it's 5:00 a.m. here at cnbc global headquarters. welcome to "worldwide exchange." here's your "five@5." split decision. nasdaq sits near record levels with the dow at the losing streak. futures are big. so is bitcoin by the way surging to the record high crossing the $106,000 level for the first time ever. the big event. jay powell and the central bank looking for the last event of the year as one watcher says get

ready for a policy 180. plus, tim cook makes the trip to mar-a-lago as tech titans make the case for tech. it is monday, december 16th, 2024. you are watching "worldwide exchange" here on cnbc. ♪ good morning. thank you for being with us. i'm dominic chu in for frank holland. let's kick off the morning with the nasdaq looking to open at a record high while the dow tries to snap the long of the losing streak since 2020. futures are showing a nice modest upside up 20 points for the dow. implied higher for the s&p and

nasdaq up 56 points. big moves in bitcoin crossing the $106,000 level and hitting a new all-time high. checking on the bond market. wild moves in the ten-year. continuing rising 24 basis points last week alone. its biggest one-week jump so far this year alone. yields are moving slightly to the down side here. 4.83% right now. we'll keep an eye on the ten-year treasury note. we've got a very busy week shaping up in had europe and asia. let's get to the trade in europe with silvia amaro. >> good morning, dom. so far, it hasn't been a good start to the trading week for global equities, for several global equities. over in asia, the hang seng or

shenzhen compose it. both ended the day as chinese retail sales missed expectations in november in the sign of weak domestic demand which is keeping pressure on china. there was some industrial production beating forecast. over in south korea, the parliament has impeached the president after yoon's martial law declaration. he has been removed from state duties. in europe, we are seeing a little bit of weakness to start this trading day across european bourses. looking at the cac 40, we are down .60% after moody's downgraded their evaluation on the french economy citing the political turmoil we have seen recently and the credit rating agency saying they doubt the next government will manage to significantly correct the country's finances.

let's see what's going to happen over in france. more broadly speaking, this is a very busy week on central bank policy, dom, let's see how that impacts the investment community. >> silvia amaro with the latest on the european update. thank you very much. here, a number of stocks are on the move ahead of the opening. shares of palantir and micro strategy and axon are moving higher. they will join the nasdaq next week along with the qqq trust which tracks the nasdaq 100 and has more than $300 billion in assets for the fund alone. nasdaq says illumina and super micro and moderna will be removed on december 23rd. watching shares of broadcom after the monster day on friday, it's best day ever, closing up

24% and joining the $1 trillion market cap club. shares are trying to fall a bit. up 1% in the extended trade. reports that super micron has brought on evercore for capital. it is weighing a private investment in pipe and talking with pe terms to gauge try. shares of super micro are at an all-time high and on the brink of the possible nasdaq delisting. this had morning, shares are down by 11% in a volatile trade. let's get to the top stories with pippa stevens. >> good morning, dom. apple is preparing for a change on the iphone line up with thinner phones and two foldable devices. the first will be intended to serve as a laptop and a screen

with 19-inch display fully open and the smaller model similar to the apple 16. speaking of apple, tim cook was in florida with donald trump. the get together coming a day after the face-to-face with sundar pichai at his mar-a-lago resort. companies and executives, including jeff bezos and sam altman and mark zuckerberg have been cozying up to the administration in recent weeks with pledging $1 million donations to the trump inauguration fund. the ft has informed nippon steel that it has not come to a con clusion of $14 billion takeover of u.s. steel. treasury leads the foreign investment on the u.s. wrote to both companies saturday saying the nine agencies on the panel

are struggling to reach consensus. the deadline is december 22nd. dom, lots of twists and turns in that case. >> pippa, thank you very much. see you later on. this is a week chock full of actions from the fed and bang of england, the bank of japan, sweden and norway as well. the fed leads the pack with the decision and chairman jay powell's news conference on wednesday. the markets are pricing in a nearly 100% chance of a quarter-percentage rate cut at this meeting. investors are not sure how rates will fall next year with the plan on tax cuts and tariffs could spark a rise in inflation. in a note this weekend, apollo's torsten writes toward a rebound in 2025 and the odds are rising the fed may have to hike rates

