it is 5:00 a.m. here at cnbc global headquarters. here is the kwf"five@5." the fed is set to hit the pause button. and gearing up in sk cupert. we he -- we preview what is on tap for apple. and taking on alphabet and the search engine dominance. the exclusive with the ceo

of u.p.s. and her first on air comments since averting what could have been a catastrophic strike. and oversubscribed and under managed. new details of the a.r.m. ipo ahead. it is tuesday, september 12th, 2023. you are watching "worldwide exchange" here on cnbc. good morning. i'm frank holland. let's get you ready to start the day as we kickoff with the check of u.s. stock futures after a higher day for stocks yesterday. the dow posted the third straight winning session in a row. the nasdaq higher by 1% and second day in a row closing higher along with the s&p. futures are in the red across the board. the dow would open up 75 points lower right now. yesterday's gains in tech coming on the back of tesla shares.

closing out more than 10% higher things to an upgraded morgan stanley. shares are down .50%. shares are up 6% in the last week. we are checking the bond market with the 10-year treasury at 4.27. important to note the 2-year treasury is below 5%. the inversion on the 2/10 is narrowing in recent days. down 70 points. also morning to note the yield on the 2-year treasury is higher than the 5, 10 and 20 and 30. we are watching the energy market. the wti is coming in at $87.95. brent crude is above $90 a barrel. similar for natural gas up .50%. cpi is the biggest data event of the week, but today is

all about with big tech. starting off with the department of justice facing off against alphabet and search engine dominance at 9:30 eastern time today. one of the biggest anti-trust fights since microsoft more than 20 years ago. at 1:00 pc.m., attention shiftig to apple the a-- apple and the iphone release. time to check on the corporate stories with silvana henao. silvana. >> frank, good morning. uaw slightly lowering its demand for pay increase to 36% from 40%. sources tell auto news and others the union is now asking for a series of wage hikes over the next five years starting with the pay boost of 18%. raises would alternate between 4% and 5% annually. gm, for d and stellantis have

until midnight on friday to reach a deal. sticking with the summer of strikes, fast food workers in california are set to get a minimum wage of $20 an hour. unions and the restaurant industry reaching a deal potentially killing a referendum to be on the ballot in 2024. under the agreement, workers with chains at least with 60 locations nationwide must be paid $20 an hour by april. california minimum wage is set to rise to $16 an hour in january. shares of oracle dropping. first quarter revenue missing forecast and the company is now projecting sales this quarter to fallbelow estimate. cloud revenue did rise 30%, but that's slower than in previous quarters. chairman larry ellison is touting the prospects saying the

customers signed more than $4 billion in a.i. contracts. >> big more for oracle. silvana, see you later on. turning back to the market and the check on u.s. stock futures. futures are in the red. dow easing off the lows of earlier. now looking to open 60 points lower. jpmorgan chase's ceo jamie dimon says the u.s. economy is doing well, but it is foolish to believe this will last for years. speaking at the financial conf conference, dimon saying rising wages are supporting conditions for now, but there is risk ahead. >> i just think people are making a mistake to look at real-time numbers and not look at the future. the future has quantitative tightening. we are spending money like drunken sailors. the war in ukraine still going on. the state of the consumer is strong today meaning you will

have a booming environment for years is a huge mistake. >> let's get retoox thaction to with delano sapuro. >> thank you, frank. >> angree or disagree with jami dimon? >> you know, i would say somewhat. i think if you look at my call and saying you have short-term pullback and over the spring and summer we have been rising over that time period. if you look at it, july or late july is where we saw the peak, then that has to do with what jamie was speaking about. september is the worst month for the year for stocks on average. if you look at inflation and wages are not keeping up with inflation. especially if you see the hotter inflation we have seen over the

last several months. i think those things are concerning, especially if you look at what is going on with the broader consumer. you have earnings that were average to sub par for a lot of companies in the past season. >> you mention inflation. we had two big reports. cpi is the biggest. we also have retail sales. how do they inform your thesis with the markets? >> i think we will see inflation which will be troubling as far as what we see with the data which comes out later this week. we are seeing a lot of spending. retail sales numbers will show a little bit of that. if you look at it right now, i think those are highlighting the big thesis which is saying there is still a lot of pressure on the fed to tame inflation even if we see a pause in the recent meeting. i think there is a potential for a hike. that is highlighted by what we see in the data coming out later

