tv Worldwide Exchange CNBC September 21, 2022 5:00am-6:00am EDT
it's 5:00 a.m. on cnbc here's your "five @ 5. investors are turning a little bit higher investors focused solely on jay powell and the federal reserve and the latest policy decision due at 2:00 p.m. eastern time today. in europe, the continent's energy crisis getting more december prass this morning as germany nationalized, took over one of its largest utility
companies. plus vladimir putin ordered a partial global iization as they are engaged in war with ukraine for seven months. later diamond and others are headed to congress today wednesday, september 21st, and you are right here watching cnbc good morning i'm dominic chu in for brian sullivan today left. 's kick off on wednesday morning with equity futures at a lower session after yesterday's trades right now futures are pointing to some modest gains the s&p up by roughly 5 the points, the dow jones by 36 and the dmacz by ten this is a wait-and-see market. 2-year and 5-year yields t
highest since 2007, the long bond, the highest since 2014 each of those slightly lower, 3.94%. the ten-year at 3.5% and 30-year long bond, 3.5%. again, a little bit of movement, but everybody is waiting for the fed. on the energy side of things, oil prices are slightly higher in trading you can see 1.5 point gains here ice brent crude, up $1.50. $92.18, roughly the same percentage move higher, so we'll watch those energy markets ahead of the fed and in crypto, you're seeing the prices for bitcoin and ether bitcoin, by the way, still below that 20,000 mark, 18,879 at this point, down 3/4 of 1%.
down for ether prices as well. around the world, a mostly lower session in asia as you can see there. roughly 1.5 percentage losses. the hang seng in hong kong down also now, in europe the trading day is also underway right now the cac and franc down let's get to the top stories for that we turn to silvana henao. >> good morning. u.s. white house is putting chinese chipmakers on a black list for allegedly violating controls senate majority leader chuck super calls the reported actions troubling and says the biden
administration needs to act swiftly. crypto's exchanges are portedly the top assets of voyager's digital. it stands at about $50 million that's slightly higher than ftx. back in july voyager said it had $5 billion in total assets and liabilities of $4.9 billion. and elon musk is looking to bring wireless internet to iran. he said his company is now working with the treasury department on the necessary permissions. national security adviser jake sullivan says the administration in the past has provided various exemptions for iran's people and their ability to communicate with the rest of the world, dom. >> silvana henao, thanks very much for those. in a rare national address and his first since the start of the war in ukraine, russian president vladimir putin announcing a partial
mobilization of his military calling it a preservist and significant escalation of his plan in ukraine. in calling for russia's first mobilitization, by the way, sill world war ii, putin says if the west continues its, quote, nuclear blackmail, moscow would respond with the might of its vast arsenal we've got much more on that story as it develops >> back in the markets, investors are counting down to the fed chair's decision at 2:00 p.m. eastern time. ahead of that they're down 2.5%. the nasdaq has declined by 3/4 percent. let's bring in craig john of piper sandler.
the markets are down but is there any relief in sight? is there any stability or are we waited like catalysts and the fed decision >> it's something i have not seen or felt in years at this point in time. everything is what is going to go wrong i'm hearing very little about what is going to go right. when you come back and look at the charts and step back and unemotionally look at it, you haven't seen a break below the june lows. and if we're going to get a big drop below the june lows, it's going to have to be a lot more hawkish and a lot more negativity and something else is going to have to come in to push the market as lot lower from our per speck active i would note from that sentiment, if i go back and look at the aaii data, it's the second longest negative streak in terms of the aai data, going all the way back to 1987 when you look at very simple returns from the year forward, the odds and probability
suggests that the market can go higher, but, again, most investors don't want to hear it and don't want to see it, and the charts to me look pretty ugly, but they're starting to kind of go sideways at this point in time. >> you know, i hate doing this because people have been proven so wrong over the years by saying these exact words, but isn't this time different, craig? this time is different because we're embarking on the recovery from pandemic and even financial crisis-era financial policies, monetary policies, that have been unprecedented in u.s. economic government history. unprecedented means there is no historical comparison to it, so is this time different >> i'm not sure that this time is going to be, per se, different, dom, because when i go back and look at it, stocks have already been declining. if you look at the growth sector stocks, they've been declining since basically february of
2021 you've got a lot of stocks that are already anywhere between 50 and, well, frankly 80% off of their prior highs. again, a good friend of mine would say one doesn't get hurt falling out of basement windows. and when you look at where a lot of these stocks are already trading, what is it we don't know i get it it's unprecedented at this point of time for a lot of these pieces, but, again, sentiment is super band stocks are really beat up at this point in time. when i go through and look at bond markets, credit spreads, and a lot of other caters, they look at tops they don't look like they're going higher if we don't see a huge expansion of high yield or investment grade in some of these other pieces, dom, i don't think we have a great financial crisis or something along those lines in front of us at this point in time things in the escalation of europe is troubling, but, again, the energy stocks are still a place to hide at this point in time. >> you know, it's interesting,
craig. a former boss of mine in my wall street days used to say to me, there is only one end of the world, and this is not it. so if this is, in fact, not the end of the world and the markets are not headed toward armageddon and this country is not doomed to be fated toward a fiery pit of inflation, there has to be places -- there have to be places out there that are looking attractive i wonder what the charts say those places are. >> well, dom, from our work and our relative strength work and absolutely trend work, i will tell you that energy is overwactd for us if we look at stocks in here such as conocophillips, it looks like to us it's a constructive chart, about to break out in new highs. i also mention consumer land there's still consumer spending. go around to the malls, target right next door, and you'll clearly see spending is happening.
