kind of change we experience at fortune brands innovations i fundamentally believe if we don't disrupt, we will be disrupted. there is a clear need for products that are going to make people safer, that are going to make environments better, that can be good for business, good for people and good for the planet all at the same time. >> it is 5. >> a.m. here at. >> cnbc global headquarters. welcome to worldwide exchange. >> here is your. >> five at five. tariffs could come as soon. >> as tomorrow. >> in. >> canada and mexico. >> president trump reigniting. >> a trade. >> war with questions. >> about one. >> key commodity. >> on wall street. >> stocks are trying to. >> end this. >> week on a high. >> note after. >> monday's deep. >> tech meltdown. >> shares of. >> apple helping to. >> boost futures despite. >> a surprising. >> slowdown in iphone. >> sales, plus a historic approval. >> at the fda. >> has one. >> stock surging in the premarket. >> and then later. >> the. latest on that deadly. >> plane crash. >> in dc and the search for. >> a cause. >> it is. >> friday, january. >> 31st, 2025. >> and you're watching worldwide exchange.

>> right here. >> on cnbc. >> good morning. >> happy friday. thanks so much for being here. >> with us. >> i am. frank holland. >> let's get you ready for the day ahead. we begin with the. >> markets after a. >> higher close yesterday. >> but keep in mind the s&p and the nasdaq still on pace for a. losing week after that deep. >> seat sell. >> off on monday. take a look in the green across the board. >> this morning. >> so the s&p up. >> about 24 points. >> up just under a half a percent. the dow. >> looks like it would open. >> over 130. points higher, up. >> about a third of. >> a percent. the nasdaq. >> the best performer right now up about. >> 155 points, up almost. >> three quarters of 1%. futures are. >> getting a. >> lift from. >> shares of apple. they're higher. >> on some upbeat guidance. however iphone. >> sales they did not meet expectations. >> we have. >> a lot more. >> in their earnings. >> in just. >> a moment. >> but you can. >> see right now. >> apple. >> shares up just about 3.5%. >> in the premarket. and right. >> now. >> we want. >> to. >> look. >> at some of. >> the. s&p 500 premarket. >> leaders taking a look here. >> we see. >> vertex pharmaceuticals.

>> right now we just mentioned fda. approval boosting. >> this stock right here. >> shares up. over 8%. >> right now. >> rounding out the top five allstate. >> eastman chemical. >> hologic and. >> henry schein. >> taking a look at the laggards too. we got to. >> look at. >> the other side of the coin every morning taking a look. right now we see deckers outdoor, the maker of hoka and uggs. those shares down nearly 15%. >> we're going to dig into more. >> on that in just a second. walgreens boots alliance, ppg. >> industries. >> incyte and. >> resmed rounding. out the. >> bottom five right there. >> i want to. >> take a look. >> back at the. >> market. >> so take a look at. >> this chart. >> year to date, we are. >> seeing. a very. >> interesting trend. >> communication services with stocks like meta, alphabet and netflix. that's the. >> leading sector. >> up over 8%. >> the other side of the coin. >> here techs. >> the laggard i infrastructure. >> stocks like nvidia, broadcom. >> and dell moving. >> that sector lower. >> tech down. >> 2% for the year. >> and this. >> month we're also. >> seeing some encouraging signs for the. >> market at. >> least based. >> on. >> history according to. >> the. >> january barometer. >> when we see the gains on the s&p 500 this month. we see a. >> positive rest. >> of the. >> year 84%. >> of the time. >> now, take a look at this one. during a. >> post-election year, the first year of a new president, we see

gains. if we see a positive january 80th percent of the time. >> so a lot of positive. >> historical trends. let's take a. >> look at the. treasury market right now. bond yields holding. steady since. >> that fed decision. >> take a look. the benchmark coming in at about 4.53. a little bit of movement a few basis points of movement but pretty much. >> holding steady when we look at. >> the bond market. and we. >> got to. >> look. >> at the energy. >> markets, they continue to. react to. >> potential tariffs. >> on canada. >> and mexico and other trump trade policies. >> oil on. >> pace. for a second consecutive losing week. you can see. >> right now. >> oil actually. >> moving lower as. >> we see. >> the potential for tariffs. >> being enacted on canada and mexico right now, wti down about a quarter of. >> a percent. >> brant crude down almost a third of a percent. natural gas actually moving. >> higher up. almost 1.5%. >> and we got to take a look at cryptocurrency. bitcoin still. >> above 100,000. >> right now trading at 104 basically 275 falling. >> back about. >> a half a percent. >> right now okay. >> that is your. >> setup i want to continue. >> talking about stocks. and we have. >> your big money movers. >> going to talk. >> about apple just quite. >> a bit. >> more right now. >> given a big. >> boost to futures. as we mentioned.

>> apple is higher in. >> the premarket. >> thanks to. >> some. >> upbeat guidance for the. >> current quarter. >> the outlook. >> helping investors look past year over year declines in iphone sales and. >> some ongoing. >> weakness in china. >> apple also saying that. services are becoming. >> a larger. >> part of. >> its. sales mix. >> boosting gross margins to a new record of. >> 48.9%. >> an ugly picture shaping. >> up for the. >> maker of uggs and. >> hoka deckers is. >> lower despite. >> top and bottom. >> line beats for the holiday quarter. the company also raised its full year guidance. >> to. >> $4.9 billion. however, that was. actually short of street estimates. dekker says current. >> quarter sales. >> will be challenged because of inventory limitations. we just mentioned shares down. now over 15%. also looking at shares of software maker atlassian, they're taking off this morning. >> you can. >> see they're up. >> almost 19%. >> after beating revenue and earnings estimates. revenue guidance also better than expected. the company highlighting 30%. >> year over. >> year growth in subscription. revenue as it makes the shift to the cloud. so if you if you include today's pre market jump. >> this stock up. >> more than 65%. >> over. >> the last three months. right now up nearly 19%. all right. turning to the. global markets.