this week. the fed has been very strong on being hawkish if you look at what is going on. you see energy prices start to creep back up. you still haven't seen shelter be tame. those will play a role in the numbers and how the fed reacts. >> i know you are generally bullish mega cap tech for apple and alphabet today. are you focused on that? is that guiding investment to sell and take profit or buy into weakness? >> i think the barbell strategy is one the investors can look at right now. right now, you have the opportunity to stay in high risk/reward areas or low risk areas which if you look at money market funds, an lot of folks ae still not fully into the money

market funds. they are in areas with lower yields. if you have the barbell strategy, there are two areas. you can be at the high risk or more risk areas that actually have potential to do well this year and may pull back. i looked at a company like salesforce which has done well this year and has potential to do well. they shot out great growth historically and those are the areas in big tech as we mentioned like apple with issues in china as well. those are areas you want to look at. >> to your point, salesforce with the interview with jim cramer today. thank you. still ahead on "worldwide exchange," the one word investors need to know today and

new investor concerns with a.r.m. ipo. and u.p.s. ceo speaks out in our exclusive interview. and we have mark hahaney from evercore speaking out on apple. we have a very busy hour when "worldwide exchange" returns. every day, businesses everywhere are asking: is it possible? with comcast business... it is. is it possible to use predictive monitoring

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exchange." look at u.s. futures. dow down 74 points in the pre-market. s&p and nasdaq down .25%. now let's see how europe is shaping up as its trading day is getting underway. julianna tatelbaum is live in the london newsroom with the latest. >> frank, good morning. here, european sentiment is possi positive. dax and cac 40 is trading lower, but elsewhere is an increase. one name to watch is ab foods. owner of primark. they had an earnings update. shares trading at 4% this morn morning. on the down side, smurfit kappa agreed to merge with westrock. a $$20 billion packaging

environment deal. smurfit stock is down. the uk listing down 13% at one stage. breaking it down by sectors. here is the split. fairly even board. retail up in front at 0.8% higher. telcom trading decent. you have media down .50%. chemicals and technology d down .90%. the big event this week in europe is the ecb which meets on thursday means a lot of questions over if they go for another rate hike. we had fresh growth forecast yesterday as we mentioned here on "wex." european central bank has a difficult task to continue to fight inflation which remains elevated in the block and also not at the expense of growth. a challenge for the ecb coming up on thursday, frank. >> julianna, thank you.

julianna tatelbaum live in the london newsroom. turning attention to the most anticipated ipo this year. a.r.m.'s offering is oversubscribed by ten times. the deal could end up 15 times over subscribed before trading begins. sources tell cnbc this morning there continues to be investor concerns of governance. eunice yoon is joining me with more on the story. >> reporter: frank, china accounts for 25% of a.r.m.'s sales. it does it through a fractured relationship through china. the a.r.m. technology is independent of the uk a.r.m. it is depending on a.r.m.'s ip and it generally generates sales through licenses and royalties. for investors, a big risk, i'm

told is the fact that a.r.m. doesn't have much control over the china business. softbank has a 48% share. most is held by chinese investors. so the concern is that there's no majority shareholder and it is also run moreover by two co-ceos. the former ceo who was nierd o fired over a drama maintains his leadership. there are big questions as to whether or not the money will go to the potential customers for a.r.m. the consumer electronics demand is not looking healthy and then the macro factors here in china. the third big risk that people have been concerned about here is the geopolitics. one is just the overarching

concerns about the environment and business climate for foreign and private companies. secondarily, people are wondering whether or not a.r.m. china would get pressure to turn from a chinese partner into a chinese rival, and then, frank, the worries of the u.s. export controls and how that factors in. >> eunice, you outlines that risk. what are investors telling you about actually investing in a.r.m.? >> reporter: not only was i talking with investors, but folks in the chip industry. i asked that question as well because i was curious if they would put money into a.r.m. china or a.r.m. they said the way they think about it is do they believe that a.r.m.'s business outside of china will continue to grow and

expand. if you believe that, in the end, a.r.m. ends up losing the china business entirely, then you are still feeling okay. >> eunice yoon live in beijing. great reporting. good to see you. coming up here on "worldwide exchange," we have an exclusive with the ceo of u.p.s. and her first on-air comments since ti who cat could have been a catastrophic worker strike.

