it is 5:00 a.m. here at cnbc global headquarters. welcome to "worldwide exchange." here is your "five@5." semis surge. it helps for the market turn around as the nvidia ceo talks about extraordinary demand for the a.i. chips futures are higher in the early going. threading the needle

david solomon speaks about the rivals and his outlook for the u.s. economy ahead of another key inflation report today. waiting for a walkout. the ceo pleads his case to avoid the first strike since 2008. one that could cost it $1 billion per day. oil traders are on alert as francine is pummeling the gulf coast. it's thursday, september 12th, 2024 you are watching "worldwide exchange" here on cnbc ♪ good morning thank you for being with us. i'm dominic chu in for frank holland on this thursday morning. let's kick things off with the check of u.s. equity futures which are pretty much green across the screen.

dow implied higher by 32 points. modest, but green. the s&p up 7 all of this came off a wild wednesday that at one point saw the dow down 700 points as you see here before staging the rebound before the end of the day. we did end the day higher by 125 points an 800-plus point swing. even better for the nasdaq coming off its best day since august as you see here, it was generally more positive through the week, but the big dip we saw a lot of buying especially with the chip stocks a big story, a part of that, was nvidia coming off an 8% gain after ceo jensen huang took the stage at the conference telling investors its key blackwell chip is in full demand and fears of a

slowdown or production problems were not a concern. >> here we are ramping blackwell and it's in full production. we'll ship in q4 and scale it and start scaling in q4 and into next year. and the demand on it is so great and everybody wants to be first. everybody wants to be most and everybody wants to be -- the intensity is really quite extraordinary. >> so, nvidia is still part of the big market story these days. checking on the bond side of things, the two-year note yield is hovering near a two-year low ahead of the second key inflation report today the august producer price index, ppi, out at 8:30 a.m. eastern time following the consumer price index or cpi, ticking to 3.66%. the ten-year is 3.67%.

the difference between the longer and 30-year long bond at 3.992%. let's see how europe is shaping up in the early going. investors bracing for the key central bank decision. our silvia amaro is there now. good morning >> good morning, dom equities at this stage are in the green. they have been trading just over two hours. as we await a new rate decision by the european central bank the ecb is expected to cut by 25 basis points that would be the second cut this year. of course, the key question for investors is what will be the message from the ecb whether they will give us any clarity of what they will do now and the end of the year. also worth noting we will get new economic forecasts let's see what the ecb will say in terms of the economic outlook as well. let me take you to the different

sectors in europe to understand what's happening as we look at the corporate announcements here as well. we are keeping a close eye on the banking sector u u unicredit bought the stake in commerzbank. we are looking to see if this will lead to a bigger deal in the future we are looking at technology trading higher by 2.5% significant gains here and also off the back of what you were describing, dom, from the nvidia ceo. that is boosting the momentum we are seeing here in europe today. when it comes to the worst performing sectors, it is worth keeping in mind i should say it is a positive day. we are seeing some modest moves when you think about the performances food and beverage at this stage is moving below the flat line as well as yutilities. we will see if the ecb decision later today will shift things a

little bit dom. >> silvia amaro, thank you very much for that. back stateside and the top corporate stories and the boeing ceo looking to avoid the first worker walkout since 2008. we have silvana henao with those head headlines. silvana. >> good morning. newly minted ceo asking boeing's largest union not to hit the picket line over the quote frustrations of the past the plea coming ahead of the vote of 33,000 union members today on the tentative four-year deal with the aerospace giant. the current contract expires at midnight now, a potential strike could shut boeing factories in washington and oregon. boeing last strike had a striken 2008 a new strike of a similar length could cost boeing between $3 billion and $3.5 billion each

day. we are seeing shares of boeing fractionally lower in the pre-market norfolk southern announcing its fired ceo alan shaw following the misconduct investigation. the rail operator's board determining shaw took part in a consensual relationship with the company's chief legal officer who was also fired norfolk was board named mark george as the new ceo. and atlanta fed president raphael bostic broke trading ru ru rules many times dozens of investment trades were made through bostic through third-party investment managers during periods when the fed would issue decisions around interest rates the ig adds it found no evidence bostic profited from inside information, dom >> silvana henao with the latest there. thank you. to a developing story and

