tv Worldwide Exchange CNBC April 12, 2022 5:00am-6:00am EDT
it is 5:00 a.m. here at cnbc here is the top five at 5:00 stocks are renewed selling with tech stocks building on the retreat. futures pointing to another tough trading day ahead. investors waiting for the read on inflation. expected to show prices surging by levels not seen in 40 years we preview that number. also on the rise mortgage rates back to levels not seen since the financial crisis and the state department ordering some staff members to
get out as authorities are easing lockdowns we are live on the ground with the latest etsy kicking off what is expected to be a battle over the direction of the ecommerce darling. it is tuesday, april 12th. you are watching "worldwide exchange" here on cnbc good morning to you. i'm frank holland in for brian sullivan let's kick off the hour with the check on the markets and your money. stock futures are a mixed picture. nasdaq higher. the s&p and dow in the red the dow could open up 30 points lower this morning it's still early stocks kicking off the week in the red. dow aand s&p falling.
down more than 2%. investors are gearing up and expected to show the biggest spike since december of 1981 driven by higher food, energy and rent we will geta report on the bon market the 10-year yield is ticking above 2.8% the 10-year yield increased 80 basis points over the month. the 5-year and 30-year is ticking higher we are getting a look at the price of oil rebounding since the lowest level since february wti under $100 brent crude over $100 a barrel crypto bitcoin falling below 40,000 for the first time since mid march on monday. it is just an move 40,000. we are looking here barely above
40,000 we will keep our eye on crypto i thought of inflation hedge we have an analyst coming up to say crypto and bitcoin could be poised for a bounce coming up. knikkei leading losses and shanghai climbing 1.5% europe is seeing losses in early trade. rosanna lockwood is in the london newsroom with more. good morning, rosanna. >> reporter: good morning. you are right. we are certainly having a negative morning in europe all of the major indexes in the red. ftse 100 in london is energy exposed and mining exposed it is spiked by commodity prices down only .40% and cac here is actually down .9%
the dax in germany down over 1% in the red. and a major investor in deutsche bank you see selling heavily. down almost 10%. investor shed a large stake in both of them the position is 5% holding in both of the banks. now cnbc is working to confirm who the investor might be. plenty reporting that capital group may be one of the people in the running or institutions in the running with the stakes in the banks we had statements this morning saying they are confident in the strategy and nothing has changed. saying all is par for the course we are confident in what we'ring doing. back to you. >> thanks, rosanna to other top stories, including the cost to buy a home
is more expensive. bertha coombs is here with those. good morning, bertha >> reporter: good morning, frank. after breaking above 5% last week, the rate on the 30-year fixed climbed to 5.25% that is highest since august of 2009 and two percentage points higher than a year ago according to freddie mac, it has seen the fastest rise since may of 1994. president biden is eyeing former treasury official michael barr for the treasury department. barr has merged as the frontrunners after biden's previous pick pulled her nomination barr played a major role in crafting safeguards in the wake of the 2008 financial crisis and a long-time consumer advocate.
and shares of veru continuing to surge after announcing positive results of the phase three trial of its oral covid treatment the company saying the drug led to a meaningful reductions of deaths of patients hospitalized with moderate to severe covid. veru will meet with the fda to seek emergency use authorization for treatment. note, this is a small cap company still below $1 billion in valuation it is much bigger than it was before the news yesterday. stock soaring more than 180% in yesterday's regular session. frank, there must have been a big short position there 180% surge in one day. >> you don't hear about a triple digit move often.