>> let's look. >> at how europe is closing out its january hour. sylvia mauro. >> is in. london with. >> a look at. >> that trade sylvia good morning. >> very good morning frank. i have to say that thus far today it is a positive day for european equities, with investors very much focused on the earnings season. at this stage, though, we have the ftse 100 up 3/10 of a percent similar moves over in france. but i have to highlight the context here. let me show you the week to date performance. at this stage we are on track to finish the week higher across all of the major bourses. but i have further context for you. let me show you the month to date performance. it has been such a strong month for european equities. at this stage, the benchmark is on track to finish the month up 7%. a lot of this has been driven by the performance in health care, as well as in luxury names. and there's two markets that have clearly stand out here, the german market and the uk market. both of them have hit record

highs this month. so it is a positive start to the trading year for european equities. let's see whether this performance is going to continue for the rest of the year. >> all right. >> sylvia thank you very much. >> our sylvia mauro. >> live in our london newsroom. >> we want to turn. >> back stateside. investors all. >> around the world are back on edge following. >> fresh comments. >> from the president. >> about a trade. >> war coming between. >> the. >> us. >> mexico and canada. >> we could. >> see. >> tariffs as soon as this weekend. >> the president, speaking from the oval office. >> yesterday and in less than a minute, injecting a new. >> level of. >> uncertainty. >> into the markets. >> i'll be. >> putting the tariff. >> of 25% on canada and. >> separately. >> 25% on mexico. and we. will really have. >> to do that because. >> we have very big deficits with those countries. those tariffs may or may not rise with time. >> so along. >> with the deficits, the. president says. >> he's taking action. because of illegal. >> immigration and. >> the flow. of fentanyl. >> into the u.s. >> trump also teasing. >> he will likely target china in the months ahead. when asked.

>> if oil. >> will specifically. >> be included. >> in these tariffs, the. >> president said, maybe. >> adding he would decide. >> probably tonight. >> joining me now is philip. >> luk with the center for strategic. >> and international. >> studies. >> also a. >> former deputy chief. >> economist with the state department under president biden. philip, good morning. thanks for joining us. >> good morning. >> all right. so i'm just taking a look at the oil markets last two weeks since the president. took office. oil has actually moved lower. it's even lower today with these tariff threats. if we do see tariffs on canada and oil is included, what do you see the impact being and what do you see the impact specifically. >> when we're talking. >> about canada of. >> broader tariffs. >> for broader tariffs and oil specifically. >> the impact would be. >> quite large. we import an enormous amount of oil for refining here in the united states. that can't easily be offset. >> and overall. >> we import over $100. >> billion. >> from canada. >> this is largely. >> in. >> machinery. >> electronics, inputs to industry. these are highly integrated supply chains. this would. >> really disrupt a. >> lot of manufacturing here in the united states. >> all right.

>> so canadian tariffs. >> would it would. >> impact manufacturing. i want. >> to talk to you. >> about mexico because actually i didn't realize this mexico is a. >> top. >> auto supplier. >> here to the u.s. what are some other areas that would be impacted outside of autos? i think that might be a surprise to a lot of people that we get so many imports of autos coming from mexico. >> yeah. >> we get the. the north. >> american auto supply chain is. incredibly integrated. >> your average. >> car that's produced in the united states is going to cross the canadian and mexican borders about 6. >> or 7 times. >> before it's completed. >> and that's another reason that bilateral. >> trade deficits that. >> the trump is. >> complaining about don't. >> really make a lot of sense. because the final good, once it comes. >> across the. >> border. >> that's a lot of that's embedded. us content. so those. numbers don't really they're not something you should really be thinking about. >> all right. >> there's some reports out and we're. >> going to. >> show the headlines in just a. >> second that. >> trump aides, they're trying to basically make an 11th hour effort to try to pare. >> back these tariffs. >> or do it in a. >> more.

>> measured way. if we do see that happen, does that still impact the us economy? >> i mean. >> if they dial it back, i mean, you know, it's a pretty aggressive. >> tariff level. >> the president was just talking about there in the oval office. if it's slightly less, does that significantly lessen the impact or any increase in tariffs specifically with our two very close trade partners that we have free trade agreements with, does that immediately impact the us economy? >> i mean. >> any tariffs. >> will have. >> some impact. obviously the more you scale it down or narrow. >> it. >> that'll be a smaller impact. i mean, specifically oil would. >> be enormous. >> we import about $47. >> billion worth of minerals from. >> canada that affects our. >> industrial. our defense. >> industrial supply. chains as well. >> so a. >> broad across. >> the board. >> 25% tariff. >> would be really. >> massively disruptive. the more we narrow it obviously it's less so. but but none of these are going to be very helpful for the us economy. >> all right i don't know if you saw this philip. the president. >> putting on truth social, his social media. platform essentially that any company i mean companies countries. you talk. >> a. >> lot about companies here. any

