it is 5:00 a.m. at cnbc global headquarters. here is your five at 5:00. we begin with wall street coming off its worst day since march as surging interest rates trigger a new round of market turmoil. and not just here at home, overseas, over in europe, it is following asia's lead to the downside as japanese bonds hit their highest level in a decade. we turn to washington, house kicking off the first day without a speaker after kevin mccarthy was ousted by far right members of his own party and every democrat in the house.

plus, the season of strikes set to grow even larger. today, with more than 75,000 kaiser permanente workers possibly walking off the job. and then later, we have a rare downgrade for apple, like key bank says, it is taking a fresh look at the stock. it is wednesday, october 4th, 2023. you're watching "worldwide exchange" right here on cnbc. good morning. welcome to "worldwide exchange." i'm frank holland. let's get you ready to start your day. we kick off the hour with the checks on u.s. stock futures. in the red across the board. the dow looks like it would open up 30 points lower right now. this after the dow posted its worst day since march, falling nearly 1.3%. similar story for the nasdaq and the s&p 500. both of them closing down. 1.8% and 1.3% respectively on the day. we also want to look at the russel 2000, negative for the year and seen as a leading

indicator of a possible u.s. recession. you see the move -- this is dow transports. dow transports dipped below the 200 day moving average. you see the move on the far right-hand of the screen, year to date up, but falling for first time since june. all of this, we continue to track. the five, the ten and the 30 trading at their highest level since 2007 with the 30-year long bond hovering right around 5%. i'll move this circle off the screen. 4.93, something we continue to watch. 30-year seen as an economic indicator by many economists, seen as a look into also inflation expectations as investors want a higher yield on the long bond if they expect inflation to be higher. the benchmark now at 4.8. a lot of thoughts and forecasts that we could see this right here move all the way up to 5%. we'll talk more about that later in the show. the bond sell-off also triggering a vix rally, the fear

index sitting at a six-month high. we're seeing it at 20 now. you can see throughout the year, just a few weeks ago, down here, throughout the year, got up around the 25 range. that was earlier in the year, we were worried about the recession. right now seeing it back at about 20. okay. that's our u.s. setup. let's turn to the overnight action, overseas. we'll turn it over to ger germana burcetti. >> u.s. markets, asian markets, but today the picture in europe is somewhat resilient given the moves in bond yields. it is a pretty mixed picture. we have the ftse 100 trading around the flat line, below the 7,500 mark. we're seeing the likes of minors, commodity names come under selling pressure. flip side, others at the top of the british index after posting better than expected profit outlook for the year. we have been talking a lot about the luxury space within the cac

basket. we continue to see downward pressure on renault. also for the dax as well, auto industrials coming under pressure. commerce bank down sitting at around 15,000. let me show you smi, one stock we're watching is novartis. the stock is up after formally spitting off its generic business. let me take you to yields. similar to the u.s., the price action in europe has been quite marked as well. we're seeing the ten-year bund, this morning got to just about 3%. this is the highest level we have been at since 2011. so in line with the u.s. we are seeing yields move higher and higher. ten-year gilds up as well. yesterday we moved up six basis

points. ten-year btp sitting at 4.93. if you take the difference between the two, we're very close to 200 basis points between where the italian bond yield is trading and the german bund yield. some of the credit concerns are beginning to bubble again and all of that is having ramifications on where the currency is trading, which is also getting back down to very close levels to paris once more. 104 here. some concerns bubbling beneath the surface in europe. >> thank you very much. let's get over to jp aun in singapore with the overnight action. what are you seeing there? >> good morning to you guys out there in new york. a similar story. we're seeing smalls extending out here in the asia pacific from tokyo to taipei and a lot of this reaction and the focus on where u.s. bond yields and global bond yields are heading. it is not that the federal reserve officials said anything

different. they said that rates will stay higher for longer. it is a statement they reiterated many times. what it sends the u.s. ten-year to the highest level in 16 years, that does dampen sentiments, even out here in the asia pacific. two markets to take note of. the south korean markets, the kospi and seoul, which came back from an extended two-day holiday. and losses greeted them and hit them pretty hard as they play catch-up with the rest of the region that has been a downtrend since the start of the week. falling by more than 2%. a lot of tech-related stocks. japanese markets also worth look at. a lot of this also with questions with regard to yen volatility. the japanese yen we saw flirt with 150 against the greenback yesterday and then suddenly come down, strengthen significantly, hinting at potential intervention from officials out in tokyo. certain officials from tokyo did say that they're still watching this, but said they could

