it is 5:00 a.m. at cnbc global headquarters. welcome to "worldwide exchange." here is your "five@5." investors taking a breather following yesterday's fed fueled rally, but one major market event could inject fresh volatility into what's been a winning week for the stock market. shares are soaring after the company names a new ceo under

john donahoe. we look at the steep recovery. shares of fedex moving the other way after cutting the full-year outlook. sales and earnings also falling short of expectations, but that's not stopping our next guest from calling it a buy right now. plus, the technical take. we see if history can teach us a lesson on where stocks go after a jumbo sized rate cut. later on, apple's iphone 16 goes on sale today around the world, but that's not stopping the competition from trying to steal the spotlight especially in one critical major market. it's friday, september 20th, 2024. you are watching "worldwide exchange" here on cnbc. good morning. happy friday. thank you for being with us.

i'm come dominic chu in for fra holland. after the fed fueled rally that pushed the dow to record highs. we are seeing losses. the dow down 16 points. s&p down 12. the nasdaq down 60. in the context of record highs. investors poured into tech stocks yesterday pushing tesla and nvidia higher by 7 and 4% respectively. now big tech this morning, you see this move. tesla off fractionally. same with nvidia, apple and meta platforms. mega cap tech or magnificent seven in key focus. we are watching shares of nike surging on news it is replacing its ceo john donahoe with former nike executive elliott hill. we'll have much more on that story throughout the course of the hour. of course, there's fedex

getting hit hard after cutting the full-year outlook and posting lower profit and revenue for the recent quarter. fedex shares down 15%. in the pbond market, the two-year note yield drifting to 3.75%. the ten-year yield at 3.70%. the yield curve is moving lower in today's session versus yesterday. busy day shaping up around the world with two more central bank decisions and asia coming off a banner day. karen tso in our london newsroom with more. >> dom, good morning. the fed bought on the cover, but china has kept the benchmark rate unchanged after the fed cut

this week. series of weaker data prints had markets pricing in from beijing as they look to recover from the sl sluggish economy. the bank of japan kept rates on hold at 0.25%. that was expected as it comes as the central bank is looking to monetary policy without upsetting markets or the economy. lessons learned after unwinding in the yen carry trade prompting a selloff. you see a firmer day trade with the nikkei popping 1.5%. else where, we were on the back foot from the onset, but negative news flow in corporate europe. the ftse is down with bigger losses in the german stock market. it was at a record yesterday and got through 19,000 points, but today, we are giving back that territory. french stocks on the back foot with the luxury downgrades in

target prices this morning. italian stock market more contained with the losses. let's look at sectors. you can see what's moving. autos with the disappointment in the sector. technology with the concerns of chinese sales and restrictions impacting asml. household goods is the luxury story i'm talking about. the cyclical disappointment thanks to the chinese central bank not doing enough. mercedes-benz cutting youtlook for the second time and the slow real estate sector. german automakers see seeing add return 7.5% to 8.5%. dom, concerns you are seeing in the autos in the united states. same story, with weaker sales in the european markets. back to you. >> karen tso with the global trade. thank you. time for the big money

movers. three stock stories of the morning. as we mentioned a moment ago. shares of nike popping in the pre-market. ni nike announcing john donahoe stepping down and elliott hill coming out of retirement to take the helm effective october 13th. in a statement, donahoe said it became clear now was the time to make a leadership change. shares of fedex sinking after lowering the full-year sales forecast and missing wall street for the first quarter profit. fedex says results were dragged down by weaker demand particularly in the u.s. domestic package market. shares of lennar fall despite the recent quarter and laying out what it expects to be strong demand for home buyers in the months ahead. shares may be down this morning, but it did close at an all-time high yesterday. 2.5% decline is not so terrible for lennar. investors are taking a breather today, like lennar,

