it is 5:00 a.m. here at cnbc global headquarters. welcome to "worldwide exchange." here is your "five@5" fed edition. global markets rally after the fed's first interest rate cut since 2020 a 50-basis point move. also sending a signal another 50-basis points of cuts before the end of the year. >> you have a cooler labor market with the activity what that tells you it's time to

change our chance. ahead of the curve, defending the fmoc policy path powell says the cut was not a reactionary measure. >> i would say we don't think we're behind we think this is timely. i think you can take this as a sign of our commitment not to get behind. as we said, global markets in the green we will check in with london and singapore in a moment with stock futures surging. breaking out the playbook for re-calibration and looking at strategies to boost your return. in the face of falling rates, jeffery gundlach looking for more. >> it might be time to start upping markets and if you are really intrepid in local currencies. it is thursday, september 19th, 2024 and you are watching

"worldwide exchange" right here on cnbc. ♪ good morning thanks so much for being with us i'm frank holland. let's check on the futures futures are in rally mode. the futures are up 75 points the dow looks like it would open up nearly 400 points higher. nasdaq is up more than 300 points up over 1.5%. this action we are seeing after a turbulent session the dow and s&p after a fresh intraday high. this is the russell 2000 both hitting an intraday high. russell futures behind me is bigger gains with the small caps is the lone index to close higher yesterday they did close higher.

right now, you see the futures up 2.5%. fed chair powell and company announcing the .50-point cut and signaling two more cuts before the ebds end of the year >> with the re-calibration with the strength in the labor market can be maintained in the contcontex of moderate growth >> right now, we are looking at the pre-market gainers in the s&p 500. look here on the list. enphase energy very sensitive to rates. freeport and broadcom up 3.5%. ge vernova up 3% we are getting a sense of the stocks moving on the fed decision in the pre-market a chip name at the top of the list a bunch of chip names dominating

the board. asml up 4% broadcom and arm and advanced and tesla up 3%. we want to take a look at the bond market. benchmark at 3.69. ticking up a few points after the fed decision here is one we want to watch the 30-year now back above 4% at 4.01 the cut seen by some as inflationary we'll talk about bonds and other moves later in the show. we want to look at oil wti is back above $70 a barrel a key sentiment level for west texas intermediate a bigger move to the upside for brent crude almost at $75 a barrel that is a key sentiment level for brent crude. and cryptocurrency bitcoin is moving 3% higher this

morning. even bigger more for ether up 2% ripple up 1% as well that is the morning set up we will get to other parts of the market wall street is looking to rally. let's see how things are shaping up with silvia amaro in london and with jp ong with the asia trade. silvia >> good morning, frank european investors are reacting positively to the latest fed decision look at the stoxx 600 benchmark here in europe is currently trading higher above 1%. yesterday, the stoxx 600 actually ended the session down almost .50%. today, it is actually the first moment that the european investors are having the chance, really, to digest the comments from the federal far, it's goodr investors. however, there are a couple of

moments to create volatility here later today we will hear from the bank of england with the latest rate decision at lunchtime. let's see whether that could actually change the feeling here across the european continent. let me take you to the sectors to understand the dynamics within the corporate moves so far into thursday's session. we are seeing a lot of upside when it comes to the mining stocks basic resources up 3.4%. at this stage, they are actually on track to see their best day so far this year off the back of higher metal prices. we are also seeing quite a lot of momentum when it comes to autos up 2.5%. let me take you to the other side of the equation looking at the worst performing sectors thus far we are seeing a little bit of pressure with the utility names down 1%. continuing that lack of momentum we saw on wall street when this

sector also ended the session as the worst performing sector on war street however, we are seeing further downward moves when it comes to telecoms frank, so far, so good european investors are reacting positively to the rate cut from the fed. >> silvia amaro with the reaction in europe let's go to asia with jp ong jp >> good morning, frank it is not every day you hear about a 50-basis point cut from the fed. that caught investors here in asia with the equities rallying. the confidence wasn't broad across the board the gauge for kospi after plunging on morgan stanley cutting the chip maker price in half again, even across the board

there's more hope in mainland stocks and the hang seng with the federal reserve cutting, that gives the pboc more room to set the loan prime ra rates. we have to remember a lot of volatility here in asia. you don't see that in one place. we saw it weakening significantly against the stronger dollar after it found its footing, but recovered after the two-day chart because the bank of japan is set to meet tomorrow which is another key data point here in asia. the early weakness for the yen is enough to lift the spirits of the nikkei 225 keep in mind that the japanese jgb bond yields.

