it's 5:00 a.m. here at cnbc global headquarters. welcome to "worldwide exchange." here's your "five@5." earnings blitz. wall street picks up the pace as tesla and ibm headline a busy week for corporate america. we have dan ives here with his take. and holding on for the longest win streak in nearly a year. activist alert.

outspoken investors making their voices heard and moving a number of stocks ahead of the open. boeing makes inroads to the month-long strike and china has another round of stimulus measures. it is21st, 2024. you are watching "worldwide exchange" here on cnbc. good monday morning. i'm frank holland. hope you had a great weekend. now it is time to get to business. taking a look. a mixed picture. the dow down fractionally. the s&p up. the nasdaq down fra fractionall. you can see the moves right here. we also want to look at the bond market with the 20-and 30-year

yields. we start with the benchmark. it ticked up a few basis points since last week. 4.11. the two-year still below 4%. the long bond at 4.41 on the yield. energy, specifically oil at a three-week low in the worst week in a year. we are seeing a bounceback. wti up 1.5%. brent crude 1.25%. we want to talk about another key commodity, gold. marching higher. another record high this morning. look year to date. gold up 32%. up over .50% right now. we have to talk about bitcoin. some people call it digital coin. up 68,000. remember, bitcoin trades around the clock. year to date up over 60%. that is the money set up. let's see how europe is getting

started as silvia amaro is in the newsroom with more. good morning. >> very good morning. always good to see you. at this stage, whetat we have seen, frank, is a muted session here in europe. to give you an idea, the stoxx 600 actually ended last week up about .6%. however, investors at this stage are trying to piece together, really, what's likely to happen in the united states as we approach the very important presidential election. on top of that, european investors are also asking questions about the detail of those chinese stimulus measures. so, when you have that context, really, what we have seen thus far is investors are very much focused on corporate earnings. this week, we will hear from deutsche bank and aberdeen and barclays and some consumer staple names. with that context in mind, let me show you how the different

sectors are trading at this stage. we are seeing pockets of green when it comes to some of those oil and gas stocks as we are tracking higher oil prices today. however, we are seeing basic resources moving higher in this session. indeed, amid the latest announcements from china of further stimulus. when it comes to the other side of the equation, let me show you the worst performing sector so far today. we are seeing a bit of pressure with insurance stocks at this stage they are down .50% after a couple of downgrades in the sector this morning. we are also seeing quite a lot of pressure when it comes to banks. a lot of pressure on european banking names as we wait to hear from the banking names really. on top of that, let's not forget we heard from ecb officials suggests the recent back-to-back cuts are unlikely to suggest anything for the coming months. so, all eyes on the upcoming conversations this week from the

imf world bank meeting to understand what's likely to happen next also for monetary policy. frank. >> silvia, we know you will have the latest. sticking with the action in china and revealing stimulus measures. eunice yoon is joining us from beijing with more on that story. eunice. >> reporter: thanks, frank. the central bank did as what people expected which is they cut lending rates, key lending rates, by 25 basis points. this was the biggest reduction on record. it was bigger than expected. so, the movement came to the lpr, loan prime rate. the one-year is the reference to household loans and corporate loans. the five-year is a reference for mortgages. standard charter said the pboc cutting this interest rate is just another signal of stronger support. they expect to see more moving

and more easing and more decisively, they said. chinese traders are also eyeing a movement on the midterm rate. a medium term rate is expected, a cut on friday. separately, several chinese companies said they were talking part in the central bank's evident to try to get more of them to buy back shares. this is a $42 billion scheme that was flagged and kicked off last week. many of them said they would be issuing and securing special loans for the share buy backs. the chinese have also called for more institutional investors to take part in the beijing stock exchange. with all this commentary and encouragement by the authorities, ubs said they would raise their outlook for china gdp for the year to 4.8% and for next year 4.5%. a lot of that is because

households and corporations will feel more confident about where the economy is going. of course, that all depends on whether or not, frank, fiscal stimulus is going to be in play, which is what many people hope we'll see in the coming weeks. >> interesting. second big bank to raise the china gdp. eunice yoon, live in beijing. great to see you. time for the check on the corporate stories and a busy morning for activist investors. we have silvana henao with those. good morning. >> good morning, frank. really busy. first up is starboard value taking a sizable stake in kenvue. starboard believes the consumer products giant has some of the best brands in the industry, but is frustrated by the relative market under performance since being spun off from johnson & johnson last year.