following the fed fueled rally with the s&p and dow hit fresh record highs and the russell 2000 is up for seven straight days. its longest winning streak since 2021. it is a triple witching day, so to speak, more than $5 trillion of options on the table today. joining me now is lizzie evans at evans may wealth and forbes next generation and top women wealth advisor in the state of indiana. can you tell us your thoughts on what the fed did and how it impacting your clients? >> good morning, dom. the 4550-basis point rate cut o wednesday did not concern us in any way. if you look at the fed

commentary had they seen the july employment report prior to the july meeting, they might have cut in july. we view this cut as a 25-basis point catch up from july and 25-basis points from september. this 50-basis point cut bodes well for risk assets and could be the next leg up in equity markets which is what we saw yesterday. >> the leadership yesterday was where it has been for years at this point. investors just seem to have the muscle memory to pour into technology stocks. there is still a broadening out theme that has been happening or pitched by a lot of advisors out there. it is the leadership from the mag seven times or will this prevail this time around? >> the broadening out trade is encouraging from a broader macro market standpoint. we believe the mega cap tech will continue to be leadership going forward. we are in an era of disruption

and innovation. i believe that we're still early or middle innings in ya.i. the mega cap tech firms have the ability to invest. we believe it is a winner take most environment. you see the russell pop the last seven days, that index is still well behind the s&p and nasdaq. we think mega cap tech will lead going forward. >> lizezie, we have seen the broadening out trade . it is also more sensitive to the economic cycles. does this rate cutting regime that we may be entering bode well for that small-cap trade and is there still room to run? >> it's a great question. i think certainly a 50-basis point rate cut helps the companies that need the rate

cuts the most. you have seen the russell 2000 in pop in anticipation in how lower interest rates will work its way into earnings. as we no frknow from higher int rates, it takes time to work its way in. it is important to remember that the russell 2000 is made up of 1800 stocks. if you look at the average small-cap stock over the last two years, it has negative earnings growth and unprofitable. especially in small cap, you want to be selective of which companies you are owning in that index. >> all right. lizzie evans, thank you. a lot more to come on "worldwide exchange," and including the one word that investors need to know today, but first, more on the big money movers and our next guest sees the rocky report as a upon buying opportunity. plus, apple's biggest

chinese rival with the big sale of its own. later on, the technical tape on where stocks go after the supersized fed rate cuts. katie stockton says it may be time to get more defensive. a very busy hour still ahead when "worldwide exchange" returns after this commercial break.

welcome back. time now for one of the big

money movers. fedex shares falling to the tune of 13% as they missed the forecast and expects sales growth in the low single digit percentage range as the demand is muted. for more, let's bring in david vernon for transportations at bernstein. david, thank you for joining us this morning. take us through the reaction and whether or not it is too much or too little given the story you heard from fedex yesterday. >> sure. thanks for having me. i think the reaction is a little bit overdone. they did bring down the full-year guidance by 2% to 3%. the first quarter is really, really weak. not a lot to be happy about in the results. we read this as a delay in the structure cost takeover. in the cyclical quarter with the

contractary territory in the last 13 months. shipping is having a negative impact on yield. that is below what we consider to be seasonality. second quarter is on the softer side with the earnings building throughout the year. as you get in the back half of the year and the cost takeouts, we should be past this cyclical or weaker cost period and you get back to track on earnings. they are bringing down in the first half. they remain optimistic to catch up on the cost takeouts. we would be buying any weakness, especially if it is down as much as it is indicating in the pre-market here. >> you know, david, one of the things in the past that has been a concern or focal point for investors with the fedex story is the product mix and growth mix between ground and between express and between certain key parts of the logistics operating

system. you have heard anything that makes you concerned? i know you say buy the dip and use the opportunity. do you think the mix is proper with what you see in fedex? >> mix is always difficult with the model of companies. what you are seeing now is where we are in the cycle and where we are in the structural changes in mix. i think it is more cyclical than structural especially with the shippers pulling freight out of the priority service and economy service. that happens in periods of economic weakness with not as much inventory and you are not willing to pay up for the speedy offering. as we get past this period of time and you see the impact of the fed and easing cycle spurring economic activity, you will see some of that pressure on trading down move away. now the company is also going through this effort to integrate the express and ground

