic data coming together. you say you are cautiously optimistic. aren't there signs of more volatility ahead? >> i think it goes with the territory, right? when a lot of things have broken the right way and when stocks are up a lot, you are generally more apt to see disappointment occasionally. i tilt being more defensive with

new cash even within stocks. again, the other part going on under the surface in stocks is the extremely, not components h done really well and rightly so. earnings have bottomed. you have to push recession out to next year. i think all of that is right and maybe an extreme that you want to fade a little bit and look at the more defensive sectors which have done or are down for the year so far. >> bill, the big concern for a lot of folks out there right now is the economic picture and inflationary outlook and jobs no market. is that enough to outweigh the uncertainty as we head to the

consumer shopping? >> right now, as we are in football season, i would say the last jobs report was close to throwing in the hail mary with the softening, but more people coming back into the labor market which is the best outcome for everyone which is more people coming into the labor market and softens wages, but people have jobs. it doesn't lead to a downturn in the economy. an gain, that is a lower probability of what we typically see which is a slowdown. right now, a lot of jobs created. when jobs are created in the u.s., u.s. consumer tends to spend. i think there is less reason to worry about that with earnings downturn here in the short run or rest of the year. >> bill stone with the latest. thank you.

let's check on the top corporate stories with silvana henao. silvana, good morning. >> dom, good morning. welcome back to us all. dom, here is good news. goldman sachs lowering the outlook for the u.s. sliding into recession. the bank says it sees a 15% chance of that happening. down from the previous 20% forecast. goldman sachs says cooling inflation and continued strength in the labor market suggests the fed theral reserve may not need raise rates further and policy drag could be gone by early next year. president biden throwing his two cents into the potential strike by workers at the u.s. three largest oughtautomakers. the president does not think it will happen. the united auto workers union says members are prepared to strike if the agreement with ford and gm and stellantis is

not reached before the current contract expires next thursday. and tesla deliveries of the chinese vehicles raising by 9% in august from a year ago. data revealing that the ev maker delivered more than 84,000 vehicles from its shanghai plant. this coming after tesla cut prices and rolled out the long anticipated revamped model 3. dom. thank you. more to come on "worldwide exchange," and the one word investors need to know today. we have the china's largest property developer holding off default for a little bit longer. we go live to beijing. and boosting the semiconductor industry with pressure from the west. speaking of chips, a.r.m. holding is looking for the long anticipated ipo. whether that debut will live up to the hype. we have vea ry busy hour on

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welcome back. now to the latest in china's country garden and its debt problems. reports out this morning it made payments on some of that debt providing relief for the embattled developer.

the market reaction in china there. eunice yoon is joining us now with the latest on country garden. eunice. >> reporter: thanks, dom. country garden appears it will avoid default. creditors have been saying that after the company was able to secure a three-year extension for repayment plan on domestic bond, the company was able to make payments of $22.5 million on coupon bonds. in addition to that, creditors have been saying the boss wired a coupon payment for the malaysian bond. the company itself has not confirmed many developments. it hasn't really had a lot of impact on its own stock. it has brought a bit of a relief rally the last couple days to the broader sector which has already been seeing some

investors taking interest, dom, in the sector, because of the fact the government had unveiled several new measures to stabilize the property sector. we have seen a boost in some sales for homes in beijing and shanghai. >> eunice, what exactly is next then for country garden? this is one of the biggest financial and economic influences in the chinese markets. what does it say about what's next for them? >> reporter: well, the company says it still owes $15 billion on bonds that are coming due within the next 12 months. a lot of money. we have been hearing that the company is looking to try to work out similar repayment plans as the one they secured last friday for some of the domestic bonds where there was extension of three years for the bonds. a bigger picture, though, the company has said it is hoping to

increase its liquidity and make sure it has good cash flow, but, of course, there is a question mark as to whether it will do that. a lot of analysts have been telling me unless the company is able to really sell homes and convince people to buy, it will be a very, very tough slog for the company. >> eunice, sticking with the chinese story. it is reportedly the chinese government taking steps to boost the chip industry. they will launch a new state-backed fund. the report says one focus for the $40 billion fund is equipment for chip manufacturing. this is the latest move by china in the bid to catch up with the u.s. and other countries over semiconductors. if we take a look at the

picture, overall, with particular moves on a.r.m. holdings, it could be a huge indicator for what the chinese government has in store for the next leg of economic development. a.r.m. holdings is expected to kickoff today ahead of the chipmaker anticipated ipo. thank you, eunice. we turn to reuters which says a.r.m. is lowering expectations and set to price at $47 to $51 a share. that puts the valuation in the range of $55 billion. that is down from $70 billion previously. a.r.m. to price and list shares on the nasdaq as soon as next week. it is just one of several high profile ipos on the calendar for this fall. joining me is avery speier.