separately, elliott and southwest are in talks to settle their months long proxy battle to give elliott significant representation on the board of col col directors. elliott likely ending up with six or fewer spots. talks may fall apart before any deal is official. boeing reaching a new contract proposal with its striking machinist union that could put an end to the months long strike. among the terms, the new proposal includes a 35% wage increase over four years, a $7,000 sign-on bonus and guaranteed takeouts and annual bonus program. a ratification program is set for wednesday and all this as the wall street journal reports

boeing is exploring a possible sale of non-core units in an effort to boost its balance sheet. frank. >> a lot of action for boeing. shares up 3% in the pre-market. kenvue shares up 5%. >> busy monday. >> thank you. we will continue the market discussion with one-fifth of the s s&p reporting. tesla is one you need to watch. as of the friday close of the companied reported so far, 79% exceeded expectations. joining me now is kevin caron. >> good morning, frank. >> kevin, i know you are looking at earnings season. the eps outlook for q3 drops significantly from the previous

quarter. this quarter, it is about 4% with 4% refervenue growth. that is something investors should be concerned about. why is that? >> you are coming in with the multiple on stocks at 20% premium over their ten-year average. if you look at the forward looking operating for the s&p 500, the multiple is something like 22 times. if you look back over the last ten years at the same number, you get a number like 18. so, the market is anticipating growth, but as you pointed out, the growth rate is rolling over here and continue to growing at 3% or 4%, it might call into question whether the market deserves that premium. >> not the first prnerson to brg that up. our other guest said it is an opportunity. something also that's moving higher i want to talk about is the dollar. you are noting the moves on the dollar, but you are also bullish

on emerging markets. i looked up emerging market etfs. when i look at these emerging market etfs since the rate cut, they are out performing the cyclical sector as the dollar is moving higher. is that a headwind? >> what you've seen is possibly in response to what china has done in terms of their steps to ease, what you've seen is emerging markets begin to pick up. they demonstrated a little bit of relative performance imp improvement over what they have been doing the last few quarters. we want to move along with that. secondly, when you look at the dollar more broadly, gold is up 40% or something like that year over year. there is some sense that the pivot from the fed from very tight money to perhaps easier money, might be something that take a little bit of the

pressure off the upward move in the dollar. so, those are the kind of things that are likely affecting the change in the relative permanent f performance of eem. >> not concerned about this upside move for the dollar despitesupposedly going into the rate cutting cycle. if it continues to move higher, does that change your thesis on the emerging markets? >> it could pose a headwind. that would be one of the risk scenarios. it's too early at this point to say that we've entered a new bull phase for the dollar. the fundamentals simply don't support that. we're sticking with the call that emerging markets are likely going to provide some leadership here after a long period of under performance. >> another area you are looking at is fixed income. specifically mortgage-backed securities. i pulled two etfs.

i'm not saying they're your picks. two popular etfs in the space. dividend yield right around 3%. i'm looking at the yields here. it's about 3.5%. what are you seeing here that makes it more attractive than treasuries or corporate bonds? what are you seeing? >> mortgages just represent a significant portion of the u.s. bond market. i wouldn't say we're overly enthusiastic about mortgages here. they typically would be an instrument that would play out the best if you have stable interest rates and investors can pick up carry. i think that ultimately ta tactically, the more interesting things above mortgages would be a point you enter the longer end of the treasury curve. now we're moving up to 4.4%. there have been calls for higher rates here as we move into, you

know, the need for the treasury to fund itself while the fed is still not buying thereasuries. o ultimately, extending may make sense as we move along here or if the economy begins to show signs of deceleration from what has been a pretty robust economy. >> okay. so, i want to clarify. you are overweight according to the notes in mortgage backed securities and also on the 20-year. that's what you are talking about? >> yes, yes. we're going to be looking at mortgages as they relate to this. they are a large chunk of the u.s. bond market. obviously, we have to have an exposure there. the sense of some stability and interest rates would be good for that. the more interesting tactical call for us has been the extension of our duration and picking up being overweight duration on the long end of the

treasury curve. >> kevin, always great to see you. thank you very much. >> thank you. >> for more earnings season and the members playbook, head to cnbc pro at cnbc.com/pro. we have more to come on "worldwide exchange," including the one word investors need to know today, but first, we may be in the early innings of a.i. innovation. and the five stocks on dan ives watch list. and later, berkshire buys up a beaten down media name. we have a very busy hour when "worldwide exchange" continues. stay with us. personalized financial advice from ameriprise can do more than help you reach your goals. -you can make this work. -we can make this work. it can help you reach them with confidence. no wonder more than 9 out of 10 of our clients are likely to recommend us. ameriprise financial. advice worth talking about. ♪♪

