tv Worldwide Exchange CNBC May 6, 2022 5:00am-6:00am EDT
and now, you know the news of this thursday, cinco de mayo, 2022 i'm shepard smith. follow us on instagram an twitter and we'll see you back here tomorrow night on this first in business worldwide. it is 5:00 a.m. here at cnbc global headquarters. we begin with the wall street whip saw futures opening up lower inflation. the fed. rising borrowing costs are a big part of the story. 10-year treasury yield surging as high as 3.1%. and doordash to dropbox. a number of household names mo moving on quarterly results. it is not all red arrows on
wall street. the areas are doing well and the guests offering stock picks. and the volatility ends with the test for the markets the monthly jobs report due out at 8:30 a.m. it is friday, may 6th, 2022. you are watching "worldwide exchange" here on cnbc good morning i'm frank holland in for brian sullivan let's get right to the markets this morning futures right now are lower the last time i checked. lower this morning at this point, still very early. dow poised to open up about 100 points lower this follows another wild day on wall street. indexes breaking the three-day win streaks. nasdaq with the worst day since june of 2020 dow dropping 3%. its worst day since october of
2020 nasdaq composite and 100 and russell 2000 are in bear market territory. more than 20% from the 52-week highs. all 11 sectors closed lower in yesterday's session. the worst is consumer discretion the best was utilities only off about 1%. they are down in the red, but the best performer it is flat breaking 6 of 11 sectors two stocks are up. nrg and eversource leading the way. trans ports. what a turn around we were talking about a recession. the index is up for the week on pace for the third positive week in the last four. you see here down yesterday. on one one of the best performers are
companies that provide more than just traditional trucking. they offer freight solutions forwarding and logistics let's get a check on yields. 10-year surging 3.1% yesterday the highest level since 2018 the 10-year yield is 3.1%. the yield at 3.073.075% we have to watch cryptocurrency. bitcoin and ethereum up this morning. bitcoin up 30% you have to remember the bitcoins are still down a lot from the start of april. bitcoin was up 46,000 at the start of april now at 36,000. let's go worldwide to chery kang in hong kong and julianna tatelbaum in london. chery. >> good morning, frank a lot of de-risking happening on friday in asia japan was the exception. nikkei pushed higher by 0.6%
that inn derdex was coming backm holiday. that was a catch up. asian shares taking out japan with the seven-week low. it wasn't as dramatic as thursday on the wall street in terms of the magnitude of the selloff. a big reversal of the picture i was reporting on 24 hours ago on this show. i think it is really about china's zero covid policy and that could be the reason why we see the more pronounced losses coming through in mainland china and hong kong stocks we have csi 300 blue chip stocks down 2%. hang seng index was the loser down 3%. that was led by technology names. we're talking about alibaba down 6.5%
tencent down and meitu down in the space. taking a big hit on friday because of that covid lockdown fear, currenkcurrency taking a . yuan is breaking below the 200-day moving average a lot of bearish bets piling on. yesterday, we saw chinese state tv saying china will be fighting any actions or comments that dis distort, deny or doubt china's covid response the markets thinking is china is doubling down on zero covid p policy when the fed is getting aggressive with hiking rates frank. >> chery, thank you. to the trade in europe with julianna tatelbaum she is standing by in london
>> frank, good morning a similar picture here in europe to what chery explained in asia. we have red across the board magnitude of selling is not as severe as wall street. cac 40 is down 1%. german market down 1% as well. some earnings coming in focus today in germany the big one to watch is adidas they came out with cut guidance which is uncharacter for adidas. it has been strong of late that is because of what is happening in china they are taking a hit on the china business and that is coming through in terms of the forecast for the months ahead. ftse 100 is down .8% resilience in the italian and swiss markets. this is what the split looks like in europe we have a couple sectors in the green. auto and oil and gas the energy names up 1% on the down side, retail is under performing down 2.4%.