countries that try to create currency that competes with the dollar. obviously referencing the brics nations, he would put 100% tariffs on potentially at least. talk to me about the potential impact of that. that seems like a very aggressive move and something that could lead to retaliatory. >> tariffs as well. >> yeah, absolutely. >> and i. >> mean. that's a point we haven't really raised when talking about the economic impact of the canadian. >> and. >> mexican tariffs. that's all saying. >> that these. >> are all impacts. >> without any retaliation. so that's obviously going to happen as well. >> the other. >> point i would. >> say. >> is there. >> really are no. >> other rival currencies to the dollar right now. it just doesn't exist. >> obviously, russia. >> is very intent on having one. >> because of how. >> bad it's been. >> impacted by our. >> drifting of the russian economy, but. they've had no luck. i mean, this is. >> not something. >> that's an immediate problem by any means. the thing that makes it more likely. >> is weaponizing. >> of the dollar inappropriately, the way the president. >> threatened to do with. >> colombia over the past weekend. >> philip luck, thank you so much for your time and for your

insight. thanks for joining us this morning. >> thanks so much. >> turn our attention now. >> to a developing story. >> and crews resuming their. search this morning following wednesday's. >> deadly mid-air. >> collision involving an american airlines jet and a u.s. army black hawk helicopter. nbc's alice barr joins us now from the scene with the very latest. alice. good morning. >> good morning. yeah, we're here at reagan national airport. the potomac river is in the distance behind us. and right now search crews are not in the water. it was just too dangerous and. >> dark overnight. >> they are due back in as. >> soon as it is. >> light enough. they've committed to recovering. >> all 67 victims. >> 64 from that american. >> airlines regional. >> passenger jet. three from the us. army black hawk. >> helicopter. >> and key pieces of evidence. >> are beginning to. >> come to light. >> we have learned that two black box recorders. >> the. data recorder. >> and the voice recorder from the passenger plane have now been recovered, and national transportation safety board investigators are beginning

their. >> analysis there. >> nbc news has also learned. >> about an. >> faa preliminary report. >> that notes. >> that staffing. >> in. >> the air traffic control tower at the time of the crash was considered not normal. >> that's how. >> it was described. typically, you would have one controller who's handling airplanes coming in and one handling helicopters. and apparently at this time, those two roles had been consolidated to one controller. but important to note that that. >> is. still considered. >> acceptable under established. >> faa guidelines. >> we're also learning that the helicopter pilot, there's some investigation into whether that pilot may have been flying. higher than his. >> designated altitude. >> and a very. >> important piece of evidence is. >> the air. traffic control audio. >> that you. >> can. >> hear between the tower. >> and the helicopter pilot. >> you can. >> hear the. >> tower warning. >> the pilot, do. >> you see that. >> airplane go around it, you know, repeatedly kind. >> of giving him those cues. >> very shortly before the

collision. the response from the helicopter pilot is. >> a little. >> bit garbled and difficult to understand. it's not entirely clear. >> if he. >> acknowledges that he does. see the airplane. and so that's going to be a key area, of course, that they're looking into. and they're working so hard to find. >> answers. >> now for these devastated families. there's no other way to put it. >> certainly a. >> huge tragedy. >> alice barr. >> live from the scene. >> alice. >> thank you very much. >> all right. >> we do have. >> a lot more. >> to come here on. worldwide exchange, including a new way. >> that rbc. >> says investors can play the rotation into value. but first, apple's shocking slowdown. and we asked our next guest if he's changing his buy rating or his price target. plus, the u.s. reportedly probing deep sea hardware and exactly how it got its hands on those nvidia chips. and then later, much more on the trump tariff threats and what it could mean for inflation. joyce chang from jp morgan. she's here. a very busy hour still ahead when worldwide exchange ahead when worldwide exchange returns. (grunting) at morgan stanley, old school hard work meets bold new thinking.

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interesting. >> people. >> in the world. >> it's a. privilege to get to talk to them every day. >> it's more entertaining than any other morning show. >> but you might get. >> some useful information. >> squawk box weekday mornings, 6 a.m. eastern. cnbc inside wealth an exclusive newsletter for a select audience inside family offices. how the wealthy become ultra wealthy robert frank's high net worth perspective. craig here pays too much for business wireless. so he sublet half his real estate office... to a pet shop.

there's a smarter way to save. comcast business mobile. you could save up to an incredible 70% on your wireless bill. so you don't have to compromise. powering smarter savings. powering possibilities. switch and save with comcast business internet and mobile. find out how to pre-order and get the new samsung galaxy s25+ on us with a qualifying trade in. call, click or visit an xfinity store today. >> all right. welcome back to worldwide exchange. shares of apple moving higher today. you can see they're up just about 3.5%. right now. after the company reported first quarter earnings and revenue that beat estimates even as iphone sales. they were slightly below estimates. china. that continues to be a weak spot for the company, with iphone sales dropping 11% as it still does not have a local ai partner to roll. >> out its. >> apple intelligence features. but apple very upbeat about the current quarter, seeing sales rising by low to mid single digits. ceo tim cook telling cnbc apple is seeing better

iphone sales in markets where apple intelligence has already been launched. she's talking about the us, the uk, canada and also mexico. excuse me australia. joining me now is angela zino from cfra, who has a buy rating and a 270 price target on apple. angela good morning. good to see you. >> good morning. >> thanks for having me, frank. >> so important to note here, angela, you actually raised your price target. >> after this report. >> and you're considerably more optimistic than the consensus. the consensus is less than half of where you're at. what are you seeing to make you raise your price target and be so much more optimistic than the rest of the street? >> yeah. i mean. >> listen. >> we increased the target price to, to $270 from 260. and listen, this is a story right now where, you know, apple is kind of you know i look at the quarter here. >> and overall. >> this is a company that's being extremely resilient. i mean coming into the numbers, there was a lot of kind of hate into into the stock. it was largely due to some china issues. out there. and listen, they're holding up extremely well out in china. and you know