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welcome back to "worldwide exchange." the growth of generative a.i. has grown in last few years with chatgpt and demgemini. how the corporate world releases artificial intelligence across the board. now with a look at the spending outlook for 2025, the chief forecastgardner. >> good morning. >> what's the catalyst? >> the catalyst is the generative a.i. we are seeing companies move back from the cost saving optimization or the upgrading they have been doing from the last 18 months.

2025, they are shifting back to growth. focus on growing business and growing revenue. they need generative a.i. and applications to do that. >> let me ask with the 9% dpro growth, how is that tied to a.i.? there are other areas where companies want to spend. >> there are other areas that companies need to spend. most of the growth in spending this year and next year is the tech sector. google, microsoft, amazon, alibaba, baidu are all building the infrastructure that will be needed for generative a.i. software companies are spending to put generative a.i. in the products and services. we start to see cios spending on that next year. we see the foundation being built. cios building it and next year and 2026 and 2027 really accelerating their growth. >> that's a long-term outlook. i want to focus on 2025 for a minute. the 14% increase in software.

that spending is the software companies spending to basically bolster products with gen a.i. or maximize with gen a.i.? >> it is all of it. there is a tremendous amount of money spent by software companies to bolster products. most do not have the capa capabilities to put the a.i. at the base of the product. they are partnering to bring in other people's models to add it to their software. the big spending is still cios getting ready for a.i. which means upgrading the systems they have and getting on the modern infrastructure and making sure the data is ready for generative a.i. where we see them failing in the proof of conscept is the data i not ready to support a.i. >> that is surprising. the data and the demands that companies want to put on the

generative a.i. programs may not be coming together in the way they hoped. the biggest area of growth, at least, with the forecast next year, is data centers. over 15%. that's not surprising. it is a slowdown from 2024. in 2024, it was 35%. next year is 15%. what does that tell us? >> it tells us the denominator is getting awfully big. we talked about the infrastructure being built out for generative a.i. that, for a great sense, is the number of servers we need. enterprises, banks, governments, retailers, they are all buying out the optimized servers. the biggest is the hyper scalers. they are trying to build out. when you think of the massive amount of money they're spending, if you think of amazon, microsoft, google, all

of the money they spent on the cpu servers from 2000 to 2026, that total number will be surpassed by how much they will spend on the a.i. optimized servers by 2026. the investment they're making is staggering. 70% growth among the hyper scalers among the servers. they are keeping up the net increase, but that is bringing down the growth rate. >> john lovelock from gartner, thank you very much for the sneak peek at forecast. >> you are welcome. coming up on "worldwide exchange," elon musk and his strategy as he rallies potential voters. we're back after this.

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welcome back. 15 days away from the u.s. presidential election and bmo is out with the playbook navigating the stocks. among the sectors highlighted. bmo says the positive outcome for a democratic majority, but not a sweep come november. with amazon and netflix with a bump with a harris win. bmo says to look to auto desk. when it comes to food and

retail, tariffs and income and tax credit policies, it will play a major role with cdollar store benefits harris and not trump. and the criticism with the election voters. we have frances rivera with more outside of the world of business. >> good morning, frank. elon musk made the promise while campaigning for president trump. the billionaire saying he would give away $1 million a day to a pennsylvania voter who signs his petition in favor of free speech and the right to bear arms. on "meet the press," josh shapiro questioned this and it is something that law enforcement take a look at. musk did not respond to the request for comment. israel launched strikes on lebanon targeting the hezbollah

