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tv   Worldwide Exchange  CNBC  October 25, 2019 5:00am-6:00am EDT

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it is 5:00 a.m. at cnbc. 2:00 a.m. in seattle amazon seeing decline. a shake up at citi group 145 s&p 500 companies set to release numbers next week. >> forced evacuations.
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some 40,000 residents to evacuate their homes amid wild fire rage. the one thing at the biggest risk in stocks now it is friday, october 25 "worldwide exchange" begins right now. good morning, good afternoon, good morning thank you for joining us this friday morning this is your stock and your story of the day that is amazon shares are sinking in the pre-market after those earnings were reported. bounced back some what down around 5% still
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that is a nearly $$50 billion move they are losing a ford-sized company right now. moving on to indonesia authorities recommend closer scrutiny of automated systems and better flight deck systems in a statement, they say the max are undergoing, quote, unprecedented level of testing, oversight and analysis they say they are making sure the conditions from the accident will never happen again. >> boeing, the highest value stock means it is the heaviest
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weighted boeing, the most important single-weighted stock. boeing's move down not impacting the futures. the dow dropping 28 points yesterday. we slowed grinds higher. s&p 100 just higher. the bond market not moving much. future and earnings not hurting the bond market. 1.77%. let's start with asia. japan continues its slow grind higher up now i think eight of the last nine sessions. in the nikkei and the european markets kind of similar. france mildly higher, ftse
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mildly higher. not a big trend either way back to your top story that is amazon, as we showed you. that stock getting hammered. down 5.5%. i guess that is relatively decent amazon was down as much as 9%. that stock prepared to show as much we talked about ford and mai marriott and fedex joining us now from london, elizabeth, what was the primary reason for the drop in profit for amazon this quarter? >> hi. that chart is not a pretty
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picture. the one-day shipping program brought an increase in shipping costs. they are said to spend billions in the holiday quarter to expand that guidance of higher spending is looking to have negative impact it will also increase spending on aws and sales force for on line advertising business. overall this drop in profit shows they are a little less focused on profitability here. >> what about aws, did amazon say anything about potentially slowing sales growth there >> yes this is crucial because of the high margins it makes up a lot of amazon's profit that growth came in at 35% sales brother for aws.
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a little below the estimate. if you look at it, it has been slowing. there may be signs that google cloud is making head way this is an increasingly competitive space. there is concern if amazon is losing some of that edge competitively, that could have a bigger impact on amazon going forward. >> amazon not big on giving guidance any comments about the holidays. i'm told the holidays are fairly important for retail sales >> they are. they did guide lower than what analysts had been expecting for sales. it was up about 80 to 86.5 this shows concern about the
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sales going forward. it looks like these investments in one-day shipping are paying off. these sales were strong. the question is if the amount of money will payoff in that holiday quarter and if they'll continue to get subscribers to prime. certainly an important stock to watch going into the third quarter of the year and a big indication of the consumer >> we could have printed the amazon's profit not there because they are vesting billions for the future. that has been their story for two decades now. a major leadership change at one of the country's largest
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banks. >> citi bank moving and fraser will replace steven bird who will leave after a short transition period. phra fraser has been at the bank for years running the bank's spanish market and corbat is expected to stay on a few more years. he says i remain committed to our firm and working even more closely with jane and her new roles. making fraser one of the highest ranking women in the industry. shares are down fractionally today but have risen almost 40%
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year-to-date >> is as we come back here where your next guest says you should an should not be putting your money losing their fizz. why shares of inbev are tanking. one man says is the biggest risk to the market and your money and it has nothing to do with brexit, trade or trump and the rbi and why wash nationals fans may be able to start preparing for their victory parade about being a scientist at 3m. i wanted them to know that innovation is not just about that one 'a-ha' moment. science is a process. it takes time, dedication. it's a journey. we're constantly asking ourselves, 'how can we do things better and better?' what we make has to work. we strive to protect you. at 3m, we're in pursuit of solutions
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that make people's lives better. so servicenow put your workflows, huh? your employees must love you. thank you. ah, you could say that. so how are things with you guys? great. thank you. thank you, sir. lunch next week? terrific. say hi to the team. will do. call my office, i will. -sounds good. alrighty. servicenow. works for you.
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>> if you thought this week was busy and we kind of did, get ready. monday will kick off the single busiest so far we've heard from a third of the s&p 500 and among those some have hit the bottom line the markets have been quiet this year we'll go to our guest now. amazon bounced back a little back 5.3%. still losing about $40 billion in market cap on a quarter that doesn't look all that terrible does amazon's move tell you anything about the market right
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now? >> that is sensitive and really the struggle right now there is a lot of areas that are fully priced software has struggled the multiple type of stocks are very, very high. you are getting the violent rotation out of those. when they come out with numbers that appear to be quite good it is not enough to keep the stocks worthy. >> we would say priced to perfection so many of these tech names. look at valuations you realize, your quarter is not perfect, you could see what amazon is doing right now. >> the approach to take now is forget about growth value.
