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tv   Worldwide Exchange  CNBC  August 19, 2022 5:00am-6:00am EDT

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reduce shipping costs and print out shipping labels it's my secret ingredient shipstation the number 1 choice of online sellers and wolfgang puck go to and get 2 months free it is 5:00 a.m. at cnbc. here is the top "five@5. futures are pointing to pressure ahead of the open. fed signaling a united front on fighting inflation. comments from two bank chiefs suggest lingering divisions over how fast and high to raise rates. the roller coaster week for bed, bath & beyond and ryan cohen dumped his stake in the retailer. and demand means prices are
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set to rise again for home prices and the biggest insider buys by executives, including the common thread among three of the companies topping our list. it is friday, august 19th. this is "worldwide exchange. >> well good morning, good afternoon or good evening. welcome from wherever in the world you may be watching. i'm brian sullivan good friday morning or good friday evening depending where you are. let's check on the markets and your money stock futures are down across the board. dow off .50% overall, i should be quiet about this, it has been a quiet week for stocks overall that could change today. as we told you yesterday, it is the monthly options expiration
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today. the notional value of the options could be as much as $2 trillion that could increase volatility it may not, but it could, particularly on the sell side since so much has been on the buy side the last two months we will see if the position changes. something to watch futures are down in the bond market, yields ticking up a bit right now, 2.92% the oil market crude oil naggingly hanging around the $90 a barrel. gasoline is strong and natural gas, by the way, still above $9 a contract the longer that stays elevated, the higher your electricity costs may rise sizable move in crypto bitcoin down $1,500. ethereum is down right now about 7% it has been a pretty good run for ethereum hitting a bottom in mid-june
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bitcoin up 20% ethereum nearly doubling since that time in june, that's downgraded today, but still a nice run investors anticipating a major upgrade there to the ethereum blockchain that can be giving a lift to ethereum down right now, but still a heck of a monthly run let's get the trade overseas and key headlines with joumanna bercetche in london with that. good morning, joumanna >> good morning, brian it is not a pretty day for european forces. now looking stoxx 600 ending down 1%. ftse 100 down .20% despite better retail sales coming in at .3% better than expect expectations. the major theme in europe is the wholesale ppi numbers from germany. shooting to 37% year on year
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hugely surprising to the upside. obviously huge implications on consumers and industry one reason why the xetra dax is trading down .90%. losses are accelerating in the italian index down 1.4%. the european yields. heavy selling across the board today. the 10-year bund is down the italian is up. the spread is widening between the two. the focus in foreign exchange. the euro is on that parity line. this time analysts say we will have a sustained breakthrough because of the germany numbers which were worrying. brian. >> the numbers continue to get more difficult heading into winter storage getting filled, joumanna, but the river levels
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are a concern. joumanna bercetche, thank you. let's stay overseas with th story we have reported on since last fall. officials in uk look to take on the sky rocketing prices bertha coombs is here with that and more good morning >> good morning, brian you know, in britain and europe, people take august off the labor party is looking to have parliament recalled to have a plan to help households. party members writing to boris johnson and tory leadership candidates to order the recall this comes ahead of the expected price cap energy rise next friday millions of people could be forced into poverty if the government does not come up with a plan ken griffin's sicitadel
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securities firm told lenders it will use money for additional trading capital. it comes and citadel took in trillions in the first half revenue. and home depot names ceo ted decker as the new chair of the board. decker replaces former ceo craig menear who will retire at the end of next month. home depot announcing a new $15 billion share buyback program. announcements coming on the heels of the retailers second quarter results showing a strong performance as customers deal with high inflation. you see home depot shares up nearly 1%. brian, i bet we will hear more buybacks ahead of the i.r.a.
