tv Worldwide Exchange CNBC January 24, 2023 5:00am-6:01am EST
it is 5:00 a.m. in new york. here is your top "five@5." tech in control. bears shocked this year. investor attention turning to earnings in technology, google defending the layoffs at the all-hands meeting last night what some employees had to say about it ahead. some bad blood expected on capitol hill when lawmakers target livenation over the ticket fiasco from taylor swift. and elon musk on the stand
defending the secure tweet why he said the price was no joke. and later on, a candy-covered controversy. m&ms pulls the plug on the s spokes candy this is "worldwide exchange" on cnbc welcome and good morning, good afternoon or good evening. i'm brian sullivan let's kick off stock futures which are not giving us a lot of indication of the way things will go. yesterday turned out differently. dow futures down right now .10% off. nasdaq down 21 again, it is very early. i know we got to show the
futures. i wouldn't put a lot of credence in them at this hour this after the big day in nasdaq and technology futures were not moving a lot. then stocks took off the nasdaq surging more than 2%. having the best day since back in november. one of its best days in a long time names like tesla, apple, nvidia and amd leading the gains yesterday. by the way, speaking of amd, more than 9% jump. that is its best day since november people were active trading volume popped. 80% of the 50-day moving average. showing you renewed investor interest in the beaten up technology names bond yields are moving steady fed reserve kicks off the two-day policy meeting one week
from today on january 31st have you been watching oil it is continuing to creep higher it is closing in on $82 per barrel gasoline prices are beginning to rise price of crude oil at 81.24. crypto and bitcoin above 22,000. ticking back to 23,000 we talked about it yesterday bitcoin was under 16k during all of the ftx breaking news back in october and november now it is back toward 23,000 the crypto bulls shall not be denied let's put the worldwide in "worldwide exchange. much of asia, korea and china still closed for the lunar new year japan stocks rose by%. europe is fully open for business let's head out on arabile gumede
in the london newsroom with the moving and headlines arabile. >> brian, good morning it certainly has been a day of heavy movement a lot on the economic front than stock front. we are getting a lot of data coming out as i noted the economic news has been heavy flash pmi in the eurozone. french, german and eurozone numbers. you are seeing a return to growth those numbers still remain in contraction territory. some of the really not necessarily helping the growth picture by too much. not blowing the lights out in any particular way the services pmi in the uk at 48 compared to 49.9 a drop on that front a drop of the composite number of 47.8 to 49. that is in the uk. the french economy composite number at 49 to 49.1
a falloff there. you are seeing a better picture when it comes to the manufacturing with france. in germany, similar picture. the composite number at 49.7 for the month of january up from 49 in december. a slight improvement on that front. overall, the market is moving on general weakness the cac 40 in france has been moving higher. out of the uk, deficit numbers there and deficit climbing to record numbers that weakness playing its part on this as well as the currency. overall, weakness across the european market. quickly, other news making headlines. the qatar investment authority raising stake in credit suisse it is just under 7%. making the sovereign wealth fund the second largest shareholder after the saudi national bank. the move means the middle
eastern investors have now taken control of 20% of credit suisse stock. as long time u.s. investors as harris investors reduce the stake in the lender. on the other side, logitech sales slumped in the fourth quarter. demand eased from the heights of lockdown and supply chain issues which hit the maker of mice keyboards. brian. >> all right arabile, thank you very much. let's get to the top story that is in technology and google's parent company alphabet an all-hands meeting and executives defending the decision to cut 6% of the work force and adding bonuses may be on the line. arjun kharpal is here with us now. >> brian, good morning a lot of discontent going into
the town hall social media people flooded by google saying they were cut off from the systems. they were questioning the criteria for layoffs and manner in which it was done some of this addressed in the town hall. the ceo saying the company seeing the boom in 2021. they hired to keep up with trends, but the normalization that we have seen taking place in areas like cloud and others, it had to adjust that was the reason for some of the reductions the management said there were 30,000 managers at google. having to consult them around the job cuts would have taken a long time. therefore, that's why they kept a small number of management in the loop of the job cuts management saying cuts came from areas where work was necessary, but too many people whose work wasn't critical. very much trimming the fat in areas for google
