it is 5:00 a.m. here at cnbc global headquarters. here is the "five@5." we start with stocks coming off the bestweek of the year and looking to build on the gains this morning. futures are higher right now. and this is met by a steep dropoff of the yields. we will see if that trend continues today. and it is not just yields, but oil going negative for 2023. we will see what opec has to say about that. plus the berkshire cash hoard that swells to a record high. later on in the show, elon

musk releases the a.i. chatbot for you in the mood for sass. it is monday, november 6th, 2023. you are watching "worldwide exchange" here on cnbc. good morning. welcome to "worldwide exchange." i'm frank holland. let's kick off the morning with the dow opening up 40 points higher at this time. all of this after the dow and s&p and nasdaq logged their best week of the year rising between 5% and 6%. you see the moves there after the fed decision. it was after the pause where the markets take an upswing. looking to turn the corner with the russell 2000 up 7% for the week after the fed decision day

and action in equities coming in part to the steep dropoff in bond yields. the ten-year bond dropping 30 basis points from the fed decision day. right now, 4.58. you see the moves to the downside there. we want to check out the energy market which is trending to flat. wti crude is almost at $82 a barrel. brent crude is $86.25. up over 1.5%. sharper move for natural gas down 3.5%. that's the u.s. set up. let's turn to the global markets which is following the wall street. we have sherry kang in hong kong and joumanna bercetche in london with the trade in europe. sherry, good morning. >> let's kickoff in south korea. because of the short selling making a comeback in the market

and unusual price action when the risk of sentiment is supportive and constructed, the kospi with the biggest ever rise and percentage rise since march of 2020. the authorities in south korea saying this is really to promote a level playing field. a lot of people are linking this with the general election schedule in april of next year. the short selling ban will be carried through june of 2024. volatility picked up in south korea and retail investors got b burned in the battery sector in recent months. that sector led the charge here with double digit gains for heavyweights in sectors as well. overall in the market, it is constructive with the nikkei 225 closing higher by 2.3%. the japanese yen is stabilizing after the rally last week,

especially on friday at 149.62. to push the agenda forward, china trade data for the month of october crossing tomorrow. we saw a higher close for mainland whchina as well as hon kong lclosing higher by 1.7%. frank. >> chery kang, thank you. we have joumanna bercetche in london with much more. joumanna, good morning. >> good morning, frank. despite the hand over from wall street and asia markets overnight. it is not pretty in europe. we have a mixed bag with the indices. stoxx 600 at the flat line. the october pmi numbers come in sl slightly weaker when it comes to france and italy specifically. growing views that the eurozone may be entering into recession. the ftse 100 is trading flat.

we are seeing some love in the aerospace industry today as the market continues to review the higher for longer theme from the bank of england last week. dax is down .20%. we see bounce in retail names with adidas. cac 40 is down .25% today. we are seeing some of the luxury names come off trading close to the bottom of the index. the ftse mib is the only spot of green. the ceo spoke out earlier this morning. in terms of broader sectors, we have basic resources up .50%. we have travel and leisure up 1%. namely on the back of one stock that is ryanair which posted better results and forecast for the year. on the flip side, real estate is an issue with a stock under

pressure in germany today. construction and material is down .90 as we talk about the higher interest rate environment. frank. >> joumanna bercetche live in our london newsroom. that is the set up for the u.s. and international markets. let's speak with d ivory johnso with latest here this morning. >> good morning, frank. >> markets followed a steep drop in bond yields. do you see that market action continuing this week? >> i don't. i wouldn't look at one day or one event and make a long-term inve investment. any time the interest rates go down, the market should go up. that is what has happened the last two decades. if you peel back the onion, you will see that corporate earnings are still decelerating. you will see gdp is particularly

strong. a lot of that was government spending from the infrastructure bill and the employee retention credit. we had nine straight revisions to the downside of unemployment numbers. ism contracted. that bears out and all of the other indexes, frank. until last week, the russell 2000, the small cap and mid caps were down. you have seven jobsstocks that 30% of the index and 70% of the returns. they are hitting lower highs. a dog that brings you a bone will take one from you, too. you have a company like apple with 7% to the s&p. i think you should be cautious. >> you want to be careful. would you put money to work in the equity markets? is there one sector you think is attractive right now?