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kicking in >> that 1% stock buyback tax ber bertha, the uk story can you imagine if your power bill or heating bill doubled and you are struggling to make ends meet and they change those rates. a lot of sticker shock bertha, thank you. >> that's something they have to deal with. >> it will be tough for millions of families there. we will get more on that story going forward. in the meantime, federal officials with a united front on tackling inflation it is the question over how fast and how high to raise rates and it is revealing fractures within the central bank yesterday, st. louis fed chief james bullard said he is currently leaning toward supporting a third straight 75
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basis point hike in september. the san francisco fed president mary daly said raising 75 would be reasonable, but that is dependent on inflation data between now and then the comments coming from the conference in jackson hole, wyoming. let's talk about the stock picks and opportunity friday on "worldwide exchange. joining us now is degas wright of decatur capital degas, good morning. how closely are you watching or listening to the fed it seems every day we get a new comment. it seems exhausting at times to be frank >> so, brian, what we're doing is that we're listening to the fed, but we have to make strategy decisions either way it
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happens. a soft landing or hard landing we have to prepare our clients for a really performance to address either outcome >> yeah. if they signal they will get more aggressive on raising rates, does that mean we should back off our stock ownership because of concerns of recession? or to be honest, does a quarter basis point matter to you and your clients that much >> you know, at this point, we always say that it is really more time in the market versus timing the market. we will be, you know, still going through the process of buying stocks that meet our strategy objectives. >> all right let's talk about those because we like to call them opportunity fridays here you can give me a pass
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a mulligan on that one let's talk about semiconductors. klac what do you like about this company? >> we like about it is it focuses on one step in the manufacturing of semiconductors. it means that it identifies defects in the manufacturing process. now the reason this company will do well is a soft or hard landing is it has positive growth profits and growing earnings ultimately their gross profit is 59% if you look back in 2020 if you come forward to 2022, it increased 2% and up to 61% gross profit it has a forecasted earnings growth of 16%. >> already
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unh. united health. what about this name which is attractive to you? >> well, health care does really well in a recession environment. ultimately, you united health wl continue to collect premiums and the technology aspect. the profit is 23% in 2020. it has grown to 24%. plus it has a forward earnings growth of about 18% for next year >> united health we've got klac and cube mart who are they why do you like them >> we like cubesmart because it has over 1,200 storage
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facilities and many customers. it doesn't have much inventory it doesn't have credit the gross profit is 66% in 2020. it has grown to 67% as gross profit it has positive earnings growth on 6% with the 3.4% dividend yield. >> cubesmart and united health and klac degas wright, i appreciate it. thank you forg getting up early. take care. we have a lot more to do here on "worldwide exchange. when we he come back, big money movers bed, bath & beyond stock down 40% ryan cohen bowing out of the retail. and storm prediction getting high tech.
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diana olick looking how communities are looking to get ahead of hurricanes and how they mitigate more extreme damage. rivian with the wrath of customers after apparently pulling the plug on one of the popular models a very busy hour still ahead when "worldwide exchange" returns. what if you were a global bank who wanted to supercharge your audit system? so you tap ibm to un-silo your data. 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
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[ cheers ] are we actually going? yes!! and once in a lifetime moments. two tickets to nascar! yes! find rewards like these and so many more in the xfinity app. welcome back time for the big money movers this friday. three stock stories happening now. one is applied materials
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third quarter results beating forecast thanks to new orders. giving an upbeat outlook for sales this quarter the company is trying to reduce costs and slow requiring in the near term. stock number two is madison square garden entertainment. it is considering a spinoff of the live entertainment and network business on the las vegas sphere msg entertainment runs live events at the garden and radio city music hall and beacon theater in new york. stock three is the stock of the week bed, bath & beyond shares crushed right now down 40% ryan cohen sold his entire stake in the retailer this week for a profit of $58 million. he is the founder of chewy and
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gamestop keep in mind bbby shares are tumbling today, but more than doubled coming into today this month. a roller coaster ride for the new jersey-based retailer. still on deck, giving a big boost to american chip companies. the ceo of one semiconductor company is here to breakdown what the legislation out of d.c. means for his company to compete on the global stage. we're back after this. i'm so glad we did this. i'm so glad we did this. i'm so glad we did this. i'm so... ...glad we did this. [kid plays drums] life is for living. let's partner for all of it. i'm so glad we did this. edward jones