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welcome back to "worldwide exchange." u.p.s. unveils new labor costs after the five-year contract with the teamsters. shares are down since the deal was announced. u.p.s. says the majority of the negative impact is reflected in the third quarter costing more than expected. citi views the guide at 25% p below consensus. i sat down with carol tome to discuss the overall deal and union claim they won $30 billion in new money. >> well, let me say we see this deal as a win-win-win. it is not a $30 billion deal. it is a great deal for our people. it is a great deal for all the stakeholders represented in the negotiations. we represented employees and customers and country and

shareholders and our company. when i look at the economics of the teamsters deal, the compounded annual growth rate of that deal is 3.3%. to put that in perspective, the yield on the five-year treasury today is 4.4%. if you look at the historical average of the five-year treasury, it is 3.7%. we came in under a five-year treasury yield. that's pretty good. at the same time, continuing to pay the highest wages and benefits for our people. that's a win. >> it sounds like you are saying it was a deal and you are focused on the value of reaching the deal as opposed to the price? >> it was a win-win-win for all stakeholders. we value the fact we pay our people the highest wages and benefits. we put together a budget before we started negotiations. as i look at the numbers and how they played out relative to the budget we put into plan, it

compares very favorably. it is a bit of a barbell structure where it is heavier in the beginning of the contract and low in the middle of the contract and steps up in the end of the contract. 46% of the cost increase happens in the first year. imagine what the last four years of the contract are and they are really good for us. at 3.3% compounded rate? we have work-life balance for our people while retaining for the ability to deliver on the weekend which is important for customers. we retain the ability to let our part-time workers post for seasonal jobs during the holiday time of year when the volume surges. that's a win for us. these a win for our part-time so associates and win for customers. why go outside when we can use people who are already

u.p.s.ers. >> i want to lean on this. you call it a win-win-win. we understand the win for the customers and workers. in all fairness, u.p.s. shares are down double digits sunshine y -- since you announced the agreement. what is the clear win for investors? >> the win is certainty. we now know our labor costs for the effnext five years. we know what our labor costs are and we can put plans to mitigate that cost. plans to drive propductivity through automation. plans to lean into parts of the opportunity that really value our end-to-end network life health care and logistics. we can grow with certainty. >> i want to talk about the network and business post the contracts. you have been transparent about

the fact u.p.s. lost over 1 million packages per day in volume because of the uncertainty with the negotiations. you estimate 1.25 millionper day. how does u.p.s. get that business back? what is the margin impact? >> we try to hold on to the volume. we had over 500 high-impact executives who worked day in and day out with customers to hold on to the volume. when you are faced with uncertainty and you want to take c care of your customers, you can understand the volume diverted. we are winning it back now. winning on the service that we provide to our customers. our service levels are the best of all carrier. we are winning on service. we are bringing it back. it takes time. when you leave a network and go to another network, you change your operating plans. you come back, you have to change your operating plans again. i'm pleased with how we are

progressing with the win back and win new. we had $7 billion of opportunities in our sales pipeline of customers that we currently don't serve today that we want to win back. from a margin perspective, we have a disciplined approach to revenue quality. we will not discount business to win it back. we will win it back based on the service we provide. >> i want to look ahead to the holiday season. you said your top 100 customers account for 87% of the holiday surge. these are customers sending dp gifts to people. what do they expect? >> everyone is expecting a good holiday season. we have to remember the consumer spending behavior has changed in 2023 from the past couple years. retail sales for the most part are compressed. they will peak from the compressed level.

we are planning to have a great peak. >> you are expecting a great peak. this is the first holiday peak since the pandemic officially ended. last year was between. it was 50/50. this is the first one since then. one thing that people don't often talk about the fact is you do a lot of b2b shipping. you have a good read on retailers for in-store shopping and ecommerce. what are the customers telling you about in-store against ecommerce and holiday shipping in. >> it is early days in the peak planning process. i know customers are focused on making sure they have a great experience inside stores. they have inconvventory to meet customer needs in the store or delivery to the home. >> carol tome, thank you for your time. >> u.p.s. has an average rate of

buy overweight on the street and price target of $190. year to date is still underperforming fedex. for the full sit down with carol tome, go to cnbc.com. elon musk gets the walter isaacson treatment and a heartbreaking loss for some new york srts pofans. top trending stories are coming up. we will be right back. people are excited about what ai will do for them. we're excited about what ai will do for business.