financial arm. this comes after the drone crossed from lebanon toward the home of prime minister netanyahu. he was not home at the time and there were no casualties. this as u.s. officials investigate the league of the top secret documents on the israel plan to attack iran. the fall classic is going coast-to-coast. the dodgers took game six ending the mets run in the 10-5 victory. it sets a clash of the titans with the dodgers and yankees who punched their ticket saturday night against the guardians. frank, this is fun with the east coast, west coast rivalry. >> it has the shades of lakers and celtics. coming up on "worldwide exchange," wedbush's dan ives

and the five stocks to watch. watch out chatgpt. a large language uconirn is set up. and if you miss us, check us out on your favorite podcast app. much more "worldwide exchange" coming up after this. and you mi. can ai make it all work? it can. on the servicenow platform, ai transforms your entire business. because when your people work better, everything works better. so, let's get to work. idris elba works here? mm-hmm. ya, he's super nice. this is clem. clem's not a morning person. or a night person. or a...people person. but he is an "i can solve this in 4 different ways" person. and that person... is impossible to replace. you need clem. clem needs benefits.

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me is very interesting because if you remember last quarter, they missed their asure numbers. that's where a.i. feeds through. if there's another problem there, people are not going to like it. amazon's the other one because they are the biggest of the hyper scalers. i'll watch very closely what aws has to say because that is going to be a leading indicator of a problem. >> that was niles i hnvestment founder dan niles. welcome back to "worldwide exchange." i'm frank holland. hope you had a great weekend. we start with the check of the stock futures. you can see all three indices have turned red. the dow looks like it would now open down just about 50 points. the nasdaq falling the most, however, down over .25% in the

pre-market. 75 points. we want to take a look at the biggest gainers. boeing making a progress in the labor dispute with the union. shares up .50%. caterpillar up .30%. we are checking the bond market with the 20-year and 30-year hitting the high. we start with 4.11 yeield. ticking up a bit from the levels we saw last week, the long bond at 4.41% on its kwyield. energy is sitting on the lowest level since the worst in a year. the benchmark crude is up 1.3%. brent crude is less is good this morning, that's not the way you say it, but still below $75 a barrel when we are looking at oil. another key commodity is gold. hitting a fresh record.

almost up .75%. up 33% year to date as well. that's the money set up. let's get a check of the corporate stories and new moves by warren buffett and berkshire hathaway. silvana. >> good morning, frank. berkshire hathaway is increasing its stake in sirius xm buying 6 million more shares of the radio operator. it holds 110 million sirius shares. 32% of the company stock. that makes it berkshire's 15th largest position. sirius stock is down 15% for the year right now. in the pre-market, we are seeing it up slightly higher. headlines just crossing. microsoft will expand copilot c chatbot. the feature will enter a public preview phase after access was

limited to a small group of testers. microsoft is releasing features for the salesforce competitor dynamic 365. and per flexpfperplexity s fundraising talks for a valuation of $8 billion or in a push to capitalize on openai's recent investment. perplexity has had three funding rounds over the last year with the valuation hovering around the $3 billion mark. >> thank you, silvana. we kickoff earnings this week with s.a.p. after the bell today. revenues forecast to increase 9%. yesterday, dan ives out with a new note saying oracle and

s.a.p. and ibm are foundational cloud stock players that should see incremental strength from the enterprise accelerating a.i. joining me here is dan ives in studio. >> great to be here. >> let's start with s.a.p. what are you expecting for the a.i. products? >> i think they are seeing robust numbers. if you look at s.a.p., it is taking a bit of time here. they will be a foundational player. i think this is a huge step in the right direction on cloud checks strong for s.a.p. and hyper scalers. >> s.a.p. is the global leader with eap software. morgan stanley out with a note looking at that saying it might be a super cycle for that as well. s.a.p. would be a beneficiary. are you hearing the same that erp software for human resources

and manufacturing and logistics is going from on-prem to the cloud? >> 45% of the work road is moving next year. oracle and microsoft and google and amazon are huge beneficiaries. this speaks to the second derivative of the a.i. revolution. not just about nvidia. s.a.p. is joining that party. >> the cloud segment for s.a.p. what can we read from s.a.p. earnings from after the bell that gives us insight into the hyper scalers like amazon and google? >> huge barometer. that is get the popcorn out in terms what we believe we will see from microsoft and from gcp from google and amazon. hyper scalers are huge for this quarter. the barometer for this second