at some point next year. joining me now is paul christopher, head of global strategy at wells fargo institute. paul, how can they be raising rates if the predominant regime is to lower them over the course of the medium term to longer term? >> the idea of raising rates, dominic, is a bridge too far t the moment. it is true the economy is stronger coming into the year than previously thought and inflation will hover 2.5% to 3%. that is not bad. the fed was letting rates stay too high for too long. >> if that's the case, how much is this market going to have to be dependent in some way on interest rate cuts? we know the markets feel the

incoming trump administration is going to be more business and economy friendly. that's part of the reason we see risk assets do so well. what exactly then derails that or does the fed need to be an active participant for the economy to do well? >> the fed has a lot to watch next year and in many ways they are going to be like us watching to see what policies get implemented with what timing. that's important. they could have tiered tariffs or phased-in tariffs. those might not hit the economy until late in the year. that could be a net positive for policy on the year. chairman powell, like the rest of us, are watching to see what develops. for the economy, that's a sure bet. we see that strength endure and as rates come down already, that should help those consumers,

low-income consumers, small businesses and manufacturing that have been the laggard so far so broadening the economy and broadening recovery and broadening growth should be good for stocks through next year. >> paul, broadening economy is a good thing. a broadening market is also arguably a good thing as well. does that trend continue? do you think we see and continue to see other stocks behind, besides mega cap technology take a modest leadership role? >> yes, that's a great question. we do expect cyclicals to play more of a role. cyclicals of the market that are most closely tied to the market improvement. as that happens, we like industrials. we are already positioned there. we like energy. we like s positioned. we have taken a position in improvement there. better growth there.

if information technology does make a pull back, we would be interested there as well. again, the focus is going to be on the broadening economy and broadening market as you say to include cyclicals for next year. i should mention small caps. as the economy broadens, we should expect small caps to do better than they have already. >> possible leadership afoot in 2025. paul christopher of wells fargo. thank you. >> thank you. more ahead on "worldwide exchange," and including why jeff kilburg is adding in the market to paul's point. the names on his radar are coming up. first, it's battleground adobe and the stock down more than 22% this year, but wall street is holding out hope for better days ahead. we debate that. plus, ahead of the critical week for retail. we speak with bill simon on the state of the american consumer. later on, sam altman says he is not worried, but reports

otherwise for the future of chatgpt's parent company openai. we have a very busy urho still ahead when "worldwide exchange" returns after this commercial break. (♪♪) (♪♪) (♪♪) everyone has goals and dreams. and everyone deserves a way to get there. wherever you're going, getting there starts here.

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welcome back to "worldwide exchange." watching shares of adobe right now ahead of the opening bell. that stock is sinking more than 15% last week after the worst two day stretch in two years.

wednesday on the first quarter sales guide. shares are down fractionally in the pre-market so far. the second worst performer in the s&p 500 last week and down 22% as you can see on a year to date basis. the street is holding out hope. some 68% of nalysts are maintaining a buy. compared to the current trade of $465.69. joining me is the managing director of north america tech at key bank. one of the sell shares and derrick yan at kraneshares. the ticker agix. adobe is the tenth largest holding of that fund. gentlemen, thank you both for being here with us. let's start with the bullishder

you, on why this dip may be worth buying. >> thank you for having me. i think investors are patient here. a.i. is a long-term catalyst for adobe's success in the future. first of all, adobe's software is complicated. imagine now you have a.i. agent for every user. that can learn how to use adobe software more quickly. that's really a game changer. you have to spend hours to watch youtube tutorials. second thing is like the a.i. category is improving the user engagement just like the a.i. tour of adobe has generated 16 billion images since launch. that's a great productivity and

using the engagement improvement. we have seen adobe successful of the adopt first and monetize later strategy. just like the pdf market. we believe that with the higher use base and this higher cost, adobe can really successfully monetize at a later stage. >> we're showing signs or images right now of this kind of adobe firefly product, generative a.i. product in action. jackson, why is it that adobe has not been able to ride the a.i. wave that anybody seemingly putting a.i. in their marketing materials or investment materials or otherwise, gets the pop they all get from a.i. these days? >> it's interesting. i think it probably comesmoneti. what derek said about 16 billion images and the company said