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welcome back nearly one year ago, the remnants of hurricane idada role up on the east coast and caused damage in new york and new jersey forecasts did not show how fast the rain would fall. maybe no more. diana olick looks how companies and governments are using unique weather prediction technology to safeguard assets it is all part of the continuing series of the rising risks of climate change >> reporter: when tropical storm ida blew in new jersey a year ago, the state was unprepared. after all, it wasn't a hurricane. the incredible
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>> it rained 4 inches in an hour >> reporter: the city of hoboken across the hudson from manhattan is two square miles, but home to 62,000 people. it is increasingly prone to flooding so the city had been putting protections in already this looks like a pretty garden, but a big drain? >> yes >> reporter: this park above the cistern can hold 200,000 gallons of water and held remotely so it can be released or held. to optimize the system, they need to know what is coming. after ida, they he worked with it goes beyond forecasting when it will rain >> everything is proprietary we tell how the weather impacts operations to make changes before it is too late. >> reporter: hoboken will have five parks like this one managing 2 million gallons of
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water on a dpaily basis this moves from water management to emergency management. >> they provide insight on the storm event and at what intensity and for how long and they can do really block by block forecasts. >> reporter: the firm works with clients before they start forecasting the weather to show them specifically how future weather will impact them from operations to supply chains to staffing. having such precise data of when, where and how severe weather will strike a region can ultimately save companies hundreds of thousands of dollars in resources and waste some clients are the u.s. air force and nfl and raytheon and uber and jetblue. >> we take the airline protocol and we have room for insight to dashboard to tell them when it happens. we tell an airline over the
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week, these flights will be at risk of weather and if you need to deice the plane, do it now to avoid delays or safety impacts >> reporter: climate security is fast part of global is security as cities and governments and businesses start to build climate adaptation systems that's why is sending satellites into space to send data back more frequently than government satellites. >> it will revolutionize weather operations for the entire planet >> reporter: is not only company dark sky recently bought by apple. these companies are nothing like the legacy names this is intelligence and modelling and planning and prediction takes place before a drop of rain ever falls. brian. >> all right diana, we talk about how companies have to disclose
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potential risk from climate in the disclosures going forward. how could predictions and technology like this factor into that risk and help them plan and predict? >> brian, it will mitigate that risk if they can show they are prepared when they don't know when a certain storm is coming a year from now, they can say if we have this event or heat or snow or fire event, and they are set up with the prediction models, they say our risk is less than it might have been if we werie going into this all in the dark this is the way of setting up the companies. these ceos are talking to the companies. you know from climate change, we see more severe weather. not just hurricanes, but deluges coming upon us without people knowing. t they can lessen the risk and report that. >> i remember that storm we had about a foot of water in the basement, diana.
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we showed this on tv a pickup truck where a guy got caught in a flash flood and rode a river two miles in his truck in new jersey. slammed up against the bridge. he was able to climb out we showed it on cnbc that storm was something the prediction technology needs to get better hopefully it will. >> absolutely. they heare just getting more common technology moving in where it needs. you know, again, as we see more of the storms, there is so much risks to the corporations and cities and lives >> diana olick, thank you very much see you all day on cnbc. take care. all right. still to come on this friday on "worldwide exchange. more c-suite shuffles at starbucks as the company continues the shakeup. thman l ow our podcast oalof
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stocks with the win streak looking at risk. the markets are grinding on the futures. they are pointing down the four-week win vehicle may come to an end rivian pulling the plug on the entry level truck. telling customers they need to pay up to get into the ev. and the exclusive weekly buy
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by the company insiders. this week, three of the five have one big thing in common what is it we'll show you all happening on this friday, august 19th. this is "worldwide exchange. welcome or welcome back. good friday morning. thanks for joining us to wrap up the week let's talk about it and get into the markets. 5:30 a.m. on east coast. here is how the markets and your money is looking right now not looking so hot we are seeing dow futures down 1 1 1 180. nasdaq down more .60% coming into today it has been a good run we have a four-week win streak for the s&p 500. as of right now, the s&p 500 is up 0.08% for the week.
