tv Worldwide Exchange CNBC February 3, 2022 5:00am-6:00am EST
it is 5:00 a.m. on cnbc. here is your top five at meta's. what mark zuckerberg has to say about the miss. and taking a big chunk from stock futures. nasdaq set to open 2% down it is not just facebook. spotify as well. twitter and snap also down big from wall street to d.c., investor attention on three key federal reserve nominations from
president biden with one former fed insider is expecting and detroit's all electric ambitions. why tesla has more and more to worry about from the motor city. it is thursday, february 3rd. this is "worldwide exchange. good morning, good afternoon, good evening as always, welcome from wherever in the world you are watching. good thursday. i'm brian sullivan let's get to it. this is how the global markets are setting up your day. dow and s&p are down just a bit. once again, nasdaq is getting all the attention this morning and not in the good attention kind of way. nasdaq futures right now down
2% it is a big move down. now the biggest concern for the nasdaq and tech in general today is facebook. parent company meta. it is set to lose $175 billion in market value after a dismal fourth quarter report. that stock is down 20% right now. we'll get more on facebook all show long. just like paypal and netflix the other week, we see the butterfly effect shares of pintopipinterest and and snap snap shares are down 15% right now. that means watch the social etf. the socl facebook, snap, spotify all 22% that etf the facebook effect will take a lot of companies down with it. outside of that stock, a focus
on energy. crude oil is lower right now it is still above $87 a barrel this after opec is keeping its head down after the meeting yesterday. not increasing production despite higher prices. crude is inching toward $90 a barrel as global demand begins to boom. we'll get more on oil. to find out what is happening on stocks around the world is julianna tatelbaum in the london newsroom the action and some of the early moves. good morning, julianna >> reporter: brian, good morning. a lot of focus of the meta earnings shock in europe in terms of sentiment, things are sour in the last half hour we were seeing green on the board earlier on ftse 100 was out performing, but in the last 20 minutes, we crossed into negative territory. that index down 18 points.
w we have red across the board investors in retreat one stock in focus is shell. the company posted a surge in fourth quarter profit at $6.4 billion on the back of rising oil and gas. they plan to hike dividend by 4% and repurchase 8.5 billion shares in the quarter. it is providing support for the uk market. a big day for central bank action both set to hold the first rate decisions of the year. that is against the back drop of persistent inflation and energy prices and bottlenecks the bank of england is expected to hike interest rates for the first time since 2004. this despite the inflation rising to 5.1% in january. far above expectations uk inflation stands at a 30-year high big day here in europe
>> somebody pulling the plug there on julianna tatelbaum. julianna, let us know you're all right. thank you very much. let's get back to the top story. that is meta platforms better known as facebook it is down 20% in the pre-market let's find out who is going on with bertha coombs >> reporter: big thumb's down for meta, brian. shares of the company formerly known as facebook sinking 20% after missing on three metrics earnings coming up short $3.67 versus estimate of $3.84 then user numbers missing on daily and monthly active metrics by 20 million and 30 million respectively and number three is outlook. the company says first quarter revenue would fall between $27 billion and $29 billion.