watching the energy sector higher again this morning after its best day in two weeks. you can see u.s. benchmark crude rebounding a bit $68.01 ice brent crude is $71.36. up 1% as well. this as hurricane francine continues to pummel oil infrastructure in the gulf of mexico region after making l landfall last night as a c category 2 storm customers across the gulf coast are now without power. oil and gas companies in the gulf responsible for 15% of all u.s. crude output were forced to shutdown production. we will continue to monitor francine and the energy prices throughout the course of this morning. also breaking this morning, we showed you the launch live

here on tuesday morning and now live pictures of spacex crew dragon capsule we are hours away from the first spacewalk for the polaris dawn mission. it will see two of the four crew members exit the craft which is expected to last two hours from start to finish. speaking of spacex, one of the cross country rivals is completing its mission today ast space mobile coming completing the launch into low earth orbit aboard a spacex rocket from cape canaveral in florida in the last hour ast is one of the hottest stocks this year leading the russell 2000 index you see the shares up 812% during the six-month span. now, you can see, again, $2 to $29 a share, roughly $28 in the pre-market so far to the pre-market action

another bank chief sounding off on the fed following jamie dimon and brian moynihan's views on the risk of stagflation on tuesday. david solomon speaking to cnbc yesterday on whether he thinks the central bank can still pull off an economic soft landing >> are you still in the soft landing camp then? >> yes, still in the soft landing camp i think that is the most likely scenario you know, i can't tell you there can't be a disruption to set that off i think we navigated to the likely scenario we navigate with a soft landing. >> soloman added he sees two, maybe three cuts, as we move through the sequence of the fall let's bring in bill stone at the glenview trust company how many rate cuts do we get by the time the year is done, bill? >> i think two-to-three sounds

about right. the markets are pricing in four. that might be a little aggressive i think you hope it is a little aggressive on one hand just because the fed will start a little sheepishly with a little 25 basis point cut next week >> okay. if that's the case, we saw expectations, i guess you can put, change dramatically through the course of yesterday with the idea of the mixed inflation report for consumer prices 50 basis points was in play. it is no longer in play. is that a good or a bad thing? >> yeah, i mean, it was about 50% in play before the cpi you know, i guess if you're hoping for a soft landing, i think they should probably should have gone or should go 50 basis points just because we are so tight in monetary policy.

i don't think the cpi was a big problem, you know, you are showing shelter was the biggest issue. you know, i think that is set to fade again i don't think it's a big impediment it's already a close call if they've gone 50. they can always catch up the next meeting after this. you know, i think markets obviously will watch it closely because the fed's history of avoiding recession and ending in the soft landing, is frankly, not very good. seven of the last nine, we either were in recession when they started cutting or we ended up there i am in the soft landing camp for now and we can talk more about that, but history isn't very helpful here. >> let's talk about that because right now the preponderance of economic data shows we are not heading toward a deep recession. things are slowing down, no

doubt about it, but that all leads people like david solomon and others say a soft landing is the base case scenario. >> i think he's right on that. i think it is the base case. one is markets are clearly signaling the base case. markets aren't always right, but you have to be very sure of other data or other thinking to go against what's been priced in you know, i think second is you have to keep in mind the economic cycle is unlike any other because it relates to the covid decline and just the massive rebound after covid. so, it really messages up when you are looking at the cycles of the past it's just not clear that the signals we've used in the past with the inverted yield curve and the som rule and other things are really going to work this time. i rarely say it might be different this time, but it might be different this time >> if that's the case, bill, if

it is different this time, what's the investor allocation and the stance on how you deploy your money at this point >> i think part of it is not to be so sure what the path is going to be. i think i would say you really hit it down the middleto go on the golf analogy and keep exposure to the technology and artificial intelligence ideas and cyclical connected to the economy ideas. you also have to own some of these defensives consumer staples, things until recently haven't done that well, just to give yourself balance. i think it's fair to say because it's so different this time, you shouldn't be so sure of what the path is exactly going to look like. >> all right bill stone whipping out the fairway finder swing thank you very much. see you soon. >> thank you >> for more on what's driving the markets and trading day ahead, head to cnbc pro at

cnbc.com/pro subscribers get insight and analysis. we have a lot coming up on "worldwide exchange," including the one word investors need to know today, but first, riding in the oracle wake when it reports later on today. plus, the state of staples bill stone just spoke about those. what yesterday's cpi read could mean for the sector's rally and staying power. later on, forget the mag 7 what the key central bank decision today could mean for europe and what it calls its super 7. we have a very busy hour when "worldwide exchange" returns after this commercial break. stay