media and real estate and technology overall, frank, we are seeing red to close out the week here in europe. >> julianna, thanks. turning attention back to the markets here in the u.s. and despite the wild and dramatic swings this week, all three indexes are flat for the week. dow up at this point s&p up .3% nasdaq down slightly for more, let's bring in craig johnson. great to have you here. >> frank, it is great to be here th thanks for having me on the show it is crazy. i would look at yesterday's price action to thursday. >> look at you i'm going to jump into yesterday. i'll get into the support levels for the s&p. support levels i did back of the napkin math.
if the s&p falls 2% today, we break to the down side i hate to be a negative thinker. if we do go below the 2% mark and break through the support levels, where are the markets heading after that >> frank, those are key levels we have been watching in the market the reason those are key levels are this we are starting to see a larger number of stocks in the s&p 500 breaking below the february and marlch lows. that is the key level to pay attention to 35% of the stocks in the s&p 500 have broken those lows to answer the question of where do you go, we already see the bond market move to the february 2020 pre-pandemic levels we see the russell get close to the levels in the short-term in the washout move in the market, you would be back to the levels which could
put you another 15 to 20% lower from where you are right now >> wow you are getting a lot of people's friday off to a rough start. you are overweight on energy and mega cap tech. are there any specific areas a lot of tech is under pressure microsoft down 4% yesterday. apple down 3.5% yesterday. when you say mega cap tech, what are you talking about? >> here is the scchallenge. you have to be invested. you look at what is working in the market right now, energy and materials and utilities. you start adding those parts of the entire market, frank, you are talking about 12% of the entire market. i don't think that is a realistic recommendation to the investors. we have gone overweight on energy and basic materials you have to have something out there. you have microsoft down 4%, these are still the best
companies in the world to own for a longer term perspective. some longer term trends when you look at weekly charts, they are in tact. they may correct a little further here, but you need to have exposure to the larger cap tech names. >> we are almost out of time i want to ask one more question. it sounds like you are bullish on faang stocks. is that fair >> yes we need a place to put money to work those faang stocks are the place to be. i also think you need to own some of the stocks like occidental you are reverse the ten year down turns. >> one more. you believe investors slept on powell's statement that the fed is not considering the 75 point hike in june a rally yesterday and the selloff. they have another night to sleep on it. are the markets still shaken up
of not actively considering? >> i would not be surprised to see a relief rally today s step back. it will be just a relief rally look for it to move higher and sold again. >> craig johnson we appreciate you being here thanks now to the morning top corporate headlines. fda announcing limiting the use of johnson & johnson covid vaccine for adults citing a risk of the rare blood clotting it can be used in instances where another approved covid vaccine is not accessible or not using of the pfizer or moderna. lucid has 30,000 orders for the sedan. the company saying the r reservations do not include any from the agreement with the saudi arabia government for up
to 100,000 vehicles. lucid says customers making reservations after june 1st will have to pay $10,000 more for the model. and senator toomey calls force new rules on crypto. the top republican on the senate banking committee pushed back on the measures offered by democrats. a bill from toomey would let others offer the coins as long as they publicly disclose and submit to an audit when we come back to "worldwide exchange" prices rise and shoppers still show up it is a question for companies and the broader economy. we will talk to the top ranked retail analyst and get names he says are good buys. as we head to break, check out the biggest pre-market
80 points lower at the top still very early we have been talking about tech stocks they have been hit the hardest as of yesterday's close. look at the faang stocks meta, the parent company of facebook, down 46% apple down 14% amazon down 38%. netflix down 73% faang stocks this morning in pre-market trading 50/50 here meta is the hardest hit. down .50%. netflix and alphabet in the green in the pre-market. beyond tech, one sector getting hit is discretionary off 25% from the session high. shoppers are starting to scale back spending on what is
considered non essential. w wayfair is down 26%. etsy is down 17% shopify is down 15%. joining me now is scott mushkin. scott, thanks for being here. >> thanks for having me. >> you have a buy on walmart and target how do they fend off this is true if consumers are not spending as much on what they don't need walmart has 50% revenue on the grocery business if people are not buying other stuff besides groceries, how does walmart continue? >> it is a natural switch back to services and getting out there. that's the natural thing we see. you get a little bit of that of the scene. if you look at what is going on with inflation, it is crazy.