they don't even have an ai offering at this point in time over there that also. >> kind of. >> say they're executing. >> extremely well. >> on the. >> margin side of. >> things because of that services business. and i think when you kind. >> of. >> look here over the next 3. >> to. >> 3 years. >> or so, the upside is really on the margin side of things. and where. >> the. >> street is. >> really underestimating the apple story is on the margin side of things. as we continue to see more upside on services, as well as kind of cost component reductions in areas like kind of, you. >> know. >> moving away from qualcomm's modems. >> all right. good point. >> on the margin. >> margin of record 48.9. but i want to go back to china. did you say that they're doing well in china because we're just showing the chart of their sales in china. apple seems to be losing market share. and again, they don't have apple intelligence there. they need to partner with a local ai company. a lot of questions about if the trade war could lead china to maybe hold off on allowing them to partner with somebody, because, remember, the state has to allow them to do so. what do you mean that they're doing well in china? i mean, we're looking

right here. down 11%. >> yeah. i mean, maybe the better term is resilient, right? when you kind of look at. >> the numbers. >> to your point down 11%. and that was actually on top of. >> a 13%. >> decline a. >> year ago. >> so you kind of look at that china business right now. and actually over the last two years, the china. >> exposure has. >> actually dropped from 20% of sales, now down to about 15% of sales. so that in our in our from. >> our. >> perspective, that's actually helped. de-risk the story to an extent out in china. in the fact that, hey, listen, we think that there's actually limited downside left to the china story. you go into the march quarter in terms of the guidanc. >> there. >> the reason we think it's actually holding up better than expected is actually because of. >> the fact that. >> you know, china probably sees less declines than. >> what we saw this quarter. >> because of that national subsidy program that tim cook mentioned. and the fact that some of their lower priced products should benefit more in that region. >> so one thing we talked a lot about here on worldwide exchange is the stronger dollar, the impact on multinationals like an apple. i'm looking at the dollar up over 4% over the last three

months alone. huge upside move when we're talking currency. how is the stronger dollar impacting sales in china and even international sales other places? >> yeah. >> i. >> mean it's absolutely a headwind. i think. it's about a two and a 250 basis point had won here in the march quarter. that's what's expected. and listen again. again when you kind of look at the guidance that. >> they provided. >> right. the fact. that they kind of provided guidance, that was kind of in line with our expectations and that of the street, i think that is a very bullish sign. and the fact that they are navigating kind of those headwinds better than we expected, we'll kind of see what the volatility. >> of. >> kind of, you know, some of these forex headwinds is concerned, kind of. >> looking. >> ahead over the next couple of quarters, seeing what kind of tariffs do and as well as kind of interest rates and the impact it has on the dollar. >> but as you kind. of look at it right. >> now, they're they're kind of holding up. >> pretty well here. >> as far. >> as the dollar volatility is concerned. >> angela you're pretty positive. the company said it's like a 2% headwind. you're saying they're holding up pretty well with the stronger dollar. one question before i let you

go. do you own any apple stock. does the firm own any apple stock. >> no we don't. >> all right. angela zeno. good to see you. price target of 270. one of the most optimistic on the street. apple shares up about 3.5% right now. thank you again. >> all right. >> thank you. still on deck here on worldwide exchange. historic green light from the fda sending shares of this stock surging. we're going to reveal our we're going to reveal our mystery chart coming ♪♪ amazing. jerry, you've got to see this. i've seen it. trust me, after 15 walks, it gets a little old. ugh. stop waiting. start investing. e*trade ® from morgan stanley. results you can see faster. lose 15% of your weight with a formula from eli lilly. see if you qualify at irokotv. >> nothing stands still. not technology, not the market, and

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tough on you and your gear. >> the toughest brands. >> in the world. rely on cerakote to finish strong. shouldn't you? cerakote. >> the world's leader in thin film. >> ceramic coatings. across the globe, industries are transforming, and businesses need to navigate the changing landscape to stay ahead. when you partner with barclays, every change leads to a bold possibility. you have the vision. we have the insights, financial. solutions and global perspectives to help you make it real. barclays investment bank powering possible. >> we're back to worldwide exchange. it's not going to check on some of this morning's

top corporate stories. silvana henao is here with those. silvana good morning. >> hey, frank, good. >> friday morning. >> to you. all right. we start with shares of. >> vertex pharmaceutical jumping. >> ahead of the open. after the fda approved the. company's non-opioid painkiller. we're seeing shares up overits kind ae for pain relief without the risk of addiction. the ceo of vertex will have more. >> on this. >> in a first. >> on cnbc interview. >> coming up on. >> squawk on the street at 9:40 a.m. eastern. meanwhile, sources telling cnbc, openai is in talks to raise up to $40 billion in. >> a. >> funding round that would boost the ai company's valuation to as much as $340 billion. now, softbank would lead the fundraising, contributing as much as 25 billion, surpassing microsoft as openai's top backer. >> sources add. >> that part of the funding may be used for openai's commitment

to the stargate project and sticking with ai. the white house and fbi are reportedly looking at whether deep seek got access to chips made by nvidia through third parties in singapore. that's according to multiple reports, and the move would have helped the ai startup bypass u.s. export restrictions for china on chips used for artificial intelligence. frank. >> all right, savannah. >> thank you very much. see you just a bit later in the show. >> all right. coming up here on worldwide. >> exchange, jp morgan's joyce chang on tariffs, inflation and what's in store for u.s. stocks in 2025. we'll be back right in 2025. we'll be back right after ♪ empower ♪ i got her a little something. a little something, dad? hold up. walt rolled his 401k accounts into an empower ira, and it's grown nicely. i'm for team splurge. (♪♪) thanks, grandpa! get good at money. so you can be a little bad. empower.