about generating 16 billion images. that's wonderful, but i have no context for that. 16 billion sounds like a lot, but i'm not sure if that is a lot relative in internal expectations for the usage and adoption of the products. what's clear is that there's real hesitancy for adobe to actually start charging people money to turn on the credit limits so that people will start paying for firefly in earnest. that's what i think is causing some of the struggles with artificial intelligence. investors are looking at adobe and it seems they are a little bit worried to start charging people money to use the products. they might be concerned about the durability of that demand after the fact. >> all right. so, right now we've got an interesting divergence happening. as i pointed out, we have the

majority of nalysts on wall street, jackson, not in your camp right now. if you take a look at the bullish and bearish argument, we put a graphic together for that. if you look at some of these just notes that have come out, some of the comments from stifel. adobe serves has an opportunity to regain investor confidence. mizuho, a.i. monetization is under pressured by the street. piper sandler, bullish on the opportunity. d.a. davidson. clearly, naturally and well positioned in the emerging a.i. ml realm. what the bulls are saying. jackson, are those things seem like they could be very much in play? but why do you maintain that under perform or sell rating on

the stock? >> yeah, just start. adobe is a wonderful company. they're growing nearly double digits and have margins approaching 46%. it is a fantastic business. if you want to belong-term positive, i can understand why you want to. i think in the short run, some of the concerns we have about certainly what we mentioned earlier about ing artificial intelligence. that can seems to be getting kicked down the road a little bit which is again not a trend we really like to see. the other thing is adobe has been driving pricing changes in their core products for the last couple ever years. it's really helped their growth. we think going forward in the next two to three years, either they're, a, willingness, or, b driving the cloud is going to

stunt their growth relative to what it was two or three careers ago. it also doesn't help margin expansion when you are not raising prices the way you were the last couple years. the other thing is i know adobe at least on valuation, on a valuation framework looks pretty attractive relative to its peers or relative to its history. however, this company now is growing high single digits. the creative cloud is expected to exit 2025 7% or 8%. this compares two or three years ago when it was growing 20%. i know it looks relatively attractive on the historical basis and relative to peers, but it's a different growth profile today than it has been for a long time. >> derek, this is the last word to you. you are an owner of this. it is a top ten holding. are you buying more of it?

would you like to see this stock go higher and , if so, what catalyzes it? >> i think it is making a great opportunity to buy more. i think this adopt first and monetize later strategy is working like any software company when they are building their network and building their switching costs and users really are engaged and they have gained a lot of productivity. just look what happened with the generative field. those users will stay here and they are waiting to pay more money down the road. i think a lot of analysts worry about competitors from the a.i. world. the openai and those companies. we see there's a strong mode for adobe here because they have been integrating a.i. into the

existing work flow for many content creators. that's very important working the marketing department of any company. you know how it works. you really have to create content on the company guidance and make it brand consistency. most importantly, adobe train firefly model with existing adobe stock images and license the open sources. that is critical for the user to generate content that's ready for commercial use safely. so, that's why we have a holding in the etf. we believe a.i. integration is a key for adobe's long-term sustainable success. >> it is all about brand safety and safety for corporate clients. jackson and derek, thank you very much. we will have a great discussion throughout the day. rjs ahead on "worldwide

exchange," drone watch and lawmakers looking for the full story. more when "worldwide exchange" returns after this. ♪ ♪ ♪

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welcome back to "worldwide exchange." let's get a check of the morning's top headlines. frances rivera is in new york with the latest. >> good morning, dom. good monday morning to you. the fight to extradite luigi mangione is intensifying. the grand jury could be asked to hand an indictment this week.

the possible indictment would strengthen the manhattan d.a. case by making the charges official. mangione's attorney is challenging the decision and the high power defense attorney has joined the team. mangione is due back in court next monday. lawmakers continue to push for more answers about the mysterious sightings in the northeastern skies. new york give kathy hochul says they are sending a drone detection organization to new york. chuck schumer asked for what is known as a robin radar system to provide 360 coverage in 3d can identify the type of drone from up to a might le away. the fbi official says they received thousands of reports in the last few weeks, but less than 100 warranted investigation. and the packers ice the

seahawks on sunday night football. the catch sealed the win for green bay. seattle struggled against the pack all night long and lost geno smith to injury in the third quarter. green bay gets the tenth win of the season. dom, back to you. still on deck for the show, a critical week for the consumer and one more key piece of data spending wise ahead of the big fed decision. an inside look with former walmart ceo bill simon. we'll be right back after this break.