frank, back to you good morning >> jp, thank you very much. turning our tension back to the u.s. market. s seema shah is with us. >> good morning, frank. >> seema, i want your reaction to the fed cutting 50 basis points some people were surprised and some people forecast it. how do you see the cut and market reaction? yesterday, we closed lower, but now markets are popping a bit. >> frank, it was an historic move in line with what we expect to come from the fed. typi typically, a 50-basis point cut come from the asset bursting and job layoffs and none of those are present. it was a bit unexpected. powell had a very positive assessment of the u.s. economy actually, the other part is they had very little to lose because

inflation does seem to be contained. why not move ahead and make a fairly aggressive cut and give a clear signal to the market that they are there to assure and secure a soft landing. markets had a disappointment yesterday because powell indicated a further 50-basis point move the economic outlook has improved recession risk has essentially collapsed now that the fed is assertive and attentive of avoiding recession from here on, we expect the market to make fairly significant gains. >> you are seeing the u.s. economy being strong i want to bounce this off you. this is a tweet from the ceo of cantor fitzgerald. he said in part 50 basis points is a big red flag. the fed has more timely economic data than the rest of us this means our economy our is worst shape than we thought. this is a bad sign for the economy heading into november it sounds like you disagree with

him. is intthere any credence in this with the fed having more economic data athan we have >> it is true that the fed has more data than the rest of us. they are tracking the same surveys we are we talk to our clients around in the u.s. and we get a very, very clear positive picture of course, there are pockets of weakness in the u.s., but broadly speaking, it is a picture of strength. i think historically, yes, a 50-basis point move would be considered the fed knows something. actually, powell went to lengths yesterday to play out the scenario of the u.s. economy and described the labor market as solid and gdp strong to see growth slow to 2% which is slightly above trend. i would disagree

>> let's get a bit more granular we mentioned that russell futures were the best performers in the pre-market up over 2% yesterday, we saw the small caps finish the best out of the indices. also, banks up .50%. in your mind, is this cyclical trade going to kick off from here or do you see trades in other going forward? some people saw 50, but many people thought it would be 25. >> i think this is the return of cyclical trade the areas of the market which are performing well at the moment are the most interest rate sensitive and do well in a fairly steady economic back drop that's why the cyclical space is doing well and small cap as well from here, i do think investors will be looking at volaluations. there is a slowdown under way and not going to be a recession. do we want to be focused on

markets are very frothy or are valuations look fairly attractive it does suggest further broadening out of the gains. with the additional focus on the market exposed to economic growth and will do well in an environment where there is still job growth and inflation contained with the fed cutting rates. >> we have to get going, seema surprised by that at all expect any of that trade to continue today tac technical difficulties seema shah, thank you very much. for more on the trading day ahead, head to cnbc.com/pro. we have a news alert details crossing about president biden's speech at the economic club of washington this morning. the president will use the

speech to hit on what he's calling a milestone for the economy where rates and inflation are tfalling at the same time. the white house says this is not a victory lap by the president, but highlighting progress on the economy. the president expected to address continued challenges around affordability of housing and healthcare and child care. we have more to come on "worldwide exchange," and including the one word investors need to know today and why david tepper is increasing their bets on the chinese economy and why you may want to think twice before following his lead. and we are looking at the low rate ideas you may have missed. and reports on slowing iphone demand. what one told jim cramer about the iphone 16. you don't want to miss it. a very busy hour when "worldwide exchange" returns. to make them real.