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welcome back to "worldwide exchange." adobe reports after the closing bell today shares are up marginally in the pre-market you can see they are down 2.5% and up 11% in the last week. those reports come a day after oracle posts better than expected earns after riding the wave and investor optimism ever since. where might the maker of photo shop land and what will investors say about the demand of artificial intelligence products let's bring in jackson over at key bank jackson, thank you for joining us here. what are the expectations for adobe and is it going to be like

oracle >> thanks for very me this morning, dom is it going to be like oracle? the short answer, probably not oracle has some mix of business that i think is a little bit more attractive today in software than adobe starting with oracle cloud infrastructure where they're benefitting from some of the a.i. tailwinds in the sector their application business, oracle's application business, is less discretionary selling back office applications is a little stickier than the front office applications that adobe sells. so, for those reasons, i think oracle's revenue outlook here, at least relative to expectations, is more positive than adobe. >> adobe was a darling with regard to the trade in the last year or couple of years or so.

it has shifted and has become a bit negative on that front what exactly does adobe have to do to turn things around and get investors excited about its stock and a.i. possibilities again? >> it's true it's hard to keep up it was first, i think, an a.i. loser because, oh, my goodness, gpt is available to do the same thing. now it has chops the swings are hard to predict i think for adobe and a.i., their firefly add-ins for the cloud are coming at a really rapid pace they are innovating at a rapid pace we just saw yesterday about the text-to-video generation generating up to five seconds of video. that is coming this year that was widely expected i think what's important is i

don't know if whether it's runway or sora from gpt or more others i don't know if adobe's firefly has to necessarily today compete on the merits and features and functionality. i think it is important that adobe continues to drive usage and adoption of its core flagship products. in firefly, the use case is able to did that, then we're talking about being able to sustain their revenue growth into 2025 from the use cases. >> jackson ader with the under weight rating. thank you very much. we'll talk to you soon. >> thanks, dom. still ahead on "worldwide exchange," the great miami condo divide and why developers are more bullish than ever while the rest of the market is crashes. our diana olick will dig into that story coming up next.

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about to get more expensive starting on october 17th disney shares up fraction ally i the pre-market trade. last year, we brought you the story for the plans for the last condo building going up on the miami ultra exclusive fisher island the project broke ground with two penthouses sold for stunning figures. diana olick joins us now with the details on that miami scene. di diana. >> reporter: dom, hold on to your wallet. the two penthouses which don't exist yet, sold for $150 million collectively the ten-story building will have 50 residences and 3 to 8 bedrooms and indoor and outdoor spaces and five-star amenities it should be delivered in 2026 and already sold i spoke with the condo king and ceo of related group about the

current state of the market. >> look, i'm paid to worry in 45 years, i have seen many ups and downs. i think the south florida economy, in particular, will continue to have ups and downs those people that tell you it will go straight ahead and up, up, up, it doesn't why doesn't it because the developers are a little bit of cowboys. they, they, they, they overreact to the increases in demand the demand's still there, but the competition, i think, is going to be -- is going to be brutal >> reporter: now, perez says luxury condos are selling well, but older buildings are facing new rules following the collapse of the champlain tower in surfside they have to do top-to-bottom inspections and fix anything wrong which could be costly.

if you look at august sales, miami priced below $300,000. sales were down 9% year over year and new list bing were up. new listings were up 37% on condos priced over $5 million. i asked what would happen to the older buildings. >> we are going to see more and more of the older buildings being demolished and new buildings probably more high-rises built in south florida. >> reporter: related group is breaking ground five new luxury buildings in just the next three months dom. >> diana, if this is the case, could it be extrapolated to other parts of the u.s. housing market, the dynamic that we're seeing there, or is this very much a localized miami and miami

beach phenomenon >> reporter: this is a florida story. this is the issues that florida is having with the older buildings. the great condo divide and that terrible collapse of the champlain tower. this is very localized if miami, you have the split with the high-end eleluxury buildings and the older condos that are not selling if you are in an older condo unit, you cannot unload it it is different from the single family market which is doing much better. >> miami scene great divide. diana olick, thank you very much for that. as we head to break, we are watching the solar sector and some big moves on the back of the presidential debate. investors taking a more positive tone and view to vice president kamala harris' performance and rising hopes of a potential victory and that's creating opportunities for solar companies. first solar and sunrun and

solaredge jumping from 10% to 15% yesterday. many of the stocks have seen bigger selloffs in the medium to longer term. we're back after this.