>> it is not stocks or no stocks. you can buy commodities. saudis and moscow and russia will cut production 1.3 million barrels per day throughout the rest of the year. that is some place to hide. as i mentioned earlier, you get 5% in the money market funds. if you are in the bond fund, until last week, you were down 7%. >> ivory, i want to welcome bill stone to the conversation. bill, good morning. thanks for joining us. >> good morning. >> we are asking you the same question i asked ivory. the markets with the best week of the year after the sharp decline in bond yields. do you see that continuing this week? >> i do think that the easing of bond yields has been a tremendous help. you know.

it is the hurdle rate that equities had to get over. it seems the fed is going to be paused for good, maybe, you have room for some better market action finally. >> you think the fed will paused for good and bond traders are pricing in a 90% chance of a pause of the december meeting. ivory, i'll toss it back to you. is it possible to have a year-end rally? >> it is absolutely positive. one of the things we're not considering is the inflation is still high. they may get a cpi report that shows it is sticky. they may not pause. if they do pause, i don't think that will impact some of the underlining data that gives me concern and probably why outside of the s&p 500 that all of the other indexes are not doing

well. >> bill, if we see a pause from the fed, does that set up for a year-end rally or santa claus rally? >> i do think in the labor market report you have signs that because labor seems to be softening up and wages should soften up. that should feed through to the inflation. i think the market is looking forward and maybe you would argue being optimistic about that. so far, so good. if we get to continue down that path, you can get a nice market rally. >> futures in the green right now. bill stone and ivory johnson with a cautious outlook. thank you. have a great day. >> thank you. time for the check of the corporate stories this morning with silvana henao here with those. silvana, good morning. >> frank, good morning. warren buffett's berkshire hathaway reporting a huge jump

in third quarter operating earnings up 40% from a year ago. he is now sitting on a cash pile of $157 billion. it was made up for in the bond buying with buffett wasting no time in short-term debt yelleyielding 5%. by the end of the quarter, he owned $126 billion in investments. to the middle east and saudi arabia saying it will extend production cuts of 1 million barrel per day through the end of december. affirming the september announcement it would keep cuts in place through the year's end. this as russia will extend the cut of 300,000 barrels per day through december. harvard graduate bill ackman

calling out his alma mater calling out the university to reduce anti-semitic rhetoric. this follows a dozen other ceos last month to refuse employment to members of student groups at harvard that signed a letter for the deadly attacks in israel. >> great to see you. thank you. we have more to come here on "worldwide exchange," including the one word investors have to know today. first, the tech sector is coming off the best year. could it be better? and elon musk has an a.i. bot with an attitude. and there would be weary

would-be home buyers. a very busy hour when "worldwide exc exchange" returns. stay with us. ♪ ♪ be ready for any market with a liquid etf. get in and out with dia. power e*trade's easy-to-use tools make complex trading less complicated. custom scans help you find new trading opportunities, while an earnings tool helps you plan your trades and stay on top of the market. e*trade from morgan stanley. you're probably not easily persuaded to switch

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welcome book. the tech sector coming off the best week of the year by the nasdaq which rose 6.6% and nvidia accounting for 23 points. tech and a.i. related stocks among the biggest movers last week. the robotics etf jumping 8.5%.

ark innovation was the best mover. alibaba's ant group is the best with the language model released to the public and elon musk releasing the a.i. bot. it is designed to answersarcasm. the promise of a.i. is giving the markets a boost, but people are sounding alarm bells, including gary gensler. generative a.i. has the way to change the way we invest, but also spark a crisis. let's talk about this with dan ives and dana. one of the things he is worried about is the culture where everybody is piling into the

same investment because they are all guided by the same a.i. tools. is that a real risk? >> i think it is a risk. that is why you have to understand who will be leading the a.i. gold rush. when you look at microsoft and google and palantir, that is who is leading it. because someone says a.i. on the conference call doesn't mean tremendous an a.i. play. it is a risk, but it is a risk playing out in the next decade. >> cyrus, is this a risk investors should be mindful of? >> i think a.i. is the fastest growths we have seen. as elon musk said to rishi sunak last week at the safety summit, he said in 24 months, it could