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that's it. 0.08%. even a slight drop is going to end that win streak. keep in mind, we talked about it yet, it could be volatile today. today is the monthly expiration of $1 trillion of value for a variety of options we could see added volatility. obviously, the bulls for stocks have been in charge the last two months a lot of that positioning may flip heading into fall we'll see. let's see if options bring a change it could be right now, but options expirations day is a big deal more on your money and markets coming up in a bit let's talk about something you are drinking coffee starbucks. there are more management shakeups at the coffee giant bertha coombs is here with that and more on rivian bertha, good morning >> good morning, brian chief operating officer is
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departing the coffee giant culver has been with the company for two decades now and he will step down from the current role in october and become an executive adviser until he leaves the company at the end of the year culver's departure is partrestr. and dr. pepper is looking to buy bang energy drink. the deal price for vpx has not been finalized insiders say vpx could be valued at $2 billion. the potential deal could mark the latest in the series of acquisitions by beverage makers buying up smaller brands. and rivian feeling the wrath of some of the customers after pulling the plug on one version
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of the pickup truck. the ev maker is eliminating the least expensive trim of the r1t according to the letter on the rivian owners forum. the demand for the truck was less than expected eliminating that model will help rivian deliver vehicles quicker. brian, customers are going to have to pay up they have until september 1st to decide to upgrade to the adventure trim package which is $73,000 or cancel orders all together i imagine if lawyers are in there, they are looking at the contract that they signed for orders i'm sure the company gives themselves that out. if you are expecting to use your i.r.a., you know, benefit, that
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will eat it all up >> they recently sent a letter to buyers saying you need to lock in the contract now to lock in that $7,500 tax credit. a lot of the cars are over $80,000. they just had the price increases last year and earlier this year. mary barra told me at the conference, no-knock to anybody. it is easy to design and sell cars it's hard to make them some of the start-ups are figuring that out. >> and their customers >> bertha coombs, thank you. >> yeah. yeah see how much they can deal with. bertha, thank you. let's talk now about semiconductors and american competitiveness in the industry. semiconductors are an issue of national security. washington just passed the chips act to try to bring more semiconductor industry back to the united states from china
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and taiwan let's talk about this with gene sheridan gallium. gene, i won't get into the periodic table because i'll get a d or f in that subject tell us about your specific segment of the semiconductor industry why it is important and what this chips act may do for you. >> great question. thanks for having me on, brian it makes gallium chips the last 30 years, the world used silicone chips. we use gallium which makes electricity cleaner and lower costs. the world is operating off fossil fuels and we need to convert from carbon and de decarbonize the world. >> what would be an end use for what you helped make
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>> great example is we charge batteries faster with smaller size power supplies to do it charge anything from the smartphone or tablet or laptop three times faster we can charge electric vehicles and other applications these g chips are powering the entire world of electronics. >> what does the chips act mean for you? i did speak with the ceo of the privately held company on the margin of the semiconductor business they make thermostats for semiconductor machines he said it is great, but we thought some of the investment would come regardless. why do we need the government to step in with this money? >> well, the dominant part of the semiconductor manufacturing, including all of the manufacturing we use today is in asia the great thing about gallium chips, you can build them in old
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silicone factories with modest investment to increase capacity. in the united states, there are 45 older silicon fabs that don't have a great future. with the chips act, we can convert them to gall they meet two needs if we transition from fossil fuel to electricity. >> i love the idea of making it here it is critical stuff we know that tension between taiwan and china and what is happening there. we know the supply chain lockdowns in china we need that here, but can we find the people? if you build it, will they come? >> well, i tell you, having grown up in the silicon valley area and in what we call southern california, there is a lot of talent here there is a lot of hunger to innovate and sell them and build them as you said on the earlier
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segment. there is talent to tap into to make this manufacturing and bring semiconductor manufacturing back onshore >> yeah. that's the thing you build the factory and fab and you need to find the people. do you feel like right now, gene, even with the chips act, that america and i hope you say yes because i'm a california kid, too can america be competitive with this or will taiwan or china beat us because their labor costs and sometimes forced labor will have the upper hand >> you know, semiconductors have a lot of automation. the labor content is modest. i think it is more about control and technical skill. there is an important labor content. if you run the numbers, the labor content is small that will not be a problem with the cost competitiveness
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>> gene sheridan some positive things let's hope they play out we hope they do for the country and your company and the industry gene sheridan, thank you for getting up early have a great day i appreciate it. coming up here on "worldwide exchange." it is your exclusive weekly look of the stock buys by company insiders this week is cool. there is one common thread among three of the top five companies. we'll show you coming up. as we head to break. top headlines. europe's regulator facing internal concerns over legislation designed to take on big tech eu members are growing worried over how the new rules will be enforced when they take hold next year. including the big tech group seeking to undermine them through legal action. fisker looking to grow an amid demand. it may move beyond the 50,000
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vehicles per year threshold as autos sell out in the u.s. it may explore making cars in america. novel concept. elon musk going after documents from leading advertising tech companies it is all part of his bid to boost the effort to kill the $44 billion takeover bid for twitter. according to reuters, musk lawyers subpoenaed companies for documents to show how they were involved in reviewing accounts in any role they have in auditing the twitter base user numbers. dow down 180 we're back after this.