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welcome back to "worldwide exchange." china's been struggling in 2024 and reporting weaker than expected growth. shanghai down 8% this year and the golden dragon etf is off 15%. where many have been left for dead, the smart money is seeing opportunity. cnbc.com is reporting that david

tepper is adding to his portfolio with alibaba. michael burry loading up on alibaba in q2 following yesterday's rate cut by the fed. >> now with the dollar weakening, it might be time to start upping emerging mashlrket. if you are intrepid, i could encourage in local dollars. if we get two closes, we are not far away. >> joining me now is the portfolio manager. good morning, vivian. great to have you here. >> good morning, frank. hi. >> so, we just spelled out a bunch investors seeing opportunities in china and the factors with slower than expected growth and consumer

spending and high unemployment, et cetera. what is your view of the chinese equities in the short-term? >> it is very clear that the china economy is grappling with the prolonged cyclical downturn with the consumer and business confidence. therefore, in the near term, for the chinese equities to work, we need to see meaningful policies to support the consumption and demand. without that, i think the downward spiral on the def deflatio defl defla deflationary will continue. with china, i think traded eight times forward pe. with that, i think there could be opportunistic investors starting to look at this asset class to see whether we can

position to the upside. i know it is all about the timing of the policies. without those, it would be hard to see that rally. >> very quickly, i want to point out we are showing the charts. very similar story for alibaba. popping in the pre-market. i want to touch on that action we're seeing right now. what do you think the catalyst is for that action? you are saying it is an a attractive valuation and not trading at lows, but lower than we have been. is that what we're seeing in the pre-market today? >> there are two to support that. number one is the top-down perspective. weaker dollar with the performance. china is one of the biggest emerging markets which has been lagging. it is not surprising people can look for the opportunities there. on the other hand, i do think

the companies tend to have bigger which are accessible to the global investors. the fundamentals of the companies have improved in the early times with the consumer demand and eased competition in the ecommerce space. >> like we said, the quote/unquote smart money is in china. you don't see a really attractive set up. how long do you see chinese equities under pressure? what could be the longer term turn around? >> absolutely. we have been through this back and forth the last two or three years. therefore, we tend to be careful of getting into the asset class again without seeing meaningful policies and stimulus.

without the corporate fun funda fundamentals, we won't have a magnitude of the rally. in order for this asset class to work, you have to break the sp spiral. before that, it is difficult. that's why policy is super important and we are watching this space closely. >> one more question, vivian, a number of banks lowered the growth forecast for china. china put out their forecast of 5%. is that really a big deal? i'm looking at citi at 4.8 and goldman at 4.7. still very close to 5%. why isn't that good enough? >> the headline gdp growth of china has not been a very good indicator about the underline health of the economy or corporate earnings for some time. they have been decoupling from there. part of the reason is the gdp growth in the last couple years

was driven by exports. it may not benefit a lot of companies directly. we know that with the rising geopolitical risks and increase tariffs discussions by the eu or u.s., the export led growth could be challenged. therefore, although the revision down is not high, but the impact on the corporate earnings could be meaningful. >> vivian with more insight. thank you very much for your time and insight. coming up on "worldwide exchange," the clock is ticking. over a week to go for congress to g aet funding deal done and keep the government running. we are live in washington if the lawmakers will get that deal done in time. stay with us. that story coming up. discover . 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. caplyta can cause serious side effects.

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welcome back to "worldwide exchange." a market flash on apple. the company expected to get a warning in eu. apple could face significant fines if it does not make that move. taking a look at shares of apple up 1.75%. time for the big money movers. three big stock stories of the morning. truth social owner trump media is up over .50% after hitting the low of the expiration of the lockup of the company. you will be able to sell shares and former president trump.

shares are up over .50%. and mike seiffert told jim cramer he is seeing others trading up for pricier models. >> this is another year. >> you are saying this is better? >> yes. people are buying pro and max and they are buying at a greater rate than last year. >> he thinks the iphone upgrade cycle may be stronger and longer with the delayed release of apple's features. look at apple shares up 1.75%. and cracker barrel and darden restaurants are taking two different paths. crackle barrel is down 2%. darden is up 1%.

and fedex is up 20% since the last report. lennar is hovering at a new 52-week high. turning attention now to washington, d.c. house speaker mike johnson is back to the drawing board to fund the federal government. johnson facing a rebellion by republicans with the recent plan to do so. our emily wilkins is here with the latest on the drama in d.c. emily, good morning. >> reporter: good morning, frank. the government set to run out of money in two weeks. the only bill we have seen to keep it running on the floor last night failed. this would bring us into march of next year and that included a measure of requiring prove of residence and citizenship.