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you can help those impacted by disasters big and small. give now. >> i'll be putting the tariff of. 25% on. canada and separately. >> 25% on mexico. and we will. >> really have to do that because we. >> have very big deficits with those countries. those tariffs may or may not rise with time. >> that was. >> president trump ramping up his threats to hit canada and mexico with fresh tariffs as soon as tomorrow. the comments creating new questions for investors about the future of relations with america's largest trading partners. welcome back to worldwide exchange. i'm frank holland. coming up this half hour, we're going to dig into the potential economic and market ramifications. if the president's tariff threats, they end up becoming reality. but first, we begin with the markets

after a higher close yesterday. but remember the s&p and the nasdaq, someone pays for a losing week after that deep deep seat sell off on monday. taking a look this morning and the green across the board s&p up about 25 points. just under a half a percent. dow looks like would open up about 155 points higher or roughly a third of a percent. the nasdaq the best performer, up about 165 points and also up about three quarters of 1%. futures getting a big boost from apple after earnings higher in the premarket. you can see shares are up just about 3.5% after an upbeat forecast for the current quarter. the outlook helping investors look past year over year declines in iphone sales and some ongoing weakness in china. right now, i want to take a look at the nasdaq 100 premarket leaders taking a look. you can see atlassian. this is another earnings mover up over 18% vertex pharma. we just talked about this getting fda approval for a new drug. those shares up about 8.5%. apple of course gaining after earnings. kla and also diamondback energy rounding out the top five. we want to look at the bottom five. the other side of the coin the nasdaq 100 premarket laggards taking a look at that list.

right now we see nvidia right here at the top of the list. that's down about 1%. nvidia having a tough couple of weeks actually. but definitely a tough week after that deep sea fueled sell off. astrazeneca cognizant tech. micron another chip maker and monster beverage rounding out the bottom five on the nasdaq 100. turning back to the broader markets year to date, we are seeing a very interesting trend. communication services with stocks like meta, alphabet and netflix. that's the leading sector, up over 8%. the laggard that's tech i infrastructure stocks like nvidia, broadcom and dell moving the sector lower. you can see right here. tech down 2% year to date. and for the broader market we're also seeing some encouraging signs at least based on history. now according to the january barometer, if we see gains in the s&p 500 this month, we see an 84% chance of a gain on the s&p for the rest of the year. and this one's important. this one's very important right here on the year after a presidential election, we see an 80% gain, 80% chance of a gain i should say, in the markets, if january finishes higher on the s&p 500.

so that's what we're seeing right now at least so far here on the last day of the month. i want to turn to treasuries right now. bond yields pretty much holding steady since that fed decision. we're seeing the benchmark at 4.53% right now. not a lot of movement just a few basis points. similar story for both the two and the 30 year. very little movement following that fed decision. and we do want to look at the energy markets. we are seeing some movement there. they just continue to react to potential tariffs on canada and mexico and other trump trade policies. oil on pace for a second consecutive losing week. right now we see wti and brant crude both pulling back about a third of a percent. natural gas however, up just about specifically bitcoin still above 100,000 right now. about 104 168a coin pulling back right now pulling back over a half a percent okay. that's just set up. now we want to turn our attention to a key economic report coming out later. it's the latest test for the fed. it comes today as december pce out at 8:30 a.m. eastern time. it could show a quicker rise in prices at the end of last year. supporting

that fed decision to hold rates steady. headline pcs forecast to rise by 3/10 of a percent from november and 2.6% year over year. that would be the biggest annual increase since back in may. core pce, which excludes food and energy, is seen rising by 2/10 of a percent month over month and 2.8% from a year ago. joining me now is joyce chang, chair of global research at jp morgan joyce. good morning. good to see you. >> great to be with you, frank. >> so, joyce, what are your expectations? expectations when we're talking pce that that report again coming out at 8:30 a.m. eastern. do you believe we're going to hit the estimates be cooler or hotter. what are you expecting? >> i mean. >> we see inflation remaining pretty sticky here in the first half of the year. so it's not just this month's reading, but we're looking at core cpi at around 3% here. so i think that you have the potential for more upside surprises here. and with all of the talk on the chairs, i don't. >> think that. >> the concerns on inflation being higher are going to go away. >> okay. so those concerns don't go away. let's talk about

tariffs. we saw a couple of economic reports just like a couple of weeks or months ago where manufacturers, they were starting to kind of work tariffs into their pricing. how do you see tariffs impacting inflation going forward. specifically these potential tariffs on canada and mexico. the president was talking about the potential for even more tariffs coming on china. how do you see that not only impacting inflation but also the dollar. if we continue to put tariffs on these different countries? >> yeah. >> well i don't think the full impact of the terrorist is priced in yet. the market is still trying to figure out how much of this is a negotiating tactic versus a reality, and the timing for the terrorists. you still have to go through, even if you announce them a review, a notification, a comment process. so i don't think this is fully priced right now. but when we take a look at the 10% tariff that is proposed on china, 25% tariffs on canada and mexico, we think we could be looking at price effects that are anywhere from 3/10 to over a percentage point on the pce price level. so i don't think that's fully priced right now. and turning to

the dollar, we think that tariff rates of 7 to 8% are priced right now. we've seen dollar appreciation, but we're not pricing in the possibility of higher higher tariffs in the inflation numbers yet. i think this. a 25% tariff on canada and mexico could be as much as 0.7 even 1% of gdp off of the us. there are doubts on whether this can actually be implemented, though, because it's really hard to replace some of these supply chains that we have with mexico and canada. >> all right. i also want to talk to you about tariffs and fed decisions. is the fed in your mind. are they pricing in the idea of these tariffs coming in. and also do you see a potential presidential impact on the fed. of course the president back in davos he basically demanded for lower rates. you know kind of what a lot of people call jawboning jay powell and the fed to make a decision. how are you seeing those two things when it comes to the fed decision making for the rest of this year?