we have been talking about this with our buy side clients and consulting business. there is a lot of fear of food annd utilities and rent households under $52,000 you see the basics go up you are seeing some of the basic things go up 20% this is putting enormous amount of strain on the households. it is putting fear into people like walmart or dollar general even some of the supermarket guys i talked to volumes have turned negative you mentioned discretionary. >> i want to look at other stocks you talk about. you say ecommerce is certainly not down higher than it was pre-pandemic. i was interested in the fact you had amazon, target and walmart
as a buy costco is not a dot-com retailer or ecommerce retailer. i know they have a grocery store business are they going to be hurt by this trend or helped by people going back to the store? >> i think you look at costco specifically that is one of the best retaretailer retailers globally it is the best in class. think of the michael jordan. in the business, it had a great mentor who said trim all the way up we don't tell people to sell costco as far as the other guys, our big focus has been companies with specific initiatives that can drive better earnings than people are thinking. we also have been looking at
valuation compared to the past although we took it seriously. target is one of the more under valued retailers one of the top picks for 2022. clearly, they are an amomni channel superhero. they own shipt he and his team transformed that organization over the last seven years. we don't think they get the credit they deserve. walmart is a safety play we have concerns with the low-end consumer or middle they are under a lot of strain we worry about the non-grocery business of walmwalmart. you can back up the discretionary spending and product depending on the consumer >> wayfair down 26%.
et et etsy down 17%. are we just not going to buy from online retailers? you say people want to go back to the store will this hurt >> we will have a period of consolidation. everyone is buying everything online you look at amazon, biggest in the business you pull forward huge revenue and they have grown their business tremendously. the biggest issue we actually see is expenses are out of control. this is most demonstrated by amazon fuel is up a ton labor costs up significantly what people don't realize is the ecommerce facilities use a ton of labor absolute ton of labor. 2,500 people employed there. there are big challenges and expenses which are clearly hurting them of course, we have the natural
aversion here as we digest growth you look at wayfair. someone dealing with disc discretionary items. we had such an increase in home prices charleston, south carolina things were selling for $600,000 and now $1.2 million 18 months later. things in florida, same thing. we have issues in those types of names and discretionary names and housing. is that going to hold up it is an expense issue, not that the businesses are done. >> scott, thank you for being here >> thanks for having me. coming up on "worldwide exchange." more of the big money movers and what has shares of doordash taking off and another group of stocks worth watching
more than 100 points lower oil prices were up slightly this morning. right now, ticking up 1.5% for wti and brent crude. time for the big money movers three stock stories this morning. stock one is block quarterly results missing on the top and bottom line. the financial services company giving upbeat outlook. block reporting $578 million for cash app stock two is doordash. st taking off on the first quarter. total orders were better than expected rising 23% year over year doordash reporting a larger loss despite the record order number. stock three is drop box. adjusted profit of 38cents per
share on revenue on $572 million. let's get a check on the other headlines with frances rivera in new york with the latest happy friday, frances. >> frank, good morning we start with the u.s. officials telling nbc news that intelligence may have helped ukraine sink the war ship last month. the officials say the u.s. helped confirm the russian ship location, but not involved in the decision to strike the white house did not provide a comment on it. the wnba season tips off as the teams show support for britney griner. the all-star has been detained in russia since february her team hosts the aces in one of four games tonight. the chicago sky start the quest for repeat against the sparks. the number of unruly passengers on planes have plummeted according to the faa
report the week before the mandate was lifted, there were 4.4 unruly passengers the faa imposed a zero tolerance policy on services in january of 2021after the pandemic surge of incidents. a lot of airlines stopped serving booze. people are more calm and zen and happy without the masks. >> masks caused tension. you know, hard to talk about this one a lot of covid cases i'm glad the unruly passengers declined thank you. coming up here on "worldwide exchange." we are talking tech and g good buys. as we head to break, more stats for you over the wild week chip stocks are hanging on the gains. among them is monolithic
if it holds on today, it is poised to hold on to the longest losing streak since 2018 stay with us on "worldwide exchange." we'll be right back. ifferent sy. you need to pull it together. so you call in ibm and red hat to create an open hybrid cloud platform. now data is available anywhere, securely. and your digital transformation is helping find new ways to unlock energy around the world.