skill set and productivity metrics were taken into account when they decided whose jobs would be axed. employees shut off from the corporate system management said this was preventing security risks. the key for google is keeping up morale at the company and reinvigorate growth against the difficult macroeconomics back drop especially with advertising and cloud spending as well brian. >> truly remarkable, arjun, the way they are handling this how do you read this when you look at all of the things we have seen -- layoffs we have seen i know you have been in china and europe you have a global perspective. is there a macro take away that the u.s. and global audience should have here >> we see these tech cycles play
out, brian i'm glad you mentioned china two years in china is a tougher macro environment with zero covid policy, but the strict regulation in china hampered the growth of technology we have seen rounds of layoffs in china businesses readjusting to the new reality. adjusting in areas they still think will grow, but disciplined on cost. i think we are seeing something similar with the u.s. tech giants analysts expecting return to growth over the coming quarters after making those adjustments also against the fact that china is reopening, but for the u.s. tech giants, it is important, microsoft's 10,000 jobs was under 5% of the work force yes, this is a large number of jobs, but clearly this for microsoft is trimming the fast and getting costs under control. for alphabet, similar narrative.
that investment in open ai for microsoft is an example here these businesses are not retreating from investment, but they are readjusting to some extent and disciplined against the tougher macro environment in the hopes of reinvigorating growth in the coming quarters, brian. >> bad headlines for workers stocks have popped tough combo. arjun, thank you. let's get a check on the other top headlines, including more news on google. silvana henao is here with that. >> brian, good morning it doesn't end with google u.s. justice department is duidusuin alp alphabet the bpending filing is the fift major case in the u.s.
challenging alphabet business practices. the senate judiciary committee is set hold a hearing over the tour ticket sales for taylor swift this is after hours long wait times and prices as high as $22,000 per ticket and glitches preventing people from securing tickets. livenation's president is expected to testify that they were hit by a cyber attack that led to those issues. and gemini is laying off 10% of the work force in the latest job cuts they cut 10% in june and 7% in july they join the crypto chirfirms announcing the collapse of ftx brian. >> silvana, thank you. folks, we are getting started on this busy tuesday when we come back, we breakdown
stock markets misses with kevin simpson. he is up next. could it be a case of buy the rumor and sell the news? how the luxury stocks may be too much too soon? and musk takes the stand why he says his $420 funding secured tweet around tesla is no joke very busy hour still ahead right after this very short break.
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welcome back investors are waiting for a batch of economic data and earnings ahead of the federal reserve meeting next week and any sign the fed is looking to ease the ak hecceleration of the interest rates let's discuss with kevin simpson. i enjoy the insight, kevin you sent a note like if we have recession, we don't know where earnings will come in. we don't know how long inflation will stay hot. you know specific investment strategy over time prove to make money. dividends are a big part of that >> absolutely, brian the theme of 2022 was dividends, dividend growth and really saved our bacon and lots of investors over time. what i found most interesting is
the stat i saw last week bob pisani put it up it talked about the s&p 500 over the past 100 years going back to 1926 what it showed is if you invest in the s&p, you get a 10% return every year that's why we do it, brian if you get a double digit return, sometimes up 30%, sometimes down 30% on average, 10% number is pretty good pretty darn good look at that stat. 39%. almost 40% of the total return comes from dividends and dividend distribution. it's powerful. >> are you surprised by the strong start to the year, kevin? >> well, i'm shocked because i don't think anything has changed in 2023 from what we saw last year i think the markets are ahead of the skis and it is great and i hope i'm wrong from the valuation perspective,