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it is 5:30 a.m. in the new york city area. more ahead here on "worldwide exchange." here's what's on deck. stock win streak looking at risk ahead of the open. apple gearing up for the event and expected to unveil the latest iphone as it deals with headwinds out of china. we have a landmark trial in washington as the justice department takes on google. it is tuesday, september 12th. you are watching "worldwide exchange" here on cnbc. welcome back to "worldwide exchange." i'm frank holland. we check on the u.s. stock futures. you are seeing red across the board. dow would open up 70 points lower. s&p and nasdaq down .25%.

we are looking at the bond market right now with the benchmark 10-year treasury. it's at 4.28. the 2-year treasury is very, very close to a 5% yield. also the inversion with the 2/10 narrowing to down under 70 basis points. we want to talk oil and the energy market. wti at $88.06. rising higher through the morning. brent crude at $91.32. similar more for natural gas here in the green. now turning attention to cupertino, california and the apple launch event of the year where it is expected to unveil the apple iphone 15. this is marking an important time ahead of the holiday quarter which is the biggest sales period of the year. sales are moving higher following a recent slide over concerns about a potential

iphone ban for chinese government workers. cnbc tech reporter arjun kharpal is here with more. arjun, big day for apple. what are you expecting? >> reporter: that's right, frank. iphone 15 unveiled at the wonder lust meeting. about the pro model and what we heard from reports is analysts are expected to have titanium casing over stainless steel. better cameras as well and a powerful chip. 3 nanometer chip which could make it the only phone on the market to have the semiconductor on the phone. the big change is the charging port. expected to have usb-c which you may know from the android phones. that is as a result of eu laws forcing electronics in the eu to

have a common charger. that is usb-c. apple expected to make the change globally. the key issue is the pricing and rise of memory of processing costs, apple will have to raise prices. it did not last year. this will be a closely watched part of the unveiling. frank, we may get a new apple watch. there are not major upgrading with shape and sizes. you could get new health features and sensors and a new chip. i0s 17 will be released at the same time. this is all coming with slowing sales. 2% drop of revenue latest quarter. the question is can these r revived sales in china and the new market in india as well, frank? >> arjun, you mentioned slumping

sales and pricing being a question. are you expecting a price increase? h here in the u.s., people buy the phones on a payment plan. does that mitigate the pricing for apple? >> reporter: it does in the u.s. and here in the uk with the pricing plans which are popular. you remember in places like china, it is not necessarily the same. some of the other markets apple is targeting, like india, the user is buying cheaper phones. apple has to be sensitive on pricing globeally. expect that to change market to market. you may see that in some places. in china, competition is ramping up. maybe apple will be careful. in the past, it has made mistake was pricing. i think it has managed to learn from the mistakes, particularly

the last few years. it will be careful with pricing. >> arjun kharpal live in london. thank you. time to get to the other major stories in the tech sector. the doj trial against google over the online search dom dominance. it is marking the biggest challenge to tech in decades. ja eamon javers is here with more on the story. >> reporter: frank, this is the tech trial of the century. another one maybe on the horizon. we have not seen a heavyweight antitrust battle since the department of justice took on microsoft in the struggle with government and industry back in the late 1990s. the trial will be months long and full of technical testimony. at the core is a set of simple, but competing arguments. u.s. department of justice will argue google built the market share on violating the law. spending billions of dollars a year to become the default

search engine and squashing competition. lawyers for google will argue the company built dominance by building a better product. customers and business partners chose on their own. the government is defining the competition too narrowly. google will argue it does and just compete with bing and duck duck go, but competing against any place people are searching for information. amazon search for products or twitter and now x search for news items. the two sides are bringing enormous assets to bear with the doj bringing assets to its team and google hiring three outside law firms. we expect the google ceo to testify at some point here, although witness lists have not been released. google founders are not expected to take the stand in the course of the trial.