intervene if volatility is excessive. we're seeing the yen again, something close to watch right now as it is starting to show signs of inching back up toward that 150 level. all of the uncertainty props feeding into the japanese markets with the nikkei also falling in today's session. mainly chinese markets are offline for the extended golden week period. but the hang seng is open in hong kong and they fell. look at a number of the major indices there, from tech index which fell on the back of the rising u.s. bond yields and also with the property index falling because there are concerns of a continued slowdown in the chinese property sector. this could feed into hong kong. they might see rents or property prices fall by another 15% next year if the downtrend and rates continue to stay this high and that's showing a very bleak picture for how markets closed for hump day in asia. back to you. >> thank you very much. turning our attention back to wall street, and treasury yields that continue to surge with ten-year hovering around

4.8%. that's the highest level in 16 years. yield on the benchmark is up 24% this year alone. pimco co-founder and former bond king bill gross telling "last call" he believes there is still more room to run. >> the market certainly is oversold at the moment. and in anticipation of treasury supplies and in anticipation of higher for longer and in terms of the fed and the fed's only quantitative tightening program. i think maybe 5% caps it for the near term. it depends on our inflation, depends on economic growth we'll see going forward. >> let's talk about this with robert teeter, head of investment policy and strategy at silver crest asset man management. good morning. great to have you here. we heard from bill gross just there. do you agree with him? you to see the ten-year yield hitting 5% this year as we see the long bond very close to 5% right now? >> well, i think the bond market has been following the fed here. if you look at fed projections,

the dot plot out to next year. if you look at futures and expectations for fed funds, those are around 5%, about a year out as well. i do think we could head a little bit higher on yields here. i think we're getting closer to a point of stabilization, but there is a bit of room for it to go higher since we have fed funds looking above 5% for the foreseeable future. >> a lot of people call bill gross the former bond king. we heard from the current bond king, via x, jeffrey gundlach. the u.s. treasury yield curve is deinverting very rapidly. 108 basis points, now 135 basis points, should put everyone on recession warning, not just recession watch. he finishes off with buckle up. what about the current bond king? agree with his assessment? >> i think that's an interesting insight as well. i think the high rates are starting to weigh on economic growth. we're seeing a big slowdown in

terms of the momentum on the economy. there are multiple indicators of the atlanta fed numbers are still quite high, the new york fed numbers are lower. you have powerful recession indicators like the inverted yield curve. momentum is slowing down on the economy. i'm not expecting recession anytime soon. the job gains have been quite strong. historically you had one to two quarters of slowing economic growth before going into recession. the last two quarters, of course have been reasonably strong. i think the recession may still be a ways out there in the future. the economy is slowing for sure. >> you know, we're doing a lot of bond talk. i want to ask you one question about equities. according to your research, you're saying that the full-year estimates are going to influence the market in q4. you have an estimate of 8%. that's growth right there. give us a sense, how important is the full-year eps estimate for next year for q4 and tell us why. >> i think it will become very important very soon. so i think we have a convergence

of factors here. i think yields will start to stabilize a bit. perhaps now, perhaps a little bit higher from now. when you get into earnings season, we'll get a lot of color on what 2024 looks like. i think it is going to look decent. a lot of work that companies have put in on the basis of this slowing economy to help margins. even with the slowing economic bac backdrop, earnings can be solid. we're lower than the street. it is typical. but i do think next year can be a decent year for earnings and that will start to matter relatively soon. >> robert, great to see you. thank you very much. appreciate you being here. >> thanks. with all this talk about 5% rates and higher for longer, tune in for our special coverage on monday looking across several sectors of the economy to see where surging rates mean for the markets and for your money in the months ahead. that's next week. we'll look at this new potentially 5% world. a lot to talk about there. turning our attention to washington, d.c. developments around that historic vote to remove kevin mccarthy as house speaker and

what it could mean for fiscal policymaking and the u.s. credit rating with the possibility of another shutdown showdown in mid-november. nbc's brie jackson joins me now with the d.c. drama. i think that's a phrase we'll use a lot. >> drama, chaos, you could use a couple of words there after we saw yesterday and what is expected moving forward. kevin mccarthy's removal as speaker comes less than nine months after he was elected to that job and it has thrown the republican party into even more chaos. >> the chair declares the house in recess, subject to the call of the chair. >> reporter: a sense of frustration from some lawmakers, following the historic decision to oust kevin mccarthy from his job as house speaker. the move comes after heavy criticism from hard right conservatives who slammed his decision to work with democrats to avoid a government shutdown. >> doing the right thing isn't