sustains of non-citizens voting are rare. 14 republicans bucked the party leadership. that included defense hawks who said forcing the government to go six months without increasing funding would hurt the u.s. defense department. deps democrats have called for a three-month funding level. reopening the funding debate before the next president is sworn in. former president trump weighed in on this. he called on the republicans to shutdown the government if they can't get the voter requirements. he wrote on truth social yesterday that if republicans didn't get the save act and every ounce of it, they should not agree to a continuing resolution in any way, shape or form. mcconnell said that would be a bad idea for republicans

especially with an election around the corner. >> the one thing he cannot have is a government shutdown. it would be politically beyond stupid for us to do that right before the election because certainly we would get the blame. >> reporter: we'll be on the lookout for a new plan to keep the government funding. the deadline for lawmakers is the start of october 1st. frank. >> emily, going back to the comments of the save act. do we have an impact of how that will impact the republican vote? >> reporter: i think for the most part, you can look back to what happened last year. trump put out a similar call for the republicans to shutdown the government and they wound upkeup upup up keeping it open. mike johnson know thes there's play he can run.

that is putting a bill on the floor that has bipartisan support to get across the finish line. >> emily wilkins live in d.c. as we head to break, one more check of u.s. stock futures. we are hitting the highs this morning. nasdaq up almost 2%. the dow up over 450 points. it looks like it would open over 1% higher. the s&p up almost 1.5%. ahead, we are breaking out the recalibration playbook for is some under the radar ideas you may have missed and cnbc is celebrating hispanic heritage this month. here is the chief operating officer of google hardware. >> i'm from a small country in latin america, costa rica. when you gyou grow up in a smal country, you realize you need to do a lot with very little. for me, i made scrappiness and creativity part of my work. i think they are my super power today. i bring a lot ofat lin values

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welcome to "worldwide exchange." i'm frank holland. thank you for joining us on the post-fed trading day. stock futures are in rally mode

following the fed decision. in the green across the board. futures very close to the highs this morning. the s&p up 82 points. the dpow would open up 50 point higher. nasdaq up over 1.5%. we want to look at the small caps. the russell is the best performer in the futures right now. those are up over 2.85%. the best finishing index yesterday and finished in the green yesterday. fed chair powell and company announcing the .50 can you tell an cut and two more before the end of the year. >> within appropriate recalibration policy stance can be maintained in context of moderate growth and inflation moving down to 2%. >> we look at s&p pre-market

gainers. enphase energy up over 4%. also freeport up over 4%. two chip names here at the bottom. we want to check the nasdaq gainers. chip names dominating on the cyclical sector in the pre-market for the nasdaq 100. arm holdings up 4.5%. we want to check the bond market this morning. we begin with the benchmark here at 3.69. ticking up after the cut. the two-year ticking up a few basis points. the 30-year is a read on inflation expectation and back above 4%. bond traders seeing potential for rising inflation. inflation ticking back up a bit after the rate cuts. lastly, energy, specifically oil, getting a boost from the fed decision. this morning, wti, the u.s.

benchmark up over 1%. more importantly, up over $70 a barrel. brent crude ticking toward $75 a barrel. up 1.25% now. that's the set up. let's get back to the market and your money. the fed's decision to slash and forecasting more forcing many to reassess strategies and where they want to put money to work in the new lower rate world. let's find out where the opportunities could be with gina sanchez. gina, good morning. great to see you. >> good morning, frank. it is amazing to me. >> i'm sorry. i have a question if you don't mind me kicking it off with you. we were looking at the russell futures up over 2%. we heard about small caps once we got the rate companies. is that the place you want to

put money right now? >> in that is one place. if you look at what the fed is able to accomplish over the meeting and in the comments after. he was able to manage a larger than normal rate cut without spooking the markets that we were going into a recession. he managed to paint a soft-landing scenario. that is one that benefits small caps and, quite frankly, the stock market in general. >> ialso housing in general, i know you are looking at home builders and housing related stocks. give me a sense where you see opportunities in that space. >> here, it is not just about looking at what stocks benefit from the rate cut, but also where we might go policy wise in washington. looking at the polls right now,