to the latest on ukraine u.s. and uk working to verify unconfirmed reports of chemical weapons in the city of mariupol. a report by the national guard of ukraine said they used a poisonous substance of unknown origin president biden is looking to minimize the russian invasion on american lives. we have brie jackson from washington with more on the story. good morning, brie >> reporter: good morning, frank. the united nations security council said 90% of those fleeing ukraine are women and children there are growing concerns they may become targets of the russian attacks. russia ramping up a new offensive in ukraine an already devastating situation expected to get worse now that a general nicknamed "the butcher of syria" is in charge
>> this has been a brutal campaign in ukraine. >> reporter: there are fears of new attacks like the one at the train station that targeted civilians, including children trying to flee the region. >> over 90% of the 4 million have already left the country are women and children out of the 7 million that are displaced in ukraine, the vast majority are also women and children >> reporter: the u.n. is investigating reports of violence against women >> women in ukraine are at increased risk for are violence, including rape, sexual assault and sexual exploitation. >> reporter: volodymyr zelenskyy making pleas for more fire power are from the west. warning of the dangerous chapter of the war during a meeting with president biden, india's prime minister condemned the killing of innocent civilians
>> they should use that leverage constructively to help bring this conflict to an end. it is undeniable that india has a relationship with russia that we don't have. >> reporter: hope for diplomacy on the table and the biden administration blames gas prices on the putin war. president biden is expected to announce the situation is suspending the ban on the sale of gas blended with 15% ethanol. >> brie jackson with the latest. thank you. turning attention back to the markets now. investors are watching key inflation data that comes out later today. joining us now is gina sanchez good morning, gina >> good morning. >> you and i chatted yesterday you said the sanctions are russia and impact on the commodity markets are the reason for the down turn in the market. that conflict not easing any time soon and sanctions with no clarity of when they will be
lifted commodity anxiety. how long do you see that impacting the markets and is there any relief for that? >> i agree i think commodity anxiety is the root of most trepidation right now in the markets i think it could last for the nort rest of the year there are segments where the united states and opec can have an impact on oil and impact on various metals there are some metals we cannot impact where russia or ukraine are the number one or two producers in the world you look for palladium or platinum forecasts are above of what is priced into the futures markets which are already high that is really what is feeding a lot of this anxiety. you have two pieces. one is that high commodity prices could take a chunk out of demand and really put the skids on the recovery we have been
having which is slowing down the second is it could create and force high inflation and force the fed to be very aggressive neither is a good outcome. >> it is soaring importance for chips. we have cpi numbers coming in. last read at 8%. it will tick higher as estimates come in. can the fed doing something to make us feel better about inflation? >> there are two pieces, frank the current forecast for cpi for this year is 6.9%. the bar is actually pretty high to get below that number i actually think it could remain high where i really think all eyes are on the fed is the fed
forecast to take a move every meeting for the rest of the year expectations of the shortened up to 2.5%. given the 10-year, the bond market is positioning itself for that just one miss, if the fed were to take one break, and you heard comments from the fed saying there is a difference between inflation that is the result of the overheating economy and inflation momentum and wage inflation and inflation driven by commodity prices. what we don't want to do is make the same mistake we made in the '70s which drove us into stagflation. >> jgina, oil. we saw the prices dip a bit. opec warning of tight supply how do you see oil continuing to impact in the oil markets? >> the problem with oil is we went into the year in a tight supply market. we had a lot of labor shortages
we are holding over from the pan pandemic it wasn't easy to let loose production spigot. if we didn't do that, it would be an issue. we are not in an oversupply situation. we are in a very tight supply situation in the oil markets and across the entire commodities complex for the same reasons it is a reason you continue to see this pressure on oil >> rising oil prices with pressure on main street. gina sanchez, thank you for being here when we come back on "worldwide exchange. ongoing lockdowns in shanghai easing up as some residents leave their homes for the first time in weeks. we will go live to china for the latest. and buffett's pc pick.
concerns over if that investment pays off. and more efforts to uniozeni a very busy hour still ahead when "worldwide exchange" returns. what if you were a major transit system with billions of passengers taking millions of trips every year? you aren't about to let any cyberattacks slow you down. so you partner with ibm to build a security architecture to keep your data, network, and applications protected. now you can tackle threats so they don't bring you to a grinding halt.