what can make stocks go higher earnings could go up a lot that would be great. i'm not convinced that will be the case multiples could expand when you have rising interest rates, typically the opposite happens. from my lens, i think we are drinking some kool-aid here at the outset and maybe we should temper our expectations a little. >> i'm going to say something that probably just will throw a giant bucket of cold water on the next two weeks of cnbc coverage i apologize to my colleagues i wonder if earnings will matter that much. the only reason i say that and i know, whatever, is because the market run up is so big and after doing this 25 years, i get the feeling people are buying what they view as less awful earnings and guidance. if we get those numbers, which are going to be a little better than expected or less awful, i wonder again if the gains have
been made. we are making 6% and 7% moves in the first three weeks of the year, kevin. that is an annual gain in many years. >> it is great if you are a trader, right, brian i look over a longer lens. i agree with you completely. you can set the earnings bar as low as you want. it will not allow the market to continue on that trajectory. the good news is i think markets have some attention paid to earnings and economic data and wage growth is down and cpi is good service pmi is down. core pce to your point, earnings across the board. from the valuation standpoint, you and i are in sync with this. we have come too far and too fast if the levels are here at the end of 2023? this is a win. i would be more defensive and take this rally with a grain of salt
a fair amount of skepticism. >> neither you nor i are technical traders. probably an important period in the s&p. we are in a declining wedge pattern is where we see resistance it is 5:18 in the morning on a tuesday in freezing cold new york if we bust through, good stocks are up. maybe this year will be better than people think because, all due respect, almost every st strategist was spectacularly wrong last year and now they are all negative >> it is the herd mentality that scares me. i don't like to be past of the crowd. last week and this week we have heard optimism a month ago it was the first part was horrible and second part is better now markets react in a strong
open out of the gate and you hear people saying the beginning of the year is strong. i'll stick with conviction and an say markets trade on price. we will not extend the rally into the end of 2023 i hope i'm wrong >> some smart guy said something about short-term adding machine. equi kevin, wrap it up. three or five years. stay invested. look for cash flow and dividends. that's it. long term. >> dividends and distremeibutios to shareholders. that's how i make money. >> own a stock over time, history will do the job. kevin simpson, capital wealth. good advice. still on deck, a cand
candy-candy candy-candy candy-covcandy candy-covered controversy. and chatgp it is making history that is part of the top trending stories. it's next. my name is joshua florence, and one thing i learned being a firefighter is plan ahead. you don't know what you're getting into, but at the end of the day, you know you have a team behind you that can help you. not having to worry about the future
california after another mass shooting this time in half moon bay officials say 67-year-old man opened fire killing seven people and injuring another this happened at two nurseries some workers lived on the premises authorities believe the suspect was a worker at the farm business he was arrested two hours after the shootings. the sheriff says the suspect has been cooperating with police the victims have not been identified the fbi is working with authorities to continue the investigation. another round of convictions in the wake of the january 6th attack on the capitol. richard barnet with his feet here on nancy pelosi's desk is guilty four other members of the oath
keepers were guilty of seditious cons conspiracy and the baseball hall of fame announcements have been released back to you, brian. thank you, phillip mena. and china 's reopening has cause a boom for stocks. especially high luxury names after three years of lockdowns consumers are able to get out of china again and they are getting out and spending robert frank has the look at the stocks with the biggest bumps from that reopening. they are getting out and opening their wallets, robert. >> that's right. brian, looking for revenge spending it is called the big bang theory
for luxury stocks. china driving luxury shares up double digits. lvmh with the market cap over $400 billion it is bigger than walmart or any other american retailers richemont and hermes up this month. calling it the big bang with the china reopening sparks more luxury spending in china and boom in europe as chinese consumers head to paris and milan where lux ury goods are 30 cheaper. burberry citing sales in january. bernstein projecting that demand could surge 25% to 30% which puts global luxury in the teens.