look at ulta beauty. they're finally breaking topside and showing relatively good strength on the flip side down, as we go back and look at some of the household clearance and staples in the market, they're starting to selloff if the market is going to be super negative, end of world, i i wouldn't expect them to be selling off and looking weaker i would expect to see them looking stronger i suspect investors will start playing more offense than defenses, just at the margin not at a measured pace too. >> craig johnson on the charts there. thanks a lot appreciate it. when we come back, germany taking charge of its energy supplies with what's expected to be a rough winter ahead. plus diamond, frazer, moynihan, and coe are headed to the country's leader with two
days worth of testimony. we'll preview what they have to say ahead right after this commercial break power e*trade's award-winning trading app makes trading easier. with its customizable options chain, easy-to-use tools, and paper trading to help sharpen your skills, you can stay on top of the market from wherever you are. power e*trade's easy-to-use tools make complex trading less complicated. custom scans help you find new trading opportunities. while an earnings tool helps you plan your trades and stay on top of the market.
back after its highest level in september, up nearly 80% as you can see in the chart so far this year for more let's send it to our london newsroom. this is a big deal when a country in essence takes over and nationalizes a private company. can you take us through what's happening right now? yay, good morning, dom certainly a big move in a statement the finnish company said uniper's situation had deteriorated since back in july that doesn't mean new measures had to be agreed upon. the federal government will now own 9% of the utility, giving a stabilization package around 88 billion years. at the same time the state owned development bank will provide financing to uniper, according
to its liquidity needs certainly a big story and one that kind of shapes the energy discussion, particularly for germany who, of course v relied herbally on russia for gas imports. >> desperate times call for desperate measures, arabile. amid this news in germany, across the british channel, the british government is using a bailout program. they're going to put caps on prices, price meant for consumers here what exactly is that going to do to shape the energy picture in the coming weeks and months? >> it does mean that supplies, of course, need to be compensated somewhat for the price sort of staying that low they're going to put a cap on the prices per megawatt per hour that is for electricity. gas will then be capped at $85
per megawatt per hour than it was some of those caps are going to be set in placing and they follow from the consumer caps that were put in place by the new uk prime minister liz truss not so long ago, a clear statement of intent from her to kind of ease the burden as much as possible, kind of a sense, then, that things are getting a little bit difficult on that front and trying to find the best way possible to try to aleleviate the pressure and mak sure the problem does month escalate further dom. >> arabile gumede. thank you very much. still coming up t 2:00 p.m. policy decision and why and what powell might say is likely bad news for stocks and other risk-related assets. plus, besure to tune in to the premiere of "jay leno's garage" with a special guest elon musk in jay leno's garage
it kicks off at 10:00 p.m. stn me you can watch it right here only on cnbc. ♪♪ ♪♪ ♪♪ be ready for any market with a liquid etf. get in and out with dia. (vo) some bonds last a lifetime. be ready for any market some bonds inspire confidence, and some you grow to rely on. these are the bonds worth investing in. for over 50 years,
pimco has reinvented fixed income to create opportunities for investors in every market environment. so, no matter what happens you can build the bonds that mean the most to you. pimco, a global leader in active fixed income. when you work in it complaints are part of the job. bill says the coffee is weak today. but since cdw helped us switch to mac, everyone's happier. dan from finance likes getting performance without a big price tag. bibi digs the power of the apple m1 chip. mac is easy to manage, compatible with all our apps and came preconfigured by cdw. now we're even getting compliments. that was bill again, says he loves his new mac. he's right about the coffee. another busy day? of course - you're a cio in 2022. but you're ready. because you've got the next generation in global secure networking from comcast business. with fully integrated security solutions all in one place.
