cnbc headquarters and here's your "five@5" your "fifive@5." front and center is alphabet. the stocks are heading lower ahead of the open. but it's a very different story for microsoft. impressive cloud growth fueled by ai is sending that stock higher in the premarket. plus the d.c. drama, it continues as republicans float yet another name to possibly unify that party. and later what one market guru says could spark a year-end

stock rally. it's wednesday, october 25th, 2023, and you're watching "worldwide exchange" right here on cnbc. good morning and welcome to "worldwide exchange." i'm frankholland. we kick off the hour with a check on u.s. futures as the market had a positive day and the nasdaq had the best day of the week. the blue chips index at the tow would open up 50 points higher, however, the s&p under pressure and the nasdaq more than 50% lower in the market. also checking meta, almost a percent. we want to check the bond market, the 10-year yield hovering but low. take a look at yields right now. the benchmark at 4.86. the 2-year at 5.5%.

we're also looking at energy this morning coming off its lowest close in more than two weeks. in the green this morning at least fractionally at $83.79 a barrel. natural gas under some pressure, down half a percent. turning our attention to the top story this morning, two very important reports from big tech accounts for about 10% of the entire market cap of the s&p 500. of course, we're talking microsoft up 3.5% and alphabet down about 6.5%. we're going to toss things over to our senior reporter arjun kharpal with much more on these reports. good morning. >> good morning. let's dig into some of the numbers. it was the tale of two clouds that was in focus for investors. microsoft's intelligent cloud segment made $24.26 million in

revenue smashing past consensus. it jumped ahead of consensus. it helps market shares after hours. there was commentary around ai, the big focus for investors. ai usage led to 3 percentage points on ai growth. clearly beginning to pay dividends here. meanwhile alphabet's google cloud unit posting in the third quarter below expectations while profits remain slim. alphabet's core advertising business remaining resilient, but it needed to show it could show the massive share rally we've seen this year. the market clearly was disappointed by what it saw in cloud computing, investors hoping to see them. we'll have to wait a little bit longer. >> there is also a lot of excitement about microsoft's ai co-pilot in this earnings report

to get more details about how it plans to compete when it comes to ai and cloud? >> yes. just on the co-pilot, it's $30 per month. it's sort of like a chatgpt. it's gotten a lot of excitement from investors hoping it can boost microsoft's revenues. the cfo tempered the expecexpectation si saying it would grow gradualy over time. it's taken aen early lead in this ai race amongst the tech giants. for alphabet, that's not the case. we didn't hear much how much ai was going to contribute with revenue. but google is soon expected to launch a foundational model called gemini. investors hope this will boost the company's cloud division and open up some of the new ai revenues for the company, frank. >> arjun kharpal, live in

london. time for a check on some of our our top corporate stories. silvana henao is here with us now. >> california is kicking cruise units of gm off the roads saying the vehicles are not safe for public operation. officials allege cruise misrepresented the safety of the technology it used in their vehicles after national highway traffic safety administration opened up an investigation last week. visa shares moving lower despite an earnings beat and strong guidance boosted by an ongoing rebound in international travel. for the quarter, free cash flow came in at over $6.5 billion compared to the $7.4 billion exp expected. the company also announcing it's buying back more stock. shares of sunpower also sliding down 9.5% in premarket.

it's calling the financial statements unreliable reflection of a cost of revenue. a review into the financial impact of the errors is ongoing and is subject to change and comes amid a massive downtrend for stock, with shares nearly down 75%, frank. >> shares down almost 9.5%, silvana. we'll see you later on in the show. >> thank you. turning our attention back to washington, d.c., all the drama down there continues this morning. house republicans floating yet another name to possibly unify the party. nbc's brie jackson joins us now from washington. good morning. >> reporter: good morning, frank. last night mike johnson was chosen as the republican nominee for house speaker and he's now seeking to achieve something the last nominees could not do, and that's to earn 217 votes from his own party to win the gavel. last night he told supporters