investors continue to fall out of favor with the sector dan ives is standing by. and elon musk's bid to buy twitter is catching the eye of regulators. it is friday, may 6th. you are watching "worldwide exc exchange" here on cnbc welcome back to "worldwide exchange." i'm frank holland in for brian sullivan 5:30 a.m. here on the east coast. here is how your money is looking right now. futures in the red this morning. down slightly lower. the dow looks like it could open 100 points lower another wild day on wall street. the indexes breaking the three-day win crestreak nasdaq with the worse day since june of 2020 the nasdaq composite and nasdaq
100 and russell 2,000 are in bear market territory. the dow and s&p are in correction off 10% or more we have to watch yields. the 10-year yield at 3.073%. yesterday, it topped at 3.1% highest level since 2018 we saw some of the impact on the market we want to talk about oil right now. oil trading higher up almost 2% for wti and brent trading at $110 a barrel for wti. right now, a lot of people are trying to navigate fears of tightening supply. energy is a strong sector. a number of names having strong weeks so far we are talking about devon and object obje occidental back to toech.
the lowest level since november of 2020. for the week, nasdaq is on streak for the longest losing streak in 20 years and 20% off from the all-time highs. let's look at faang stocks facebook's parent company meta, down 46% from the all-time high. let's go to the wall apple down 14% amazon down 38%. netflix down 73% google down 23%. joining me now is dan ives dan, great to have yyou hire we are seeing the tech wreck
there are other factors causing big tech to be under pressure? >> it has been a nightmare on elm street you see the combination deleveraging across the board. worries about the fed and multiples across the board for tech stocks. i think the crux of this is investors are worried about what this means for fundamentals. do you believe numbers for this year for 2023? frank, i have seen this three times. early 2001, fall of 2008 and today. the point is i'm not calling this a bottom, but the panic and fear i'm seeing is really unique relative to what i have seen in last 21years. >> you are saying a lot of buzz words. bottom and panic is this an opportunity to buy? >> affirmly believe for tech
when i look at microsoft and apple and you see where google is and other cybersecurity unless you think enterprise spend has fallen off the cliff and no one is going to buy iphones and you see massive consumer and spend off the cliff, to me, this is the time that's what we have been advising clients the point is in chaos with many yelling fire in the crowded theater, it is easy for panic. we believe this is the time as we navigate clients over the last few decades in tech. >> dan, we met earlier this week to talk about cloud names. on pace for the seventh month in the red. are there any particular names are there any best of class names you believe if you have horizon longer than a week that you should buy right now >> 40% of workloads is in the
cloud. we have a vast majority ahead of us you look at microsoft oracle you play with amazon you also see benefit was the names of ibm as well that's why in these situations you have a bifurcated spend. that is what is strong through earnings and cloud to me, we are still in the fourth or fifth inning >> a lot of people are talking about risk off high risk names and high valuation names. people are not into them is there any where in the high valuation names or high risk names you put money into you were the believer in the ev story. autonomous story do youbelieve peloton could come back? >> first, i think when it comes
to electric vehicles, i look at tesla and where they trade today. we are super bullish on in the coming years when you really peel away the onion, where is the spend going to be? it is going to be in areas like ev across the supply chain then i think also on the consumer side, you look what is happening in the supply chain. ultimately the headwind is the tailwind you look at scenarios like apple and you look at chips. you look at amd. you look at nvidia this is the time for the high quality tech names in the bifurcated tech name. >> dan ives, we appreciate you being here on "worldwide exchange." thanks now to the other top stories. elon musk's bid to buy twitter
coming under scrutiny. the ftc is reviewing the $44 billion takeover off the company. the agency will decide the next month if it will launch an in-depth probe of the deal to delay closing deal by months. peloton is apparently seeking a minority investment to strengthen the business amid struggles. the fitness company is courting investors to buy between 15% to 20% of the company the move follows previous moves it was looking for a sale. and a senate committee passed a bill setting the stages for lawsuits against owepec. it would revoke the sovereign unity of the companies from lawsuits the biden administration says it has concerns about the potential implications and unintended
consequences of the legislation. the bill must pass the full senate and house and then be signed by president biden to become law. coming up here on "worldwide exchange." more of the morning big money movers, including the worrying signals sending shares of zillow lower. check out the biggest s&p winners and losers stay tuned "worldwide exchange" is back in just a moment.