will this live up to the hype for a.r.m.? >> that is a good question. it will be a good indicator for appetite in the ipo market. you know, if it does well, it could easily be the deal that breaks the ipo log jam. as for investor appetite? you know, it will woulith -- it will be a good test. any deal is significant. for the rest of the pipeline, we are looking at deals more like software firms which is a typical ipo candidate. that will tell us more about appetite for the rest of the pipeline. >> a.r.m. holdings is one that everyone is watching, not just because of the ipo barometer aspect of it, but because of what is happening with regard to computer chips and artificial intelligence and everything

else. the a.r.m. holdings ipo, does it say anything that we are seeing some reports, at least, that the demand picture is cooling off so slightly for it? >> that's a good question as well. you know, i think a.r.m. is a unique company. it has a little bit of hair in the deal with the ties to china. so demand for this company may not be indicative of demand for all future chip companies looking to go public in the ipo market. >> now, if we take a look at the rest of the ipo calendar for the year. renaissance capital with a close eye on all of the offerings. is there anything that says to you that the ipo market could have a better year in 2024 over 2023? if so, what types of companies

will there be outside of a.r.m. that is leading the move higher? >> absolutely. we are seeing very good signs heading into the fall. the ipo market is in a good place. the renaissance ipo index is up about 30% year to date. we're also seeing solid returns from the years and large issuers. volatility index is settling. all of the pieces are falling into place for a gradual pick up to year end leading to a normal market in 2024. as far as what activity will look like? we have eyes on bio-tech and consumer brands and energy companies. >> all right. bio-tech and consumer and energy of the avery spear, thank you. coming up on "worldwide exchange," new york city rolling out rules cracking down on

companies like airbnb. why landing a short-term rental to the big apple may be more difficult. we have more on that story when "worldwide exchange" returns after this break. ♪"please don't go" by harry casey, richard raymond finch♪ (sfx: ping) (♪♪) ♪ please don't go ♪ ♪ please don't go.. ♪ ♪ please don't go ♪ ♪ please don't go ♪ ♪ don't goooooo! ♪ (♪♪) ♪ don't go away ♪

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welcome back to "worldwide exchange." that is a live shot of new york city. new york city is important. the process of getting a short-term rental is about to

get harder starting today. new york city is beginning enforcement of new rules of airbnb with an eekqual and all-t ban on short-term rentals. robert frank has more on the story. robert, this is something that coops do already. they restrict the leases you can have. why is this a big deal for new york? >> dom, mainly because it is all about enforcement. starting today, short-term rental hosts on airbnb and booking.com will register with the city and have to comply starting todaywith the new law that states number one, you can't rent out the entire apartment for less than 30 days, even if you live in the building. hosts can offer short-term rentals if they remain with the guests in the apartment.

hosts will receive $5,000 per violation per apartment. there are 5,000 airbnbs in new york. abuse where they bought to airbnb has led to complaints. council members said this process raised rents in new york. airbnb says the short-term rental rules are a blow to the tourism economy and thousands of businesses who rely on home sharing and tourism dollars to make ends meet. hosts say registration is almost impossible. many have waited months for approval and the building codes make it too costly to comply. >> i think the impact of the legislation is lumping one and two-family homeowners with

buildings and landlords where there are bad actors. that needs to be an addressed. >> dom, city councils in dallas and philly have passed similar rules. they have not done much to curb the abuse. good news for the airbnb and shareholders. they have not done much to dent the company growth in the marketsmarket s. >> as a consumer of tourism, i like the options of staying at an airbnb or hotel. you have to imagine the hotel industry has a dog in this fight or pony in this race? what is the hotel industry looking at with regard to how these rules affect their particular economics? >> you are right. it is going to be a boost for hotels. hotels in new york have already had a good recovery post-pandemic with occupancy rates well above 70%.