he's certain he can secure those votes. the louisiana congressman could be put to a full test today. he's well liked in the republican party and he has for the most part avoided making many political enemies on capitol hill. they had a roll call vote to see how much support he had. he said there were no votes against him, however, some members were absent from that voting. he said he'd reach out to them overnight. now the previous nominee, tom emmer, he only lasted about four hours as the speaker nominee yesterday before he realizeded he didn't have enough support and he dropped out. so now republicans are focused on their new nominee, mike johnson. >> there are a number of nominees in the ring. remember, kevin mccarthy was removed three weeks ago. is it actually possible he can return? >> reporter: three sources told cnbc news kevin mccarthy started

floating the idea and jim jordan would be the assistant speaker. the idea would be to unite the different factions of the party. it's unclear if it would gain traction among republicans. when asked why this idea, one gop replied, we're desperate. frank? >> brie jackson in washington, d.c., with all the drama. we've got a lots more to come on "worldwide exchange" including the one word investors have to know today. first, what one market guru says needs to happen to spark a year-end market rally. piper sand's guest coming up. we speak with one invisitor playing the long game and we ask if she thinks goleog's long side move isn't an overreaction. we have a busy day ahead when "worldwide exchange" returns. stay with us.

as an independent financial advisor, i stand by these promises. as a fiduciary, i promise to be the financial steward that you and your family need. i promise to put your long-term financial well-being above any short term transaction. everyone has a big picture. my job is to help you invest in yours. charles schwab is proud to support the independent financial advisors who are passionately dedicated to helping people achieve their financial goals. visit findyourindependentadvisor. com

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late. these markets are cheered on by profits of extra fiscal stimulus coming through from the chinese policy makers. they approved a $1 trillion bond issuance and the funds will be used to rebuild disaster zones and build infrastructure. the hang seng also up 0 pnlts 6%. the nikkei coming off a low here. in europe it's a slightly different picture. today we're focused on earnings season. we're seeing major disappointments in the payment space, the likes of worldline right at the bottom of the stoxx 600 down 40% today. it's dragging down other names in the sector as well. ftse 100, the relative outperformer. we're seeing moderate green in sources and miners. for the most park the banking sector is under pressure. barclays disappointing yesterday with their earnings. xetra dax, you can see down 3.5%

and cac 40 down almost 0.4%. let me take you to the luxury space. kering shares have hit their lowest level since march 2020 after sales fell, missing estimates. gucci and saint laurent fell respectively. not only is it at the bottom but also pulling down the luxury space as a whole. i also spoke about banking earnings. it's a bit of a tale of two halves, barclays disappointing, but very strong numbers come through. you can see the stock is up 6% today in trading amongst the best performers after the german lender said it may return more capital to shareholders in the form of share dividends and buybacks. they're in for the best day since march. they've been trading sideways for the better part of this year, but today they've shot northward right at the top of

the dax. frank? >> joumanna, thank you very much. joumanna bercetche live in our newsroom. turning our attention back to the u.s., the 10-year is inching slightly higher, right now about 4.86%. it's largely been in retreat mode. our next believes that downward trend could continue and we could see a downside by the end of this year. craig johnson is the chief market technician of piper sandler. good morning. it's great to have you here. >> good morning. >> it's 48.25, a 30% upside and you have a new forecast for the 10-year yield. give it to us. which way is it going? >> frank, i think the 10-year bond yield is going to be headed lower from a technical perspective. we're seeing a divergence happen. as we saw it reach that level,

we've been watching the momentum trailing off. in the technical world we call that a divergent move. when we step back, we've got to pull out the long-term charts, frank. we've got to go back and look at the long-term secular change that's happening. i'll just note since 1981 we've been in a down trend. in 2022, we finally reversed that down trend. frank, when you accelerate through the down trend reversals, you get a pullback and recess support. i would not be surprised to see the 10-year bond yield have a 3 in the front and be as close as 3.5% because i do think you need to see bond yields come back and check the area which was resistance, which would now be support. i think a lot of investors would certainly be encouraged by that move. >> i'm sure a lot of investors would. a pretty bold prediction. you're saying it's going to move

more than a percent. you'll have to mark your calendar. we'll have to meet up in december to see if this all works out. >> any time. >> we know what your price target is, but let's look. it's just above its two-day average now for the near term. we know you say s&p ends at 48.25. but what are the charts tellinging you about s&p action? >> the price action for the s&p, we made the lows in october of 2022, and on a near term basis, frank, we've been trying to -- we've been seeing the market pulling back. the s&p is pulling back. we're off mid-single digits from where we were in the july highs. but we're finding support around the 4200 level. it's also been a retracement level. lower end of the channel. 200-day moving average. all of those things are here. at this point in time the market has gotten about to be pretty