be 25 times as powerful as it is now. that leads to trust issues. if market makers are linking systems to capital markets, you may have a trust problem if markets react in a way you don't understand. a lot of a.i. system developers don't understand their models. >> cyrus, you hit on something important. when it comes to a.i., there is a risk of hallucinations. getting out inaccurate results based on the bias in the model. cyrus, regulators are behind the curve with a.i., but does that mean there is a way to catch up with the risks? >> i think they need to put trust back in the system. the first issue is some models

can ha lllucinate. the second is the bad actors can impact the result. the third, this is the most important thing the tech sector can fix, explainable a.i. you have to understand how the model works and what it will do. regulators have not regulated that responsibility yet. >> dan, i want to come back to you. you have been one of the loudest voices on the potential of a.i. and how it would power the market. you mention companies leading a.i. i want to ask about the risk and if the a.i. hallucinates, is it the company that puts out the model or the firm that gets the model? how do you deal with it? >> cyrus made a good point. regulators are in the right lane going 30 miles an hour and the technology is going 90 miles an hour in the left lane. that is why self regulation is

important, but it will come down to the vendors. it is risk with the hallucinations. that is why gensler brings up a great point. this is a balancing act going forward especially as more consumers and enterprises go forward in the next two or three years. >> let's come full circle. the risk there with the monoculture. we see a lot of sharp moves in the market. when you inject a.i. into the markets, how big of a risk is it in the short term and long term with the kinks worked out? what is the number one thing they need to pay attention to? >> they need to look at how the models work. if you look at cloud, there are two or three big players in the world. it is concentrated among. they if you look at a.i., there is a risk there are two or three

big players. microsoft this week is launching copilot. the first company in the world to take generative a.i. into a mass market commercial proposition. go google, which has good a.i. skills, still hasn't done that. there is a risk of overconcentration. you add that to no referee with the capital markets and you have a big problem. it is like playing a football match and nobody knows the rules and you have no referee. >> dan, over to you. i know you are coming back from a big trip to asia talking about a.i. and tech more broadly. as we look ahead to the possibility of generative a.i. in investing, what is the number one things financial firms should pay attention to and the companies that design the models. what should they pay attention to with the models and investing? >> it is understanding the model and make sure the vendors have

done their due diligence. if you don't do the due diligence and go with the a.i. plays, there is a lot to be aware of where this comes down. this is why the safety blanket in terms of microsoft and what is happening from the a.i. perspective and google as well. palantir is a massive beneficiary of this. there is a model perspective and little questions relative to how they proven it. >> dan ives saying there are reliable models. cyrus is saying regulators are behind the curve. we have to have you both back. great to see you both. >> thanks. ahead on "worldwide exchange," first apple and now epic games looks to take on alphabet. does the search giant have what it takes to fight a legal war on two fronts and win? steve kovach is here with the

answers. stay with us. at ameriprise financial, more than 9 out of 10 of our clients are likely to recommend us. our neighbors, the garcias, love working with you. because the advice we give is personalized, hey, john reese, jr. how's your father doing? to help reach your goals with confidence. my sister has told me so much about you. that's why it's more than advice worth listening to. it's advice worth talking about. ameriprise financial.

welcome back. epic games set to launch the latest fight in big game tech. steve kovach joins us for the preview of the trial. steve, good morning. >> this is the second time. this is epic games. better known as the maker of

"f "fortnite." facing google in court today. this case is nearly identical to the one epic lost against apple back in 2021. epic is appealing that to the supreme court and we will find out if scotus takes it up next year. in a blog post, the vice president of government affairs argues that the case is weaker than the case it lost against apple. android allows you to download from alternative app stores or from the internet. these app stores are profitable. both companies are going to do everything they can to protect that fee structure. if google loses the case, it

could disrupt the economics that have driven the ecosystem on multiple devices for the last 15 years. in the meantime, laws in the eu are kicking in and it will be easier to sell apps on iphone and android. that will eat into the profits. for now, they will try to stem that bleeding and keep control of the policies in the u.s. >> steve, put it in context for us. how does this situation compare tota the alphabet's other legal headaches? >> the app store is not as important for google as apple. that doj case going through the courts with google battling on two fronts, but that case, the

doj case is against the search bins. t business. that is the pay to play to be the default search engine. if that rules against dpgoogle, that hurts the core business than the side business with android. still an important business for google, but not as important as the doj. >> we will wait and see. we will continue to watch the story. steve live from the nasdaq. thank you. straight ahead on "worldwide exchange," the bull and bear outlook for oil with crude set to go negative on the year. we will be back with more "worldwide exchange." stay with us. and deliver solutions that meet complex needs. massmutual. partnering with financial professionals, benefits brokers, and institutions.