it's 5:31 a.m. in new york and there's still a lot on "worldwide exchange" coming up investors look for wild swings with the cpi report.

futures are higher ahead of the ppi report. it's one of the year's best performing spectors. c sectors. consumer staples. running up the tab with d.c. insiders breaking a southweat an it's thursday, september 12th, 2024 you are watching "worldwide exchange" here on cnbc welcome back to "worldwide exchange." i'm dominic chu in for frank holland. let's pick up with the equity futures which are modestly big the s&p up 12 and the nasdaq up 55 stocks are coming off a wild wednesday. at one point, the dow down more than 700 points at the low point in yesterday's session we ended up the day higher by

around 125 points. again, a big move there. and even more pronounced one for the nasdaq coming off its best day since mid-august you see the nasdaq trade up 2% with a lot of that momentum coming in yesterday's session throughout the course of the day. now, a big part of that story is nvidia coming off an 8% gain after ceo jensen huang took the stage at goldman sachs' conference telling investors that the blackwell chip is in full demand. >> here we are ramping blackwell. it's in full production. we'll ship in q4 and scale it and start scaling in q4 and into next year. and the, and the demand on it is so great and everybody wants to

be first and everybody wants to be most and everybody wants to be -- so, the inn ttensity is really quite extraordinary >> on the back of huang's comments, check out taiwan semiconductor and asml rising between 3% and 9%. that chip trade seeing a bounce back. we are seeing boeing and the ceo asking members of the largest union not to hit the picket line in washington and oregon in the first worker strike since 2008. 33,000 union members are set to vote today on a tentative labor deal with the aerospace giant. the current contract ends at midnight tonight that's norfolk southern. we are keeping an eye on norfolk southern as well the rail operator board fired

alan shaw after the investigation saw he took part in a consensual relationship with the company's chief legal officer. cfo mark george is named the new ceo and the norfolk southern shares are down .75%. among the stocks today, kroger reports today top of mind for investors is the fate of the company's acquisition of albertsons which u.s. regulators are seeking to block. kroger will offer more insight on the consumer and where they stand at the time inflation is now trending lower something goldman sachs' ceo david solomon discussed with scott wapner yesterday >> when you look at inflation on the cumulative prices, they are feeling pressure and you are seeing that in places. generally speaking, i found the

ceo/cfo of the consumer con frin ference quite con trucktive. >> we have john blankenship with us let's talk about the comments and whether or not we see kroger as indicative of the consumer spending story, john. >> dominic, let's scroll back to yesterday and talk about food at home which is the kroger story which is 0.0 it was a flat story for the cpi. food was up .3% in the month this is also the story of goods and services goods are basically flat services are still showing some strength so, this is kind of what -- what kroger is probably going to face which is a flat market for pricing. that has been true for food over

there overall. 2.1% for food prices overall i like your headline this will be about the merger with albertsons, most of all, because they will try to overwhelm this weakness with some kind of national excitement over a multi-thousand store strategy to bei able to take on the real elephant in the room which is walmart >> can we talk about this with the current house views as anti-competitive or mostnopolisc practices? we know the ftc has not been kind to these types of mergers how are you handicapping these types of deals happening >> dominic, walmart is at 23%.