oversold inside of the s&p 500. i think it's going about to be very difficult, sort of like pushing a beach ball below the waterline in a pool. it's going to be harder to pull from here. i think you're going to have to see it move up. true confirmation is going to happen, that the trend is re-emerging and reasserting itself when you get back to the 20-day moving average and 50-day moving average, which is around 43.76 for the moving day. i think that's yet to come. as we get through this earning season, frank, i definitely think the s&p will finally get there. >> i want to talk about something outside of earning season right now. you're not a stock picker, but you add a stock to the piper sandler selectives opportunity fund. this one is a favorite here on "worldwide exchange." it's an energy drink, celsius. i drink it myself. what makes this a stock to add to your opportunity fund? >> we've seen the shares pull

back appreciably and we've gone back to the support line. this is a stock that's followed fundamentally here. it's among the fundamental names. technically we've had a nice correction and it looks like momentum is sort of rebuilding whether you're looking at rsi and those technical indicators, frank. i think there's a technical upside and we like it and hence we added it into the portfolio. >> shares up more than 60%. it's a favorite of our jim cramer. i was in cramer's office. there's like a mountain of celsius in there. i had to climb up and have one. it was amazing. craig johnson, great to see you. the 10-year yield is going to go below 4%. we'll have to follow you. coming up on "worldwide exchange," facebook's meta platform getting set to change. our julia boorstin will break it down. 'snehi you need to watch after the close. we're back right after this.

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movers. we're going to start with snap, initially soaring on a top and bottom line beat before declining on ad-spending concerns. the company warning a number of advertisers they've paused spending in the face of the israel/hamas war and announcing it will not announce q4 guidance following the unpredictable nature of war.

shares up 1.5%. texas instruments offering a disappointing revenue for the current period saying it expects revenue to continue slumping. it's breaking three years of consecutive sales growth. shares of ti down 5%. and stride posts a record compared to the $425 million estimated. eps, that was also a major beat coming in at 11 cents per share compares to the estimate of 37 cents per share loss. you can see those shares up just over 11%. let's get a check of more of this morning's headlines. let's check in with phillip mena. >> good morning. let's start with the situation growing more dire in gaza. after more than two weeks,

palestinian health officials say more than 700 are dead. more than half on tuesday alone were children. secretary of state antony blinken is pa urging a pause n-bombing. a hurricane slammed into mexico a few hours ago. hurricane otis gained strength before landing. forecasters are warning of catastrophic damage. the national hurricane center is calling it a nightmare scenario, one of the strongest storms to hit that area. finally the world series matchup is set. the arizona diamondbacks outlasted the philadelphia phillies at citizens bank park, punching their ticket to the world series for the first time since their only appearance in victory in 2001, the d'backs will head to arlington on friday to face the texas rangers for

the first game of the series. i'm an astros fan. if i remember correctly, you're a phillies fan, so this one is going to be very, very tough for us to watch. >> you know, it's not going to be tough for me, phillip. my team, we played hard, we didn't cheat. we just lost. we just lost. >> that was so low. >> my producers, a shout-out to them. they insisted this was in here because i'm from philly and a philadelphia sports fan. hat's off. sorry about your astros. >> kicking me when i'm doing. >> have a great day. ahead on "worldwide exchange," why the transports could be at a tipping point. two companies and their results, what they may be saying about the u.s. economy at large. if you haven't already, follow our podcast. check us out on apple, spotify, and other podcast apps. "worldwide exchange" will be back right after this. stay with us. introducing watsonx