it is looking like harris has at least enough of a lead and still getting out of the margin of error. that would really benefit home builders. not just any home builders, but those that focus on affordable housing. we are actually looking at dr horton. that would be a huge bene beneficiary. >> i believe you are looking at home depot. the idea is we have loosening of the housing market, that is a boost for their sales? >> what's the first thing you do when you buy a house? you have to fix it up. the second part of the story is home depot has a tremendous dividend yield. the dividend payers really do get a boost from rate cuts because the dividend yields go up. >> one of your picks mcdonald's. is your idea that staples will move higher?

why mcdonald's in particular? >> that also is a dividend play and one where you you will cont to see demand growing. if we are headed for a soft landing, this is one that should continue to benefit and if we're wrong, it also benefits. >> okay. you know, i think it may be more consumer discretionary. if you have kids, it's a staple. gina, thank you very much. coming up on "worldwide exchange," meta and others are drawing a line in the sand if regulators do not ease up. we are back in just a moment. ♪♪ because now their network is self-configuring, self-detecting, and self-healing. theyhave a virtual asnamed marvis. so they can simply ask the network... how's the wi-fi today? that's the now way to network at work— with real ai— letting you rise above it all.

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welcome back to "worldwide exchange." time for the global briefing. the boe is widely expected to keep rates on hold after cutting .25 in august. japan is reporting the walkie-talkies were detonated across the country killing 20 people and hurting 450 people. icom is looking into the facts surrounding the matter. a group of companies, meta, s to

spotify and others are looking to fall behind because a.i. could expand growth, but europe has become less competitive and risks falling behind other parts of the world. coming up, jay powell has one and the one word every investor needs to know today. a real life impact of the rate cut. what it means for small businesses like our next guest. we'll be right back after this break. citi's seamlessly connected banking, markets and services businesses, deliver global financial solutions. so our client can keep investing in innovations for patients around the world. without pause. for the love of moving our clients forward. for the love of progress.

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right now. you can see right now the s&p is up 1.5%. the dow would open more than 470 points higher. the nasdaq up nearly 2% up 400 points. we're looking at the dow gainers. intel shares up over 2.5%. we have seen a big rise in chip names in the s&p and nasdaq as well followed by microsoft. similar more for amazon. apple shares are up. similar move up .75%. turning back to the fed. the supersized 50-basis point cut. for main street and small business owners across the u.s., that cut could not have come soon enough. before yesterday's cut, according to the national federation of independent business, the average rate paid on short maturity loans was 9.5% compared to 4.6% in august of

2021. the further jutoutlook for expansion and 4% of nifb saying it is time to get bigger. yesterday's cut moved the needle for small business leaders? joining me now is tom rowan of 1-800-t-shirts. good morning. >> good morning. >> tom, answer the question for us. 50-basis point cut. did you expect 25 or 50? what does mean for your business over the next couple months? >> i was expecting 25. that 50 adds confidence up and down the board. >> when we talk about a 50-basis point cut, does it make a bigger difference for your operation or your customers that buy your products? >> i think on the customer side.

for the customers and for us. like i said, what it does is adds confidence. if it came in at 25-basis points, it signals we're headed in the right direction. i think 50 is the big confidence boost, not only on confidence, but eases credit card rates if people have floating rate debtor l or lines of credit. for us operating a small business, it will help everybody out. >> you are talking about consumer confidence right now. what about your confidence to make cap ex decisions or buy new equipment or hire more people? does this give you confidence or do you need to see the rate cutting cycle continue? >> yeah, this definitely gives us -- it's been 2020 since we saw a cut. it gives us the confidence to move forward and keep investing in new equipment and hiring and

looking for things moving forward. also with our lenders, they were frozen up here the last year not knowing which way the fed was going to go. that gives our lenders some c confidence as well to give us favorable terms to keep operating and growing our business. >> tom rouen, thank you for everything. we will check back in with you. thank you for your time and insights. founder and ceo of 1-800-t-shirts. coming up, the catalyst our next guest says is in line for a market rally. we'll be right back here on "worldwide exchange."