inning of the a.i. revolution. >> s.a.p. is forecast to see 27% growth in the cloud segment year over year. dan niles, they missed estimates on azure. is there anything else we should see with the earnings that might be a sign or concern? he mentioned amazon as a bellwether in this area. >> i think it is the opposite this quarter. the reason is the consumption model. you see what is happening with p palantir. on the consumption side, you see acceleration this quarter which bodes well not just for them, but shows about the software phase. you talk about the gartner interview. that is the next play to move out. the tech stock is up 20% next ye year? >> is the fact that they

continue to grow? the growth when comes to data centers expected to slowdown next year. >> i think slowdown, but from a stack perspective, they get more share. you look at microsoft. i think whetat we will see is beaten raises across the board on cloud. that shows the enterprises are spending more and more. $1 trillion of cap ex. if you think of the script and third derivative and the rest of tech joining the a.i. party. that's going to be what's playing out here. it starts with the hyper scalers. s.a.p. starts that party off. >> you mentioned cap ex sp spending. we saw nvidia get hit. this time around, we are looking at earnings. do they want to see another acceleration or a slowdown? >> i think they want to see

another acceleration. the last thing, if meta, that was the initial reaction. you want to see them aggressively doubling down a.i. it shows if they are seeing the actual roi, that will fuel 2025, meta is a clear beneficiary of that. >> thanks for that look ahead. dan ives from wedwbush. thank you. coming up on "worldwide exchange," warby parker with the tailwinds in focus. we're right back after this break. (vo) what does it mean to be rich? maybe rich is less about reaching a magic number...

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welcome back to "worldwide exchange." time for the morning call sheet. goldman sachs raises warby parker to a buy. there are several tailwinds. loop upgrades jd.com to a buy. time for the global briefing. the banks are lowering the one-year and five-year prime rates. this is the move by the chinese government to jump start economic growth and halt the slowing housing market. and sanofi in talks to sell opella. it is joining a number of rivals

in shedding assets. it is valued at $17 billion. opella brands include the allergy drug allegra. coming up on "worldwide exchange," the one word every investor needs to know today and over two weeks to go until election day, the race with harris and trump remains tight. our brian sullivan is in pennsylvania taking a closer look at one county that could play a pivotal role. brian, good morning. >> frank, you hear the term battleground states or swing states all the time. it is swing or battleground counts or cities. coming up after the break, we are live and we will introduce you to one othf e most important places in america and all economic stats that may ultimately turn the election. that is next right here on "worldwide exchange." it's time to simplify. waystar's technology is the way to make healthcare payments more human.

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welcome back. we have 15 days until the u.s. presidential election and bmo is out with the investor playbook marking the trump or harris presidency. one of the stocks highlighted is the energy and the lng prospect approvals. bmo focusing on baker hughes impacted, but promised to end the pause on day one. sticking with the election this week, cnbc ishitting the road

and the economic and money issues in three counties critical to the outcome of the november contest. it kicks off in erie, pennsylvania and we see brian sullivan out that that county and that county's significance. brian, good morning. >> reporter: frank, good morning. you were talking about the energy with the lng pause on the terminals. there are thousands of jobs in pennsylvania and some in erie related to energy and could benefit from the end of the pause. we will hit that all day long here on cnbc. we're certainly not here to try to figure out which way the election will go. there's a lot of more expert people on that. what we are going to do is show you some of the key places you keep hearing about and really meet some of the people in these swing towns and swing counties that may swing the election.

erie pen erie, pennsylvania, in erie county. it is a critical county. erie, pennsylvania has not only voted for every president since 1988, but it swings back and forth. it went republican and then democrat barack obama and back to trump and then back to biden. it is right down the middle with list less than 1%. the economy has changed. all day long, frank, we will tell the story. the unemployment rate and right before covid hit is the best metric. it spiked with covid. it is about 4.3%. this is, i've been here before t. is a city and county in transition from the manufacturing base. there's still a lot of that here. manufacturing base going to education and medicine. what people call eds and meds.