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it's right around 5:30 in the new york city area. there's a lot more on "worldwide exchange." here's what's on deck. the s&p 500 dropping. also points of microsoft taking off on the back of quarterly results as the tech giant gets a leg up on ai. it appears to be paying off. different story for alphabet. it's getting hit after it's

overshadowed by better than expected results. it's wednesday, october 25th. you'r you're watching "worldwide exchange" right here on cnbc. welcome back to "worldwide exchange." i'm frank holland. i get you ready to start the day as always. we pick up the half hour with a check on the u.s. stock futures. the dow looks like it would open up about 50 points lower, moving to the highs this morning. however, the nasdaq under some pressure this morning, down over half a percent. we want to pay attention to bond market. the 10-year yield, 4.85. still well below the 5% yield we saw in recent days. continue to watch the 2-year and 30-year, both right around 5%. the 30-year bond, the long bond hovering just below 5% yield. we want to talk energy, specifically oil. wti, the u.s. benchmark trading at $83.94 a barrel. brent crude back below 90 bucks

a barrel. natural gas taking a move, a bit of a reversal, up over a quarter of a percent. it with us in the red earlier this morning. that's the setup in the u.s. markets. time to get back to your two biggest money movers this morning. of course, we're talking microsoft and alphabet. the two stocks are moving in opposite directions despite both of them beating quarterly top and bottom line estimates. let's start with microsoft reporting an increase thanks to cloud revenue. you see the shares are up over 3.5%. alphabet posted revenue growth of 11% rngts its first double digit increase in over a year. its revenue in the cloud division will come in at $84.1 billion. you see those shares under pressure this morning down more than 6.5%. let's dive deeper into the corner with nancy tang letter, ceo and cio of loeffler tang guerin vestments.

nancy, thanks for being here. >> thanks for having me, frank. i love the energy in the early morning hours. >> i try. it's the energy drink. let's start with alphabet, those shares under a bit of pressure. we haerkd ruth porat tell cnbc cloud estimates really weighed on the quarter. are you concerned about google not seeing the cloud growth that microsoft saw? >> yeah. i think what you have to be worried about as investors is microsoft gain shares during the quarter, i think they got flat footed on the open ai, generative ai issue. that gave them the opportunity to step in. he's now expanding ai across the office suite. so they have the first mover advantage, and i think that has put pressure on google as well as the revenue growth was impressive, but it was driven primarily by ad revenue.

what multiple do you pay for that over the long term? that's our concern as investor. >> i want to talk about the ad revenue for a minute. youtube ads gained consumer confidence. but i want to focus on what it means for alphabet. the company says it was fueled by the sunday ticket. we don't talk about the streamer, but they are. youtube might be the biggest streaming platform of them all and they added live football. do you believe the growth in ads? is this sustainable? is this an area of growth going forward? >> i think it's an area of stability. it a political year next year. that's always good for the ad generators. it's a holding for us. it's not a major holding. microsoft is our largest holding across all of our large cap equity strategies and i think investors should look for an opportunity if they don't own google to get in. ruth porat is probably one of

the better operators in corporate america, but i think we need to give her some time. there is concern that that's the driver and that cloud is slowing at least for google. let's turn to microsoft. we saw them accent rags. what did you take of the azure results. also important to note from the report azure's open ai customers increased by 63%. >> yeah. 18,000 corporations using the product, and add laffer tengler to that. it's going to bring them the game pass that are a billion dollar each. if you look at cloud growth, they are taking share. it is still in the high 20%

change with azure at 29%. that's pretty impressive growth in a company that big with revenues that large. and then you've got nadella taking the first move, offering and expanding the ai offering across all of the office suite. i think that is going to be very sticky. the $30 a month charge for open ai chatgpt, the usage of that is also something that's going to be a revenue generator. the naysayers were saying, frank, ai was a flash in the pan. i think not. i think this is a company that you need to have in your portfolio despite valuations. they do pay a dividend. the yield is not that high, below 1%. but they're groering materially year after year. >> microsoft is trading at 32 times its earnings. i want to get back to the ai co-pilot. it launches december 1st. you're saying it's den it

inially a revenue generator, but we didn't hear any numbers, no projections, nothing concrete. >> i think that was wise of management. they don't know yet. i do think, though, if you look at the adoption of existing customers, you will see growth. i don't know that it's going to -- you know, it's a pretty -- it's hard to put a dent in that overall revenue of the company, but i think what it will do is it will make the user stickier, and over time you'll see that it contributes more and more. go back and think about the apple watch. when it first launched, people kind of rolled their eyes and then it became a material contributor to apple's revenue growth and profit margin growth. so i'm not concerned about that. i think this is a company that knows exactly what they're doing and they're not going to make promises they can't keep. >> all right. nancy, i want to turn our attention to meta. reports after the close today, our julia boorstin has a preview of what to watch in those results. >> revenue growth will be the key number to watch when meta reports after the bale.