always easy, but it is necessary. i don't regret standing up for choosing governing over grievance. >> reporter: florida representative matt gaetz led the motion to vacate. >> it is to the benefit of the country that we have a better speaker of the house than kevin mccarthy. kevin mccarthy couldn't keep his word. >> reporter: only eight members of the gop voted to remove mccarthy. democrats sealed his fate. >> nobody trusts kevin mccarthy and why should we? >> reporter: mccarthy's removal has further divided republicans. >> it is disgusting. it is what is disgusting about washington. >> we're all adults here all about making deals and negotiating and that's the way this place works. >> reporter: now, lawmakers must decide who will lead the house majority moving forward. mccarthy says he will not run for speaker again. and representative patrick mchenry from north carolina now serves as temporary speaker. he plans to hold an election for a permanent replacement next

week. frank? >> all right, brie jackson live in d.c. brie, great to see you, thank you very much. we have more to come here on "worldwide exchange" including the one word that investors have to note today. first, the rate shock hitting oil prices as opec plus kicks off a production meeting today. we have helima croft here to weigh in. the season of strikes set to grow by one more as thousands of kaiser permanente workers get set to walk off the job. we debate the broader economic imp impacts. and later, working on metaverse ambitions.

icy hot. ice works fast. ♪♪ heat makes it last. feel the power of contrast therapy. ♪♪ so you can rise from pain. icy hot. the power goes out and we still have wifi so to do our homework.ain. 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 through power outages with unlimited cellular data and up to 4 hours of battery back-up to keep you online. only from xfinity. home of the xfinity 10g network.

all right, welcome back to "worldwide exchange." we're watching the price of oil this morning. brent, the global benchmark, continues to trade at its lowest level in three weeks, hovering just above 90 bucks a barrel. investors in energy traders fearing higher for longer interest rates are expected to pump the brakes on global fuel demand. take a look at this chart. that sharp move higher in the ten-year yield corresponding with an inverse move for wti, two of them crossing right there on monday. all this ahead of a panel meeting of opec plus ministers today with saudi arabia already saying we'll continue the voluntary cuts of 1 million barrels per day until the end of this year. joining us is helima croft, rbc, global head of commodities strategy and cnbc contributor. helima, good morning. great to have you here.

>> thank you for having me on. >> helima, it seems like it was just about a week ago, everybody was talking about $100 a barrel brent. do you still see that as a publicity at least this year? >> i think we see it as a possibility. right now, though, the market is more focused on broader macro. obviously higher for longer and profit taking is impacting oil. but the fundamental picture does remain strong. and we're going to be looking for the inventory data that comes out of the ei today. the question is what is the actual demand picture look like? if we continue to see inventory draws combined with the saudi action, this remains a strong fundamental backdrop for oil. >> i want to talk about profit taking and the saudi oil minister in a minute. let's talk about the rates now. we're seeing the ten-year moving higher at 4.8%. the long bond at almost 5%. how does that impact the energy

market, specifically the oil market? >> i think that the biggest headwind for oil, said this throughout the year, has been concerns about rate hikes. and the sense that this could lead to a contraction in demand. what is so interesting is you do have macro sellers that say rate hikes for demand. but the fundamental picture held up despite the broader macro concerns. oil gets caught up in the broader macro story. the question is are we really seeing a contraction in demand. at this point, we aren't seeing evidence of that. >> you spoke to the saudi oil minister. he told you the jury is still out when it comes to the future of their cuts, he said things like china demand is one factor, european manufacturing is another factor. do you believe that we're going to see cuts for longer that maybe extend throughout 2024? >> what is so interesting, frank, is the criteria he used, you mentioned, included central bank action.

and so the prince has basically said that saudi arabia will be watching very closely what jerome powell and other central banks do in terms of rate hikes. in a higher for longer situation you have to assume that the saudis and rest of opec are going to continue to restrict supply. this is one of the factors when they make this cut decision. they're going to review it every month. but the question is in the current environment where there are macro concerns resurfacing, do you see any exit round for the production cut? >> i'm sure a lot of your clients are asking the same question. when he said the jury is still out, does that mean he's going to consult with the other opec ministers or does saudi arabia make a unilateral decision on its own in what is good for its production and its price? >> no, i mean, i do think there is a consulting process. i think the saudis, when they made that decision in june, were basically, like, we're going to take the lead. we are going to bear the burden of adjustment to bring this market back into balance. and so i think that consults

broadly with the rest of opec plus and you can see that russia followed the saudi action today with the cut. it is saudi leading, but i think that is also acting in consultation with the rest of opec. >> looking at brent crude now, 15 cents above. who better to have on a day like this, talk about rates and oil than helima croft. thank you so much. great to have you here. >> thank you for having me. chge widd on "worldwe exan,"hat ford is telling striking union workers as walkouts enter the third week. we have the full story when we come back here on "worldwide exchange." . feel the power of contrast therapy. ♪♪ so you can rise from pain. icy hot.