expectations were over $30 billion. meta's ceo mark zuckerberg contributing the miss to a number of factors including come competition. >> people have a lot of choices for how they want to spend their time tiktok is growing quickly. this is why our focus is so important. the competition and shift to the short-form video and serving young adults and we will continue to see pressure on impression groups in the near term >> reporter: pressure indeed with this being the company's first earnings report since the name change, it is the first time it broke out the numbers for the metaverse business apparently building it is not
cheap. full year 2020, a net loss of $10.19 billion on $2.276 billion in 2021. brian w the morning move set to shave $18 billion off meta or $180 billion off the market cap is seen weak across the media sector we will see bigger losses there as well. if tiktok is winning >> well, is tiktok winning or is facebook just confusing people with this meta name change and metaverse? it's an odd place. maybe it will make sense one day. the value is wiped out it is investor value the stock is $175 billion,
bertha i put out a tweet last night better said, right now, facebook is set to wipe out an entire at&t of market value at&t's market cap is 1$175 billion. one of the biggest companies in the world. remember, a lot of attention, as you noted on the social stocks >> reporter: part of the reason they're sliding is people think tiktok is also taking share from them so it might not just be, you know, facebook, instagram, what's app >> those stocks are all in the socl etf and facebook is 13% of the etf. there may be mechanical function of other stocks in the etf sold
if people are looking to redeem. a bunch of stuff is the technical term, berth ta, goingo with facebook. thank you. facebook's story is a familiar one for the markets for this earnings season according to deutche bank, that figure is lower than the recovery more companies are eating into the bottom lines these talk about what this means and get good stocky dee ideas ad bring in josh. >> i never owned it maybe i should have i don'tsee that happening. >> let's be clear. fab is facebook is above where it was a couple of months ago and years
ago. today will be tough. it is having the ripple impact do you think the market is overreacting to not only just facebook, josh, but google booms. everyone buys that today facebook down. everybody is selling the stock >> i think that without a doubt, i say i don't own facebook and probably won't they have done so well for so long, i think the name change is incredible to me it seemed odd. now we realized they are trying to tell people don't like at our left hand. look at our right hand we will pivot. there are a lot of unanswered questions for a company that is successful i think that we will see it is hard to know what the metaverse looks like and who owns it. video gamemakers or content
providers? i don't know i don't think they know either >> it feels like they saying look over here they getting criticism over information and the election that was up on the platform. what better way is change your name and think otherwise let's talk about something that is interesting stocks you love right now. the other day, josh, rbi was on car prices out of control. you think penske auto group started by the great roger penske is a great buy? >> yes we are looking at companies like penske earnings growth and stock price and valuation. penske new and used car retail in the u.s., canada and europe exposure to the used car market was, you know, behind their success in the last year or so i think as we look forward to the end of the year with hopefully better numbers out of
semiconductor availability and the like, we will see a leg higher i think we heard encouraging news about chip availability which is at the heart of the issues that carmakers have i think penske is a great cash flow generator we look for great things as things normalize >> people always ask who is the most impressive business leader you ever met i say without hesitation roger penske four multibillion dollar companies. i called it the dick's sporting goods or cabela's of the midwest. you think shares of academy sports are a good value? >> yes also, the cornerstone cap 30 fund we hear names trading lower have the expectations built in.
with penske and academy, trading at 6%. no a lot over expectations here. sporting goods and retail and stores in 16 states. incredible name that lives in the shadow of dick's and ca cabela's very strong private label business and strong growth something that was tangible and not a lot has to go right for the name like this to work for investors. >> a lot of talk today about the metaverse. i like, josh, the real world buying a car and going to the sporting goods store and going outside with your family tangible stocks. josh wein, thank you have a great day talk to you soon >> thanks, brian. you're very welcome. when we come back, we have a lot more to do much more on what is facing up
to facebook's terrible no good and very bad day one why firm is still sticking with the stock we'll see it on the other side. and ford and gm ramping up their ev ambitions, should tesla investors be thenervous? the triple testimony on capitol hill president biden looks to reshape the fed. a very busy hour still to come stick around