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the whole thing of is it time to get a value or stay with growth. really stick with core two of my colleagues wrote a paper on our website at that talks about sticking with a strategy around core we were talking top cap core. >> what does core mean to you? >> a combination of value and growth it is what the russell 2000 was always before we created a value and a growth component >> are they sort of stuck in the middle with you, in that middle? the companies that just don't make the headlines on cnbc >> no. just the tech areas, the values
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will have the industrials and things you consider more of a value. in this migration from one to another. you are always going to be the second best. it is a combination of those >> any reason to own bonds >> convertibles offer a unique risk reward. you want to watch your duration very carefully right now interest rates are still very low. talking about the markets. the 10-year was over 3%. today it is 1.7% you have to be really barish to get more return on bonds everything that can happen is bad. do we need cash or should we be
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fully vested in stocks >> i think cash is something you can wait for while you you are waiting. i'm interested to see the etf because the value brother and swings are evaluated these create distortions that overshoot. having smart cash at this time will allow you to take opportunities. >> what dan is referring to is an interview coming up by a man that says that could pose the market >> a pleasure. have a great weekend we'll see you soon on deck. shares of visa we'll tell you why how much would you pay for an historical bottle of whiskey it is probably not as much as ghe went for at auction last
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>> chips, credit cards and corona chips. intel reporting better than expected third quarter numbers and raising out look for the
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year saying its memory business is turning around intel ceo bob swan will be on squawk today at 11:00 a.m. visa is up ab inbev stocks are flat the world's largest brewer reporting flat operating profit. damaging the bottom line company says it now only expects moderate growth. down 9.5% right now. ouch still to come, we are live in los angeles where fast growing fires throughout the state are forcing thousands to evacuate their homes.
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into welcome back. fast growing fires throughout california are forcing thousands to evacuate their homes as dry winds and high heat continue to make the situation untenable we'll go live for more >> reporter: brian, the gusts
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are intense. they come through and blow embers everywhere. we see fire on all of the ridges around us. firefighters are just trying to keep up. >> so many battles are under way. >> pay attention to fire behavior these things can occur quickly >> to the south are burning homes, sending thousands running to shelters and some trying to save their own homes >> apparently, it missed us right there. hopefully we are good. >> fire in the city sent smoke across the valley and into downtown >> i didn't realize how it got so big so fast >> and to the north, wine country again is under a shroud of smoke some coming to shelters for
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masks and information waiting foreword >> we saw it come over the hill. we were concerned and just packed a pack in case. >> utilities cut power to tens of thousands if a fire starts, it makes evacuation harder. >> with the power off, there is limited ability to make phone calls. >> the wind doesn't look to be dying down the fraction has temperatures in the 90s. when the wind does change direction, it will not just be cooler it is expected to have that marine influence which will bring in much needed moisture as well >> right now, is there any sign
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things may help the firefighters and families save their homes? >> we are hopeful that these winds are not going to be as intense as they were originally expected we had that happen last night. the most important factor is the direction of the wind. this off shore wind is blasting through here it is very warm. it can pick up embers. they need that marine influence and for the fog to roll in that is expected maybe in the next 48 hours. >> where are you in l.a. i grew up in los angeles and want to get an idea where this is happening >> we're in santa claritia right now. there was a fire for the people who know l.a. well, there was a fire at the
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101/405 interchange that sent smoke and ash downtown people are paying attention to this this is santa clarita just off of 14. >> that's a densely packed area. thank you for joining us appreciate it. >> straight ahead, why vice president michael pence is putting the nba and nike in a corner and why amazon has a $40 billion wip out. more ahead
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>> amazon, not amazing right now. investors losing as the market slows. vice president pence slamming nike and the nba for falling in line with china. we'll get a live report from beijing ahead. and what might be the single biggest risk to the market and your money it has nothing to do with brexit, trade or trump
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♪ >> good friday morning we hart you for watching see when i did there stock futures are less than 1% off all-time high. that has been the case about three months one story to watch volume or lack thereof markets traded under half of the 30-day average where is all the volume. let's get around the world japan is up again. just a market you want to watch. they are mitched to basically flat getting back to what else? amazon it is still down more than 5% right now. the company is set to lose about
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$40 billion in market value reporting the first quarter decline as it spends more to speed up package delivery. more from the conference call last night >> the cost of deploying inventory to customers by and away the biggest expenses are on the actual transportation costs. we are pleased with customer response to our one-day. you can see it in our acceleration >> the stock was down. it has come back off the close do they have it wrong? >> they did disappoint
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people appreciate they are making the investments in one day. this makes the competitive gap even larger. these are not long-term consensus. you need more planes or trucks over time, there is some transition many can get that thing they ordered later that day can it drive that cost >> we think so there is so much share up for grabs. they know if you get the
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consumer used to the one day that is the type of service. >> that business is showing some kind of ma occurity. we are seeing ads on television. is that a sign that they need help or are you happy with the business >> amazon is vesting in marketing which is the race to what you are seeing. >> is cloud computing the commodity that prices only will drop >> they are driving price lower. there is more functionality.