back to 2019 levels. still a number of hotels still closed. they are planning to reopen in the next year or two. that will be a boost for them. the big question for new york is how it impacts the rental market. rents in manhattan are at the all-time high. $5,600 a month. some are hoping the rental platforms that will add more inn p con -- inventory. in addition to the benefits for the hotels which could be a short-term impact. >> affordability in new york city is an issue. robert frank, thank you. still ahead on the show, apple and microsoft looking to keep two key technologies from facing the wrath of new regulations from europe. the case made by the tech giants. if you haven't done so, follow our podcast.

if you miss "worldwide exchange," you can check us out on your podcast app of choice. we'll be back after this. ♪ and brands you love on the shelves. ♪ behind the counter, or in the aisles, healthier's better when it happens together. cvs pharmacy. healthier happens together.

it's 5:30 a.m. in new york. still a lot here on "worldwide exchange" coming up. stocks are set to kickoff the holiday shortened trading week in the red as investors prepare for a rocky fall season. futures right now in the red.

in washington, d.c., congress returns from summer break with a lengthy to-do list. we layout the legislation on the docket and the impact on your money. disney standoff with charter communications is taking a new turn as it gives customers left in the dark a new option to get programming back. it is september 5th, . you are watching "worldwide exchange" here on cnbc. welcome back to the show. i'm dominic chu in for frank holland. let's check on u.s. equity futures. the dow jones industrial average is implied lower by 20 points. modest losses at the opening bell. s s&p is lower by 8 points and nasdaq down 54. in the bond market, yields are on the rise. 10-year treasury is just around

4.22%. the 2-year treasury is 4.91%. let's hit oil prices as well. prices at the pump staying high, but prices on the move lower this morning. down .10% for wti. they currently stand at $85.42. down 13 cents. ice brent crude down 50 cents to $88.52. off .50%. let's check on the top corporate stories with silvana henao. silvana. >> dom, the financial times is reporting that apple and microsoft are reportedly looking to get imessage off the lists for tech companies. microsoft and apple say their services are not powerful enough to be subject to the regulations

meant to promote competition within the industry. that gives users the choice of other search evenngines. elon musk threatening to sue the anti-defamation league over the role of the revenue slump for his x platform. in the past, musk says ad revenue is down 60% due to pressure put on advertisers by the anti-defamation league after they called out 5,000 examples of anti-semitic messages on x this year. and disney is urging users to switch to hulu after pulling the programming in the middle of live programming. h hulu, which disney owns, offers all of the same channels,

including abc and espn. >> very interesting move by the cable operator. silvana henao, thank you. turning to washington, d.c. and congress set to get back to work after summer break, there is plenty for lawmakers to tackle the. emily wilkins has more on the agenda. emily, it is a lot, but the senate first and then the house later on this month. >> reporter: you are right, dom. the senate will get back today. the house will get back next week. with that extra week for the senate, they still have so much to do. remember, congress was out all last month and they have the busy schedule. number one priority is ensuring the government is funded past the september 30th deadline. both house speaker kevin mccarthy and minority leader chuck schumer wants to continue the funding for the year and in addition to keeping the lights

on, several programs are set to expire at the end of september unless lawmakers act. overseeing airplane safety and farmer billss and assistance for child care providers and ensuring the u.s. primary flood insurance program is able to still renew and sell new policies. huge with the hurricanes we have seen. in addition, chuck schumer told colleagues last week that he hopes to do other bills on artificial intelligence and banking for cannabis companies and clawing back senior executives for failed banks. bill hogan said it is unlikely congress will get much done. >> given the divisions that exist up there, i think the majority leaders is probably overambitious of what can be

accomplished. under the best of circumstances, it would be difficult, but the partisanship now means it is worse. >> reporter: in addition to bill ps s bills this have to be passed, they must decide to fulfill the white house request for the $44 billion package for funding ukraine and southern border and natural disasters. dom. >> emily, out of that list you just laid out, what is it that actually gets done? it is not going to be all of it, we don't think. what could happen in the coming weeks? >> reporter: dom, congress loves a deadline. i would point to the programs that actually do need to be renewed this year. things like the farm bill and agriculture package which includes s.n.a.p. funding and food stamps. you see bipartisan support on that. another one which is the faa

reauthorization. that has a lot to do with airplane safety and infrastructure. you see a lot of bipartisan support for that. there is debate over training hours for pilots and if those can be changed with the current shortage. those are the things where there is pressure on lawmakers to do it. other things like pandemic funding for child care and the white house request for funding has less pressure on the lawmakers to get that done. >> emily wilkins live in washington. thank you. let's talk more about the packed agenda in congress this fall and the potential for the government shutdown is jimmy pethokoukis. he is with the american enterprise insuratitute. he is the author of "the conservative futurist."