( ♪ ♪ ) ( ♪ ♪ ) ♪ (when the day that) ♪ ♪ (lies ahead of me) ♪ ♪ ( seems impossible to face) ♪ ♪ (a lovely day) ♪ ♪ (lovely day) ♪ ♪ (lovely day) ♪ ♪ (lovely day) ♪ a bank that knows your business grows your business. bmo.

you deserve better than that. i'm hungry, i'm in a hurry, i don't have time to make anything healthy. you could if you had a blendjet. blendjet? it's the portable blender that makes the healthy choice the most convenient choice. i don't know. it seems like a hassle. hahaha! wrong. just pour in some milk, add some frozen fruit, and bam! you've got a nutritious and delicious smoothie. mmm! that is good. you're welcome, sad office guy. get yours today at blendjet.com are we in in an ad? we sure are.

time for a check of the top corporate stories. silvana henao has those. >> good wednesday morning to you. three weeks into the strikes and the seventh and strongest offer to striking uaw workers is on the bargaining table, one that promises no job losses related to ev battery production. the company says it made this latest offer monday night. but did not put a number on the wage increase. only to say it would put uaw represented jobs among the top 25% of all u.s. jobs, hourly and salary, no comment from the uaw yet. shares of intel moving higher in the premarket. the company says it plans to spin off its programmable chip unit through an ipo in the next two to three years. ahead of the move, the unit will

be treated as a stand alone business with its own balance sheet. intel plans to retain a majority stake in the new company. and meta is reportedly planning to lay off employees in its metaverse focused reality today. according to reuters, affected workers were informed of the potential layoffs yesterday with official decisions today. meta's reality lab is developing custom silicone chips for the company's continued push into the metaverse. >> down half a percent now in extended hours. i have to say, not sure about the future of the metaverse, but it looks better. >> it does, right? based on what we're hearing. we'll see. we'll see what happens. >> silvana, thank you very much. see you later in the show. we have today's big consumer stat. it is 64% of u.s. consumers believe the country is already in an economic recession. that's according to a september consumer sentiment study from research firm numerator. looking ahead, 65% think the

economy will get worse and 74%, almost three-quarters, think inflation will increase over the ne f mthxtewons. up next, we'll see if a growing list of striking unions can add to that expectation of economic pain. we have much more "worldwide exchange" coming up. stay with us.

a lot more ahead on "worldwide exchange." here's what's still on deck. stocks are set to extend yesterday's losses after the dow crosses into negative territory for the year.

and bond yields continue to surge. d.c. adding to the investor wall of worry with historic vote to remove kevin mccarthy as house speaker. we're live in washington with what happens next. and the summer of strikes spilling into the fall with workers at a major healthcare provider preparing to hit the picket line today. it is wednesday, october 4th, 2023. you're watching "worldwide exchange" right here on cnbc. and welcome back to "worldwide exchange." i'm frank holland. let's get you ready to start this day as always. we pick up with the dow coming off its worst base since march, now in negative territory for the year. take a look at futures, you can see red across the board right now. right now the dow actually off of its lows of earlier this morning, looking like it opened up ten points lower now. the s&p and the nasdaq fractionally lower now as well. so, of course, a big part of the story is the bond market.

the five, the ten and the 30 all trading at their highest level since 2007 with the 30-year long bond hovering around 5%. 4.93%. we see the ten-year at 4.81. this is important. this is seen as a big economic indicator of inflation expectations and also investor confidence. higher yields shows investors they want a premium right now. we're also watching a fresh leading indicator of a possible u.s. recession. looking at the dow transports just dipping, below its 200 day moving average the first time since june. we have to bring you all the way over here. right here, you see the freight and transportation index falling just below that 200 day moving average. we have seen big declines in both airlines and also u.p.s. after prolonged labor negotiation with the teamsters. that's your u.s. setup. now we look overseas. after a rough session, let's check on trading and how it is shaping up in europe and asia.