and then bain & company with a 6% to 8% swing the issue is will demand in the west hold up as the economy slows? we will know when lvmh reports on thursday. >> the numbers is there anything to indicate, robert, that we had this information hole with china for years. we have had eunice yoon reports for years and they have been locked down for those years. do we know if the purchasing power from the chinese consumer is still there you wonder if we will see the same number of travelers come to the united states or will it take a long time to tick back up i imagine after what they went through, they will still have a
lot of hesitancy or shell shock or both? >> that is the key question. do they have the money and mood to spend we saw in 2021 when they emerged from the first lockdown with a lot of spending, especially luxy -- luxury in china. it may not be as strong as the west the savings increases in china were not in the u.s. they did not have the stimulus spending that happened in the u.s. the real estate there has not performed well over the past year big questions there. the early reads at the luxury shops at the stores in january show very strong lines outside louis vuitton and hermes and the big brands especially this summer if they truly travel to europe and buy luxury goods there >> that's it it might take a while to get the
data and find out, but they are able to get out right now. not just internally, but externally as well it could be good news for new york as well >> absolutely. absolutely tiffany headquarters which is still renovated relied on the chinese consumers. bulgari as well. if the west and america can hold up, that will be icing on the cake this year for luxury companies. the stocks have run up >> big icing for new york city and big apple. robert frank, thank you very much coming up here on "worldwide exchange," why apple is i ammun to the big tech hiring this year oil is up a touch. we're back right after this. technologists in india, and customers all on different systems.
money keeps floating into beaten down technology stocks, but are earnings ready to spoil the party? we kick off with microsoft numbers and those could set the tone and move markets as tech stocks boom to start the year. and funding to he says elon musk back on the stand in the shareholder trial. on this on tuesday, january 24th this is "worldwide exchange.
welcome or welcome back. good tuesday morning it is 5:30 on the east coast i'm brian sullivan let's get right to it and take a look at stock futures. once again, not giving us a lot of indication about which way they will go they are slightly lower. dow futures off 52 points. kind of nothing. one guy starts to come in or one trader hits a button and futures go up. either way, we had a big start to the year. investors might be waiting on earnings to make another move after what has been a good start to 2023. a ton of numbers out today ton of numbers out of the rest of the week. in fact, it is the second busiest week for corporate earnings busiest is next week we will get a flurry of numbers all for the next remaining four days this week oil has been moving higher
oil creeping back up toward $82 per barrel stimulus from the spr is wearing off. china demand is kicking in oil right now down a bit $81.53 natural gas is getting a little bit. let's talk about energy and something not getting attention it deserves. that is solar stocks solar stocks are as hot as a solar flare this year. the invesco etf is up 12%. on fire this year to kick off 2023 well below the highs of a couple years ago, but still a big start to the year for the tan and it is tied with the gdx gold miner etf for the non leveraged etf.
2x this. 3x that. they move up and down more for regular, if you will, non-leveraged etf. solar stocks and gold miners you know what they have in common you both have to dig a lot of stuff out of the ground to make their product. all right. meantime let's bet bget back to technology here is a mini rbi the best start to a year since 2019 when it gained 8% by this time in january. that was a good year nasdaq in2019 finished up 35% overall. will we get that number this year let's talk about what is driving the gains with sophie lund-yates sophie, good to have you back on maybe a stronger start to the
year than anybody else or anybody would have predicted except for the permanent uber bulls out there. do you ascribe, i know, big word for the morning, do you ascribe to anything for the particular strength the only thing that changed is the calendar >> you are right, brian. it has been an incredible start to the year so far there are three things to consider when i look at this the first thing is the investors and market more generally is getting very excited by the prospects we will see the interest rate hiking cycle start to cool down we have seen really quite encouraging inflation reads recently which is feeding into that secondly, it is really important to consider, you know, china reopening. that is seeing massive boost to some of the biggest technology companies. you know, apple and tesla among those which created the uplift thi