so you're covered. on-premise and in the cloud. you can run things the way you want - your team, ours or a mix of both. with the nation's largest ip converged network. from the most innovative company. bring on today with comcast business. powering possibilities. (vo) with their verizon private 5g network, associated british ports can now precisely orchestrate nearly 600,000 vehicles passing through their uk port every year. don't just connect your business. (dock worker) right on time. (vo) make it even smarter. we call this enterprise intelligence. exchange." let's start with interest rates. we know they've been on the rise the ten-year yield the highest in more than a decade. meanwhile the difference between long-term and short-term rates is continuing to kind of collapse i'm showing you a chart with the difference between ten-year note
yields and two-year note yields. you can see by about 41 basis points or 0.4% to the downside here this has been one of those recession indicators in the past that some experts have looked at, and it continues to show we're due at least for an economic downturn. next up, if interest rates are on the rise and we have a fear of a recession coming up, what are those technology stocks going to do? over the course of the last decade plus, they've been a relative safe hav frn investors. however, over the course of the last week, despite the fact the interest rates have been on the rise, check out what's been happening with apple shares, up 0.75 tesla stock up about 1.25% microsoft bucking the trend, down nearly 4% if there's some sign with mega cap technology and stock, could it mean a possible bottom is in sight? that's one dynamic consumers are
paying attention to. take a look at this. two economically sensitive type sectors on the opposite ends of the spectrum the consumer course is down 7.5% energy, we know the spike in prices has been in place for most of the years despite the recent weakness that we've seen and technology has lost more than 1.25% consumer staples continues to be a staple what's that economic narrative weaving into this discussion something to watch. now let's get a check on this morning's other headlines outside the world of business. nbc's phillip mena is in new york with the latest here. hi, phillip. >> hi, dom, good morning hurricane fiona is slowly moving toward bermuda, strengthening toward a category 4 storm after slamming turks and caicos. the dominican republic and
puerto rico still reeling after the hurricane barreled through there this week? the special master held the first meeting on mar-a-lago. he felt skeptical about trump's claim he had declass feed them trump's attorneys said they didn't want to disclose them yet because it could be part of an eventual defense the fed says unless trump can show those 100 documents are not classified, he will treat them like they are. he told the trump team, quote, you can't have your cake and eat it in a separate filing, trump's lawyers called this case a document stormage dispute that spiraled out of control. what do aaron jaudge and bab ruth have in common? >> here's the 3-1. deep to left field there it goes. number 60! slide over, babe
you've got some company. >> that ninth inning blast, aaron judge became the sixth player in major league baseball to hit 60 home runs in a season. he's the third yankee to reach that mark, and he now sits just one home run behind roger maris's american league record judge also leads all categories in the a.l. triple crown on tom of that. dom, the yankees still have 15 games left for judge to break that record. >> it's only september right now. all rise for aaron judge thank you very much, phillip mena we appreciate it. >> you've got it. still ahead on the show, helima croft is here, weighing in on vladimir putin's new threats to the west and first military mobilization since world war ii by the way, take a look at shares of defense companies in the u.s. following putin's remarks, all getting a pop lockheed martin up 3%. northrop grumman up 2% boeing and raytheon getting a
bid in the market. they tend to do better when there's geopolitical conflicts. a reminder, be sure to sign up for the most powerful investment event of the year alpha returns to new york city in person on september 28th. just go over to deliveringalpha.com to register. a slew of huge names i'll be part of that program moderating a panel on what the next big short could be with carson block at money waters and jim che noe. "worldwide exchange" will be right back ♪♪ ♪♪ ♪♪
pressure on stocks as they continue to climb. futures in a holding pattern as you can see right now. all of this as the investors gear up for the fed's latest policy decision and extend tags of another big rate hike, but just how aggressive will the central bank go to take a bite out of inflation and the heads of some of america's biggest banks in the hot seat today on capitol hill kicking off two days worth of getting grilled by lawmakers it's wednesday, september 21st you're watching "worldwide exchange" on cnbc. ♪ welcome back to the show i'm dominic chu in for brian sullivan it's right around 5:28 a.m.