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the state department telling u.s. citizens to reconsider travel to china. some residents are leaving homes for the first time in two weeks today in china the city in shanghai takes steps to ease covid lockdowns. eunice yoon has the latest from beijing. hard to imagine being stuck in the house for two weeks. >> reporter: frank, people have been waiting and in the house much longer. several weeks. the easing is happening and is happening slowly street by street and building by building if your apartment complex has had no covid cases the past 14 days, you can technically leave your home. if the building next to you had any cases more than one in the past 14 days, you can't walk outside your door and potentially risk that. according to the local authorities. people now in those low risk
buildings can technically leave to walk their dog, but most of them only can walk their dog hay risk measures in shanghai. the factory area that is close to shanghai, suzhou, is implementing mass testing for districts. there are other cities kunshan and taicang. there are a lot of u.s. companies with facilities there. this area has a lot of apple suppliers. already companies making the ipad and these companies are saying they had to stop or suspend production because of the controls frank. >> eunice, you were showing the
population shanghai with 26 million people. hard to imagine how big of a city that is when you come from america in the new york city area with 8 million. the fact they were able to lockdown shanghai, that is an accomplishment on its own. now easing lockdowns can we see more easing of restrictions across china? >> reporter: at this point, it will be case-by-case in terms of overall lifting? probably not very fast because the way the government has been talking about zero covid and policy it has. it has become quite defensive. it wants to impose what it thinks is a successful scientific policy. in fact, it was critical yet again of the united states saying the u.s. state department shouldn't have made the decision it has made to warn american
citizens of what the united states has said of arbitrary quarantine and detentions because of these sudden lockdowns. also the state department has now ordered as you mentioned at the top the non-essential staff to leave shanghai. the chinese government is getting really sensitive how this is portrayed overseas and in this case blaming the united states for what it thinks is a smearing of its image. >> eunice, please stay safe there. eunice yoon live in china. thank you. >> reporter: buying a lot of frozen goods and instant noodles. >> whatever it takes we appreciate the report still on deck on "worldwide exchange." president biden looking to combat sky high gas prices addressing the pain we are all feeling at the pump. stay with us
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exchange." let's get a check of the headlines with frances rivera in new york >> good morning, frank we start with the three former minneapolis police officers charged with aiding and abetting the murder of george floyd rejected plea deals. the prosecutor did not disclose the offers, but they were identical. the offers were made after the jury convicted the three in the separate trial in february on civil rights charges stemming from floyd's death. numerous reports of hail in arkansas and oklahoma and in some places the hail the size of golf balls there was significant damage in the northwest part of the state. and she did it again britney spears is expecting her third child and first with sam asgari she noticed her stomach was
joking on vacation after she was released from the con conservato conservatorship, she became pregnant good for her something to look forward to in her life. >> frances, i wanted to play along, but i don't know another song >> "toxic" or "i'm a slave for you. you have to spend time doing homework. >> i don't know if the word need applies here frances rivera, we appreciate it still on deck on "worldwide exchange." investors embracing for another record read on inflation we preview the report and ask when price pressure may ease
if you haven't already, follow our podcast if you miss "worldwide exchange" chk o oecusutn spotify or apple or other podcast platforms we'll be right back. 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.
'80s. and etsy facing a potential strike by sellers and what could be the battle for the stay at home favorite. it is tuesday, april 12t you are watching "worldwide exchange." h welcome back to "worldwide exchange." i'm frank holland in for brian sullivan 5:30 ammonium.m. on the east co. futures are lower to mixed nasdaq between negative and the positive dow opening slightly lower 25 points. we have to continue to watch the trading week starting off in the red. dow falling and s&p falling by 1.2% and 1.7%. we are watching the rising bond yields nasdaq down more than 2% investors gearing up for the march cpi report
expected to show the biggest spike since december of 1981 ahead of the report, let's get the check on the bond market 10-year is 2.8%. highest level since december of 2018 the 30-year was ticking higher we want to look at the price of oil. rebounding after falling to the lowest level since february on the china lockdown fears wti is below $100 a barrel up 3%. brent crude just above $100 a barrel up 3%. natural gas higher as well we want to highlight the collapse in chipmaker stocks shares of nvidia falling 16% over the last week and more than 30% off the high other names in the sector taking a beating. amd down 9%. applied materials down 4.5%.