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and tons of savings. bring on the good stuff. xfinity. >> i believe that pretty strongly, i believe pretty strongly that elon will do the right thing and that americans will be profoundly unamerican to use political power to the degree that elon has to hurt your competitors and advantage your own businesses. and i don't think people would tolerate that. i don't think elon would do it. it would go -- again, lots of things not to like about him, but it goes deeply against the

values he holds that i'm not that worried about it. >> that was openai ceo sam altman earlier this month brushing off concerns this elon musk's tight relationship with president-elect donald trump will do anything to harm the good for the tunes of his chatg project. welcome back to worldwide exchange." "dominic chu in for frank holland. first, let's kickoff the half hour with the stock futures and the nasdaq set to open at an all-time high. the dow riding the longest daily losing streak since 2020. right now, the dow implied higher 30. s&p implied higher by ten and the nasdaq up 68 points. we have big news on bitcoin breaking above $106,000. helped in part by micro strategy

is going into the nasdaq 100 next week. checking in on the bond market right now after a sharp move higher in the ten-year yield last week. the biggest gain of the year so far and those moves put in context with what is going to happen with the fed interest rate decision later on. turning to sectornomics. we close in on the end of 2024. the s&p 500 is up currently 27%. now for next year, oppenheimer's john stoltzfus was on the high end of the start of 2024 as well, but didn't predict the 27% run. neither did any of his strategist colleagues on wall street. he thinks the tech , consumer ad industrials will out perform the

other sectors. the only other underweight is the real estate sector and index. deutsche bank's binky chadha says the firm is favoring financials and consumer stocks. they are underweight healthcare and lecom. bmo's brian belski is cautious compared to last year. his overweight sectors are consumer discretionary and financials and technology. he has an underweight on healthcare. at the low end of the calls is ubs with the low end move so far. there is the state of play so far. we will see how those targets

pan out next year. there are nine days left until christmas and hanukkah. the holiday sales expected to grow between 2.5% and 3.5% this year putting total spending under $1 trillion. that slower growth than the past four years, but higher than the average before the pandemic. we get latest snapshot of the consumer tomorrow with the november retail sales. they are forecast to rise by .50%. let's get more on the state of retail with bill simon. former walmart ceo. bill, thank you very much for the early wake-up call this morning. let's talk about this holiday season shaping up. does it speak to the idea the american consumer can still power the american economy? >> good morning, dom. great to be with you. yeah, this is an exciting time. it's, it's really sort of a track meet at this stage with the way the calendar falls,

there is a week shorter between thanksgiving and christmas. the kickoff at thanksgiving and ending at christmas. the question is can the retailer and consumer process all the transactions they need for the 2% to 3% growth. how do we get the consumers out and how do you process the orders and product flowing to the stores in the compressed time period? >> during that compressed time period, there is an interesting mix developing with where certain people are shopping. some lines have been blurred especially when it comes to the income spectrum and who prefers to shop where. what are you seeing? is there still a trend in place? how strong could it be next year that we do see many parts of the income spectrum gravitating toward that value-oriented transaction and outlet and if walmart does benefit and others like the big box stores?

>> with the price inflation really severe that we went through for the 18 months or so, price inflation is abated, as you know, meaning prices are not going up as fast as they were, but they are not coming down. they are sort of sticky at the top. there is a trade down. walmart reported that where they are getting high-end consumers, $100,000 plus earners in the stores. typically, they stay as long as the stress lasts and then go back to where they are shopping. each economic sector trades down to the next department store and discount stores to the dollar stores. sort of the odd-man out at the end is the lower-end consumer because they don't have anywhere to trade down. prices at the dollar stores and convenience stores have gone up and the lower-end consumer