the thing you have to understand is how did walmart get to 23%? they have 4,200 stores, number one. they already have a national foot footprint. the penetration of grocery online is 20%. walmart is 18% they are a $630 billion market cap stock. they are the driver of the consumer stables i s they are the driver of the consumer stabletaples they are becoming a delivery juggernaut eating into kroger. if you put kroger at play, they are 10% market share and 1% less, 9% is costco what is interesting about costco here, to make it more complicated is costco has 600 stores, but they are giant warehouse stores costco has found a way to compete with walmart and doing

it with far less stores are kroger kroger says we will go national and buy our competitor albertson which is the safeway brand and get to 4,500 and be at the same level with walmart the difference here is they do not have anywhere near the ecommerce capabilities of walmart. that's the story here. what defines grocery and what defines, you know, concentration and then you have another wrinkle, dominic, which is all the democratic attorney generals oppose the merger and republican attorney generals support it it goes beyond the ftc and partisan divide as well. >> a lot of currents in the kroger story john blank, talk to you soon. >> you bet. a market flash on general

mills. reportedly in advanced talks to sell the yogurt business including the yoplait brand. headlines coming across right now. general mills shares down .25% coming up on the show, ahead of the big fed rate decision, another central bank is expected to cut rates for just the second time in the last five years. so what that could mean for one batch of stocks on a red-hot run? we're going across europe to talk rates back in a moment

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welcome back to "worldwide exchange." the federal reserve is not the only game in town. we are two hours away from the next european central bank to make a decision. expected to make a cut following the landmark quarter point cut in june. since then, it has been a rough go for the stoxx 600 index check out the action there since the rate cut, it's still down 1.5%. the region's mag 7 competition, or what citi calls it's super 7 batch of stocks, most of which were on fire to start the year richemont and lvmh are down 18% since that decision.

ferrari and s&p are up 15% since rate cut joining me now is strategist -- thank you very much for joining us i wonder if you could take us through what exactly you think happened for some of these super 7 names in the wake of that interest rate cut. >> great to be here. that's a very important question back when we had the first ecb cut decision at the beginning of june, we were in the goldilocks scenario for europe and seeing a positive direction and improvement in the growth. economists are upgrading growth for europe and since then, coincco coinci coincidentally, everything has changed since the french election announced you see the weakness in the

luxury names out of france there. everything, all of these positive catalysts that europe has been benefitting from have turned from being tailwinds into headwinds. we continue to see these pressures until now. not much longer after the first decision, we've downgraded europe to neutral and upgraded the u.s. on luxury goods, we are now not t neutral. we like the health stocks. we are under weight auto going forward, i think european equities will try to rise. we are almost flat target by the year end around mid-july, we turn to a more defensive tilt away from cyclical tilt beforehand you can see it in the super 7,

right? these are the leaders in what they do globally and in europe and they come from very diverse set of sectors many of them are very cyclical and especially these consumer luxury goods exposed stocks have suffered since then. >> okay. this is where i want to make the point. the super 7 is very different from the magnificent 7 as you point out, there is a relatively different diverse set in the mag 7 as we approach what traders are talking about a certainty of an interest rate cut from the fed, how much of the price action of the super 7 in the down side since the rate cut could translate into the tech heavy mag 7 in the wake of what could be an interest rate cut from the fed in the next week >> so, for us, the focus has moved away from inflation and

the cuts we perceive them as a done deal and the markets mostly priced them in the focus is what will happen to macroeconomics indicators. we are seeing slowdown in europe, as i mentioned, in europe, we see the slowdown. downgrades especially in the cyclical part. the u.s. has been holding up a bit better, but, of course, we worry that underneath the surface there is a labor market slowdown and our economists in the u.s. expect a mild recession coming through in the near term. of course, this is going to be noticed by the fed and also effect decisions if we get more slowdown, there is a silver lining that we are going to get more cuts out of the fed than has been expected how does it influence the mag 7

versus the rest of the mrarket? it depends on the time horizon we think the market will start to broaden up. tech is still something you have to focus in the u.s., but the main focus is not going to be on the large caps, but strategy diversifying the broader tech over the next 12 months or so. >> the big question for investors is will the mag 7 trade follow the super 7 trade in the fed cut beata, thank you >> thank you. ahead, one word that every investor needs to know today and congress fing acan uphill battle to keep the lights on as the high costs of all the borrowing hits a grim milestone today. we'll be right back after this discover caplyta. unlike some medicines that only treat bipolar i, caplyta is proven to deliver significant symptom relief from both bipolar i & ii depression. and in clinical trials, movement disorders and weight gain were not common.