something to watch now to the attention on the latest on ukraine. u.s. and uk working to verify unconfirmed reports of russia using chemical weapons in the port city of mariupol. nbc's raf sanchez is live in lviv with the latest raf. >> reporter: frank, good morning. these claims of chemical weapon use are coming from the battalion. the far-right ukrainian militia leading the defense in mariupol. last night, several soldiers were exposed to what they say was chemical weapons dropped from a russian drone we should be clear, we have not independently verified that. in the last hour or so, ukrainian deputy defense minister saying on telling, she is not able to verify that claim. she says initial information indicates this may have been phosphorus munitions that is a nasty weapon
it drops burning white material over a large area. it is not traditionally what we think of as chemical weapons the uk is urgently trying to v verify what is going here. the british secretary says if they used chemical weapons, that would be a callous escalation and one moscow needs to pay the price for. it is easy to say and difficult to do. we remember president obama drawing that figureative red line if they use chemical weapons, it could trigger an american military response. that response did not happen president biden will be wary >> raf, the war is turning to the eastern ukraine area what is the latest on the fighting there >> reporter: officials say every day they are seeing more russian
tanks and armor and artillery troops in the donbas region. over the next two-to-three weeks, we are likely to see a major escalation there this is going to be a very different kind of fighting to what we have seen so far in this six-week war we are likely to see something more like the second world war battles and tanks and artillery going up against each other. that is a situation that may favor the russians remember, in the east, they are fighting closer to their own bord border supply lines are shorter it is difficult for the ukrainians to mount the hit-and-run guerilla attacks in the suburbs. it is a very difficult fight ahead for the ukrainians in the east volodymyr zelenskyy says they need more weapons from the west to keep up the fight
frank. >> raf sanchez, i appreciate that report. to the other top stories our bertha coombs is back with those. good morning, bertha >> good morning, frank the biden administration announcing steps this morning to try to combat surging gas prices the white house saying it will suspend the ban on summer sales of gas blended with 15% ethanol. the president is expected to speak on the matter when he travels to iowa which is the country's top producer of renewable fuel the corn used to make it as well the extra epa will issue an emergency waiver on suspending the ban closer to june. sellers on etsy start aid strike in protest over the fee it charges shop owner force transactions the fee from 5% to 6% on monday.
first since increase since 2018. it is critical to invest in the marketing and seller support services more than 20,000 sellers have signed a petition against that move and employees at two more starbucks have now voted to unionize the boston area shops mark the first in the massachusetts stores to make the move. the votes to join the workers united union was unanimous frank, of the 19 starbucks stores voted to unionize, 18 have done so it looks like it is one of those moves. a time for labor >> certainly broad labor movement around the country. starbucks, amazon. bertha coombs with the headlines. thanks. inflation surged in march and gas prices to record highs
consumer price index jumping 1.1% last month. that would be the largest increase since september of 2005 year over year, it will shoot up 8.%. the largest gain since 1981. let's get more insight on the data from michelle girard. >> good morning. >> michelle, do you agree that inflation can shoot up 8.4% year over year? >> it is frank, with everything we are talking about with these numbers. others have an outside increase. we are looking for a gain of over 1% in that headline cpi that is really driven by a surge in energy prices they could be up over 8% as a
result of the invasion of ukraine. we expect food prices to be up sharply so the headline gain is going to be the largest that we've seen since 2008. if you strip out the volatile food and energy, the numbers are going to look for that core rate of inflation excluding food and energy. up 6.5%. it will be another round of very unsettling numbers for the fed. >> you mentioned stripping out food and energy. heat the house or get in the car and drive. in this case, the core cpi is just as relevant we will see the numbers come up. inflation will rise. fed has plans to hike rates. do you see any change to the plan dependingon what we see today? >> no, it is interesting last week, the minutes from the