eastern time in the new york area right now futures are pointing to a modest and flat and stable opening bell 38 points implied higher for the dow. three points for the s&p, and down four points for the nasdaq overall, very much a wait-and-see mode situation ahead of the market's big policy decision from the fed and fed chair jay powell in the bond market, obviously a big focus with interest rates in the picture and in the cards today. the ten-year note ever so slightly lower, 3.54% right now. the 2-year note yield a little over 3.5% and the 30-year long bond a hair below 3.5% keep an eye on those rates >> let's get a check on the top stories. silvana henao. >> reporter: hey, dom. the largest of banks in the u.s. are set to face tough questions from lawmakers when they go before lawmakers today
james dimon, jane fraser, brian moinny hay and charles sharp will testify before the house financial services committee demon will warm congress of economic storm clouds. that's ahead of supply chain disruptions and supply chain issues fraser is set to deliver something similar. they're no less daunting but her bank can continue to serve as a source of state. beyond meat formally suspending its chief operating officer doug ramsey after his arrest for allegedly punching a man and biting his nose. the company says its senior vice president of manufacturing on rags will step into the role in the meantime ramsey's arrest is just the latest headache for beyond meat as it grapples with operation headwinds and the price of its
stock sinking. and home depot becoming the latest company to face the growing wave of unionization among workers. workers in pennsylvania have filed petition to unionize back in 2019, 60 home depot drivers voted to join a union in san diego, dom. >> silvana henao, thanks for the headlines. the top story, jamie dimon and others facing off, and the fed chair to speak at 2:00 p.m this is ahead of an actually decision of a 75 basis point hike or 3/4 of 1%. you can see 84% odds and as we await chairman jay powell, checking yields, of course, the 2-year and the
5-year at the highest levels hovering near there since 2007 and the ten-year since 2011, and the three-year, the highest since 2013 ladies, thank you very much for joining us the economy right now, is it justified to see interest rates where they are, given the current and expected state given the economy? >> yes, i think we still have work to do, but we are beginning to see the toll of a tougher stance in terms of rates and policies that are beginning to take on the economy. we certainly see it in the housing sector we're beginning to see it in manufacturing, but we're still looking at a pretty resilient consumer right now and i think overall when you look at the inflation pressures in the system, there is still more work to do.
>> you know, the fed has been very clear kind of since earlier this year that with inflation being a problem, it was going to look to take cash out of the financial system, raise interest rates, start to look at ways to do that. they're more perhaps not -- desperate's the wrong word they're more forceful now because of the data. are the markets pricing it correctly in your mind >> i think the front end is pricing it correctly you know, all they care about is inflation. i think the front end, two-year rates, five-year, i think that's where the price is i do struggle the long end because i think the idea of long landing, the fed's giving up on it we went from soft to softish to something, so i do think long end interest rates are
attractive now i think the markets should be pricing in the risk of the high landing is high i think even if the economy slows down, they care about inflation. it's going to take a while for inflation to get closer to 2%. i think the long end is a little too optimistic i think some of those long end interest rates have risen too much it's actually an attractive point for investors who want to hedge some of the risk assets. i think it's around 3.5%. >> so you read my mind i was going to ask you, where do you think they could top out if you're saying 3.5% for the ten-year right now, that implies this is a buy, because if you buy them, prices go up, yields go down. in your mind f this is a scenario where the global picture becomes more recessionary in the coming months, how low could ten-year rates go in a scenario where there is a hypothetical?