jimmy, emily laid out the agenda for us. i'm more interested in the conflict and where exactly the friction points will be between democrats and republicans on getting some of the deals done. what exactly is the outcome that we could expect in the coming weeks? >> i think the key conflict is really between the house freedom caucus, the very right-wing house members and everybody else of else. we'll go to the spoiler. i think there will be a shutdown. one reason is that shutdowns are not market events. the risk of doing so is not that high. there's a political risk. there is not an economic risk or market risk. less incentive not to do it. i think we will get a shutdown. whether it is two days or two weeks, i don't know. i think that will with hap-- wi

happen. >> if that does happen, you imply it is theater and not anything else. there is not market impact to it. why do it? what is the calculus and what is the cost benefit in the up ccomg election cycle who pushes the shutdown narrative more? >> generally, the people who are pushing it and perceived as pushing it, there is a negative political impact broadly. if you are a congress member, you are looking at your district and you are a republican and you want to show you are fighting against president biden and bidenomics and his climate agenda. the incentive is to show you are a fighter. they will not change the budget. they will not roll back the budget to 2022. if you are actually concerned about deficits and debt, you should talk about entitlement reform and a more efficient tax

system. they are not talking about that. that is why you are right to say it is theater and performat tiv. for those individual congress members, there is not much of a cost. you cannot govern and you look like you can't shoot straight for the others. >> jimmy, the house freedom caucus is front and center with the negotiations coming up. can you take us through what exactly in your mind they want to see and how far are they willing to push this if this is, in fact, theater? >> listen, again, i'm not -- the longest shutdown was a month. it seems unlikely it will go that far. one reason is the budget agreement we got back in may which president biden signed in june was a bipartisan agreement. they already agreed on a bipartisan basis how to fund the government. i don't think this is going to

be a very long shutdown. there is no chance they will throw out that agreement and roll spending back to 2022. that is fantastical. i think it might help particular members of that caucus showing they are sticking up for themselves and sticking up to president biden. in the end, the agreement that was signed earlier in the summer is what will stick and we will move on from there. >> all right. jimmy pethokoukis with the latest plays at the capitol. see you soon. coming up on the show, lvmh officially dethrones as europe's largest company. the new giant with that title is next. and as we head to break, are you in need of a good night's sleep? hotels and wellness resorts in

london and maldives launching sleep programs using artificial intelligence beds and on call are hypotherapists. and sam altman is the first person getting a golden visa to the country of indonesia. the ten-year visa allows longer stay periods. for forget the plain old yachts. super yachts are in style. w wealthy are looking to impress guests and relax at a moments notice. it's nice to be rich. "worldwide exchange" is back after this.

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new nature's bounty hair growth. clinically shown to help grow thicker, fuller hair with just one capsule a day of advanced hair complex. conquer hair thinning... ...and fall in love with your hair all over again. only from nature's bounty. welcome back. we have a market flash on viatris. the fda issued tentative approval for hiv treatment for children. right now, shares are reacting positively up 6% in the extended trade. now time for the upgrades and downgrades. bernstein hikes tuesday morning and it expects to see more

improving for the home improvement retailer. similar story for barclays and oracle. the price target to $150 a share. barclays ses multiyear opportunities at oracle. shares are up 1.5%. and ubs is initiating coverage of dine brands with a $68 price target. the applebee's company provides a unique casual dining market. time for the global briefing. some economic reports from overseas are taking note here. china's services activity with the slowest pace of growth in eight months as weak demand continues to drag the world's

second largest economy. and business activity fell more in the eurozone. the services sector fell in contraction and that fears of recession talk. the australian central bank is keeping interest rates steady. a grow number of economists betting that the tightening cycle this likely over. more hikes may be required to curb further inflation. shares of novo are up 1% as it becomes the most valuable company in europe. it dethroned lvmh. all of this as novo's best selling weight loss drug wegovy is entering the market following soaring demand in the u.s., norway, denmark and germany as