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nature's bounty helps you grow thicker fuller hair with just one capsule a day. you are bountiful, it's in your nature. welcome back house republicans are back at the drawing board after speaker mike johnson called off the vote on the temporary funding bill. that facing opposition ahead of the october 1st deadline to get it done. the development coming as the cost of financing the government's debt is set to make history today. megan cassella is joining us with more on that big debt story. megan, good morning. >> reporter: good morning, dom the u.s. has now spent more than $1 trillion on gross interest this year. that is a record for spending on

interest in a single year caused by deficits and elevated interest rates it becomes official this afternoon when the treasury releases the monthly statement for august it will show that like in july, gross interest is the second biggest line item in the budget followed by social security. we're spending more on interest than healthcare on medicare or on national defense. with the debt now at $35 trillion, the u.s. is spending $3 billion a day on average on interest according to apollo that debt load, perhaps surprisingly, is manageable for now. interest costs adjusted for inflation are on the high end of historical norms they are still within them that trajectory is shifting fast the congressional budget office says the payments will hit 3.1% and rise to 4.1% within a decade at that point, cbo says 1/6 of all federal spending will go to

interest two big questions from here are, one, when the financial markets will start to react to all this and, two, when the political leaders will begin to address it the economists say the only true solution is raising taxes and cutting spending most likely unpopular programs like medicare and social security it is a program that either parties want to touch in an election year. dom. >> what happens if the deal does not get done >> reporter: going good. the bond vigilantes could come back we could see reaction in the bond market to push interest rates up a bit social security say big one here the trust fund is set to run out within a decade. the estimate would be a 17% pay cut for every american we cannot spend on priorities. the child tax credit is reducing

child poverty, but it is too expensive. we don't have the money in this debt. >> megan cassella, thank you see you soon. coming up next, the strategy our next guest says has to take before the big decision ahead of the fed. we'll be right back. me who i am ♪ ♪ so i'm off to see... ♪ we invent them. we design them. we build them. and one day, we have to let them soar. ♪ i'm always coming home ♪ what is cirkul? cirkul is the fuel you need to take flight. cirkul is the energy that gets you to the next level. cirkul is what you hope for when life tosses lemons your way. cirkul, available at walmart and drinkcirkul.com.

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as we gear up for the trading day ahead and the ppi read, another check of the markets. let's bring in matt powers at powers advisory group. matt, take us through what you expect today >> dom, good morning it's been a quiet earnings week and it will be there is plenty happening within the markets. coming off the inflation numbers, it sets the stage for the cut next week. yesterday's comeback is the largest in the market and shows we priced in a 50-basis point cut. we are expecting a 25-basis point cut next week. >> okay. 25 seems to be consensus at this point. what exactly does that say and that brings us to your word of the day. can you tells why in the context of the fed decision? >> the word of the day is gradually. as much as the increase in

rates, we feel the fed will gradually cut. investors should reallocate and shift from the heavy cash money market and short-term fixed positions within the portfolios. >> where should they shift with the cash >> don't make drastic changes in the portfolio is our advice to clients. especially before the fed makes the decision next week having said this before, we advised clients with the wind at the back of the value defensively, it sets up perfectly with the rates moving down and will be here for a while. you got to be patient. you had to be patient in the past two years in the area the sectors we like and led year to date and over the past month is consumer staples and financials and utilities >> matt, what's your top pick?

>> briefly, target with the valuation looks excellent. they returned to a growth mode dividend growth is great morgan stanley and financials is great. dividend growth is 25% over that period >> perfect matt, thank you so much. we'll get to you soon. >> appreciate it, dom. >> "squawk box" picks up the market coverage coming up next good morning i don't know if you watched it, but sharp turn around yesterday. it looked like a real selloff yesterday after the inflation point. futures are trading higher today ahead of the ppi, producer price index. boeing's ceo making a plea to workers to not strike with the deadline approaching. more history about to be made in the final frontier

it's thursday, september 12th, 2024 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 along with joe kernen and andrew ross sorkin. we have another big morning for data as joe mentioned, the august producer price index is going to be released today at 8:30 a.m. eastern time then the ecb also announcing a decision on interest rates coming at 8:15 a.m take a look at the u.s. equity futures ahead of yesterday's huge volatile swings the dow indicated up by 45 points the s&p futures up 7 the nasdaq up by 28. as joe said, it was a wild