operations to make them less exposed to the tradedowns. that has a cost structure that is really sensitive to trade downs. once they get past that in the next couple years, you will be in a much more resilient place. i would say overall, if you are thinking about this as a business you want to invest in, the multiple now is not priced to perfection. i think the stock has been doing pretty well among transports. it will continue to do well because it has the structural cost story and not aggressively priced in the marketplace and should benefit out of the doldrums. >> david, i like to get your take quickly. when it comes to fedex or u.p.s. and u.p.s. has been a laggard for so long versus fedex. >> sure. i think both of these stocks have been suffering from a lot of different factors. i think with this move lower right now, you know, you are

looking at an opportunity inside of fedex that probably doesn't last that long. it's a shorter-term trade opportunity. both companies are levered to the same idea. will u.p.s. and fedex be leveraged on the pricing side? we heard from the company that they are matching u.p.s. on surcharges and they will continue to push on prices to lever to extract the value they need from the shippers that are willing to pay for their services. i think that same core thesis is there. investors it will be more a tr tracked to fedex. >> david vernon, thank you very much. have a nice weekend. >> thank you. speaking of u.p.s., we have a market flash. they are telling cnbc they are planning to hire 125,000 seasonal workers. that is up over the past six

years. u.p.s. expects to see the highest level of hiring in the atlanta region and louisville and dallas and denver areas as well. u.p.s. shares down 2.5%. still ahead on "worldwide exchange," a smartphone showdown as the iphone 16 hits store shelves today, but that's not stopping one big chinese rival from trying to steal the spotlight. double live coverage coming up from beijing to new york to where you see a line down the plok. this is live in new york city from apple's fthif avenue flagship store. we have much more ahead when "worldwide exchange" returns after this. le tenni pickle! yeah, aw! whoo! ♪♪ these guys are intense. we got nothing to worry about. with e*trade from morgan stanley, we're ready for whatever gets served up. dude, you gotta work on your trash talk. i'd rather work on saving for retirement. or college, since you like to get schooled. that's a pretty good burn, right? got him. good game.

thanks for coming to our clinic, first one's free.

welcome back to "worldwide exchange." apple releases the latest iphones and airpods around the world, but huawei wants to share the spot llight on its phone. we have steve kovach is live from the apple store in manhattan, new york city, before doors open at 8:00 a.m. eastern time. then our eunice yoon is at a huawei store in beijing. now, steve, we're going to start with you because we are very interested in how this juxtaposition works. you are closer by.

steve, take it away. >> reporter: dom rjs, just acro the river from you at the fifth avenue apple store. people are lining up for the phone, but this is coming at a time of uncertain demand for the lineup of phones. monday, we woke up to a slew of analyst notes that sent the stock down with pre-order times shorter than years before. that was a signal that the phone might not be selling as well. then, yesterday, we saw the stock go up nearly 4% on just off comments from one carrier. ceo of t-mobile said sales are better than last year. that is one positive data point there so long with the market rally yesterday with the shares surge. so far, the reviews have been quite good with the iphones. obviously, so much of the focus is on artificial intelligence. you can see behind me the apple store is glowing. that is a reference to the slogan it's glow time which is how they are updating siri to

the version of artificial intelligence. it tells a different story, dom, because they're marketing this phone heavily of artificial intelligence features that aren't going to launch with the phone. people in line today buying a new iphone will not have the artificial intelligence features promoted heavily. i talked to one guy third or fourth in line here. he is a photographer. he said i'm not pewibuying the e with the nice upgrades for the future, but for the camera. >> we have a lot of things in play with huawei as well around the world where huawei is offering its smcustomers its latest iphone. it is a triphone. eunice, let's talk to the point of the apple phone versus hauha