>> i think the fed. >> gave a very clear message. the fed policy was unchanged at the four and a quarter to 4.5% target rate. it was a unanimous decision. powell has said repeatedly that the fomc is in no hurry, and he's also made it very clear that if inflation remains firm, rather than the gradual easing that had been expected previously, they will keep the policy on hold at current levels for longer. so i think that the fed is likely to remain on hold for the upcoming meetings. and they also made it very clear that the 2% inflation target would not be debated during the framework review. so i think the messaging from the fed has been very clear despite the jawboning. >> all right. i want to ask you about something else. i don't i don't know how much research you've done on this, but i would like to get whatever thoughts you have on it. deep seek rattled the markets earlier this week. it certainly changed a lot of perspective when it comes to the eye trade and the need for ai infrastructure compared to software. how are you viewing deep seek its impact not only on the markets but potentially on the economy. does this have the potential to influence, you know, hiring and other things like that?

>> well, i. >> think it has opened a debate. you know, when we first started talking about ai, we talked about it being open source and capex light that then transformed into a debate. >> well, how. >> capex heavy is this going to be given all of the costs that are involved in data centers? so we're getting back to now just taking a look at the model and the cost efficiency that deep sea training, you know, seems to imply. but i think there's still a lot of questions here about the training costs. also about the specifics on the training data set and the methodologies that are employed. so i think it's still early stages here. i don't see this having a big economic impact. it is a debate that's going to be ongoing. but what we see with every new technology innovation cycle, we continue to see these innovations. i still think we're early stages in the investment cycle here. >> all right. so early stages overall when it comes to your view on how it might impact the economy and the investment cycle, let me talk to you about one particular part of the market, the chips a cyclical sector. how do you see it

impacting that. >> i think that chips there are many other factors, not just deep sea, that will be in discussion when we look at u.s. industrial policy and what could play out, whether it is tariffs, export restrictions and even legislation. so i wouldn't just look at this one isolated incident. i think there's going to be much more emphasis on the us on industrial policy. had been on the, you know, on chips, you know, even the potential that could we see like a chips 2.0 act at some point in the future. >> you know, joyce, you missed your chance to say jevons paradox. a lot of people like to throw that out. i'm sure we're going to do a super cut here on cnbc with people talking about it. that was your chance, joyce. happy friday. always a pleasure to see you. hopefully you're going to come in the studio next time. >> take care. >> all right. good to see you. all right. turning back to the markets we are tracking etf inflows on this friday morning. etf net inflows year to date at roughly $95 billion on track for a second trillion dollar year in a row. we're also tracking the moves on the 30 day moves above the 30 day moving averages for the popular index funds. that's the s&p and the triple qs. take

a look here. on the left hand side of your screen you can see that investors they look to buy the dip with big jumps in inflows to the s&p. and the triple q's triple q seeing an 84% jump on monday. so week to date the s&p and the nasdaq 100 they're both on pace actually for a losing week after that deep seat fueled sell off on monday. also looking at the sma chip etf falling more than 6%. as investors, they question the demand for high performance chips. week to date index flows. they dominated the inflows. and when it comes to etfs, the voo tracks the s&p 500. so does the s&p investors. they also bought the dip on bitcoin with the ybit and also bought the dip on chips. buying the sm sm h. all right. coming up here on worldwide exchange tapping into the utility sectors dividend power. a new and unique look at the stocks offering the biggest yields in that space. we're yields in that space. we're going to show you when what tractor supply customers experience is personalized service. made possible by t-mobile for business. with t-mobile's reliable 5g business internet.

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not, eighth out of the 11 sectors in terms of overall performance. now the sector spider etf that tracks utilities, the ticker xlu has gained roughly. call it 2,728% over the last year compared to the 25% gain for the s&p 500 overall. now, that rise in prices has also pushed dividend yields lower for both of those measures, the utility sector spider now trades with a roughly call it 2.9% yield, and the s&p 500 etf trades with a roughly 1.2% yield. short term treasury yields, by the way, are all down. as you can see here, more around the 4.2 to 4.3%. now the biggest yields in the sector come via aos corp, which currently trades with about a 6.3% yield, and then edison international, which is at just about maybe 6.1. now, those yields have been boosted by sharp price declines in each of those stocks. aos has lost nearly half of its value over the course of its highs that we

saw from last year. edison international has lost around 39% of its value since its highs just this past september. so where can you actually find the heftiest dividend yields in the sector that have not been driven by stock declines? we screened the entire sector, found all the stocks that had positive one year price performance and a greater than 4% yield. there are four names there dominion energy with a 4.8% yield, also a gain of around 22%. evergy with a 4.2% yield and a gain of roughly 29%, first energy yielding 4.2% and a gain of 12%, and pinnacle west at around 4.1%. it had gained 23% in the last year, so this balance between yield and price performance is something that a lot of income investors will analyze before making a potential income generating stock investment. that's it from the cnbc cube. i will send

things back over to you, dom. >> thank you very much. coming up here on worldwide exchange, we have the one word that every investor has to hear today in the stock pick that every investor needs to know. plus shocking the ai landscape deep sea creating waves from silicon valley to wall street. this week the ceo of ai player unifor is here laying out who may be the big winners and the new players in this red hot space. we'll be right back after this break. stay with us. >> sector nomics is sponsored by sector spider etfs. >> welcome to reinvented with accenture. today i'm here with margherita della valle, ceo of vodafone. you were employee 25 in vodafone italy. today you're the ceo of vodafone. what is