analysts are projecting 21% revenue growth, which would be meta's fastest pace in two years, going back to the third quarter of to 21 when meta grew at a 35% pace. other key items to watch is about a strengtheninging ad market. growth in reels and how they plan to use tools in messenger. we'll talk about years of efficiency, bernstein writing, quote, we see no better risk/reward in internet right now than meta. even if we see alarmer investment, we expect the company to comment that invest microsoft levels are tied to core developments. we'll see if ceo mark zuckerberg gives any details how this might financially impact the company. frank, back over to you. >> important to note that meta shares are actually under pressure, down almost 1%.

nancy, i know you're no longer a meta investor, you sold your position, but in general what are you looking at when it comes to meta results, and are you concerned about the lawsuit? >> i think the lawsuit -- it's noise, right? these -- well, i think it has merit potentially, but i don't think it's going to put the company in jeopardy. these lawsuits are reminiscent to me of, you know, old tobacco back in the day, and so, yeah, i think they have some work to do. they'll find a workaround. they'll find a solution. i think for me the bigger issues, i'm just not crazy about the market, about the model. we've seen from google that revenue growth was decent in the ad space. i think meta will show the same. but over the long term, the real question is going to be how are they going to monetize, and that is the issue for me, i think. we've looked for an opportunity to get back in. we sold back in 2021 at surprisingly levels higher than

current. we missed the low again. but, again, i've always been a reluctant shareholder of meta just due to the two-share status where the investors really have not much to say and management owns the direction of the firm kind of entirely. so i think there's better places to be just by what bernstein said, and it's a firm e i respect very much. >> shares up over 60% year to date. you said you're looking for a positive position to get back in. obviously big rise of shares this year. julia mentioned the capex spending. a really elevated number right here. what do you think about their spending? it's mostly focused on ai and enabling the business for ai. does that completely blow up the narrative in the year of efficiency? >> it's hard to tell. this was facebook long ago and then it was meta because they're going to drive the universe and

now it's ai. i think going. 's costs went up as well last quarter despite laying off 7,800 employees. there's a lot of fat in these companies. you can call it the year of efficiency, but if you're still spending at the robust levels we've seen, you do have to step back and take a pause. i'll say this. we took a look at meta to get back into and decided not to. we made a space for spotify. i think at this valuation level -- and i could be very wrong. if you own the stock, don't act on my advise. but i think you should possibly take a pause and see what management has to say and look at the future. cutting costs is a strategy for the short term. it's not necessarily a strategy for the long term. where's the growth going to come from? whelp is the spending going to ease? that's my concern. >> that's nancy tengler.

nancy, always great to see you. thank you very much. >> thank you, frank. well, in addition to big tech, it's also a big week for transports earnings. they're often seen as a nations indicator. coming off the highs of earlier this year, now underperforming both the s&p and the nasdaq. so the next 24 hours, there could be a major inflection point with about 50% of the index waiting reporting earnings. so the truck line reports before the bell. u.p.s. reporting before the bell tomorrow. here's what we know. rail volumes are down year to date, but we have seen a modest upswing in recent weeks. a similar story for trucking. rates are a proxy for trucking demand. well off lows with a choppy recovery with the bankrrunt ban yellow. and the teamsters strike at

u.p.s., the conversation i had with spokesman bill milken says we need to take a look at it. >> there's a look. you have to be very careful to parse out what it is that's causing the transport indks to shoots either up or down. like i said, higher jet fuel prices or the potential strike can do things that are completely unrelated to the economy. >> take a look at this. here are the companies in the next 24 hours ranked by weighting. old dominion, that's about 17% of the index. this one company could potentially pull the index into the red. also a question, are transports a good indicator, we'll have to see. coming up on "worldwide exchange," a major exchange on lg energy. a major symbol of a bumpy road ahead for electric vehicles. first as we head to break we'll talk with trending

stories. bud light announcing a six-year partnership with an effort to revise the slump in sales. they'll receive exclusive branding at usc events, marking the biggest deal in u.s.hill. taco bell announcing restaurants all across the u.s. cannot use the phrase taco tuesday over fears of a violation. and beyonce may be having a banner year, but jay-z says lunch with him is just not worth $500,000. the rapper settling a debate whether you'd rather have $500,000 or have lunch. he said anything he says at lunch would have been said in music. so just take the money. much more "worldwide exchange" coming up in a moment. stay with us. blender power on-the-go. so you can blend up a mouthwatering smoothie, protein shake, or latte