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we think there is growth >> is any change to the price target >> no change we are just as committed the story that just won't go away vice president pence accusing china. amid that speech, the vice president also slammed nike and the nba for what he says is falling in line with beijing >> siding with the communist party and silencing free speech. >> what is the chinese reaction if any to the vice president >> there has been chinese
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reaction they resolutely oppose vice president's comments on hong kong saying his speech ar against and hypocrisy. unofficially, the state media reaction was surprisingly blaza. describing the speech and criticisms as old gripes and suggested that it is a negotiating play for the trade talks. the paper said pence and trump were playing a bad cop, good cop game in order for the u.s. to gain leverage. more will be speaking on the phone today to talk about the trade talks and trade deal
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news agent said china would ask for tariffs to be lifted and buy more crops that the pledge could fall short of the $50 billion purchases president trump had stated before. >> so they are addressing the issue. is there any indication people are tuning out the nba in china? >> i think they are quietly going about their business and watching the games >> ten cent still airing the nba games every day. the only one that is missing is the houston rockets. the foreign ministry was asked
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they said it is up to the chinese people based on what the chinese people want, they still like the nba ganls. one other thing. nike you had mentioned nike mike pence had singled out nike as one of the ones that should have done more they should have pulled items off the shelves in china today, the top editor posted that nike was just doing something that a lot of multinational companies do which is to just not get involved in
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political affairs and that now we are having a situation where the state media is defending nike, and american companies defending them from the vice president of the united states a little strange >> bizarre 0. >> remember basketball legend michael jordan said both republicans or democrats wear sneakers what are you a raptor's fan? >> no. i will not engage. >> we are sending you a raptors jersey >> and why an app your kids
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probably use is being called a potential national security risk why amazon is trending this morning for reasons other than earnings i mean you're still blatantly sucking up to me gary. brilliantly observed, sir. always three steps ahead. six steps ahead. sixteen. so many steps. you done? a million steps ahead. servicenow. works for you.
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one idea can unlock a breadth of solutions. at 3m, we are solving problems that improve lives. >> busy week for earnings. juniper networks up 5% third quarter profit did fall. lower orders weighing on sales barclays trading higher in london the bank says its out look is challenging. you might have heard about this brexit thing gilead, stocks are
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down the excitement over that run up appears to be muted. volume appears to be eneemic the size of trades has come down some worry that another december-like melt down could happen again or worse. we spoke with president of modern ir and i asked why all of this matters >> do you look at the data, the liquidity measures have gone down, down we tli liquidity is the amount of something you can buy brokers are required to post a
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minimum 100 shares to buy or sell if you look at the s&p 500, this was the point i raised in the market watch piece that the s&p 500 trades at 135 share increments if you look underneath that, almost half of all trades are less than 100 shares you look at the size of black rock and state street. >> you just talked about how the actual sizes of the trades are getting smaller as well. is that in some way a taste of
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things to come is. >> yes if you look at the data in 2015, the same figure shifted to etf, about $360 billion there was a net zero change. how does the market go down 20%? the answer has to be a supply chain issue. they've adopted this term, passive. i'm passively vesting. they are passive in a sense that they are constructed you leave it alone and buy what has already been built etfs are already being traded like stocks and fast
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>> you are a brave man to take this on. they by definition have to have the mechanism. created in large blocks. 50,000, large price. how much you can buy what happens to the market if this is a small part of the market, it becomes a big deal. etfs directly are part of the volume then the focus shifts to how prices of the etfs and underlying stocks change it
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means these value and risk is half of what they should be how many etf created in data 2.6 trillion of etf shares have been redeemed in flow. what is going on we've moved into the relative stocks short them and buy the stocks and vice versa that is now 87% of market volume >> more of that interview, you can check it out on one i promise you will hear more about here aside from market liquidity and
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volume let's find out what else going to our whiskey expert. >> yesterday, i said tequila is my drink $1.9 million at the auction. distilled in 1926 and aged for 60 years before being bottled in 1986 they say it is the largest prize paid for a bottle of liquor.