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three big stocks stories in the morning. we start off with shares of walgreens sliding after it announced it will suspend its quarterly dividend. shares down almost 10%. the pharmacy chain cites a focus on improving its balance sheet as part of its turnaround efforts. intel shares there popping this morning after beating the street with its fourth quarter results. those shares up just about 2%, but the chip maker also issuing a weak forecast, with executives citing seasonal factors and competition. samsung shares sliding in asia after reporting a sharp profit drop from the previous quarter. you see, right now, shares are down about 2.5%, revenue also sliding during the period as profitability at its core semiconductor business that continues to weaken. and we've got a bonus money mover for you this morning. shares of novartis. they're rising after posting better than expected fourth quarter sales. however its guidance fell short, the ceo telling cnbc the results mark a positive early signal since implementing a strategic overhaul last year. shares of

novartis up just about 3.5%. all right. apple ceo tim cook taking a positive view on deepfakes ai technology. speaking with analysts on the company's earnings call last night, cook says the chinese startup's models represent innovation that drives efficiency. he calls that a good thing. deep tech has rocked the tech landscape and the markets this week over its claims that its new ai model outperforms openai's and only cost a portion of the price to bill. for a closer look at the new ai landscape, let's bring in umesh sachdev, co-founder and ceo of uniphore. thanks for coming back. good morning frank. >> always good to. >> be. >> on your show. >> all right. let's just get down to business on this one. we were here on monday. first show on markets, rock futures. deep down a lot of thoughts about it's going to change the landscape for ai infrastructure, the need for capex spending and things like that. i want to talk to you about deep sea. now we've had a few days to digest. is it a meaningful development when it comes to enterprise ai? frank. >> i was just. >> here a month. >> ago. >> and we. >> spoke about. >> the pace of innovation. >> in ai. and this week was just a great example of that. >> so much. >> has happened this week. >> deep sea ultimately.

represents a very profoundly. positive impact on. >> the ai space, bringing. >> down the cost of. >> compute, bringing. >> down the. cost of. >> inferencing. >> making it. >> far more easier. >> for startups. >> for consumer. >> ai to. adopt these technologies. however. >> the. >> reverse is. >> true for. >> my customers. over 2000 enterprise. >> clients at. unifor as i. >> speak to them. and, you know, just this week, i've hit up over. 20 of cios and ceos. and here's what they're telling me. they're telling me, first of. >> all, the impact, the roi. >> of the use cases in the enterprise, large banks, large telecoms was already so large. >> that it wasn't. >> like these companies were waiting for the cost of inferencing to go down. so in that sense, it's a net positive but doesn't change too much on the pace of adoption. it's already very high. but the second issue, about half of my customers told me this week that the china issue was top, top of their mind. in fact, one cio of a major bank that we do business with said. >> we don't even. >> use lenovo laptops in this

bank, let alone letting something that's going to look at our data and touch our data. so i think there are implications that we will keep hearing about. but make no mistake, we're going to see more of these deep seeks type announcements in the coming weeks from us, from countries around the world. and we are just at that early. cycle of this innovation. >> all right. so great for consumers, great for startups. we're talking about large enterprises. not quite a great fit. so you kind of hit on something i was going to ask you, is there a national security or at least a company data security threat when it comes to using deep sea? are you concerned that it's possible this hedge fund that created is possibly working with the chinese government? and also, do you believe the claims developed in two months for $6 million? >> well. >> the separate. >> questions. >> let's talk. >> about the claims. the good thing that deep sea has done, and i think it's a massive positive for the whole industry, is they have open. >> sourced. >> they put out a. >> lot. >> of detailed technical data about how they went about bringing this innovation to market. we've had time. our engineers have had time not only to play around with the technology, but to study that data minutely. and i think

there's a lot of believable believability there. a lot of people make the mistake of saying they claim $6 million of. >> training. >> versus hundreds of millions of dollars of a us model. i don't think that's true. anthropic and databricks have said their training runs are in the 10 to $15 million range. so for a deep sea to come out and say they did it in six, it is believable. i think on the flip side, you asked me about security concerns, etc. it's too early. >> okay. >> people have to examine, but it is top of mind for large enterprise, especially regulated american corporate america. that is top of mind for them. >> all right. we're just showing the audience. a second ago, while you were talking, the relative cost of the deep sea model with some other models, as you mentioned, the cost is going down. we talked about the impact on the chip sector a short time ago with our guest. i want to talk to you about the software sector and companies like yours. what are we seeing when it comes to development of a lower cost overall for a company like yours and for enterprise software names? is this definitely a tailwind and how does it impact

the long term outlook when it comes to names and companies like yours? >> the analogy i like to draw here, frank, is when the internet was about to take off, there was a lot of talk about how are we investing in over capacity. networking? was the big infrastructure build out llms are like that right now. we are in this infrastructure build out. lots of capex is being announced every week by different companies and so on and so forth, but not until the mobile device came out. with a. low cost option that the consumption of internet in consumer and enterprise really took off two decades ago. we're at that moment. the cost of compute just went down, and it's on a one way street here. the cost of compute is beginning to get commoditized, trending to zero. and deep seek was the first step in that direction. we shouldn't be surprised. this is how technology rolls. what unifor does for its clients is give them now the application layer, giving them the access to a gigantic ai, which really is where they can derive roi from these big ai models, automate a

lot of tasks, bring efficiency in their business, increase their earnings overall. okay. and so in that scenario, this is a net positive. our customers weren't waiting for this. ceos have told me 2025, they aren't just looking for one or the other area like a call center to get ai fired. people have said in 2025, umesh, my entire company needs to be ai. we've done workshops after workshops with our customers and enterprises are accelerating the adoption of agentic. >> i have great to see you. thank you very much. we got much more worldwide exchange coming up right after this break. stay with us. >> are you. >> having a hard time. >> growing your sales? >> is it tough. >> getting new customers? >> try info.thscore.com. >> hot. >> sales leads. >> you'll get. >> unlimited sales leads, mailing. >> lists, business. >> profiles. >> person search. >> email marketing, and free crm. i got four new customers. >> the first month. that's incredible. >> i can see all my prospects on