again, hypothetical, i don't know the future, priya, u.s. for the economy, how low could ten-year yields get? >> i think a year out, we're actually forecasting 2%. in the near term, it's a little hard if the fed is taking rates up to 4.5%, in our view, terminal rate, it's a little hard for the tenure to fall a lot more. i think 2.75% to 3% should be where it is in the near term i know the fed's saying they want to stay higher for longer, but there is an economic response that the hikes are going to create. there's a lag defect sarah talks about how the economy is resilient six months it starts to slow down we see all the cuts happening next year, so that -- you know, the fed is keeping that high you know, i would say getting
closer to 3% is where we're forecasting the ten-year in the next few months, and then heading lower because i don't see how the fed can really cut a few basis points i think they're going to have to cut to below an accommodative policy we're thinking closer to 2% in 2024 that's not something they'll address. i don't know if it decline as lot today because i don't think the fed is going to sound dovish, but as the economy slows down, i think that's where the opportunity is for the tenure to get closer to 2.5% 2.75 is where we forecast. >> you know, sarah, it's interesting. there's the dot plot the fed puts out on a quarterly basis. they're looking, trying to forecast where the economy is going to be. right now, there's been a big debate in america, sarah, about whether or not this country is, right now, in a recession.
what does the data tell you right now about whether or not this country is in a recession or not or whether we're due for one and what data points matter the most >> i think in terms of whether we're currently in a recession or not, i would say we're not. yes, we had two quarters of declining gdp, but when you look at what's happening with gross domestic income, it's another way of measuring so that's continuing to grow we're still adding jobs at a robust pace. so you have hundreds of thousands of workers gaining income each month. i think not there yet. but when we look ahead, we are expecting the u.s. economy to enter recession sometime around the early part of next year. as you see the tightening we've seen to date, again, we've already seen it in the housing sector we're seeing it in other leading sectors like manufacturing we've had a decline for six consecutive months i think we are seeing the economy run out of steam the problem is inflation isn't
running out of steam just yetting and so i think that keeps the fed on this hawkish bend for not only today's meeting but probably through the end of the year. >> sarah, before we let you go, roy's the one data point that would point us toward a possible recession? >> i think when you look at just the unemployment rate, we saw it tick up over august from labor force participation, if we begin to see that decline higher, there's a prts firm rule in economics, some rule if you see that rate move higher, it's pretty clear we're in a recession. i'll be watching that in the coming months. >> priya, what's the key point for you to watch in the economy? >> i'm watching the consumer the consumer is dealing with real rate growth of wages. wages are growing at 5.7 inflation is at 9.
at one point do the savings run out and consumer spending starts to slow down that will then impact the labor market i'm watching the consumer to see if the consumer is turning over. >> all right priya misra and sarah house, thank you both for your thoughts we appreciate it. oil prices are slightly higher, this after a rare national address and his first since the start of the war in ukraine. we're talking russian president vladimir putin announcing a partial mobilization of his country's military this morning, calling up reservists, in what is seen as an escalation of his offensive in ukraine after a series of military setbacks, especially in the eastern regions. since calling for the first mobilization since world war ii, putin says if the west continues its nuclear blackmail, moscow would respond with the might of its vast arsenal read into that what you will
joining me now, helima croft she's a former cia nachlt helima, let's talk about whether or not putin is implying what we think he is by saying vast arsenal at their disposal. >> i mean, dominic, obviously the grave concern is he's threatening a tactical nuclear strike it's a check-off gun scenario where you put the gun on table in act one is it going to be used in act three? vladimir putin has staked his entire reputation on the success of ukraine, and the military setbacks he's experience in the northeast potentially makes him very prone to a very dangerous escalation obviously t partial moeb san diego, 300,000 troops put into this that it letter be very, very concerning to the west, but also that threat of a potential nuclear threat will cause people a lot of anxiety this morning. >> what's interesting, helima.
you and i were both watching and i think we were together at one point in february and march when we were watching the various market reactions to the russian invasion of ukraine. we saw a lot more volatility, not just in the stockmarket but commodity markets as well, given that first push and invasion by russia now we've got the biggest kind of military buildup in calling up reservists since we've seen since world war ii why aren't the markets more skittish about this? >> well, again, this news just broke. i think it will take time for people to process what this exact pli means. i think market participants have grown a little tired of this con conflict i think a lot of market participants are thinking when can we get on the other side of this the concern has always been for people who follow russia closely, that putin may have nowhere to go with a military loss in ukraine. so the prospects of a serious escalation has always been on the table.