fed's last meeting indicated the pre-disposition to move 50 basis points they said 50 basis point increases. one or more at future meetings would be appropriate potentially to combat inflation. i think in the minds of most market participants, ourselves included, no matter what number you would have gotten today, it would have, i think, sealed the deal that the fed was inclined to make a half a basis point move in early may. the question now is going forward. will they continue to act that aggressively and the market is pricing in aggressive moves. the market now thinks the fed will raise rates to above 3% before they're finished. >> i have to ask the fed and other experts said the inflation is due to the supply chain issues and geopolitical uncertainty how do rate hikes address two issues that are beyond the scope of the fed's control
>> you are right, frank. what we have is an imbalance with supply and demand there is not much the fed can do to increase the supply of goods and services disrupted by supply chain issues and war, et cetera. what rate hikes do is helps limit demand by raising interest rates and moving policy away from a very an an caccommodating stance, it fuels the imbalance. the rate hikes are intending to move to a more appropriate position given the fact that sitting with rates below the neutral level at this point in the sickle cycle with the infla appropriate. >> president biden addressing gas prices later today food inflation is something that
probably isn't spoken about enough we all eat we look at commodity prices spike up there is no end to what is going in russia any time soon. how will food inflation continue >> i think food inflation is more persistent than the energy price surge. we have seen the energy price surge dominate the march numbers. energy prices may come off a bit in terms of pace, but food prices are going to be very persistent in general, let me say, we have expectations for inflation to remain very elevated that's really the concern. even though the year over year numbers will start to move lower helped by comparisons to higher levels a year ago. we still have the inflation rate
unco uncomfortably high if yyou strip out food and energy, it is 4% 3% at the end of next year this is what the fed is worried about. the persistence of inflation across the board. >> michelle girard, we appreciate it. estimates for the highest inflation in 40 years. thank you for being here. coming up on "worldwide exchange." bitcoin facing pressure as it dips below 40,000. we talk about the action as we head to break, other top stories. deutsche bank plummeting on a report that undisclosed investor told large stakes in both. they remain confident in strategies. shares of dubai water authority begin trading today. that is the largest ipo since aramco and piling on the pressure to
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buffett took an interest in the company. buffett becoming the largest shareholder in hpq days after the deal to acquire a head set maker. hpc giving guidance on are margin data shows a decline in the pc market you have to keep in mind the comps are tough. off the best year in decades in 2021 pc shipments down 7% year over year hpq losing market share. the number two company globally. dell and apple gaining share this is after the sale of chrome books. lenovo is the global leader. shares in the red along with dell the biggest decline in pc sales down 17% year over year. on deck here on "worldwide exchange."
stocks seeking direction as the key pci report is here keith lerner says he is downgrading the outlook on stocks ahead of the data if you missed "worldwide exchange" check us out on apple or spotify or other podcast platforms. we'll be right back. and start crunching a year's worth of transactions against thousands of compliance controls with the help of ai. now you're making smarter decisions faster. operating costs are lower. and everyone from your auditors to your bankers feels like a million bucks. let's create smarter ways of putting your data to work. ibm. let's create
a mixed picture. up and down this morning we are seeing the dow down very slightly nasdaq up slightly right now s&p basically flat investors gearing up for the cpi report expected to show the biggest spike since december of 1981 monthly jump of over 1% and year over year gain of 8.5% driven by higher food, energy and rent costs the stuff we need. ahead of the report, let's get a check of the bond. 2. 2 2.803% for the 10-year we want to get a look at the price of oil rebounding after falling to the lowest level since february on the china lockdown fears wti is under $100 a barrel. up 3%.