huawei. what are you seeing? >> reporter: dom, the timing of the rollout hasn't been lost on huawei fans or apple fans. the mate xt is a tablet and phone. once you touch the screen, you are able to roll around and open several windows. in terms of weight, it is heavier than the iphone pro max. behind me is an apple store which is one of the many where people have been lining up since the early morning to be able to get their hands on the iphone 16. one person we spoke to who was there since 5:30 in the morning said they were really excited about the iphone 16 although there were not a.i. functions included. people were talking also about the scalpers outside of the stores. scalpers kept coming up to people trying to buy the pro max

for about $70 more for a black or white one or more for the desert and titanium. this doesn't mean that apple doesn't have competition here. one is the a.i. issue still not proved by chinese regulators and it does have competition from huawei. in fact, huawei said on its web site it has 6.8 million pre-orders. one of the complaints with the huawei folks is that the fans is that you could put in the pre-order, but, dom, you wouldn't be able to get the actual phone unless you got a confirmation text. the company has not confirmed how many phones have been sold today. >> eunice, before we get back to steve here, the competitive dynamic not lost on us here or viewers.

those listening on xm, eunice's shot is in a huawei store that looks exactly like an apple store and she is right across the street from an apple store. how is that playing on consumers on the ground in china, eunice? >> reporter: apple has been losing market share. last quarter, 14% market share. that is actually down from the previous year. a lot of it is because of the chinese competitors. not only huawei, but others which are lowered price. we were talking to several this morning and they were saying they still have a lot of faith in apple. i thought it was interesting that people were confident in apple and artificial

intelligence would come to china next year. that's their hope. >> eunice, that sums it up for the dynamic. steve, i would like to end with you because i'm in the u.s. market. i have a work and personal phone. some one is an iphone 11 and one is an iphone 12. i'm not an early adopter. should i go out and get this phone and why? >> reporter: that's the question i get the most. my answer is the same. not really. if you bought a phone a year ago or two years ago, you will be okay. based on the reviews of the iphone 16, you will not notice a massive difference. you have an iphone 11. that is many years old. five or six generations hundred

t behind the phone now. you will notice the camera and screen and battery life. that will be better. this is the story of the iphone for the last several years. incremental upgrades year over year and doesn't justify an upgrade. it does fooleel like an upgrade you five four or five years, dom. >> one last question, steve, before we let you go. i know it is early and you have other things to do. how is this line waiting for the apple store on fifth avenue compared to other launches you have seen as well? >> reporter: you know, i was curious about that, too. i got here about 20 or 30 minutes ago before 5:00 a.m. what apple usually does is they line people up on the side of the building down 58th street. not as many people as last year. that doesn't mean people won't still show up. people can still show up. we will also see another group

that swill show up. i expected to see more people to show up. it does look a little bit thinner, i guess, than this time last year. i haven't gone out and counted people. it is really hard to use it as a justification for demand. >> steve will do the channel checks this morning. thank you, steve. as we head to break, we're watching shares of scraskechers coming off the worst day since february. shares are up fractionally today. we'll be right back after this. . today's challenge is to play 9 holes without the middle of your bag. how does that sound? that sounds terrible. ♪♪ ♪♪ ♪♪ ♪♪

why choose a mobile network built for places you'll probably never be... ...instead of for where you are most of the time? xfinity mobile was designed for where you need it most. xfinity internet customers, ask how to get a free 5g phone and a second unlimited line free for a year.