we are live with more on the action. >> good morning. so clearly the market has been impacted by what has happened with the beat on the economic front. we have manufacturing data coming out yesterday out of europe and really showing that manufacturing not necessarily doing too well. even today services pmi number, the likes of spain, certainly coming on today and impacting the market picture. we saw a dip of around more than 1% yesterday and this european trading picture. today, we managed to pull back a little bit from the lows and are seeing a few gains coming through as well. even on the negative numbers, the dax was the biggest loser, now sitting on the flat line. we are taking a look at some company news in the likes of sandals, split off from novartis coming into play today, out of the swiss market, which is up

around .1%. but novartis managing to head higher even though we thought it would go the opposite way. the bond market has been the one that we all watched quite interestably today. the ten-year bond yield at 4.61%. the ten-year in germany have reached that 3% mark a little earlier on, now dipping just below that. still relatively higher across the board. the french ten-year at the highest mark since december 2012. bond yields across the board headed higher. >> absolutely. something we continue to talk about here on "worldwide exchange." thank you very much. now we bring it back to the states and turn to washington, d.c. and developments around that historic vote to remove kevin mccarthy as house speaker. republicans now working to figure out who will take that position next, only adding to d.c. drama with lawmakers

needing to secure a government funding deal in just over a month. emily wilkins joins us now. a lot to cover here. >> absolutely a lot, frank. yesterday eight republicans joined with democrats to oust kevin mccarthy from the speakership. and while mccarthy maintained a lot of support from the majority of his conference, he announced last night he would not run again. >> so i may have lost the vote today, but as i walk out of this chamber i feel fortunate to have served the american people. >> the house can't pass any legislation until a new speaker is chosen. but instead of going straight into votes like what we saw in january, republicans are going to take a week to regroup. they'll be back next tuesday and meet and hear from different candidates who want to run for speaker and then they'll make their choice. and once republicans have a candidate, votes will begin on the house floor. that could happen as soon as wednesday. several lawmakers including

house majority leader steve scalise are exploring a potential run for the speakership. and, yes, scalise's name has come up from members who said they would support him. matt gaetz told me after the vote yesterday that he would be open to backing scalise, saying that he would be a phenomenal speaker. but gaetz also said that members really do need to grapple with the outcome. this is the first time that a speaker has been ousted. listen to what he told me. >> the stages of grief i think are in progress right now with some of my colleagues. i think there was a stage of denial, and i've certainly experienced a good amount of their anger and now we appear to be heading toward bargaining. i think the world of steve cleese. scalise. he would make a phenomenal speaker. >> other members have come out and said they would back congressman jim jordan and some say they would nominate former president trump, the speaker does not need to be a member of the house of representatives. whoever gets the job is going to hit the ground running, though.

they face another funding deadline on the 17th and there is another chance another stopgap is going to be needed to stop another government shutdown. >> a lot going on down in d.c. i want to ask you specifically about moodys. they warned that political brinkmanship in d.c. and derailed fiscal policy could hurt the u.s. credit rating at the top level at aaa. do you think this drama over the house speaker, does this move the needle when it comes to the u.s. credit rating? >> i think for a lot of republicans they're hoping it won't. that's why you're seeing it break right now. republicans want to make sure the next time there is a vote on the floor for speaker, they are united and united behind one candidate. now, how they get united, who that one candidate is going to be, whether it will be scalise or jordan or someone else remains to be seen. republicans understand that they have a problem right now with unity in their party and they're really trying to get back to the point where they can kind of all act as one. >> yeah, certainly a lot going

on. i had not heard the part about president trump possibly being nominated as house speaker. interesting development there. emily wilkins live in d.c., great reporting, great to have you here. we'll go from that drama in d.c. to the growing wave of labor strikes across the u.s. another potentially set to begin today. more than 75,000 workers at kaiser permanente, the largest nonprofit private healthcare provider in the u.s., now preparing to hit the picket line. bertha coombs joins us now with more on this developing story. good morning. >> good morning, frank. this will be massive, barring a last minute reprieve. kaiser permanente staffers will be hitting the bricks at the top of the hour, starting with 200 ophthalmologists and pharmacists at kaiser's virginia and washington, d.c. facilities. they authorized a 24-hour walkout. workers at facilities in colorado, washington state, oregon, and california have voted to strike until 6:00 a.m.