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omni luxe ledcom. >> for me. >> squawk box. >> is breakfast. >> with. >> the. >> most interesting people in the world. >> it's a. privilege to get to talk to them every day. >> it's more entertaining than any other morning show. >> but you might get. >> some useful information. >> squawk box weekday mornings, 6 a.m. eastern. cnbc the day's top stories driving wall street brian sullivan joins kelly evans power lunch weekdays at two

eastern.■ cnbc want to apply to be on cnbc's disruptor 50 list? is your startup disrupting the status quo? scan this code or go to cnbc.com. slash disruptors to apply before february 10th. >> welcome back. let's put a button on january trading. joining me now is amy wu silverman head of derivatives strategy at rbc capital markets. amy good morning. good to see you. >> good to see. >> you, frank. >> amy, let's start with your word of the day. >> my word of the day is rotation, frank. and even in a week like this, that was quite volatile. i think that's the. >> theme that keeps. >> picking up in this market. that i've been joking, is the paddling duck market looks calm and smooth on the surface, but you have those violent rotations underneath. and this week was no different. >> all right. no different this week. so with all this action we saw specifically on monday with the deep sea sell off, what are we seeing when it comes to the options market. how are investors trying to play some of this uncertainty.

>> look you really have seen hedging demand pick up. this is true not only for nvidia on a single stock basis. it's also true on a broad based indices basis. so when you look at s&p you look at nasdaq. you know institutionally one of the first things we saw happen after the deep tech news was folks buying nasdaq puts essentially you know, i think. the psychology is people are pretty long on the ai names. they've always been worried about this concentration. even though hedging got more expensive, they still wanted to do it. and we continue to see that on our side. >> all right. we have nvidia earnings coming up in just about three weeks from now. what are you seeing specifically when it comes to nvidia. that stock really rocked by the deep tech news. and the idea that maybe advanced chips aren't won't have as much demand as we previously thought? >> yeah. you know, there's an old saying in options which is hedge when you can not when you have to. but that's not what the derivatives market has been doing. they've been hedging when they need to the most. and unfortunately that means the cost of protection is more expensive. that's true in nvidia, but that has not stopped people from trying to protect

against this earnings event, which is in two weeks. as you mentioned, either through nvidia puts or puts spreads directly or through nasdaq options. so you see hedging demand in both rising frank. but at the same time the rest of the market remains sanguine. and that's why we kind of call it a paddling duck market, because you still see strength in the broad broadening trade. you still see other pockets doing well. and overall vix levels still are psychologically below that 20 handle. >> all right. so you're saying there's a lot of paddling under the water i want to talk about something that's under the radar. you have our pick for us today. it's a trade that's kind of under the radar recently. >> yeah it has been i feel like it's been forgotten a little since 2025 began. people have been so focused on tech. but i like looking at iwm. so that's the russell 2000 etf call options. one of the reasons is in all this hustle and bustle we've seen this week very volatile week. those option prices actually remain pretty okay. most of the focus and concern obviously has been in tech. and then the reason to look at upside. there is one thing you've really seen this. >> week is people. >> do want that broadening trade

to work. if you look at s&p equal weight, you know that's kind of where the rotation went when you saw concerns in market concentration. >> all right amy with silverman. great to see you as always. thank you very much. your pick for us today. call options on the iwm etf that tracks the russell 2000. all right. that's going to do it for us here on worldwide exchange. hope you have a great weekend. squawk box starts right now. >> good morning. >> president trump saying he's going to carry out his threat to impose 25% tariffs on mexico and canada. >> and that's going to begin tomorrow. >> we're going to. >> take you live. >> to washington for the latest. plus apple. shares they're rising. upbeat guidance strong service. revenue outshining a slowdown in iphone sales. plus it is. >> a big morning. for energy earnings. >> we're going to bring you reports from chevron and exxon. we've got interviews with the ceos. >> of both. >> of those companies. it is friday, january. >> 31st 2025. >> and squawk box begins right now.

>> good morning. >> everybody, and. >> welcome to. >> squawk box right here. >> on cnbc. >> we're live from the nasdaq market site in. >> times square. >> i'm becky quick along with andrew ross sorkin joe. >> is out today. >> he'll be back soon. >> let's take a look at what's been happening with. >> the us equity futures. >> at this hour. >> right now we are looking at. >> some pretty. >> decent advances for the. >> last trading day of january. >> dow futures indicated. >> up by. >> close to 150 points. >> s&p futures are up by 24. the nasdaq is up by about 160. in fact, if you want to take a look at the major. >> indexes so far for that. >> month of january, first. >> month of the year. >> the dow is up by 5.5%. >> the s&p. >> is up by 3.2%. then you've got the nasdaq. up by about 1.9%. so if. >> we hold on to this. >> as the first month of january goes, so goes the year.