over the last four years, we've grown. we've grown from $39 billion to $52 billion. 39 to 52. we have been growing the last four years. growth has andn't been the issu. what's driven that growth is characterize iterative innovation. >> that was outgoing ceo john donahoe speaking with cnbc in april. the stock is down 11% since

those comments and now donahoe is being shown the door, so to speak. welcome back to "worldwide exchange." i'm dominic chu in for frank holland. we'll have more on that story coming up this half hour. first, the check of the u.s. equity futures are the dow and s&p coming off record rallies and fresh all-time highs. you see the dow industrials are down marginally implied at the open 11 points. s&p down 12 points. tech heavy nasdaq down 7. a modest pull back from yesterday's session. we are watching small caps as well with the russell 2000 index. russell futures down fractionally as well. we'll keep an eye if that trade has more legs. two sectors to watch ahead of the opening bell. industrials and materials. both sectors sitting at all-time highs. over the course of the month-to-date period, just about

2% for the industrials and materials up fractionally as well. keep an eye on the industrials and materials. on the bond market side of things, we are watching yields ticking lower across the curve. ten-year note at 3.711%. the 30-year long bond at 40.036%. let's get a check of the top corporate stories with silvana henao. silvana. >> good morning, dom. we will start with macy's which plans to hire more than 31,000 full and part-time employees for the holidays. that is fewer than last year as the department store gears up for a busy season. retailers are expected to hire fewer people this year and that's due to a softer labor market and with consumers

tightening their belts heading into the crucial shopping period which accounts for more than half of the store's revenue. the largest port on the u.s. east coast are preparing for what could be the first union strike since 1977. the port of new york and new jersey executives telling cnbc they're preparing for a complete work stoppage by the international longshoreman's assoc association. the largest union in north america. it represents 85,000 port workers and a strike would shutdown five of the ten busiest ports in north america and a total of 36 ports along the east and gulf coast. close to half of all monthly u.s. imt ports would be impacte impacting billions of trade. and former president trump speaking in new york saying he wants to impose a temporary cap

on credit card interest rates saying it will help working americans to catch up. the average interest rate on cards was 21.5% as of may of 2024. that is according to data from the federal reserve. that is around the highest levels in at least a decade. dom, credit card interest rates haven't fallen below 10% since 1994. >> that is crazy how much the levels are at this point. >> they are. i have seen so much higher than 21.5%. that's the average. >> you wonder how the consumer play was the interest rate cuts. silvana henao, thank you very much. turning to shares of nike. they're surging right now ahead of the opening bell after the company announced ceo john donahoe is stepping down and former company executive elliott hill coming out of retirement to take the helm at the dow component. since joining the company back in january of 2020, it has been a roller coaster ride for shares

under donahoe's leadership despite him leading the company to the first ever $51 billion sales year back in fiscal year 2023. this chart, however, you see there, the stock is down some 25% without today's pre-market pop and has been ceding shares on federer's brand. hill will take over with the base salary of $1.5 million. donahoe will remain on through january as an adviser. joining me now is stacey widlitz. stacey, thank you for joining me. talk about the exit of donahoe and entrance of dom. you know, obviously, a change was expected.

it was down high single digits. a shakeup was absolutely expected. it's great news they're bringing back somebody with a 32-year track record at nike. somebody who is really well liked and in tune with the brand and business and how to bring back innovation. obviously, donjohn donahoe was about digital. in the process, what happened is they turned their backs on the whol whol whol wholesalers. that was a mistake. it is an issue to build those relationships back. as they have been focusing on higher margin dtc, last quarter, that business was down high single digits and margins were down. so, we need a breath of fresh air and most important, we need innovation to start competing with the competitors that you just mentioned. >> so those competitors in the landscape has been competitive for years.