on saturday. that is three days with their walkout set to begin at 6:00 a.m. local time. this would mark the nation's largest ever healthcare strike, involving eight unions, representing 75,000 workers, 65,000 of them in california where kaiser permanente is based, ranging from lab techs, x-ray techs, vocational nurses, home therapists and other support staff, amounting to about 40% of kaiser's national workforce. key issues include wages, staffing, and subcontracting of jobs. now, kaiser tells cnbc that talks are ongoing, even as this strike deadline looms. it offered pay increases of 12.5% to 16% over four years, minimum $21 an hour in most locations, $23 in southern california. and that the hospital has hired 50,000 workers over the last two years to try to boost staffing, which is one of the issues here. today's walkout, if it happens

would mark the seventh healthcare industry strike this year. the sector accounts for one-third of major union walkouts according to the bureau of labor statistics. it may not be the last one. 4,000 tenet healthcare workers at 11 facilities in california represented by the same union coalition as kaiser authorized a strike if a deal in their case is not reached by october 19th. a lot of labor unrest within healthcare, frank. >> apparently so, bertha. i want to ask you about the kaiser permanente situation right now. you said we're very close to having a strike, seems inevitable. if it does happen, how long are you expecting this to last? >> well, this initial round is for three days. if history is any guide, though, when it is these larger union groups, they don't last very long in the case of kaiser. they had smaller groups that have gone out, engineers who were out for about three months. they had mental health workers

who were out for about two months. but when you get these big, big representative groups, usually it doesn't last that long. so we'll see this first round of three days and the hospital says kaiser says it is prepared, it has, you know, really strategic things they can do in terms of emergencies to be able to cover that during these three days. >> bertha, thank you very much. bertha coombs, the latest on this store quiy here, potential another strike in the u.s. the strike at kaiser permanente the latest in a growing list of union actions across the country that is hitting multiple sectors of the economy from healthcare to autos and entertainment. let's discuss this with seth harris, former acting labor secretary under president obama and former deputy director of the economic council under president biden and joined by james pepakoukis, a cnbc contributor and the author of the new book "the conservative futurist: how to create the sci-fi world we were promised."

good to have you both here. >> good morning, frank. >> good morning. >> seth, i'll start with you. give us a sense in your mind how impactful are the strikes? we're talking about a couple hundred thousand workers here in the u.s. economy, if you want to include also the potential of another strike at kaiser permanente. >> they're immensely impactful for workers. the increase in worker activism, organizing and the increase in strike activity has shown that workers are going to fight to increase their investment and employers investment in them. so i think it is meaningful for workers around the country. i don't think it has really significant wide scale economic effects, national economic effects. it is not going to shave the gdp in any meaningful way. but i think it does demonstrate that workers are quite angry. and they want more from their employers, they want a fair share of employers' profits.

employers have been doing quite well over the last decade. i think in that way it is a meaningful action for working people in the united states. >> so pretty interesting, you say it is not going to hit gdp in a meaningful way. you came to us about ten days ago with some data at the uaw strike at all of the big three, if it goes on could hit gdp as much as a tenth of a percent per week. are you still sticking with that estimate or does it have the potential to have broader ranging impact in your mind? >> i think it is -- it is sort of like the government shutdown, which it can hit gdp, but the expectation is that on the other side of the strike or the other side of a government shutdown that you'll get a bounceback and, you know, on that it won't make much difference. i think longer term what this tells me is that we have a really tight labor market right now, and in some cases as with the uaw or what we saw with the hollywood writers strike there was a concern about

technological change. but i don't think fundamentally the long-term trend of deunionization is going to change. i don't think that's what the strikes mean. they reflect a tight labor market and i would guess percentage of american workers covered by unions ten years from now is going to be a smaller number than it is today. >> so, seth, back over to you. let's talk about the u.s. credit rating and the risk to that. about ten days ago, moodys issued a warning if there was a shutdown the u.s. credit rating could be downgraded. that didn't happen. at least not now, a temporary decision was made to push that back down to november. moodys sited d intensifying political polarization. so does mccarthy being moved out of his role, does that count? are we at risk of a credit downgrade? >> anytime you have the kind of chaos we're seeing in washington it roils markets, it threatens the credit rating. mostly because there is real

concern that we will not be able to get to any kind of a meaningful resolution. that's what the concern about polarization is about. politics is about the art of the possible. what we're seeing in washington right now is really literally impossible. you can't govern without a speaker. and there is a lot of risk to our politics as well as to our economy that we just simply will not be able to make the kinds of decisions we need to make in order to run the government and run the country. so, i'm not worried about it in the near term, but if it is the kind of thing that persists and if we see repeated government shutdowns, if we see threats to the debt limit after the deal expires in a year or two, i think that that is going to be a meaningful risk to the credit rating of the united states. >> jimmy, same question for you, should we worry about the u.s. credit rating right now, aaa, the highest level? >> again, there is a difference between the debt ceiling debate, which is a huge risk and the