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welcome back time for the weekly exclusive insider buying segment the stocks bought the most from the executives with their money. this comes thanks to verity pla platforms. there are interesting names. not huge known stocks, but smaller caps and maybe new names to you let's go stock five trinseo. $317,000 purchased the executive buying on weakness stock four is hub group. $428,000 buy by a new board
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member, but the first overall insider buy at hub group in six years. a trucking and logistics company. the third most insider buy is at huntsman $751,000 combined buy by two insiders another chemical company they are both in the chemical space. now for the top two buys of the week stock two? mativ holdings another chemical and manufacturer related company and combined buy new ceo and two board members combining for $850,000 the company with the most insider buying this week is casava sciences. $2 million it did get attention earlier in the week cassava is a bio-tech with
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shares down 75% in the past year the ceo and board member is going long on the stock. cassava is the one to watch. top five trinseo, hub group, huntsman, mativ and cassava. three of the chemical or chemical related companies all in one week. and one trucking company manufacturing side of the economy. interesting trend to watch there. we try to do this almost every friday except during earnings season. you will see this segment on "worldwide exchange. or cnbc pro. sign up today. now let's talk about buying of a different kind. gasoline there is some bad news and good news here. first off, always give the bad news first gasoline is 70 cents higher tha it was this time last year the good news is it has come down a lot in the past couple of
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months now even the price of diesel fuel is below $5 a gallon nationwide diesel is important to the economy. it is a big input cost that goes into probably everything you buy. let's talk more about what is going on with oil and gas with suzanne danforth the gas and oil director for the americas at wood/mckenzie. i like to focus on the good news that we're down the last couple months, but that is all in the past based on the data you've got, what do you see happening in the months ahead >> basically, we have a situation in the u.s. right now where inflation is still holding although we have fuel prices down significantly everything from food to vehicles to housing is up we're already seeing even with the price fall in gasoline at the pump, consumers are coming back on the road, but not at the levels we saw in 2019 or 2018.
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maybe even below where we saw in 2021 we are still trending lower. we improved of terms of demand and looking forward. when you look at the next few months of the year, the fall and winter season. we tip ypically have a decline s folks are generally going back to school and driving less we will see gasoline demand continue to decline. in general, the supply situation we're in right now for gasoline is much better than where we were back in june. we're going to return to five-year average inventory by october in our view is what we see and return to high gas prices like what we saw in june is not likely to happen. >> all right here's where i push back a bit, suzanne, i get the push back of fall versus summer
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this fall, particularly after labor day, millions of people ordered back to the office in new york, new jersey and california pretty much working from home or hybrid apparenle and others are sayingt back to the office three or five days a week. i wonder how much the data will matter given we have never been in this situation before >> when you look at gasoline demand in 2019 or 2018, you know, fall gas demand is 500,000 barrels a day below he wwhat wee in the summer. the driving in the summer is supported by people taking road trips and getting out in the summer in our view, what we expect to see is gas demand levels which are below 2021 levels through the summer coming back on a year on year basis to where we are on par or
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slightly above 2021 levels nothing like what we saw years ago because that discretionary driving and folks are pulling back on that because of the overall cost of living and wages have not kept up that is the view for rest of the year we hope to see a 2023 lower gas price environment. looking more like the average with the numbers you mentioned >> you are right electricity prices will soar this winter. heating oil and health care costs may go up 20% for some people in the northeast. it will be brutal on the inflation side it sounds like what you are saying is gasoline prices could remain stable or go down a little by morit more from here? >> in the fall and it typically, we see summer gasoline is more costly to make. you have the demand with the
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support of boost as we he move into the fall and winter, you have a better inventory situation with margins and refineries responded with very high use levels you have inventory recovering and the benefit of the easier specification of gasoline blend. overall, we expect to see more stability. >> we have been very blessed and i don't want to jinx it. my rbi coming up on monday is about the lack of storms o i don't want to say anything. >> fingers crossed >> i appreciate it, suzanne danforth fingers crossed. have a great day and good weekend. that is coming up. that's a preview of the rbi on monday i don't want to give too much away or jinx it. coming up, the market's
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recent rally continuing to lose steam this week. our friend victoria fernandez is laying out where she is putting her money. tune in tonight for the cnbc special look at the consumer courtney reagan is diving into the fight among retailers for your money battle for the consumer. 6:00 p.meaer. stn. don't miss that and courtney we'll be right back.