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welcome back to "worldwide exchange." we start with the call sheet. barclays moving into overway. improvement in the tell con's giant driventive cash flow are still not reflected in its valuation. also we even got ubs hiking its rating. the stock's near-term risk/reward looks balanced while there are still questions on chuy's buying power. shares are up 2% right now. one of the stories this morning, we're talking

microsoft, raising its earnings to 415 dll per share, b.o.a. saying it could drive an upside. alphabet shares up 3.5%. time now for your global briefing we start with china's country garden. the report cited a notice of notice of lender citicorp. country garden said it would not be able to meet all of its offshore payment obligations. >> shares of lg energysolutions dropping 8% in south korea. it expects weaker demand for electric vehicles. general motors, which is lg's joint venture partner at a plant in ohio is slowing the launch of select ev models to cut costs.

deutsche bank beats projected higher annual revenue. it's on the back of higher interest rates. deutsche's projecting its highest annual revenue in seven years. coming up on "worldwide exchange," we have the unwith word that every investor needs to know today. plus we team up with another busy day ahead and why investor says he's bullish on bourn. if you haven't learn, check out apple, stipofy, and other podcast apps. more w.e.x. coming up after this. endless hardie® siding colors. textures and styles. it's possible. with james hardie™.

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charles schwab is proud to support the independent financial advisors who are passionately dedicated to helping people achieve their financial goals. visit findyourindependentadvisor. com ♪ welcome back to "worldwide exchange." time for your w.e.x. wrap-up. we begin with house republicans floatsing yet another name for house speaker, tapping mike johnson. after an earlier pick tom emmer abruptly withdrew his bid for

the position as he faced opposition. snap shares facing a wild ride, initially soaring on a top and bottom line beat over ad spending concerns. a number of advertisers have paused spending in the face of the israel/hamas war. it won't produce guidance due to the unpredictable nature of war. shares of texas instruments falling on disappointing revenue guidance for the period saying it expects demanltd for industrial and electronic components to continue slumping. shares down 5.5%. >> shares of stride rising. the shares up more than 11%. general motors facing a double dose of tough headlines, california announcing its kicking the automaker's cruise unit off the road saying the vehicles are not safe for operation. and this morning bloomberg reporting that honda is planning to halt plans with fw m to

develop smaller electric vehicles, the report saying honda cites changing in the environment for that ecision. shares of honda and general motors under pressure this morning. >> here's what to watch today. we get weekly applications and new home sales figures on the earning front. new results from boeing, ibm, and, of course, meta. we talked about it earlier in the show. on the become of boeing's results, be sure to catch a cnbc exclusive conversation with ceo dave calhoun at 9:00 a.m. eastern today. and at 10:00 a.m., we get the latest from canada's central bank. earnings front and center for investors. let's take a look at how futures are shaping up right now. it looks like they've taken a bit of a reversal, at least the dow has. the nasdaq has been under pressure after results of alphabet. also meta shares trading lower. big story this morning with futures is, of course, big tech. as we said, microsoft in one

direction, alphabet going in another direction. let's bring in jason katz with ubs management. give us look at the day ahead. we've had two big tech reports, the companies moving in different directions right now. >> the bears, frank, clearly have been in control. this whole higher for longer from powell, the rise in long-term rates and the speeds at which the rates move up, and, of course, you have the mid east and oil going up in turn. the bulls can hang their hat on the fact that in our view the fed is on perma pause. they're not raising arates any longer. the employment is a bust. we're seeing more entering the job market. by and large, we're seeing most companies beat expectation. recession, that's still in question.

earnings recession, that's still up for debate. >> all right. we've got a little debate here. we're looking at both sides of the coin. with that in mind, jason, what's your wo.e.x. word of the day? >> i would say "boring." i think it's time to downshift from the magnificent seven. we're bullish on boring. so it's not only utilities, but it's bond. it's preferred. you can get equity-like returns in asset classes and sectors that generally are defensive and boring. you take municipal bonds for instance, i know i'm primarily focused on equities as someone who's a senior portfolio resident. you get 6.5% or you get preferred stocks that are down over 10% from their highs, 6%, 7% yield wearing a black eye for the regional bank crisis. boring is the new sexy.