i remember nike and reebok and nike versus adidas. those are still in play now. whe what can nike tap into some of the dpglory days and translate that into the quarters ahead? >> dom, this road is going to be tougher. as you said, in the old days, you compete against adidas and battling for market share. not only has adidas upped its game in a big way being up double digits last quarter, you have all of the new guys gained shelf space. the opportunity is what the other guys have done well is blur sport and lifestyle. i think nike, self admittedly, really didn't do a good job. it is about building that pipeline back up and building those relationships again with wh

wholesale to be front and center. they struggled with the newer, shiny brands on the block and they have to win that back. >> you mentioned the wholesale side of things. a lot of the nike bullishness over of the last couple years is the dtc or direct-to-consumer growth directly to customers. there's the foot lockers and everybody else who sells to retailers to retail customers. what's the business dynamic look for them? dtc both with wholesale? >> it has to be both. i think what has happened is most of the brands in the perfect world, you want to sell direct and cut out the middle man. you can't do that. you need the wholesalers. you need wholesalers some of the best product. it can't just be the basics and

they can't save all of the good stuff for dtc. i think that dynamic needs to change. dom, you talked about skechers and china is a problem for them. i have a lot of companies looking at china not coming back for several years at this point. that is going to be a drag and that's another set of issues in addition to bringing back innovation. >> all right. the story on nike. stacey, thank you very much. coming up on the show, hitting the skids. trouble in theor's wld largest car market. speaking of -- spelling trouble for one major automaker. shares are sinking. we are back with that story after this. but he is an "i cve this in 4 different ways" person. and that person... is impossible to replace. you need clem. clem needs benefits. work with principal so we can help you help clem with a retirement and benefits plan that's right for him.

let our expertise round out yours.

welcome back. time for the global briefing. nikkei rising 1.5% today after the bank of japan keeps interest rates unchanged. the move was expected and the boj is staying up beat on the view of consumption. the bank of japan governor says they will continue to raise rates if the economy stays in line with projections. china central bank defying rate cuts. market watchers believe more stimulus measures are coming to prop up the struggling economy as the fed easing this week may give beijing the leeway to

loosen monetary policy. and shares of mercedes-benz are down after cutting guidance. other european carmakers are falling with volkswagen and bmw which last week warned muted demand in china was hurting its sales. a market flash from bank of america with berkshire selling more of b of a. it continues there. still ahead on the show, the technical take. we see if history can teach us a lesson of where stocks go after the jumbo sized rate cut. we'll be back after this.

introducing the second chance offer from betmgm. what'd he say? if you bet on a player to score the first touchdown and instead he scores the second? boom! you get your money back - in cash. straight cash? second chance, you heard? what if my guy fumbles, and some other guy scores first? second chance. what if you need a second chance to land on the field? this offer only applies to touchdowns. you alright? i hurt my spleen! get the second chance offer from betmgm. the sportsbook born in vegas.

welcome back. two days removed from the jumbo interest rate cut. stocks taking a breather after shooting up to record highs. now that the dust has settled, what should the market expect? let's get the technical take with katie stockton at fairlead strategies and cnbc contributor and portfolio manager for her firm's fairlead etf. katie, good morning on this friday. can you take us through what the

charts look like and what history tells us about the markets after the fed jumbo rate cut? >> we do have all-time highs on the back of the rate cut. if you look at the history, over the past of the eight instances, it tends to be more bearish than not. if you look at the instances, six of the eight end in recession. sort of varying degrees of lead time and also they also reported in a corrected phase or bear market cycle for the s&p 500. there is, of course, that risk overhanging the market right now even though we have new highs. now, we looked at the bigger rate cuts of 50 basis points and those were associated with the bear market cycles that launched around 2000 and 2007 in addition

to the covid corrective low. so, of course, those ended up showing bearish returns over one, three and six-month time fraims. there is some risk here in our see breakouts typically. we like to ensure any foldouts here are confirmed. we want to see the s&p 500 hang on to these new highs. we want to see stocks that have cleared resistance levels to hang above the resistence levels. >> katie, we have spoken numbness times you have become more conservative. is there anything that would change that particular view? what exactly happens in your mind that would take us to those kind of more optimistic levels that you might see? >> listen, it's an exercise in

frustration. we wait for the breakouts. the breakouts to us do typically overrule signs of upside exha exhaustion. those are more short-term in nature. we also have signs of long-term upside exhaustion that would not be called by a breakout of the s&p 500. for the s&p 500, if it continues to hold 5,670 level which is the final resistance on the chart, we would like to see that. that would be a bullish short-term development. it wouldn't do much to improve the long-term sell signals we have. those led us to a neutral long time buy in august. we still feel comfortable with that bias.