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it is 5:30 a.m. in the new york city area and there's more ahead on "worldwide exchange." here's what's on deck. stocks looking to keep momentum going with plenty of fed speak on tap following the hawkish rate pause. in the middle east, secretary of state antony blinken on the ground meeting with leaders and they pound on with the gaza offensive. a live report coming up. one-two punch on the friday jobs report with some relief for would-be home buyers. it is monday, november 6th, 2023 and you are watching "worldwide exchange" here on cnbc.

fr good morning. welcome back to "worldwide exchange." let's get you heready to start e day. i'm frank holland. all three indices coming off the best week of the year. green across bothe board. the dow would open up 30 points higher. we want to look at the bond market. ten-year yield sitting at 4.59. this is 30 basis points lower than it was right before the fed's hawkish pause. we will talk about that later on in the show. we have the price of oil trading just below $82 a barrel. up 2% this morning. we will continue to talk a lot more about oil later in the show. we are seeing it closing down more than 5.5% last week. it is the second losing week in a row. also to keep in mind is wti which is on the cusp of turning

negative for the year. up barely 2% year to date. it is not just the commodity. energy stocks down more than 4%. chevron and valero and exxon leading the declines. a number of factors i mpacting the price of crude including the israel-hamas war. let's start with chief oil analyst amrita sen. amrita, great to have you here. >> thanks for having me. >> where do you see the price action with oil? where do you see it going from here? i pointed out oil is up 2% year to date. >> it has been volatile like you said. i think we will be range bound. we've got the weak

macroeconomics data on one side and, of course, the hamas conflict on the other side. >> two big geopolitical factors having a big influence on the oil market. i want to talk about the u.s. with rates spiking and easing back now. how much pressure is that placing on the oil market? >> that is an impact with the oil prices moving higher. we were expecting prices to stay in the 90s. we have been calling that for a while. trading in the 100s is possible. what we have seen is renewed concerns of economic growth. particularly with the rate hikes here. although they paused and the fed will not hike any further, we are starting to see macro data show the effects of higher interest rates. it always works with a lag. demand concerns are widespread. u.s. oil demand is holding up well. european oil demand, on the other hand, does look a lot

weaker. still, we have a much softer demand outlook and our balance is only expecting 1 million barrels a day increase over this year. we are calling for a mild recession in the u.s. overall. that is going to have an impact on prices. i think what the market fears is could it be worse than that and could it mean the oil demand is a concern? >> we have news from the energy market overall. the oil market yesterday with saudi arabia saying it will extend the 1 million barrel per day cut all the way through december. it started in july. give us a sense how investors read that decision by saudi arabia? not a surprise, but creating movement in the oil market. >> for sure. look, prince abdullah aziz is

looking at this to make sure inventories are low enough and remain low and should there be a demand slowdown and recession, as the fed has overdone it, inventories will start to build. it doesn't build to the extent of 2020 which pushed prices negative. they are trying to keep a solid floor on the prices which is precisely why saudi arabia is leading from the front and saying we are going to actually cut production and ensure that inventory remains very, very tight. that's the objective. allow for that buffer should demand weaken. >> i want to come back to something we touched on before. rates and the oil market. we have another fed meeting coming up in the united states. a lot of people expecting the fed to pause or end the rate hiking campaign. we often talk about the oil on the impact of the equity market.