brent crude above $100 a barrel. up 3% this morning we have to look at natural gas higher cryptocurrency bitcoin falling below 40,000 for the first time since mid march on monday. up fractionally. solana up over 1%. for more on the trading day ahead, let's bring in keith lerner at truist keith, thanks for being here >> good morning, frank great to be with you >> let's look ahead to the cpi number we showed the estimates. estimates for 8.5% over the last year how is that impacting the markets? >> as far as today, frank, everyone knows we have a high rate i would not be surprised if we have a rally off that. the big picture is inflation remaining a problem. it will be a challenge for the
fed to tame inflation at the same time of not hurting the economy. it will would be a challenge for them to stick a soft landing without breaking an ankle or two. >> that's quite the metaphor keith, you have been bullish on equities you are changing your opinion. you are feeling more positive about fixed income is that just rising interest rates or are there other factors? >> frank, we have been bulls the last two years we downglraded view of equity from attractive to neutral one reason is we have seen the move in interest rates to the 10-year treasury at 2.8. that is a percent higher than march 1st. as a result, the equity risk premium is the comparative value is relative to the fixed income.
when we see that and test that out, the stocks out performance which tends to be higher, moves down 3% on the 12-month basis. we are saying we still think fixed income is under weight we think there is opportunity. >> earlier this month, before you have came out with the call, you downgraded small caps. it looks impressive. russell off the five-day losing streak during the pandemic, the small caps in general and the russell were reopening index the country reopened philly reinstituted the mask man mandate. why are small caps struggling? >> we were lbullish last year. because of the economic cycle.
as the fed raises raitstes and economy slows down, it will effect small caps. on the long term basis, they are attractive we see price trends weakening and the earnings momentum relative to small cap weakening as well. small caps are leveraged we do think we will have somewhat slower growth in the economy relative to the last year or two. >> so no recession, but slower growth are you downgrading equity what are you overweight? >> it is more where there is opportunity within sectors we have been overweight in energy over the last year. we still like energy, but it in a digestion phase. areas such as consumer staples is an overweight we still continue to like reits. some tech exposure and reflation
exposure health care and materials which are latest in the cycle. >> how do you see inflation coming out everybody is looking ahead to that cpi how is cpi doing does it still impact energy and reits? for cell towers or whatever else >> that's right. energy is a direct play on inflation staying elevated oil prices supported as well we like energy consumer staples if you have a slower economy because the fed will press higher with higher rates, that is a good sector and choppy market that we envision. with reits, there is a positive aspect every year they raise prices on inflation trends
there are offsets and a healthy yield in the reit index. >> keith lerner, thank you text me later. before we wrap up, another check of the top stories the rate on the 30-year fixed mortgage has climbed to 5.25%. the highest level since august of 2009. around two percentage points higher than a year ago according to freddie mac, the fastest rise since 1994. and president biden has picked michael barr for the pick for the treasury department. he crafted safeguards in the 2008 financial crisis and a long-time consumer advocate.
and slhares of veru saafterh oral covid drug results released veru will meet with the fda to seek emergency authorization this is a small-cap company below $1 billion in valuation. it is much bigger than before the news yesterday stock soaring 180% in yesterday's session. that does it for us on "worldwide exchange. "squawk box" is coming up next thanks for watching. staying up half the night searching for savings on your prescriptions?
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good morning futures pointing to a mixed open ahead of the inflation report that's due at 8:30 a.m european financial names under pressure after an investor sells stakes in german banks. a new covid variant detected in the u.s. and spreading to japan. china deals with continued lockdowns and a u.s. city reimposing mask mandates. it is tuesday, april 12th, 2022 "squawk box" begins right now. >> good morning. welcome to "squawk box" here on cnbc we are live from the nasdaq
market site in times square. i'm rebecca quick along with with joe kernen and andrew ross sorkin u.s. he cequity futures down 20 points below fair value. s&p futures are up just by 1.7% that is after the decline of 1.7% yesterday for the s&p and nasdaq down 2.2%. this morning it is indicated up by 36 we'll talk about what was happening with technology. all 11 sectors were down yesterday. technology hardest hit among the most notable moves, microsoft dropping 4%. nvidia down 5% in large part of what was happening in the treasury market treasury yields with the continued climb. the 10-year yield 2.8% befor