so, again, i think it's going to be very perform to watch the reactions that we have from western leaders who are gathered in new york for the opening of the u.n. general assembly. but this is obviously a very, very concerning development. >> this is a balancing act right now, if you will i wouldn't say balancing act it's a scale, right? left-handed or right-handed side and it seems as though the markets and the economy not here -- especially in europe right now -- are trying to figure out who has the bigger influence what wins out and how do commodity prices respond in the next six to 12 months? >> i see the story in europe the same story what's the key driver? it's been the weaponization of russia's commodity exports look at the news this morning. germany is taking basically the full stake in the utility
company uniper $8 billion they're having to lay out to acquire that asset. these european governments are going to be on the hook for massive economic bailouts to prevent consumers from having to feel the full effect of rising utility prices we're going to see, we're already seeing industrial entailment in gas-intensive structures, fertilizer, aluminum it's largely driven in the case of europe by this war. >> all right he helima croft at rbc capital with the latest on russia and ukraine. thank you very much. coming up on the show, what continues, red-hot inflation may be good news for stocks. it snds oupreverse we'll hear why after this. we're back in just a moment. business. n'tr
(vo) some bonds last a lifetime. healthier is getting a flu shs on your schedule. some bonds inspire confidence, and some you grow to rely on. these are the bonds worth investing in. for over 50 years, pimco has reinvented fixed income to create opportunities for investors in every market environment. so, no matter what happens you can build the bonds that mean the most to you. pimco, a global leader in active fixed income. when hurting feet make you want to stop, it'sl's time. our custom fit orthotics use foot mapping technology to give you personalized support, for all-day pain relief. find your relief in store or online. my finances were all over the place. and my banking relationship was getting... well, complicated. hahaha! so, i broke up with messy accounts
and moved my money to sofi. now i earn higher interest on my checking and savings, and bank, borrow, and invest—all in one app. feels nice being in control. break up with bad banking. get up to 2.00% interest, and bank, borrow, and invest—all in one app. plus, download the sofi app and earn up to $300 when you set up direct deposit. sofi get your money right. . welcome back to "worldwide exchange." now it's time for something random but interesting, and for that we send it out to our own brian sullivan for rbi. >> hi, everybody it's time once again for your morning rbi. today let's get random but interesting about stockmarkets and maybe a little bit optimism because there seems to be so much negativity out there that it's easy to get depressed about the market, which we totally get. it is a nervous time even if the next couple of inflation reports show a
slightdown turn in the cci or cpi, you don't need to be a economist to know that prices are high for everything. just goo to the grocery store. just remember this the economy and the stockmarket are not the same thing one can go one way t other the other way. it happens all the time. and tom lee says the latest inflation data could actually be good news for equities sounds weird, i know, but he's got some history he's looking at that when you look at it, it kind of makes a lot of sense because the data says the red-hot cpi numbers tend to tank stockmarkets, and when it comes to drops after high-inflation numbers, two of the top ten occurred this year two more were all the way back in 1974. here's the key tom notes these have alsco insided with some near-term market lows. look at this in those ten hot cpi releases, you can see that stocks did get slammed. they fell for pretty much a week almost every time with the average drop around 7% or 8%
it's kind of what's happening now. but half the time they were also lower about a month later, but then something changes stocks have historically turned around in a few months, and the ten worst stock drops after a red-hot inflation number t s&p number was higher seven times after half a year. only one time was it confirmed lower in six months. that was in 2002 the other two times, well, they're yet to be determined because they happened this year and we haven't gone six months from them. they're certainly tracking to be lower, at least for now. but it's early let's say we are lower, even six months from now in this year's inflation data it would still mean the s&p inflation data was higher, ten times the cpi came in hot. 70%, not a bad average when it comes to the markets better yet, the median gain of those seven times has been nearly 18% okay, a lot of numbers there let's recap, make it simple.
tom lee when it comes to inflation running hot says stocks tend to sell in a big way shortly after, but a few months later, the market tends to be high eric often by a lot, probably because they think the fed will soon be done raising rates. does this mean we'll be higher in a few months from now of course not. history is a suggestion, not a guarantee. be but if you're looking for something to be optimistic about, there you go. history may be just on your side random and totally interesting. >> thanks, brian on deck for the show here, investors are gearing up for the big fed rate decision. patrick fra zety and your movies of your money. throughout the hispanic heritage month, cnbc is celebrating our own teammates and contributors as we head to break, here's our
producer a.j. vielma. >> i'm blessed to come from a loving working-class mexican american family. growing up as the second of six kids meant there was always someone to lean on no matter how tough times got. one of my sisters told me there's beauty in the struggle it's not always easy, but it shapes us. no matter where you go or who you meet, you represent your people and your culture wherever you go
power e*trade's easy-to-use tools like dynamic charting and risk-reward analysis help make trading feel effortless and its customizable scans with social sentiment help you find and unlock opportunities in the market with powerful, easy-to-use tools power e*trade makes complex trading easier react to fast-moving markets with dynamic charting and a futures ladder that lets you place, flatten, or reverse orders so you won't miss an opportunity (vo) with their verizon private 5g network, associated british ports can now precisely orchestrate nearly that lets you place, flatten, or reverse orders 600,000 vehicles passing through their uk port every year. don't just connect your business. (dock worker) right on time. (vo) make it even smarter. we call this enterprise intelligence.