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welcome back here is what investors are watching as whee close out the week the statement from fed's tom barkin and then earnings from buckle and john deere and foot lo locker. and we are looking if this is sustainable the next guest says amid the
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ch choppiness, we need to focus on quality. victoria fernandez is with us. you like that intro? speaking of quality, thank you >> that's the best intro i've gotten >> you are in texas. you are getting up really early. we appreciate it i'll not take away from the market rally a feel good two months all four weeks in a row. $2 trillion in value of options expiring today futures are down what can we expect for the fall? i can't imagine it will be this smooth for the next four months? >> it is not at the beginning of the year, we set the theme which would be the tug-of-war between tailwinds and headwinds and volatility the second half of the year will bring the exact same thing you've got the support in the market a little bit. over the last week, obviously, we had buybacks going on we had the cpi report that people thought was going to be a pivot for the fed.
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i'm a party pooper in that i don't believe that in all. i didn't think we will see a fed pivot. you have rising interest rates and fears of recession, especially in europe, you have earnings valuations coming down for the second half of the year. we have the summer rally and it is great, but it is not sustainable. we will expect volatility going forward. >> again, i don't want to take anything away from the excellent coverage of the fed and fed matters a lot. i'm a little confused about this market obsession about whether or not they raise 50 or 75 at the next meeting or two. does a quarter or three quarter percent matter 25 basis points? we know they're raising. by x or x minus y. i'm not sure it matters.
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>> it doesn't matter at all. the debate really should be more along where we see the terminal rate bullard saying 3.75% or 4% other members are hawkish with the terminal rate needs to be. let's look out at euro dollar futures for march '23. those are 50 basis points. you have the two-year after cpi came down to $3.07 it is back up. look at germany yields they're higher the trend is higher whether it is 50 or 75 is not important they will not take their foot off the gas at this point in time >> inflation, food prices back on the rise, electricity costs on the rise, health care you have a daughter in college i'll not tell you about those bills. we'll talk about quality quality is in the eye of the stockholder, victoria fernandez, where do you see quality
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i'm doing air quotes right now >> quality comes down to the balance sheet. we want to seqe quality of earnings and cash flow and management of the corporation. when we look at those, it doesn't mean you are looking at a certain sector, but within each sector, where are you finding quality? we own coca-cola we have a quality name there we like insurance and health care cigna is the name we like. you know we liked financials all year long. we continue to and when you focus on quality, you look at the name like visa we are not saying go all in on growth or value or all risk on or risk off. we are saying find the pockets where you like to be in the market and focus on the quality of the companies then it is a stock pickers market at this point >> we are showing a few names like visa. v or visa and victoria
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fernandez. thanks i appreciate you getting up early in texas take care. >> my pleasure. everybody gets up early. or stays up late for "worldwide exchange." that includes us and our team. thanks to all of them for doing what they do every day that does it for us here on "worldwide exchange. we will see you monday morning "squawk" and the gang are next have a fantastic weekend be well. see you in two days. in order for small businesses to thrive, they need to be smart. efficient. agile.
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good morning bed, bath & beyond shares plunging more than 40% now trading below monday's close after investor ryan cohen dumps his stake. and nielson saying more
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people watching streaming services over cable for the first time. shakeup at two companies we will tell you the changes at home depot and starbucks it is friday, august 19th, 2022. "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc live from the nasdaq market site in times square. i'm melissa lee with andrew ross sorkin becky and joe are off. equity futures indicated for a lower open this comes as the major indices close higher yesterday for the month to date, dow and s&p 500 are up 3.5%. nasdaq up 4.6% trearyie


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