good morning welcome back to "worldwide exchange." futures following the 1,000 point drop for the dow right now in the red they were about this level earlier and dipped a little bit. now coming back up still in the red looking to open 75 points lower. 662 nasdaq stocks hit new lows yesterday we with will get to some of the names with the winners with two portfolio managers in judgst a minute three stock stories of the morning. shake shack. shares lower 2.5% despite the first quarter results. the food chain is forecasting a revenue outlook for the second quarter between $233 million and
$239 million stock two is sweet green popping on mixed results posting a loss of 45 cents per share. analysts looking for a loss of 41 cents revenue of $102 million. workers returned to offices and resumed old school lunch routines and stock three is zillow. blowing past the forecast. zillow citing an uncertain real estate environment the company citing rising rates a as a path forward for the headwind. and highlighting the top five buys of the week. in a market where the stocks are following, big names pick up stocks fifth buy of the week is intel ceo pat gelsinger buying $245,000 of shares his third straight quarterly
buy. and number four is h & e's ceo third most insider buy is general motors cfo buying $1.36 million the first insider buy of gm. and keurig dr. pepper. $2.46 million from the ceo and drum roll. the general electric ceo snapping up $4.84 million of ge shares that stock fell after earnings he bought on weakness. brian sullivan interviewed him last week. he has now invested $14.5 million of the company since he has taken over there are the top five intel, h & e and gm and keurig and ge on deck here on "worldwide
good morning welcome back to "worldwide exchange." investors are feeling dazed and confused this chart could explain the dow's wild ride. a lot of ups and downs looking at futures this morning in the red right now, the dow down about 3% this was yesterday the dow down 3%. here is the futures. looking better than earlier. still in the red dow opening three points lower it was 75 earlier. here is what investors are
watching three reports due at 8:30 a.m. the april jobs report with non-farm payroll unemployment rate and hourly wages. also earnings from cigna and under armour we will hear from five fed leaders. john williams and raphael bostic and chris waller and jim bullard and mary daly. let's bring in greg branch and an dan morgan. thank you for being here >> hi, frank >> a lot of people are looking forward to the jobs report at 8:30 this morning. a lot of pressure and thoughts about that you are looking past that to next week to the next cpi. i want to ask about both how do you see the jobs report
in the market and what do you look for with the cpi? >> it would allow 2 million more jobs with the lowest benefits taken in 50 years. the tech hands are tied unless there is a cratering in employment they forced themselves into this by being behind the curve on inflation. many of us thought they should have come out of jackson hole to tighten last year. they did not do that at this point, their hands are tied the next cpi could be a big event. at the end of the day, we have to talk about the base again this was a popular issue in 2021 for those in that transitory camp nothing to see here on inflation. it is now working the other way.