we will tell the story on erie and the economy and meet people that may ultimately, frank, decide the election in your home state. >> it is my home state. brian, i went to cool in pittsburgh. i'm familiar with erie, the city and county. it is more a blue collar area. income is a bit under some of the other areas out in the western part of the state and a bit less diverse. how does that play into the two different views of the nation? >> reporter: it's a great question because we actually spoke to a couple people about this exact thing yesterday just driving around talking to people. erie county, the city of erie, you know that, we are right up here against lake erie. everything is named erie. my producer and i driving around in the minivan counting signs. in the city of erie, frank, is

harris, harris, harris, trump, harris, harris, harris, trump. if you go four miles outside of the city of erie, more to the county, it is trump, trump, trump, trump, harris. the county perfectly exemplifies the makeup of the nation which is the mix of rural and city and how that vote may play out. everybody we talked to said the result will come down to one thing. that is turnout. we're here to talk about the economy and kind of figure out where erie may go to next and how people are feeling. we will be here all day long and been here a couple times before. great people. very proud. >> really interesting. one-third of the people in erie county live in the city of erie. interesting observation. brian sullivan, thank you. coming up here on "worldwide exchange," a picks and shovels

play. the industrial stock that could be in for upside despite being flat for the year. we'll show you that name coming up next.

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welcome back to "worldwide exchange." as we close in on the 6:00 hour,

here are the stories we are watching. boeing and the union offered a new contract. shares of kenvue jumping following the value has sttaken stake in the company. sources tell cnbc elliott investment and southwest are in talks to settle the proxy battle. they will drop the 12 members after gary kelly steps down next year with elliott remaining with six spots. elon musk announcing he will give $1 million every day until election day to a random registered voter who signs up for his super pac petition. and bit koichcoin prices on

new york stock exchange with grayscale among the funds to receive approval. and the federal judge granted google's request to overhaul the app store. here's what to watch this week. data on new home sales and durable goods. we are watching for the latest fed beige book. the major averages are m experiencing the strongest performance during this part of the year. let's bring in nimrit kang. >> good morning, frank. >> what is your word of the day? >> my word of the day and word fd yearof the year is resilient.

>> it has been a resilient market so far this year. one fifth of the s&p reporting. something you have been looking at in all fairness is the drop off with eps expectations from q2 to q3. what does that tell you about the earnings season overall? >> what it tell us is we are basically expecting a beat and raise earnings season. we've already seen that from the reports that have come through. the banks have done well. they guided to a muted net income expansion. we would broadly expect the rest to play out for the rest of the corporates as well. >> are you concerned about the

fact that was a double digit drop in q2? >> the companies have done a really good job guiding down expectations coming into the earnings season. we know there was a softness here in the summer months. that's one thing that's guiding. again, the reason we feel strong about the trajectory of the earnings is because we think there's a lot of underlining resilience. the gdp estimates at 3.2% based on the laatouast latest data. >> where are you seeing the tuturn around? you mentioned how resilient the markets have been. >> when we look at portfolio construction and stock selection, we focus on high quality and long term and

diversi diversification. let's double including on that and take a company like idex. they supply the picks and shovels with the highly engineered products across the markets. pumps and compressors and equipment for aeg and manufacturing and pharma for all industries. one thing is it is no secret the u.s. has lagged behind infrastructure here at home. there is a broad political consensus we need to invest in our infrastructure. if we take a little bit of a longer-term view and zoom out and get past the election uncertainty, we expect the demand to normalize and a company like idex would benefit. it has a long-term track record of allocation and management teams. that's why it's a good time to have a diversified portfolio and names like idex which are under the radar, but provide value. >> we have to get going. i want to ask quickly.

if this stock hasn't benefitted from the infrastructure from the government, what is the ca catalyst? >> we have been in a manufacturing recession for the last few years. the only sectors of the economy that have benefitted from the infrastructure investment so far are the ones that are exposed to a.i. and the chip manufacturing. >> nimrit, thank you very much. that will do it for us on "worldwide exchange." "squawk box" starts right now. good morning. boeing and machinists, the union, have reached a tentative deal that would end the month-long strike. details straight ahead. elon musk offering a $1 million to those who sign his poli politician. and act livist starboard ha

taken a stake in kenvue. it is monday, october 21st, 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 and andrew ross sorkin. >> announcer: this cnbc program it's monday morning and we are watching the u.s. equity futures. dow futures off 56 points. s&p futures are down 11. the nasdaq off by 66. it does come after the dow and s s&p closed at record highs for the year. that is the 47th for the s&p. you are talking six straight weeks of gains for the major