time, we get the main event, the highly anticipated fed interest rate decision. cnbc will, of course, have complete coverage of all the things this you need to pay attention to throughout the course of today. so keep it right here on cnbc. well, ahead of that latest policy decision from the fed, futures right now are pointing to some stability at least, maybe not expected the dow's implied higher now by about 110 points, so seeing a little bit of positivity pick up the nasdaq by 27 and s&p by 7. patrick franzetti is managing director at hightower. patrick, supply and demand, econ 101in 101, take us through what your thesis is and what's right or wrong. >> they're trying to figure out where you had global supply
chain issues it's caused some to look at it i think they lose some krezability if they went 100 basis points but at the end of the day, the fed in many ways has only so much they can do, right? this isn't the fed of the early 1980s. powell cannot act like paul evoke eric mainly because we have too much debt when you look at the debt and gdp in the early '780s, it's roughly 30%. when wlou look at it today, it's over 120%. they're going to have a very difficult time, i think, to sort of curb the inflationary pressures. they'll do what they can, but at the end of the day you look at core cpi and the non-energy components are still robust from
an inflationary perspective. >> so in that scenario that you've just laid out, there's got to be some kind of a compromise or happy medium maybe is the best way to put it with what the fed can and can't do in this scenario. you have to fight inflation. but at the same time, you don't want to send the economy into a recession or is it more important to get inflation down so you'll give up this idea of a soft landing for the economy >> well, i think it's -- again, it's a very difficult balancing act, right they're looking at different signals, right er day i'm a fundamental investor on any given day, we look at signals that companies provide, you know over the past few weeks we had the fedex report on that day, the expectations were wow the global economy is really tanking because of the way fedex reported, although, many of those issues were company-specific then you turn to this railroad
strike that was averted. now that is probably positive to the economy because, you know, it didn't -- you know, it didn't freeze the transportation system, but labor costs are now going up 24% over the next three years based on this temporary deal it looks like they've resolved so these are the kind of issues the fed has to face. it is a balancing act. i think they're doing their best to avoid a hard landing. i think that's going to be a challenge if they keep increase interesting rates. but with this ensuing debt problem, it's going to be more difficult. and pow ll continue to talk down inflation for the foreseeable future. >> patrick, this sounds -- not to be a market cliche about this, it sounds like you are, quote, unquote fairly optimistic. >> fair enough. >> what's the best place to put your money into given the idea that, yes, you are a little scared, but you're more optimistic, more medium to long
term >> i would say this. we came into the year, i'd say, fairly defensibly positioned, owning health care, defensive consumer stocks, energy and precious metals. and when i look at things like, you know, deglobalization factors, you know, in the global economy, i say, who's going to benefit? well, i think a country like mexico is going to benefit and i just mentioned railroads kansas city southern will own most of the rail lines from mexico all the way up to canada. i would say from a growth per speck active and defensive perspective, i like owning real assets so owning a company like canadian pacific i think is very reasonable they traded a pretty reasonable valuation given some of the headwinds that the economy faces, and they don't have the same, you know, potential labor issues that the u.s. rail faces right now. >> the call from patrick
partial military mobilization in ukraine. it's wednesday, september 21st is it fall it might be. it's autumn. "squawk box" begins right now. ♪ good morning welcome to "squawk box" here on cnbc we're live from the nasdaq market site in times square. i'm becky quick along with andrew ross sorkin and joe kernen it's really the language that we hear from jay powell after all of this. on this morning ahead of that, you see the futures are indicated up by triple digits from the dow you're looking at a gain of 3. s&p up by 12 the nasdaq up by 20. of course, we've already seen the pain to this point you've seen all the major