government shutdown, which i don't think fundamentally is a real risk. i think republicans at least some republicans, maybe not many, would say that, you know, moodys should be encouraged by this. that means they're worried about spending and worried about the rising debt and long-term big structural deficits. i'm not sure i buy that case because this is not about entitlement reform. it is about these kind of very harsh discretionary spending cuts. but for some republicans might say that, i don't think moodys is listening to that argument. >> all right, seth harris and jimmy, great to have you both here, especially on a day like this. thank you for your insight. coming up on "worldwide exchange," we have some souring sentiment around apple. a rare downgrade by one firm. we have the full details coming up when "worldwide exchange" returns.

(woman) what would the ideal weight loss program look like? no hunger, no cravings, no isolation, more energy, lasting results, and easy. is that possible? it is with golo. these people changed their lives with golo without starvation dieting. whether you have 100 pounds to lose or want to shed those final 20, try golo for 60 days and never diet again. (uplifting music) meet the portable blender we can barely keep in stock. blendjet 2 gives you ice-crushing, big blender

power on-the-go. so you can blend up a mouthwatering smoothie, protein shake, or latte wherever you are! recharge quickly with any usb port. best of all, it even cleans itself! just blend water with a drop of soap. what are you waiting for? order yours now from blendjet.com before they sell out again!

we begin with key bank downgrading on apple, moving it to sector weight. it believes the valuation of the tech giant is trading near an all time high and says u.s. sales of the new iphone will struggle due to upgrade rates and carrier promotions being restrictive. shares of apple down 1% in the premarket. and ubs initiating coverage

of fiver. they have seen job listings stabilizing and sees significant upside from current share prices. shares up 1.25%. and time now for your global briefing. we begin with asian markets sinking to 11-month low as surging treasury yields and the rising u.s. dollar put pressure on global bonds, equity valuations and other currencies. this following the bank of japan's unscheduled purchase of more than $4.5 billion of japanese government bonds. looking to balance this current monetary policy against the sliding yen. in europe, uk regulator opcom set to launch an antitrust investigation into amazon and microsoft over the dominance of the uk's cloud computing market. reuters says the details of the probe will be published in the final report tomorrow with the goal of leveling the playing field and pushing for healthier market competition. coming up on "worldwide

exchange," we have the one word that every investor needs to know today. also, as we head to break, cnbc is celebrating hispanic heritage, hearing the stories of business leaders with you. here is citi's head of investments for latin america. >> my dominican roots have really shaped the person who i am today. and have allowed me to bring the best of me and my culture to work. being latino can be your superpower. i believe it generates a diversity of thought and inclusion. my advice for latinos is really to bring your full self to work, to allow yourself to not forget your roots and actually maintain your sense of belonging to your community.

we love going to games, but good seats get pricey. so we use gametime. gametime checks ticket prices in real-time and finds you all the best last minute deals. we got our seats twenty minutes ago for sixty percent off! last minute tickets at the best price, in seconds. download gametime now!

♪ is it possible to fall in love with your home... ...before you even step inside? ♪ discover the magnolia home james hardie collection. available now in siding colors, styles and textures. curated by joanna gaines.

welcome back to "worldwide exchange." time for your wrap-up. we begin with bill gross telling cnbc last night he expects the ten-year to test 5% in the short-term as the bond market enters oversold territory. saudi arabia announcing it will continue its voluntary cuts of 1 million barrels per day until the end of this year. that comes ahead of a virtual opec plus meeting today. shares of intel rising after the company said it plans to spin off its programmable chip unit through an ipo in the next two to three years. ford making what it calls the seventh and strongest offer to striking uaw workers, promising no job losses related to ev battery production. meta planning to lay off employees at its metaverse reality labs division today saying impacted workers were informed of the potential layoffs yesterday with the official decisions due today. and airbnb is planning to enter the longer term housing rental market. speaking with the financial times, brian chesky sees huge opportunity in the one-year rental market and will launch