welcome or welcome back. the motor city is going plug-in. detroit is ramping up ev production ford and gm is seeing strong demand for electric cars and thursday mary barra saying the automaker is pulling forward investment in the sector after strong demand >> when you look at the strength of the ev products, we have 59,000 reservations for the hummer and suv we have 110,000 reservations from retail and fleet for the silverado e. we are seeing between '22 and '23, higher growth
>> let's talk about this with tim higgins from the "wall street journal." what is your take on this? is this a permanent shift or is this a fast growing, but still smaller part of the companies businesses for now >> for now, a small part compared to the overall market on the trucks and pickup trucks. sending a message to the market that growth is fast and they are all-in with electric automobile. that is where they are rewarded by the investor community. wall street and the way they rewarded tesla and you see the way that the street has looked at traditional automakers in the last few years it is not like mary barra and ford is talking about that with the reward in the past few
months in particular with ford electric is the future. >> there are a lot of big numbers around reservations for the electric vehicles. i want to be clear because the deposits on many of the cars is $1,000 for some of the electric gmc cars it's $100 for others and it is fully refundable you can throw $100 down and you can pull back and you have not wasted anything. the issue is see what converts it is easy to put a deposit down we have to see how many convert. >> absolutely. how many cars can they produce in a year? ensure they can get the
batteries and semiconductors it is critical with ford reporting and you look for signs they are on track for that electric f-150 coming this spring it is probably one of the most important product rollouts the company has done in recent memory as they show they can do this. one challenge is proving that they can make the vehicle electric and consumers want to buy. tesla has demonstrated that customers will buy an electric vehicle if it is cool and sexy and perform. when you look at traditional automakers, particularly gm, they struggled with that >> let's be clear. you and i have talked about electric cars. they faare fast and they are fu. they have few moving parts to me, where this market is
really going to take off or it's not, it will win or dpie, on the parking lot. somebody gets an electric lightning or silverado his or her buddy says what do you think of the truck they will sing praises and say it is the greatest thing ever and others buy it and you say the range is not as good as i thought or the battery really goes dead quickly when it is freezing cold. the real sales job on these evs, tim, in my opinion, disagree if you want, is when the first customers get them and start telling their friends about how they run because this is a new technology for most people completely different way to drive and operate a car. >> absolutely correct. that's been proven with tesla over the years word of mouth. that marketing is crucial to sales and building that customer
loyalty because this is something new. you get somebody behind the wheel and demonstrate it is cool to drive and it forperforms it helps the sale. gm and ford have to show once you get in the vehicle, it is worth having it is equal to having gas powered vehicle. >> quickly, how much of this will come down to battery range? they say 300 you and i have driven electric cars at 230, you get nervous. if it is cold, it is 200 you are charging more. how much is battery life going to matter? maybe the only thing that matters in a lot of these situations >> it will be huge in the next few years. average person maybe does 40 miles on the daily commute they don't need all that range it is psychological. they want to know when they get in there, they could >> the average driver goes --
all right. welcome back time for the big money movers. three key stock stories happening now. first up is spotify. that stock dropping after the quarterly numbers showed a slow down in subscriber growth. the company saying premium subs grew year over year in the fourth quarter that's a good number, but a touch down from 19% in the third quarter. spotify, of course, also dealing with a few musicians unhappy with joe rogan's views and guests on covid. that is something big enough that daniel ek mentioned on the call >> the important part is we don't change our policies based on one creator nor on the media s cy cycle. joe has a massive audience
he is the number one podcast in 90 markets he has to abide by the policies. >> you will hear from ek when he speaks with us at 10:00 a.m. eastern. you will hear a lot about this today. remember, spotify's fourth quarter ended before the controversy bubbled up try to separate the two. it is in the social etf. it may have artificial selling because of facebook today. next up is qualcomm. it is down 3% although it beat estimate chip maker rising 35%. that growth was slow compared to the same quarter last year qualcomm ceo saying they are seeing higher demand than it can supply in the pre-market, we are seeing red on the screen. and t-mobile going up.
the guidance was stronger. it expects to see 5.5 million customer ads this year which would match 2021's total. still ahead on wex, more pressure for tesla as customers complain about phantom braking with the vehicles. if you haven't already, speaking of spotify and podcast. check out "worldwide exchange" podcast. you are getting in your ev and driving to grandma's, we're on spotify and other platforms. we're back after this.