>> it is not an impact directly or indirectly if the rates go up and it has an impact on economic growth. what i will say is that purchasing power is a lot higher today than it was in the last few years. oil prices beat in the 80s or 90s or 100s is not high if you adjust for inflation. fundamentally, there is enough for oil demand to continue growing. the risk is with the fed and where it has taken interest rates and how quickly it has done it. the deal is starting to get negative impact on industrial production on employment. that is how it feeds through because of the high unemployment. you will not get the gasoline demand or the diesel demand from industries that you get. that is why we are calling for a huge slowdown in oil demand next year. >> i want to come back to what you said. you are forecasting a recession in the u.s. where does that take wti in your

mind in 2024? a lot of questions here this year weighing on the market and moving things. where do you see oil going in 2024? >> firstly, we are calling for a mild recession. this is not something we expect with oil demand falling out of bed. it will grow by 1 million barrels a day. that is by china and india. i don't think that actually necessarily weighs on wti. we are still expecting prices in the 90s next year for two reasons. one, inventories are super low. that should warrant a price premium. secondly, the opec discipline and if there is a bigger recession, they will step in. there is downside to the price forecast with the prices being substantiallier. >> amrita, great to see you. >> thank you. we turn attention now to the housing market after rising

since september and crossing over 8% on the 30-year fixed. mortgage rates have made a u-turn. diana olick is here with more. diana, it is a rare position to be the bearer of good news with are rates. >> i get to use the screen with at arrow going down. mortgage rates started dropping at the beginning of last week in anticipation of the rate hikes. 30-year fixed at 7.92%. it started to slide on tuesday and then a 19-basis point drop on wednesday after the fed held the rate where it was and another 18 basis points on thursday. then on friday with 13 more points down after the jobs number was lower than expected. that signalled a cooler economy. add it up and that's 54 basis points or .50% in one week which rarely happens. to put that in perspective, if

you are buying a $400,000 home with 20% down on 30-year fixed mortgage, the monthly payment is $119 lower today than it was just last monday. what does that mean for the fall housing market? it is a help on the edges, but not going to get the market moving again with gas. higher rates make buying more expensive, but so do high prices which continue to rise. again, a little perspective. the last time affordability was this bad was in the 1980s with the rates in the double digits and average home cost 3.5 times the median income. today, the average home is six times the median income and home price growth accelerated 4.3% to 4.3% in september according to ice mortgage technology. realtor.com and redfin reporting sellers reducing prices.

redfin posted a price drop of 7% of sellers. that may be a little bit of a help. this is still a very pricey and unaffordable market. >> you shocked the audience. in the '80s, it was 3.5 times. i have to ask. >> twice the price to income ratio. >> are we hitting peak prices? >> i don't think so. you have the supply issue. it is supply and demand. there is still pent-up demand. we talked about mortgage rates coming down and if see the rush of demand. one real estate agent says it is six of one and half of another. do you buy with the competition or the rate drop and everyone comes flooding in which pushes prices higher? because of the low supply and

high demand issue, you will not see prices come down. you will have to work within that mortgage rate margin. >> if you are a home buyer, the '80s were the good old days. diana, thank you. coming up on "worldwide exchange," the morning of ozempic to leaders. who novo nordisk is saying about the new rules and the pivot. we're back in just a moment. not only our customers but those who matter most to them. just like our company does for us. we have great benefits from principal. so i know i'm taken care of. and (pause) not just me. but the ones who matter most to me. ( ♪♪ )

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welcome back to "worldwide exchange." we start with the morning call sheet. mizuho with bilibili. it expects the company to accelerate top line growth to double digits and reach profitability next year. shares up 3.5%. barclays upgrading the dominion energy rating to $30 a share. it sees the third quarter earnings call for the stock increase. and raymond james downgrading bloomin brands. taking a look at those shares down 2% in the pre-market.

time for the global briefing. south korea's regulatory agency announcing the ban on short selling until june. the move coming after the commission fines hsbc $41 the million last month for short selling korean stocks without confirming the ability to possess them. stocks in south korea are surging on news with the kospi closing up 5.5%. and novo nordisk is warning about the new eu rules. the increased focus on the u.s. will come if the eu implements the rules to cut ozempic years of exclusivity. and ant group gets the move by the alibaba company lays out

tools including chatbots for businesses. and coming up on "worldwide exchange," what one word every investor needs to kn.ow more "worldwide exchange" coming up after this. icy hot.