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welcome back to "worldwide exchange." time for the "wex wrap-up." we have country garden reportedly making an interest payment on two u.s. dollar bonds. those payments helping to avoid an imminent debt default. china is taking steps to boost the semiconductor sector. beijing will launch a state-backed investment fund of $40 billion. a.r.m. holdings is expected to release the ipo today. the softbank owned company is setting theprice of shares between the $47 and $51 range.

goldman sachs is lowering the outlook for the u.s. potentially sliding into recession from 20% down to 15%. goldman citing inflation and continued strength in the labor market for the new forecast. president biden saying he does not think a strike by workers at the u.s. three largest automakers will actually happen. negotiators for ford, gm and stellantis have until next thursday to reach agreement. and tesla's china-made deliveries rising from a year ago. the jump coming after tesla cut prices and revamped the model 3 in that market. here is what to watch today on the economic front with july factory orders out at 10:00 a.m. the senate returns from summer break as it works to ensure the government is funded past the september 30th deadline. by the way, don't miss the cnbc exclusive interview with federal

reserve governor christopher waller later on "squawk box" at 8:30 a.m. eastern time. let's take you to the markets for the day ahead. we know what is driving the action and bullish move for the stocks this year. technology, communication services and the consumer discretionary sector with meta and tesla and nvidia and others. with the market cap side of things, check out what is happening on the year-to-date basis for the large, medium and small cap parts of the market. large caps have been dominating. midcaps are trying to play catch up. you see that with the small caps as well. if you look on the more on one-month basis. the large cap and russell 2000. that spdr etf has taken the

leadership role. we will see if the trend breaks or continues. for more on this and the trading day ahead, i'm joined by amy wu silverman at rbc capital markets. a amy, you keep a close eye on what is happening with fund flows and derivatives markets. wo could we see the bullishness continue given what the options market is telling us? >> good morning, dom. we are not seeing that peak e exuberance as we head into the fall. not only is the upside waning and less demand for the call options, but you are seeing the tick up in put demand rise on the tech stocks you mentioned like nvidia. >> the skew is something you watch closely as well. we talk about it often because

it looks at the relative price of certain bullish options against the relative price of certain bearish ones. is that telling us a little more of the skew of whether or not therecipation ofanticipation, i you will, of the further down side? >> that is a good question. in 2022 last year, skew under performed. what we mean by that is a market drawdown of over 20% of the s&p. if you had owned puts last year, you had managed to draw down 20%. a failure skew coming into 2023 means investors hedges were not working. you saw that with the regional bank crisis. that was masked by the exuberance this summer as we

looked at low volatility with the debt ceiling and the waning enthusiasm on the mega cap tech. >> amy, i liketo get to your "word of the day" here because it has to do with the trends we are seeing in the market. >> my word of the day is ride as in are we getting off the ride this fall? i think you know and i think a lot of folks have become more aware since the pandemic, people realized that option marketsome. you saw that in the yolo and as that fades, people get off the ride. >> if you look at the crazy parts momentum. you mentioned artificial intelligence. are their places in t-- are

there better places to be positioned for the final three months of the year? >> it is interesting going back to the beginning of the segment where you looked at the breadth widening and the trades growth versus value and small and mid and large caps. you see more enthusiasm in the options market in the iwm or something that is cyclical as we head into the end of the year. i will tell you that differential is not high. >> just before we let you go, amy, your least favorite part of the market? >> the concern is all in china and china-related etfs. >> so bearishness there. amy, thank you. let's see what is happening with the futures market. downside pressure. modest at this point. the s&p implied lower by 7

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good morning. we're going to talk about this. goldman sachs out with a new call downgrading the odds of the u.s. recession. it is no longer 20%. it's 15%. that's how good these guys are. whatever you're thinking, factor that in. it is 5% less likely now. make your moves based on that. now saying a september rate hike is also off the table.

elon musk threatening to sue the anti-defamation league for defamation. he blames them for the slump in ad sales on x. and disney has a message for spectrum cable customers in the dispute over fees. it says switch to hulu streaming ser service. it is tuesday, september 5th and "squawk box" begins right now. good morning. welcome back to "squawk box" here on cnbc. we are live at nasdaq market site in times square. >> thank you. >> welcome back to everybody. we can say good-bye to summer. summer is now past labor day. offici