last month, we had 8.5% on the march of 2021. april of 2021 is when we started to move past the 4% level on cpi. 4.6% in april of 2021and 5% in may. this is binary if we put up an 8% plus, that is more valuable than i thought if we come in with 200 basis points below where we were last month, i think that will breathe a short-lived relief rally in the market a market desperate of a whiff of good news. those who have said inflation was right will take the victory lap. >> and if we see a relief rally, tech would have to be a big part of it. you believe a bounce for tech
coming up? we have concern about rates and inflation. what areas of tech do you see having that bounce i know you think throwing a dart at faang stocks and that trade is over? >> you are talking about the cpi data in terms of the impact of market valuation i think we are seeing now in terms of inflation being high means we have low pe ratios on the market that is really hurting tech right now. there are areas of strengths if you look at the rollout of 5g and artificial intelligence and movement toward data center. a lot of things brought out in the last week are well documented we see slowdown in social media spending we saw it with meta and pin and snap there are markets of strength.
tech is not completely wiped out. we are seeing a revaluation because of concerns of pe ratios that brings down -- excuse me. inflation bringing down the pe ratio. most tech stocks traded high mul multiple that is what we are seeing with the impact on tech tech is not completely dead. there are sectors expected to do very well with. >> you know, greg, you are actually looking at one area of tech fintech. we talk about visa, mastercard you believe there is a lot of upside to fintech because of the reopening and traveling trends even if there is a recession >> i'll follow on with what dan said here. at the end of the day, this is the environment we will not get multiples. in the environment where you cannot count on multiples, you have to look at earnings visa and mastercard have 20%
plus bottom line the catalyst for me is turning positive six months ago for the return for the transactions. that came through in glaring fashion in the last report i was looking for return on entertainment and travel spending that came through in blazing fashion the last quarter there are other areas where you can get double digit top line. within big tech, you will have to make a difference a difference between an apple growing at mid single digits and microsoft at 20% and putting up 20% bottom line. as you look for safety, that is where you find performance >> dan, back to you. i want to ask you one of greg's points he is looking forward to the cpi. if we get the cpi report and we don't see any decline in inflation or it ticks up, that
will raise concerns of economic growth will we see the slide with tech s stocks >> absolutely. tech is the key. we had conseqversations a year and everybody said inflation is transitory the fed has things to slow down inflation. they can't change oil prices or shortages. inflation can stay elevated for a sustained period of time again, a lot of the tech stocks trade at high multiples. the average pe ratio on the nasdaq is 41 times earnings. you have the compression of the times with high inflation. if you look at the 1970s, the average s&p was ten times earnings because we had high inflation. no doubt, frank, the cpi number is critical in terms of how it impacts the pe ratio, but it will eat into growth and slow
down i.t. budgets and that hurts tech frank, i have been in the business for soover 30 years. we are not anywhere from the summer of 2000 with the tech bubble i think we are going through a period of re-evaluation. >> give us a few names you are bullish on in the tech area? >> tech right now, i would focus on names earlier apple is a major holding and microsoft continues to be very interesting. they have been able to accelerate the top line growth nvidia it will report a month from now. they woill continue to do well n the gaming space these are stocks to look at with the right investment objectives and tolerance. those are the names we have on the buy livst. >> greg and dan, thank you very much we appreciate the insight.
that does it for us on "worldwide exchange. "squawk box" is coming up next g 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.
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good morning shockwaves in the stock market yesterday's selloff wiping out all of wednesday's relief rally. we will show you what is moving right now. this is friday which leads to a monday it is concerning it is jobs friday. we'll talk about that in a second and leon cooperman sending his thoughts to us how he is thinking about yesterday's selloff. plus, the next catalyst as i mentioned, april employment report how investors view the market? we get you ready for the jobs
data friday, may 6th, the day after cinco de mayo. "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 and andrew ross sorkin. it is friday after a heck of a thursday and week. check out the equity futures you might expect we have seen relief rally if that is the case, go back to sleep. that is not happening. dow futures indicating off 31 points again, this comes after the big declines we saw yesterday. nasdaq this morning down 31. s&p off 7. yesterday, the market gave back all of the gains from the relief rally wednesday an
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