we also expect google partners to be drawn into the fray. apple executives are likely to be among the witness list, but tim cook is not expected to be on the list. this is just the first phase to establish whether google has liability under anti-trust laws. if the court finds it does, they go to the second phase to figure out the remedy to change the way google does business. >> you say this is how google goes business. does google offer a deal or have been offered a deal to change how they do business? >> reporter: not yet. both sides are putting on the suits of armor and going into the jousting stage. when you look at remedies or the legal term for the fix, neither side will engage in any kind of

speculation of what may be the end result here. you go back to the microsoft case in the 1990s, frank, and you think about how that one ended. of course, it ended with a settlement between the two sides which microsoft agreed to change some of the business practices. microsoft, although it was bloodied and had a couple black eyes, didn't end up having to break up or change any radical core way. there is precedence for minor changes here. we will see where this one goes. the expectation is that both of the sides will put their case on and leave it up to the judge. >> eamon javers, great to see you. great reporting. > joining me is mark mahaney. >> good morning, frank. >> let's good into this one. what is the read on the anti-trust concerns for investors ahead of the case?

>> well, anti-trust and regulatory concerns have been issues for google investors for the better part of seven years now. we hadn't seen anything materially impact google earnings. the cash flow or revenue. i think it is -- i'm not a lawyer either side of the case. most believe this will not materially impact google going forward. >> not really seeing the risk priced into the stock right now. i have to ask if alphabet loses, what does it mean for the ratings in your coverage universe? >> it depends how they lose. there are a couple of facts here. google has 90% share.

it has revenue which they generate off the search. they pay that revenue with google and samsung and verizon and other companies. you know, if they lose the case, depending how they lose, maybe the market share would be at risk. they would avoid paying $30 billion a year which negatively impacts the earnings. how that impacts the future earnings is the unknown. i assume google would maintain most of the market share, but not all of it, because consumers have the ability to find google and install the search app and install the browser. a lot of that share they would maintain and there is a scenario here on the worst-case scenario where they are no longer allowed to make the deals and they could

see a surge in earnings because they cut the cost and lose a modest market share. that's why most investors say until proven otherwise, it is a non event. >> in the eyes of investors. you share that opinion as well. let's say alphabet loses this and flno longer pay. is this a window for bing which is a.i. powered or duck duck go? something i haven't thought about for years. is that a way to gain meaningful market share? >> frank, there is irony in all of this with the last anti-trust case with microsoft and potential winner were google's market share clipped. a wild card here is with the inspire apple with the search engine which would be a costly process. i don't think it is a likelihood, but it is a

possibility. this would create opportunities for other search engines. no question if google is no longer allowed to negotiate these distribution deals. it would create the opportunity for another search engine to come in and get market share. >> interesting. you know, i have to say it doesn't have the same ring to say i'm going to bing restaurants in my neighborhood. mark, thank you. coming up here on "worldwide exchange," a mega merger becoming official this morning creating an $11 billion packaging giant. as we head to break, the top trending stories. the days of mixing self-serve soda is out at mcdonald's. the completion target of 2032. it is happening slow. this is an effort to provide

growth growth. walter isaacson's new book is being released today on elon musk. don't miss the sitdown on "squawk box" this morning. and aaron rodgers injured his ankle during the team's fifth play of the night and seen wearing a walking boot. the full extent of the injury is unknown. the coach is not optimistic. re "rlidexmowodwe change" coming up in a moment.

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gitlab over .50%. wolfe upgrading cvs for the company raising the rating. shares of cvs health up 1%. time for the global briefing. smurfit kappa and westrock combining an $11 billion deal. shareholders will get share of stock and cash. alibaba ceo laying out the vision for the company with the focus on a.i. eddie wu saying artificial intelligence and user experience is top priorities. alibaba would focus on young

employees to fulfill the core management team. and global foundry is opening a plant in singapore today. that facility is part of the strategy for the global manufacturing expansion. coming up on "worldwide exchange," the one word every investor needs to know today and why the next guest says wake her up when september ends when it comes to putting money to work in the markets. join us for the investor summit in new york city with the investors and leaders coming together to provide insights and ideas to balance risk with maximized returns. scan the qr code or go to c cnbcevents.com/alpha. more "worldwide exchange" on cnbc coming up.