suffers on the bottom end of the economy. >> bill, speaking of the inflation story and everything else, there's a real question developing on certain parts of wall street and main street with regard to what hypothetical tariff policy can do to prices for the u.s. consumer. as a former executive at one of the biggest, if not the biggest retailer in the world, who pays tariffs and how do the mechanics work? >> well, it depends. in the end, the consumer decides if there is a tariff or not a tariff. the cost of the tariff is in the cost of the product they buy or don't buy. we are in the early stages of the tariff war or discussion. the first stages we're experiencing is the threat of tariff. i'm putting a tariff on mexico. i'm going to put a tariff on these products. there is a response from the people who are getting tariffed

or there is a retaliatory tariff. in the end, if the tariff gets accepted or not is determined by the con sierm.consumer. tariffs on avocado gets priced up. the consumer decides if they have guacamole or queso. they will decide a margarita or a mojito with rum. the consumer will make the decision because they had pay for the added cost. >> a downgrade from petron. i'll take the margarita. thank you very much, bill. it's 5:00 somewhere. thank you very much. see you soon. happy holidays, sir. >> see you, dom. coming up, a live event boost and price jump courtesy of oppenheimer. your monday morning stock call

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welcome back. time for the morning call sheet. oppenheimer is raising the price target on netflix. it says with shares near an all-time high, it is revisiting

the bull case. netflix is a platform for live events and expects comments from the nfl games. jeffries is cutting ford to sell over decisions on the presence in europe and the widening gap with the warranty provisions and cash outflows. jpmorgan an upgrading okta to overweight. now the risk/reward is attractive as identity security is booming as a bigger priority. time for the global briefing. a mixed economic picture out of china. home prices fell in november at the slowest pace in 17 months in a possible sign of stabilization. retail sales last month came in short of the estimates, rising just about 3% compared to

forecasts calling for 4.5% jump. south korea's party voting saturday over the president's decision to impose martial law. the court is deciding if it will be removed from office. the court's first hearing is scheduled for december 27th, but it has suction ix months to mak ruling. moody's downgrades french debt following the collapse of the government. formerly led by ousted prime minister michel barnier. coming up on the show, one word that every investor needs to hear today and the stock pick every investor needs to know. plus, sam altman's elon musk problem and the $1 million donation to the trump inauguration fund may not be enough to some outsized white house influence. we'll be right back after this.

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welcome back. the parade of ceos in big tech making the trip to meet with president-elect trump in mar-a-lago showing no signs of slowing down including tim cook dining with the president-elect in florida friday night. one day after google's sundar pichai did the same thing. there is, perhaps, no more important white house ceo relationship than donald trump and elon musk. and in a new article in "the

financial times." sources tell the paper that the trump/musk tie-up could spell trouble for the catalyst of the a.i. evolution. that is sam altman and openai and chatgpt despite public comments to the contrary. joining me now of that piece is the artificial intelligence editor with the financial times. she joins us now from london. thank you very much for being with us. let's talk about how critical the elon musk/trump relationship is to the future of sam altman and openai? >> yeah, so, you know, elon musk has turned out to be a close confidante and adviser to incoming president trump. we know the maker of chatgpt, their relationship has st few

years. currently, they are embroiled in a legal controversy with musk filing a lawsuit against openai proposing altman as swindling sam. there will be concern and there has been concern expressed around those with openai and competitors to musk's companies that they might get left behind or disadvantaged as musk advises the president on a.i. wreck regulation going forward? >> how critical is this time, the juncture, for the a.i. story and a.i. industry because it feels as though the mega cap technology and media companies are in essence in a race or maybe in a land grab for sue see him you supremacy for planting

their flag? how much of a leg up does elon musk have over sam altman although sam altman and openai are the first mover in the scenario? >> exactly. openai has been the leader in the race the last couple of years particularly with chatgpt which launched in 2022 and has more than 300 million users every week. they are seen as leaders here. it's a really key time for google, x-a.i. and apple and amazon. everyone is trying to catch up and move forward. now musk as those around him say he not going to use his political position and the fact he has the incoming president trump's ear to advantage himself, they say he will play fair and be mag man man gnanomo. on one hand, you know, you could have musk sort of influencing

regulations and advising the president to help him catch up since x-a.i. is the smaller company in the space and people are concerned about that. equally, he is also competing in the market. he opened up a huge super computer with hundreds of thousands of nvidia gpus. he will compete in the market, but also he can use his policy position to advantage himself and get ahead of the other companies that are currently a lot more experienced and sophisticated in the software they're putting out. >> a.i. continues to be top of mind for all of the business community out there. thank you very much from the financial times. see you soon. coming up on the show, our next guest is trimming names and rk t g to other areas ofhe maet. he'll tell us what, where and why. we'll be right back.