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tech under pressure once again. is all the google goodwill gone? nasdaq down big. and market getting facebooked meta wiping out nearly $2 billion in investor value. and the airlines and the white house over covid testing and what they are begging biden not to do. it is thursday, february 3rd this is "worldwide exchange. welcome or welcome back, everybody. good thursday morning. i'm brian sullivan thanks for being with us here nice and early
5:30 on the east coast let's get a mid show market check. a tale of two markets. we are seeing futures down on the major averages i can say with honesty all of the futures are down that is misleading dow futures down 107 that is .10% the big story again is technology nasdaq futures are down more on a number basis they are down 1% on the percentage basis and all of tech is likely hit by facebook's big fall from grace. of course, that stock now known as meta, for some reason, down 20%. investors crushing the stock because guidance was not close to what most people wanted to hear put it this way, the loss of value on facebook is stunning. for every $1 that stock falls, it loses $2.78 billion in market
value. the loss is equal to $175 billion to $178 billion. to put it plainly, unless facebook changes, it is set to lose an entire at&t or morgan stanley worth of value that is what facebook is set to lose today facebook is under 13% of the social etf socl. other stocks in that etf, spotify and snap and twitter may see selling pressure today because they track that etf. it has been a rough ride for crypto bitcoin and ethereum is down this year. we are seeing more red across the year speaking of crypto, in the morning rbi, the survey of where they think the price of crypto is going here is a hint it varies a lot depending on
whether you already own bitcoin or you don't that's coming up in the rbi toward the end of the hour let's move on and stick with crypto details moving around a hack with the digital asset bertha coombs is back. bertha, that is going on now with hackers >> reporter: brian, more than $320 million of crypto has apparently been stolen in the latest breach. developers representing wormhole, one of the popular bridges linking the ethereum and solana block chains confirmed on twitter. analysis from block chain security firm shows the attacker exploited a vulnerability on the solana wormhole to carry out the attack u.s. safety regulators are
worried about the tesla safety with the brakes deploying on its own. the number of complaints received by nhtsa says it has risen in the last few months the agency will take action on the matter if need be. back in may, elon musk said dropping the sensor would fix the braking issue. and the testing rules for vaccinated passengers coming into the u.s. from abroad. in the letter seen by cnbc, united and southwest and delta airlines argued that testing requirements for the group of travelers is too burdensome for
travel this was days before president biden took office with the rules tightening in december t i can tell you i traveled internationally over the holidays and it was a little bit of a maneuver to try to get a test it was so hard to schedule one first to leave the place i was going which wanted one and to come back was fine you had to have that back-up place to stay in case you tested negative >> that's it when i went to the uk in november i wasn't worried about traveling. i was worried about quarantined. a rolled a positive test and stuck in a hotel for two weeks my family has moved out. it is a little tricky and nerve
wracking bertha coombs, thank you i got tested five times in seven days. back to the top story and one everybody is talking about today. facebook now known as meta plat p forms. shares are down 20% in the pre-market di disappointing earnings weak first quarter guidance. they admitted user growth, still growing, is slowing down it is taking the social sector with it. pinterest and twitter and snap will all fall because they are in the same etf. jared weisfeld is the tech specialist who joins us now. jared, i feel a little bit like this might be facebook's new coke moment. branding shift no one really understands what's going on do you think facebook might
re-pivot back to what got them here or go down the meta road? >> good morning, brian zuckerberg is committed to the metaverse. this is the focus for the next ten years. he has a segment called facebook reality labs he is investing billions of dollars over the next ten years to commit to the infrastructure of the metaverse you know, while the name has changed from facebook like we know to meta, don't fool yourself that is the commitment to the company. at the same time, 97% of the business is advertising. for reasons we can talk about, this was a significant worst quarter with $200 million of market cap this morning. >> i know the meta is getting all of the attention i'm doing it i'm as much to blame as anybody.