appropriate recalibration of our policy stance, strength in the labor market can be maintained. this will help the strength of the economy and labor market. if you look at the scp, you will see it is a process of recalibrating the stance from a year ago. we know it is time to recalibrate our policy to something that is more appropriate.

the sense of this is we are recalibrating policy down over time to a more neutral level. we believe, with an appropriate recalibration of our policy that you can continue to see the economy growing. our plan, of course, has been to begin to recalibrate. we think it is time to begin the process of recalibrating it to a level that's more neutral rather than restrictive. the sense of the chaince of the stance is recalibrating to a stance that's more neutral. >> that is chairman powell with his word of the day which is recalibration. we will bring in jay woods with his word of the day. can you top recalibrate? >> i cannot top recalibrate. my word of the day is dissent. dissent as going down to the soft landing. landing the plane. one thing that struck me was the

word dissent with one fed chairman to vote against cutting 50 points. went 25 points. that was telling. they are usually in line. it is not until the fed minutes until you see the chatter in the room. these will be epic. it is something to say we are not all in agreement. michelle bowman voted against it. i think we will hear a lot of chatter over the few weeks to keep the market volatile. it looks like we're off to a nice start. >> why do you think the fed chal chatter will be volatile? what do you think another fed official will say that will shakeup the snarkts. >> markets? >> we stpeculated more on the 2 or 50. the chatter was unbelievable. i have never seen anything like

this. he just used the word recalibration and everything's fine? no. we have seasonal headwinds. we avoided those nicely. in october, with the election season, headlines will be great. fed headlines and election headlines. i think the dissent will play out more as we go forward. >> what do you think of the market action? the archmarkets closed lower wi the exception of the russell. i want to ask about the market action and the cyclical small cap trade. i didn't want to put you on the spot. you also have. do you believe this is the moment? i don't know if this will reach tom lee's forecast. do you believe there is a rally that will continue after today. >> for the small caps, the rally is here and it will continue. we will see that continue once we hit earnings season. overall, the market action yesterday, the selloff, i didn't

like how the market closed. i want to see a close. we have back-to-back intraday highs. let's close 6,500 in the s&p 500 and continue the up trend. the price action has been choppy. today could be the day. we will watch earnings. one key earnings is the fed. >> you are bullish on transports right now. i was looking at the stats. finishing not too far from their high. i give me the case on fedex ahead of earnings because it is volatile. what is your view on transports? >> first of all, fedex is vol volatile. it is at a key inflation point. if we get a gap higher, you want to get into the name. it is the biggest weighted stock in the transportation average. fedex 300 is the high of the

price stock. the transports to me go back to the dow. industrials hitting a new high. you want confirmation in the transports. i like to avoid that. fedex, to me, could kick that out in the transports >> i do want to ask you, you said fedex is your pick in a slowing economy. fedex is levered to the economy. are you worried they will miss the estimates? >> you could think about that, but over the short-term, what they have done and how they have done the last two quarters, they were having struggles 6 or 12 months ago. they righted the ship. i want to hear the guidance. that call will be telling. that is a question you want to ask on the call what the rate cut means to them. i think they righted the ship

and a breakout here. you can see a nice 25 or 30% pop over the next six months with fedex. >> two questions. guidance and margins. jay woods, your pick is fedex. one more look at futures before we let you know. futures in the green across the board in a rally mode this morning. take a look right now. the dow would open up 400 points higher. s&p and nasdaq up over 1%. that does it for us. "squawk box" starts right now. good morning. federal reserve recalibrating interest rates. shock and awe? kind of. cutting by 50-basis points. reaction from roger ferguson straight ahead. major indices rallying this morning after being all over the place yesterday, but closing down. chip stocks are leading the way. we'll show you what's moving. and labor disruption. boeing announcing furloughs and

a strike at major u.s. ports which is not good and very costly. it's thursday, september 19th, 2024 and "squawk box" begins right now. ♪ good morning, everybody. 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. andrew is off today. let's check things out right now because u.s. equity futures are really on the move. dow futures indicated up by 450 points right now. the nasdaq looking up by close to 400 points. a gain of 389. you have the s&p indicated up by close to 85 points. if you are looking at this on a percentage basis, the biggest gainer is the nasdaq up