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oracle shares plunging since the company's accelerated transition to the cloud. uaw lowering the pay increase demands from 40% to 36% ahead of the thursday contract expiration. bloomberg says the automakers ask is still too high for viab viability. and u.p.s. shares dipping as ceo carol tome sees the company peaking again with the holiday standards. >> we have to remember the consumer spending behavior has changed in 2023 from the past couple years. retail sales are compressed. they will peak from the compressed level. >> that full interview on cnbc.com. shares of rtx slide after the fall of 8% yesterday after

disclosing an engine issue will ground jets over the next few years. it will take up to a $3.5 billion profit hit. shares of rtx down 1%. and tiktok launching a tiktok shop in the u.s. the company saying the data for u.s. users will be stored in the country and it will work with a third party payment platform on the site. as we get ready for the trading day ahead, look at futures. futures in the red. the dow would open up 70 points lower. s&p and nasdaq down .25%. let's bring in victoria greene. you are a friend of the show. vicki, thank you for being here. >> thanks, frank. >> the nasdaq and s&p off the two-day win streak. now futures in the road. what is causing this pre-market weakness? what are you expecting?

>> oracle is weighing on nasdaq. yesterday was a tesla-driven rally. you are seeing the push-pull with mega caps. it is a little hard for the s&p or the nasdaq to rally without the mega caps working there. you need to look at what will work in the back half of the year. is the a.i. looking frothy? will we continue to see growth from nvidia or oracle? dis disappointment from the street when they reported after the b bell. >> looking ahead to the day, what is your word? >> my word of the day is green day. the '90s band. their song is perfect. "wake me up when september ends."

a weak season period. we see it play out with august and september doing the status quo of what august and september do. wake me up when this is all over. we will get back to work in october. >> let's talk about bonds. we have comments pointing as a canary in the coal mine. high yielding is a beneficial to the market liquidity. what is your thought? >> i feel they are compressed and not as a tttractive in the market at this point. i don't mind taking duriation. everybody is worried about higher for longer. you want to look in the rates. the front end is super attractive. six months and below is the great rate. 5% to 6% year. you need to look at extending duration out and face reinvestment risk. the market is anticipating rate

cuts starting next year. you might want to see look at duration over credit. it is risky to trace to high yields or higher yielding parts of the market because it is not attractive over what you can get more risk for investment in corporates. >> we started off talking tech. most of the pick in the tech space. one of the stocks taking a dive right now is oracle. why are you feeling bullish on oracle? >> it is about the future. they have gone to the cloud. if you look at the adoption rates of azure, oracle is following the same rate. they will compete with the crowdspace. aws and azure have the market share. they are transitioning from the infrastructure to the cloud. we see that as a good growth aspect for them. oracle has been stuck the last couple years of getting revenue

growth. is it is there now. >> vicky, thank you. "squawk box" is next. thank you for watching. the power goes out and we still have wifi to do our homework. and that's a good thing? great in my book! who are you? no power? no problem. introducing storm-ready wifi. now you can stay reliably connected

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good morning. it's being billed as the biggest anti-trust trial in years. google heading to trial to defend the search business. oracle shares sliding. company revenue fell short. executives are highlighting opportunities in, you guessed it, artificial intelligence. apple set to reveal the latest iphone at the product launch event today. we will tell you what to expect. it is tuesday, september 12th,

2023 and "squawk box" begins right now. good morning. welcome to "squawk box" here on cnbc. we are live from the nasdaq market site in times square. i'm becky quick with joe kernen and andrew ross sorkin. let's look at what is happening with the u.s. equities this hour. you will see red arrows. this is after the up day across the board. dow seeing three sessions of being higher. dow off 67. s&p down 11. nasdaq off 35. if you are watching what is happening with the treasury market, you saw activity with yields yesterday. especially with what you have been hearing from japan and other places. right now, the 10-year treasury is yielding below 4.3%. the 2-year treasury is