thirdly, not to bring it back to the negative on this, necessarily, but we do also need to consider on the long-term view that the nasdaq performance is still pretty negative y you hit that on the yearly basis. real guy start to the year interest rate potential and china reopening. a way to get back to where we were >> why not turn to a big tech stock. microsoft. microsoft reporting after the close today. it is the first of the mega cap tech names out with their numbers. microsoft, like most of the market, sophie, had a terrible year last year it loss $700 billion in market cap. third most in the s&p 500. it was hit by cutback and consumer spending and concerns of the sector overall. do you have a take on microsoft? >> yes, i do
unfortunately it is not too positive you know, we are expecting revenue growth to really slow significantly. the current estimate is around growth of 2.4% which is obviously really far behind the growth we have seen in recent years. we have seen recent quarters even you touched on it there with th slowdown in personal computer sales and computing in general the rate of growth in the cloud business is the big hope and that is slowing, too that double-edged problem is not consumer sentiment weakening, but corporate sentiment. the upgrades will be dropped off the shopping list and the outlook is still worrying. >> now let's move on past microsoft. the numbers are out today. let's wrap up, sophie, with apple. we don't talk a lot about
computers. it used to be known as apple computer it is just apple the macbook goes on sale today like most of the others, apple is up 8% for the year. unlike many other names, apple has managed to avoid large scale layoffs. it hired at a slower pace during the pandemic again, let's dive into apple the computers, which are cool, but are they going to move the needle it feels like apple is just a phone company. >> certainly so. with the new macs, they are important. we seen in recent memory that macbook picked up the slack when iphone sales disappointed. you are saying it is still the iphone that is the big hitter. i think the recent release tells us and really telling is they developed this kind of
entry-level mac mini they are looking for another customer base that they under served in previous times fundamentally, as you talked about, they had a really strong start to the year. this is the same thing which they settle back with apple. the fact of the matter is the brand has super powers people continue to spend despite the pressure on income what they would look like over the festive season i'm not too sure yet early indications would suggest it will be positive. people did try to splash the cash exactly how that looks in the numbers i'm not sure and what it means for the rally in the last three weeks which is a question mark >> sophie, i'll make a wild assumption where you live based on the accent. it is not france
i wonder if given your energy bills in the uk, is anybody going to afford a macbook? can they afford their energy bills in england right now >> it is certainly a time of really serious pressure for consumers here in the uk what has been interesting from retailers we heard which released hults foresults for thv season is people spent more than anticipated. the question is actually it will be from this point on where people are reiningin in spending in a big way the next quarter is where we will see more pressure particularly over here it is a time of enormous challenge as you point out >> kind of a tongue-in-cheek comment. i meant it you spend money on heat and you wonder what is left over for everything else. like a macbook pro or food for
that matter. sophie lund-yates, thank you very much. on deck, elon musk back on the stand after making the case his funding secure tweet was serious business that's ahead as we head to break, the top trending stories sellers on e-bay posting listing from water from disney splash mountain boat ride r ending the three-decade run and posts are going for $100 for water from a ride that's going away all right. new research showing the chatgpt bot was able to pass a
wharton professor test remarkable ability and skills by analysts and managers and consultants. somebody pull the plug on that thing right now. m&m ditching the spokesperson candy and featuring maya rudolph candy characters will be on lpdefinite pause and maya rudoh will be the star of the m&ms ad for the super bowl we'll be right back.
welcome back let's get the latest on the tesla shareholder lawsuit over elon musk's 2018 claims of taking the company private silvana is back with that. silvana. >> brian, musk was back on the stand in the san francisco courtroom yesterday. testifying he did have the funding to take tesla private after floating the idea in 2018. musk saying the sovereign wealth fund and his take in the rocket company spacex had sufficient capital. he testified he met with representatives of the sovereign wealth fund a week before taking tesla private. musk said the price for taking tesla private wasn't discussed at the meeting and documents were not signed and he walked
away thinking he had the deal. in regards to the $420 stock as a joke, but claimed it was a 20% premium on the stock at the time he claimed he was concerned of talk around a deal would leak in the press and tweeted it himself to make sure all investors would be on equal footing. brian, musk continues his testimony when the trial resumes later this morning >> funding secured lawsuit secured as well. >> exactly >> thank you on deck, tiffany mcghee is back laying out the sectors to watch with thearng enis. stocks high on her radar we'll be right back. dad, we got this.