the biggest update for the company on record next month. here's what to watch today. several pieces of economic data out this morning including weekly mortgage apps and adp employment. a busy 10:00 hour, several fed speeches including kansas city president jeffrey schmidt, governor michelle bowman and chicago president austan goolsbee. that economic data a key focus for investors today with the dow now in the red for the year. we're taking a look at dow and s&p futures. you see here, both turning slightly positive, just a few moments ago. let's tee up the trading day ahead with keith lerner, at truist advisory services. good morning. great to see you. >> nice to see a little bit of green for a change. >> a little bit. give us a sense. what do you expect in the day ahead? we're mentioning the long bond almost at 5%, the ten-year at 4.8%. what are you expecting today? >> i think it is all about yields. what we're looking for is to see some stability. the other thing for the market,

we're approaching the moving average on the s&p, we're at 43.29. so what you're looking for is to see if we have a little bit of movement from fear to greed that people look at this pullback for some opportunities. >> you're saying if we go from fear to greed, does that mean you see this potentially as a buying opportunity? if so, are there certain sectors you buy in right now? >> we have been more since the end of july, we have been expecting more of a correction in price and time. we have gotten both of that. i don't know we have seen the low yet. in some ways i would like us to crack below that moving average to get more fear. the good news is we would be leaning in. if you're underweight equities, what we wrote last night we would lean in and look at this as an opportunity because you have seen prices pull back pretty good. and more specific to your question as far as where we would focus, two sectors i would highlight would be communication services, had a nice move back

there, where a lot of a.i. plays and the energy sector as well. >> that's what you wrote last night. let's look ahead to the day today with the futures for the dow just moving into the positive territory. the s&p flat, but slightly higher now. with all that in mind, what is your wx word of the day? >> the word of the day is reset. we had a really large reset across this market as far as it is all about the ten-year, ten-year moved up very quickly and because of that they reset higher. we have seen a broad-base recess across markets. look at the s&p being down 8%, but small caps are down 15, the average stock is down double digits, utilities and real estate down 20. we have seen a good reset and the other thing i will say, the reason we're starting to get this a bit more positive on a short-term basis is the percentage of stocks in the s&p 500 is the most oversold since last fall after being very overbought in july. >> you gave us a sense of what

you would buy into. are there certain sectors you would stay away from? >> well, we would still stay away from the real estate sector as an example, even though it is down 20%, underweight all year, that's interest rate sensitive. with small caps, we like small caps longer term. they have more floating rate debt. higher rates impact them. we continue to focus on larger cap part of the market, some of the sectors i mentioned before, like energy and communications where we see better relative value and momentum. >> back to real estate, we're showing the chart, down more than 11% year to date. you're saying you would stay a way from buying now. would you trim that position, cut the losses when it comes to that sector with the current bond and rate situation? >> we have been underweight, now down 20% from the highs in a short period of time. if i was in it today, i would be look for an opportunity to reduce it on any type of mean reversion balance in the market. >> keith lerner from truist, great to see you.

thank you very much. we're going to take one quick look at the futures now. seeing the dow inch into positive territory while we're doing the show, up 30 points. the s&p flat, vacillating between higher and lower a moment ago. that does it for us on "worldwide exchange." "squawk box" is coming up next. thank you for watching. safe from cyberthreats? absolutely. can we provide health care virtually anywhere? we can help with that. is it possible to use predictive monitoring to address operations issues? we can help with that, too. with the advanced connectivity and intelligence of global secure networking from comcast business. it's not just possible. it's happening. is it possible my network could take my business to the next level? it is with comcast business. powering all your devices with gig-speed wifi. and you get fast downloads and uploads. pick it up! pick it up! oh we got this! because it's powered by the next generation 10g network. more speed for your business? it's not just possible. it's happening.

get started for $59.99 a month for 12 months. plus, ask how to get an $800 prepaid card with a qualifying internet bundle. comcast business, powering possibilities.

good morning. a pretty wild week already in the markets and it is only wednesday. the dow turned negative for the year and treasury yields again climbing to 16-year highs. and wall street's fear gate jumping to the highest level since the regional banking turmoil we saw earlier this year. congressman kevin mccarthy ousted as house speaker. he said he won't try to retake the gavel. we'll look at potential candidates who could win the job and who would want the job.

and more than 75,000 kaiser permanente employees could go on strike today. we'll tell you what the healthcare workers and support staff are demanding. wednesday, october 4th, 2023. and "squawk box" begins right now. good morning, everybody. welcome to "squawk box" here on cnbc. we're live from the nasdaq market site in times square. i'm becky quick with joe kernen and andrew ross sorkin. and here we go. let's look at the fallout in the markets from what has been happening in washington. reverberation felt across wall street on this. you have the dow futures up by 20 points. s&p futures flat. the nasdaq down by 8. this comes after a down day for the ma