jared, reading stuff from people smarter than me and looking at alphabet or google's results, one has to wonder if the switch that they made, you get a prompt do not track across other apps one wonders if apple's advertising mechanical change behind the scenes brought people off of facebook and on to alphabet because the two companies are going in two different directions does that have anything to do with what's going on >> absolutely. if you were taking a step back and look at the reason for what happened last night, it is effectively a triple whammy. the first is the apple privacy changes. the ability for facebook to target and measure is becoming difficult and advertisers are
less reluctant to tiez advertis because because there is a lower return of investment. the expectations of when apple combats the changes. it is not just that, brian they talked about a while ago with the transition to stories where they monetizes less. that is now happening with the new format takes hold. and within 30 seconds of the conference call starting last night, zuckerberg talked about tiktok competition impacting the business it is a triple whammy of all those things >> any chance zuckerberg could be pushed out? if all of these moonshots completely bomb? or does he control too much? >> you know. it is a great question it is his company. you know, they've gone through these challenges before. you look at the transitions that have happened over the years
from desktop to mobile then from feed to stories. now stories to reels this is not anything that is new to facebook in terms of the challenges they are going through. zuckerberg has successfully pivoted on every one of the transitions. it is his company from the voting standpoint. i certainly don't see that happening. >> all right quickly switching gears to amazon what is your take on that stock? >> amazon is particularly interesting. you clearly have expectations tonight which are lower after facebook is putting pressure on the broader market if you look at all of the ecommerce data points out there for the last couple weeks. visa's data was significant better in terms of card not prp pre present. look at google two nights ago. they posted 36% growth in search year on year with retail in terms of ecommerce a significant
senate banking committee is holding hearing for the nominations to the fed reserve the top banking regulator is facing republican opposition no surprise there biden tapping lisa cook and philip jefferson to round out the people to the board of governors joining us is chris campbell chris, we appreciate your views. you are a former and current d.c. insider the beef with sara bloom raskin. always grave ycious to come on e show, but her husband is a sitting congress member from maryland that is the concern that maybe it is simply a lit too close for comfort. how do you see that playing out? >> first of all, good morning, brian. no question that there is a
chinese wall between fiscal policy and monetary policy with the united states. fiscal policy is where congress and the administration have to work and monetary policy is where the fed works. they can talk, but they can't effect each other's actions because everyone knows the fed's take will be called upon with unpopular moves. raising interest rates and restricting supply or whatever they do to get rid of inflation is deeply impactful in politics. the challenge is the fed reserve will have to do what members of congress don't want them to do sara, if confirmed that that job, she will have to do difficult things or at odds with what her husband wants >> tultimately, do you see her o any of the three get through,
chris? >> i think so. democrats control the senate and these are the democratic president's picks. ultimately, i think i would not be surprised if all four of them, including chairman powell, gets some republican support it's a tall order. no question. there is no question there have very unpopular moves by the federal reserve in the election year i think getting anyone through right now is difficult the fed will make it more difficult. i think the likely three will get confirmed. >> one of your roles, chris, is to bridge together the world of politics and markets the federal reserve, not just interest rates, but massive balance sheet is nearing one of the more delicate periods of the existence.
if they cscrew this up, there i a lot at risk for the economy and financial markets. your clients, the ones you consult, are they growing nervous? is there a fed nerve around how they are viewing investments getting more risk adverse? >> we see risk aversion across the board with the cash position there is large funds and individuals. there is a recetiscent with the federal reserve. there is issues with russia and china on the horizon that could destabilize the economy. whatever the fed reserve does, brian, whatever it does, it will would be a bumpy year and called upon to do unpopular things. it will be a wild ride >> the most important time in the federal reserve's history
since the financial crisis you have new folks going on. it is a wild time. chris campbell of kroll. thank you. take care. all right. on deck, where is the price of bitcoin going? your morning rbi is in the forecast and they are all over the map. we're leaving you with the markets and nasdaq down 300 points in the pre-market down 2%. hold on to your hat. grab a cup of coffee we're back after this.