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willelcome back. time for the "wex wrap up. amazon announcing a perk for the u.s. prime members called rx pass the add on will give users access to 50 generic medications. in the wake of the largest layoffs in history, google may be reducing bonuses for top executives sticking with google, the justice department is suing over the dominant online ad space. twitter is sued over the claims of unpaid rent at the san francisco headquarters lawsuit states twitter failed to make december and january rent payments. bad blood expected on capitol hill today as the senate judiciary committee is aiming at
livenation and ticketmaster over taylor swift ticket fiasco. and the crypto change founded by the winklevoss twins with the third round of layoffs in the last year. and let's gear you up for the trading day ahead. several pieces of economic data out this morning, including -- i know you couldn't sleep thinking about the philadelphia fed non-manufacturing and flash manufacturing index and services pmi numbers. i know it's hard to sleep earnings rolls on. you have a company called microsoft, ge, johnson & johnson and verizon and lockheed martin and union pacific out with numbers. apparently nominations for the oscars are set to be announced at 8:30 a.m. eastern time this
morning. let's dive into the trading day ahead and get movie recommendations from tiffany mcghee i'm kidding. i'll not put you on the spot with the movies. >> we can talk about movies. >> everything that "top gun:maverick" and move on. >> we have to talk about "avatar. >> yes $2 billion >> $2 billion. >> i said a lot of words pmi. what are you watching closely for this week? >> first of all, i did get a good night's sleep which usually i don't before i'm on the show i did. listen, you know, first of all, investors all deserve a day like yesterday after a year like last year so, you know, we're really
focused on earnings and particularly this week not necessarily getting caught up in yesterday. we don't want to make tactical moves in one day in terms of earnings, we have airlines reporting this week we have payment companies reporting this week in addition to diving into the individual companies, i like to look at what information these types of industries are giving us we own delta and southwest and visa and mastercard. these give us insight into the health of the consumer visa and mastercard show consumer spending habits consumers are proxies. they are companies for the payment system they will show us what consumers are doing. are they paying off debt or spending in cash >> i have to imagine the
companies are important. we had discover with charge offs rose they did move higher by 1% or more visa and mastercard have to be the best window in the consumer. they are up there. i'm not liking at microsoft numbers to tell me how the consumer is doing, are you >> no, i'm not that chatgpt stuff is interesting. it is a longer-term play >> creepy, but interesting it's okay. creepy got a b on a wharton mba exam. i may not be real right now. i was at newark airport. years over budget on the terminal it looked nice a lot of people there. what are you looking for in the airlines >> listen, we really do like delta. by the way, i travel a lot for
work if you were trying to get into a delta lounge last year, you were standing in line we are looking at all of the airlines to see if they are showing any increase in leisure travel and business travel listen, fuel prices are coming down we should drive margin growth. we should pay attention to that. we are looking at cancellation rates. when you look at december and holiday season and american airlines with the lowest c cancellation rate and southwest with the highest we we are looking at cancellation rates. we are seeing the different airlines shift and move. american has eliminated the domestic first class i don't know if they are trying to be like southwest of course, jetblue bought spirit the discount airline
southwest really positioned itself like a discount airline i think i need them to step up and claim that spot. delta is changing rules and making their lounge access more exclusive. go ahead >> i was going to say we have to go i have been on six flights i'm flying every week for the next five weeks at least once per week i have never been on a plane with one empty seat. have you >> no, i haven't i travel quite a bit i'm getting on a plane in three days that's my life it is busy business travel is back. >> yeah. it is. you can see that in the rates and hotel rates as well. we will find if it translates to earnings southwest has its own thing going on it hit at the end of the quarter. you wonder if this swrwill haven
good morning markets going back-to-back all three averages in positive territory for the year futures are lower so far this morning. earnings central big morning for quarterly results. including five dow components and couple big interviews on the way. and you can't shake this off. taylor swift ticketmaster meltdown now leading to senate
hearings we'll fix everything yeah we have that going for us. it is tuesday, january 24th, 2023 "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 joe kernen andrew is off today. we're here we're ready to go. we are looking at the u.s. equities at this hour. you will see red arrows. these are modest declines. dow futures down 46. nasdaq off 31. the s&p off 7. this comes after big gains yesterday. you are talking about back-to-back gains for