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as we close out on the 6:00 a.m. hour, a check of the stories this morning, shares of palantir and micro strategy and axon moving higher. the three will join the nasdaq 100 a week from today.

illumina and super micro and moderna will be removed. and bitcoin reached $106,000 before pulling back overnight. the move comes as president-elect trump suggests a bitcoin reserve and with optimism with micro sdrat trate added to the nasdaq. and nippon steel has not come to conclusion over the takeover of u.s. steel. the deadline for decision is december 22nd. entering last full week of trading before the christmas season, momentum struggled with the s&p snapping a run of three straight up weeks. let's bring in jeff kilburg founder of kkm financial and cnbc contributor. jeff, a leasure to speak with you. let's talk about the tech story. we spoke earlier in the hour with some folks out there who believe that maybe big tech isn't exactly the best place to

be. it's still part of the portfolio. what do you think? is big tech the place you want to be? >> dom, if you are not in big tech, you are left out. we saw that in 2023 and 2024. we have seen a lot of cycles over my years. it is time to rebalance the amount of exposure you have. if you look at the high flying names of nvidia or google or apple, you get concerned about the top ten, the mag seven names in the top ten and stretch and valuation. when you see all of the inputs. the ten-year note moving higher or the vix moving down or micro strategy oddly included in the nasdaq 100, there are a lot of flags bringing the mag ven exposure back to normal. >> what is the investor make of the market dynamic entering the trump 2.0 with the administration and the economy alongside the kind of moves we

see the fed may or may not have to make in 2025 as well? what exactly does that lead you to believe and what exactly is your word of the day to characterize that dynamic in investing right now? >> dom, my word of the day is the summit. i feel we're at the top here. i'm not bearish. i have been optimistic for the last year. i do get concerned about the fed miss step. we will see that rewrite the script for 2025. nonetheless, they will still cut this wednesday. when i look at the top here, i get really understanding where we want to trim. look at the sectors. look at materials. you can't broad swath own materials or own sherwin-williams or international paper. it is time to put on your stock picking cap and understand where you want to be and where the puck is moving. >> that's why we have you here, jeff. take us through the stock picks. what do you like and not like?

>> i want to reduce exposure to facebook. i still call it facebook. i'm old enough to call it that. also look at oracle. a non-mag seven name to own. we will reduce exposure to palo alto. look at the industrial sector. xli is up. i want to own boeing. i still think there say reason to own boeing. and honeywell. when you consider the materials, i don't want to own the broad swath. this is the moment in time, dom, with micro ategy up 5% pre-market. you go back to 2022, that market cap was $1.6 billion. now it's $100 billion. i'm not saying. that i think bitcoin is important. i'm a believer. that's why we are seeing the

markets move in a straight line, i have to look at the breadth of the market. that is an historic move. i want to consider it today. >> jeff kilburg with the trade there. thank you very much. see you soon, sir. >> see ya', pal. before we go, here's a check of what to watch with the future side of things. we see a modest up for the dow. "squawk box" picks up coverage right now. good morning. stock futures pointing to a slightly higher open and bitcoin at one point was above $106,000 last night. crypto adjacent stocks moving as well. and more high profile visitors to mar-a-lago. tim cook met with president-elect trump and jeff bezos is reported to visit this week. and apple working on new device models, some thinner with

iphones and some with foldable screens. it's monday, december 16th, 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. and we are coming to you from the nasdaq right here in times square. this is our new temporary location. we're upstairs at the nasdaq instead of on the ground floor. this is all as they are doing renovations to our studio downstairs right now. >> we have been here before. >> we have. it's been a while. >> different set. >> different set. we're sitting on -- >> the same people. >> sitting on the set of somebody else.