>> katie stockton with the chart watch. thank you very much. s have a nice weekend. >> of course. coming up on the show, after the 50-basis point cut, tee ba iinnsdetes happening over wh the fed's next word of the day will be. stick with recalibration or stick with recession. we'll be right back after this. did you ever worry we wouldn't get to enjoy this? [jeff laughs maniacally] (inner monologue) seriously, i'm on the green

and all i can think about is all the green i'm spending on 3 kids in college. with empower, i get all of my financial questions answered. so i don't have to worry. empower. what's next. ryan t. writes, "moving is stressful. can you help me take one thing off of my to do list?” ugh, moving's the worst. with xfinity, you can transfer your internet in just a few taps. just a few easy moves. did somebody say “easy moves”? ♪ ♪ oh no. no, i was talking about moving your internet. this will move the internet. ♪ ♪ ooh, ooh. -let's keep it professional.

professional dancers! -ok! stay connected during your move with the best in home wifi. easily transfer your services in the xfinity app. bring on the good stuff.

welcome back to "worldwide exchange." markets are looking to build on the rally to record highs. let's bring in sam stovall at cfra. sam, you have been doing this a long time. is this different? >> good morning, cdominic. certainly that is the debate now. was the cut truly a recalibration or simply to ward off or smooth the possible recession down the road. i think we'll find in the near term that wanting is more profitable than having because the s&p gained typically 18% from the first rate hike to the first rate cut. this time around was 23%. the following one month and six months, we were looking at returns that were anemic less than 3%. >> sam, it kind of follows very

recent precedent. we talked on this show in the last few weeks about the notion that when the ecb cut its rates back in june, we did see some slowing momentum in the european market as well. what do we think is going to happen for the balance of the year given what we see as the start of the regime change in lowering interest rates? >> sure. i think we're not out of the woods yet in terms of seasonality. september and october are the worst months in an election year whereas august is the worst month in other years. we could still see volatility today with the triple witching next week and as we head into october which is about 35% more volatile than the other 11 months of the year. yet, once we see the lifting of the uncertainty around the election, november and december,

all sizes, styles, sectors and 97% of the sub industries in the s&p 1500 have posted advances. i think a little buit of cautio right now, but end of year rally as is typically seen. >> sam, because of that, let's get into the picks you have. what sectors do you like and which do you stay away from and are there any particular companies that you think will benefit? >> sure. we look 12 months down the road. cfra equity analysts are not looking 12 days or 12 weeks, but rather a full year down the road. we believe that because of the multiple rate cuts that we're likely to see over the next year and a half, that we're probably going to see rotation away from the defensives in the beginning of next year toward more of the leaders that we saw earlier this year. so, communication services,

financials, technology are our favorite sectors at this point in terms of individual companies with t-mobile usa is one we favor because it continues to take market share from its peers. we also like kkr. recently upgraded them to a strong buy because the rates will help the ipo market. la lastly, microsoft should benefit in the a.i. space. >> sam stovall, thank you very much. see you soon. "squawk box" starts right now. maybe good morning. i'll say that first. maybe not unexpectedly. stock futures are a little bit lower. we had gains across the board in yesterday's session and around the world. down in the s&p closing at record highs. we'll show you what's moving ri right now. shakeup at nike. replacing ceo john donahoe. and sluggish demand in china

and including footwear makers like skechers and automaker mercedes-benz. it's friday, september 20th, 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 on assignment this morning. let's take a look at the u.s. equity futures at this hour. you see a little bit of a pull back. the dow went positive. it is up close to two points. s&p futures off 13. the nasdaq indicated down by close to 75. that does come after gains for the major averages. the dow was up by 1.25%.

th