that is the past you probably care where the price is going it depends on who you ask. morning consult polled people about bitcoin. here is what they found. for bitcoin owners, probably not surprising bullish the median price of $55,200 in six months a gorgeous 50% pop from here people who own more bitcoin are more bullish with the six-month target of $62,000. again, makes sense for those who aren't planning to bu buy bitcoin or the majority, they are growling like the bears they apparently are. those unlikely to buy bitcoin soon see it going back below $20,000. it makes sense if you think something is going to fall in price, you don't buy it or you wait to buy it what is really random, but interesting about this is the chasm between the two groups
similar folks with similar educations looking at a similar commodity asset like bitcoin with a $3,000 gap and how they say it is worth180 days that's what makes a market bulls and bears. not even close on bitcoin. random and hopefully interesting. turning to the broader market dow futures off big. nasdaq off 300 points or a full 2% february is shaping up to maybe be a repeat of the loss last month. long way to go according to misspoke, february starts off on a good note and sees weaker returns. february tends to be weak as well since january was with the five other times the s&p was down in january, february was also down four of
the five times let's bring in kevin simpson cio of capital wealth planning kevin, those are historical nuggets. those are good for television. do they matter or mean anything to you >> i don't know. i miss 2021, don't you, brian? it seemed like everything was going straight up. >> in some ways, yes and other ways, hell no. >> we are seeing fundamentals through earnings season. earnings matter. when we look at companies, if you have good earnings, you are rewarded microsoft, alphabet, apple if you don't come from strong, you are slammed. paypal, meta, netflix. it is focusing on earnings i'm focusing so much on dividends this year. if we are not seeing 20% sky
rocketing returns and we're seeing single digit returns, god forbid, up or down, the 2% or 3% dividend can have an impactful decision in the overall return >> there are tech companies that not only have a dividend, but increasing their dividends name like intel. call that an old fashioned boring tech stock. they boosting their yield. >> it is all about dividend growth that is something we don't talk about enough it is one thing to get a dividend, but the raise of deaf dividend growth. there are so many companies out of the gate that have dividend increase i looked at abbvie and chevron and mastercard and u.p.s with shell this morning, they are compelling when you look at
companies that are increasing earnings and growing their deaf cont dividends at the same time very impactful >> is that the kind of year it is tech has made everybody the money. qqqs have doubled in the last four to five years should we be thinking more about just getting paid? that return of capital instead of return on capital >> that's the foundation of our firm try to get paid while we wait for better times you see the companies increase values it is setting expectations i want to talk to you about mcdonald's today mcdonald's is a stong ck that is not a faang name i analyzed over the last five years. at the end of 2016, mcdonald's was trading at $160 a share. it increased to $268
that is 160% return just on mcdonald's >> a lot of money in big macs. they are a landlord. more than they sell burgers. kevin simpson. i appreciate it. good names to watch. have a great day folks, that does it for us on "worldwide exchange." i wish i was leaving you with a better market. nasdaq down. it's a facebook efctfe have a great day we'll see you tomorrow take care. here. aspercreme arthritis. full prescription-strength? reduces inflammation? thank the gods. don't thank them too soon. kick pain in the aspercreme. staying up half the night searching for savings on your prescriptions? just ask your cvs pharmacist. we search for savings for you. from coupons to lower costs options. plus, earn up to $50 extra bucks rewards each year just for filling at cvs pharmacy.
to the selloff is facebook parent meta. falling 24% overnight on the weak earnings and disappointing f forecast plus, travel nightmare flights canceled today this is a massive winter storm rolling across the united states it is thursday, february 3rd, 2022 "squawk box" begins right now. good morning welcome to ""squawk box" here on cnbc joe and becky will join us live tomorrow with a huge lineup of special guests including at&t's ceo john stankey. let's get to the markets