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>> is it an investment or do people open it up? >> do people hold on to whiskey and spirits? >> maybe the buyer should call in we'd like to help you out. >> from expensive drinks to not. >> this is gross >> starbucks is back with an over the top drink the european customers will be the first to try the phantom drink. also vegan friendly. it is activated charcoal, which is very trendy >> restaurants have to have
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instagramable food they buy it to take a picture of it >> it is like the poppy's chicken sandwich >> i got that. it was good. >> worth the hype? >> yes >> amazon releases the annual list of top 100 toys top of the list, the baby shark puppet, frozen 2 dolls, nerf, barbie and more. >> what's that puppet thing. >> you surely know baby shark? >> i have a five-year-old and i know nothing >> the baby shark song >> from like a year ago.
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i know what i'm getting you. a shark puppet, some tequila >> paying us a visit with list best ideas right now and the morning rbi. we'll give you a little hope for astro's fans we love you houston. you have a deep hole we'll tell you about history and your chances that is coming up. now, we've got away around that. looks good. we're on target. blockchain on the ibm cloud helps pinpoint a problem anywhere from farm to shelf. it's used by some of the biggest retailers everywhere. a nice wedge. so more food ends up on your table, is that daddy's lettuce? yeah. and less food goes to waste. ♪ ♪
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there were tsunamis anfourtin the world.o waste. and once they happened, we were in a major hurry to get to those regions to provide aid and support. it was very humbling to be able to help out all those people. it's my dream now to go into clean energy and whatever the next new fuel source is, that's where i want to be. i want to be on the front lines of implementation. what are you doing back there, junior? since we're obviously lost, i'm rescheduling my xfinity customer service appointment. ah, relax. i got this. which gps are you using anyway? a little something called instinct. been using it for years. yeah, that's what i'm afraid of. he knows exactly where we're going. my whole body is a compass. oh boy... the my account app makes today's xfinity customer service simple, easy, awesome. not my thing.
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welcome back, 5:53 time for your executive recap. the fall out from ken fisher's
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comment continue goldman sach the latest to pull money. clients have pulled $2.7 billion from fisher's firm >> johnson&johnson and riteaide announce they are pulling bottles of baby powder after the fda found sub trace amounts of asbestos in samples. >> and indicted on allegations he used insider information from inside apple it trade stock. don't do that. >> asking investigators to investigate whether the tictoc app possesses user threats suggesting they could be
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targeted by foreign influence campaigns. >> 145 of the top s&p 500 companies are set to release their numbers let's bring in global market strategist my question to you are you the buyer of that $1.9 million bottle of whiskey >> not a chance. >> i'll keep asking. revenue pressures haven't reacted much
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i think they are looking to the fed. another fed rate cut is not going to matter. a late cycle cut are followed by the slow down. how quickly that manifests are open to question >> can they prevent that slow down isn't that the point >> there is just not enough room typically, the fed has to pull around four to five percent. we had 125 basis points here we only had 250 when they 125r9ed. that will be the cut >> the headline so far, saying they can't and won't save the day. does the day need to be saved?
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i think you have to get the figures from the deceleration of growth here. we are starting to see the growth mostly through investment in cap ex. we are seeing ism roll over in manufacturing. the question is does it feed over to the consumer >> the question i have is why then are the markets off on the high >> the consumer is only the last to go. >> you are saying the stock market is overvalued >> we like buying the long duration with the ten year and rates. >> bonds are having a good year. they used to be boring
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now they are sexy. >> they have had a good year we think the slow down, we are siege slow down of rates >> nice to have you. time for the morning rbi, houston, you have a problem. most random thing has to do with baseball we know everyone in houston are shocked right now. some hope to win it all. according to major league baseball, there has been 10 times teams have come back to win. the mets were down 2-0 and rallied to beat boston and win the title. eight other times that it has happened going back to 1955.
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it is not common but it does happen houston, the odds are long you put us on the moon you are used to long odds. random but interesting we'll see you on monday. "squawk box" begins right now. >> good morning, amazon posts a big mix. tens of thousands of people forced to evacuate in california high winds are spreading wildfires throughout the state a special event today, becky is live at the baron investor conference closing in on the weekend. have a lot to do before the weekend. "squawk box" begins right now. ♪
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>> announcer: live from new york where business never sleeps. this is "squawk box. >> good morning. welcome. becky is live from the baron investment conference with the legendary ron baron. first, we want to take a quick check on the markets futures at this hour, dow looking to open 25 points up nasdaq looking to open 37 points down s&p 500 looking like it is going to open down as well, off by 2.5 points right now, the 10-year at 1.775. >> so close to 1776. >> a huge line up. in the next hour, tesla chair will join us


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