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welcome back to "worldwide exchange." time for the wex wrap up. tesla producing a new model at the berlin factory according to reuters. elon musk announced the plan last week with the price around $27,000. the current least expensive car in germany is the mod e the current least expensive car in germany is the modl 3 at $46,000. and warren buffett's berkshire hathaway is operating earnings up 40% this year with the record cash pile of $157 billion. harvard fund manager bill

ackman calling out his alma mater with the letter over the anti-semitic rhetoric. and lvmh is buying eyewear maker barton for $80 million. and mark zuckerberg undergoing surgery to repair a t torn acl. and elon musk showcasing grok. the prototype is only available to a select group of users before the wider release. here is what to watch, credit card numbers are out tomorrow and consumer sentiment

is out friday. earnings season is slowing down a bit this week. 50% of s&p is reporting including disney and warner bros. and softbank. and the dow and s&p and russell and dow transports are on a five-day win streak. all posting the best week of the year. led by an 8% gain in real estate. let's bring in the strategist at pro shares. simeon, good to have you here this morning. >> good morning. >> big rally after the pause last week. it was after the pause and does that continue this week? >> i think we are running out of steam with regards to the impact of treasury yields. the issue there is we normalized on the long end. you look at forecasts.

consensus has 2% inflation and 3% fed funds and 3% ten-year funds. the long-term average on the ten-year yield is 2% yield. we are in the long-term space. powell said it. they are looking for independence of the ten-year yield of qt or qe. we're almost there. not much left for stocks to benefit. >> with that in mind, you are saying not much benefit for stocks. what is your wex word? >> midcap dividends. that's a phrase. >> is it the phrase that wpays? >> here is the thought. midcaps left behind for 15 years trading at 50 cents on the dollar. the reason i say midcap dividends, as you go down in cap, quality degrades and the tailwind in stocks, you need the earnings growth. we are looking at the s&p 500

dividend aristocrats. it has declined year over year 10%. the aristocrats have grown. >> it includes the small cap. give us a sense what is in the holdings. we talk about holdings, but we don't mention the holdings with the etfs. >> you have financials. you have bank of the ozarks and less inverted yield curve. that is an important space. midcap youtilities. when you put this mix together

and there is stuff like industrial companies. when you put that mix together, you have over a 3% dividend yield. >> you say we saw a fed relief rally last week. we have another fed meeting in december and a number of inflation reports between with cpa cpi and pce. how does the market react to the different reports until we get to the decision? >> we are looking for muted inflation. we know the economic data is mixed. good gdp member. mad unemployment number. watch the manufacturing. it is still in the contr contractionary zone. we are looking for inflation. it has been coming in below 4%. remember that ten-year bond yields which is high in real terms and shorter end of the curve is higher in real terms. a lot of the work is being done

by the fed. >> rates are doing the work? >> rates are doing the work for the fed. >> the question is is this a dovish pause or hawkish pause? >> that is what i was saying at the top of the conversation. i think we're at the tail end of the benefit for the equity markets. as the fed stops or cuts, the longer end is likely to be range bound. that will limit the impact on the equity markets for both good and bad. if we get surprised by the quarter basis point hike, that is likely not a headwind because you would get stability in the 4.5% range on the ten-year bond. >> simeon hyman, thank you so much for being here. >> thank you. a quick look at the futures. they are moving higher. look at the dow which is off the highs from earlier today. it would open up at 25 points higher. the nasdaq and s&p both firmly

in the green in the pre-market. we are looking at the energy market. saudi arabia cutting 1 million barrels a day through december. a quick look at bond yields as simeon was mentioning. he believes they will see the end of the decline in the bond yields. benchmark 4.59%. a quick look at overseas markets here taking a look right now. we're not going to do that. we will toss it over to "squawk b b box." happy monday. we hope you enjoyed the new studio. "squawk box" is coming up next.

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good morning. futures are higher this morning. building on last week's strong gains. we check out the next challenge for the bulls. the countdown to decision 2024 begins. i think it's just under a year now as of yesterday. new poll numbers have president bidentrailing former president trump in the major battleground states. it was on the cover of "the new

york times." imagine how definitive that had to be. and elon musk launches a new a.i. venture promising to have a rebellious streak. it's monday, november 6th, 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. here we go. a new week where you are talking about some modest advances. dow futures up 30 points. nasdaq up 42. s&p up over 8. this is the beginning of the new week after the markets are coming off the best week of the year. the dow was actually up more than 5% last week. th