>> boring is the new sexy. a number of guests say they have to get out of utilities because of the rate pressure. we've seen short yields on the 10-year at 5%. why do you want to get into utilities now? >> look, i understand the thesis at why they're at favor. they have a large capex spend and that hasn't helped but they're effectively bond proxies. as rates have gone up, utilities have gone down. now is a great entry point when you have a 17% drawdown from the high. these are save havens in times of adversity. high levels of regulation. again, i'll come back to this thesis. you're getting paid a rating, almost a 4% differ accident yield. >> to your point they did come off the best day, finishing off at 2% yesterday as we saw the yields ease back. i want to look ahead to the days

ahead. anything you're watching for in the days ahead? >> i'm looking to see the reaction not so much to the earnings but rather the guide. you've had this resiliency in the magnificent seven and they account for the vast majority of the performance. we all know that all too well, but it's the guide. that's what you're seeing with the reaction of google and the inverse in a positive way with microsoft. it's all about the future, not the present or the past. >> all right. so you're kind of making boring your wheelhouse. any other boring ideas or boring things we should think about? big tech, a lot of fireworks on both sides with ale fa bet and meta. a lute there. anything else boring that investors should focus on? >> i want to be clear about this. tech took us to the party. they may not take us home. that doesn't mean you abandon it. you right size it. take a look at industrials, another boring sector. you know what, frank? they're the picks and the shovels to the gold mine. you think about the exponential

growth you're going to see in defense spending or onshoring or the energy transition or how about the 100 trillion dollar required infrastructure spend that will happen around the world in the next quarter of a century. you're going to need industrial capacity to accommodate all of that. it's an i yahoo! deal entry point near historic lows. again, another boring sector that looks very attractively valued relative to the pes for the accept, the valuation of the industrials look very low. >> before we let you go, we've got to get you a little bit excited, mega caps reporting after the bell. under some pressure right now after that lawsuit announcement. what's your take on meta? >> i think that meta has really demonstrated that they can continue to reinvent itself. that being said, you can see consumers in businesses being

very tenltstive with rmt to spending, sort of a snap result. i do think a lot of the snap stocks can be priced to perfection, at least for the time being. >> jason katz, it is really great to have you here. thank you very much. i'm going to call you the baron of boring the next time you're on. appreciate it. taking a quick look at futures, seeing a bit of a reversal. now we're seeing another reversal, the dow back in the green, looking like it would open 25 points higher. the nasdaq remains under pressure, following the results from alphabet. meta also lower in the premarket. the stocks moving in opposite directions by beating top and bottom estimates. microsoft reporting an increase thanks to its cost-cutting efforts with azure growth accelerating after two year declines. alf fa bet, its first

double-digit increase. it will come in $21 billion below estimates. that's it for us. "squawk box" up next. thanks for watching. ♪ ♪ every day, businesses everywhere are asking: is it possible? with comcast business... it is. is it possible to help keep our online platform 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.

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good morning. tech stocks are on the move. alphabet's stock is sinking right now. we'll show you why -- why we think, anyway. the speaker drama in the house of representatives rolls on. republicans have picked mike johnson, and if you've never laid eyes on him before, that's what he looks like. that's their fourth nominee. details are straight ahead. number four. there he is. that's the new guy. yeah, he's got a shot.

and autonomous cars from cruise kicked off the strings of san francisco, the dmv accusing the company of misrepresenting safety-related information. it's wednesday, october 25th, 2023, and "squawk box" begins right now. ♪ good morning, everybody, and welcome to "squawk box" right here on cnbc. we are live from the nasdaq market site in times square. i'm pecky quick along with joe kernen and andrew ross sorkin. here we go. yesterday was a big upset for the markets. this morning a little bit of confusion. the s&p down by about 17 points. dow futures are indicated up by 20 paints maybe in part because of what we've heard from microsoft. we'll talk more about that in just a moment. nas dak indicated off by about