it is 5:00 a.m. here at cnbc global headquarters. i'm frank holland and here is your "five@5." wall street riding a six-session losing streak and pointing to more pressure at the open. and stubborn inflation may allay concerns of the rate cut. and still awaiting the response from the iran attack. we look at the strategies that are crucial in the times of

uncertainty. and a major challenge to one player in the entertainment industry. shares of trump media falling back to earth. what is driving the latest stock selloff. it is coming up. it's tuesday, april 16th, 2024. you're watching "worldwide exchange" right here on cnbc. good morning and welcome to "worldwide exchange." we are coming to you live from cnbc london. thank you for being with us. let's get you ready to start the day. we begin with the stock futures after another very rough session for stocks yesterday that saw the s&p and nasdaq close down more than 1% and the dow ex extending the losing streak to six sessions. s&p and nasdaq is flat, but the dow is opening 40 points lower. we are midway through the month and we will do a quick check of

the s&p performers. we have globe life reeling and down 50% this month. we are looking at lamb weston under pressure. walgreens is down 19%. car max is down 40%. today is all about the banks. bank of america and morgan stanley reporting before the opening bell. bank of america down .75%. treasury yields are hovering at the highest levels in six months. the two-year/ten-year spread is skee steep evening. we are looking at the energy

sector with oil holding above $90 a barrel. wti is the benchmark in the u.s. down at $85.25. brent crude is lower. we want to look at the commodities and specifically gold which is at an all-time high. look at that chart. you see it is up 15% year to date. that's the set up. let's see how europe is getting under way with the trading with silvia amaro. we were just on "street signs" a bit ago. you have been tracking the declines on the middle east tensions all morning long. >> we do have the european stoxx 600 basically on track to see the biggest daily drop since october. the negative sentiment we are seeing in europe this morning is pretty much a continuation of what we saw yesterday stateside. earlier this morning, from asia as well. looking at the boards in europe and you can see they are all in

the red at this stage. i would highlight the ftse 100 is down by 1.5% and this is despite data this morning showing core wage growth slowed again. that could be a positive for those expecting the bank of england moving with the rate cut this summer. clearly that data is not bringing any sort of positive strength to the ftse 100 at this stage. when it comes to the sector breakdown, this is the picture. we have here at the top with the telecoms which are down .20%. one stock we are tracking here is ericsson. they had better than expected results this morning. that is helping at this stage when you see all of the sector in the red at this stage. basic resources is the worst performer at this stage down 2.7%. here is a lot to do with the weaker metal prices at this stage. >> silvia, thank you very much.

turning attention now to asia. the session there is closing sharply lower after new data from china. jp ong is with us. jp, a mixed report from china. >> reporter: absolutely, frank. terrible tuesday with the stocks tumbling in asia. we see the middle east tensions weighing on stocks. the china gdp print is now showing it is growing faster up 5.3% year on year. if you look at the march industrial production and retail sales, that was below expectations hinting of a slowdown in china. that could continue for the rest of the year. you will see stocks from the csi 300 down. hang seng is down and tech shares down in that part of the

region. also the hang seng property index is being held down as china faced an issue from the bank of liquidity and handling the future debt problems. this is complicating things for the region and spillover effects adding on to the stronger u.s. macro data that the possibility of rates staying higher. i want to look at the currencies quickly. we have a lot of currencies in asia hitting the weakest levels in months. six-month weakness forthe australian dollar and chinese shore. the weakest levels in 17 months. the japanese yen is 154 against the dollar. back to you, frank.

>> jp ong live in singapore, thank you. we turn our attention back to wall street. the push and pull with earnings growth and inflation putting pressure on the markets. san francisco fed president mary daly is the latest official to temper rate cut expectation saying there is no urgency to cut with the current policy in a good place. at the same time, bank of america says the 30 s&p 500 companies out with earnings have beaten expectations by 6%. let's get more insight into this with our next guest. good morning from london. i'll jump right into it. so far so good, but in your mind, how much of the market rally year to date and potential for it to continue is weighing on earnings and earnings not only meeting expect tationexpec beating? >> i think, frank, the market as far as the earnings are concerned is overstretched at this point in time.

anything less than stellar is an issue for the market. we are thinking that at this point in the market that it looks overstretched and poised for a correction. once every few years, we get a correction in the market and given the monster rally in equities since october of last year, i think a correction is in the cards. >> i appreciate you taking a victory lap on your call for the year-end rally. also important to note, all three indices trading below the 50-day moving average. you believe the magnificent seven will continue to be magnificent despite the call for correction. tesla is down 30% year to date. it is under pressure this morning. apple has a recent rally, but down for the month. nvidia is down 2% over the last month. the magnificent seven doesn't seem like there are seven magnificent stocks anymore. why will these stocks still

power the market? >> we think longer term the market and economy is looking good and we think the fed is going to be accommodative. we feel longer term, the market will go higher and the magnificent seven is a key driver there. they will be driven by artificial intelligence and cloud. you know, you mentioned tesla. tesla is hammered down 60% down from its high in 2021. a lot of this is factored into the stock price already. >> aadil, it is easy to say a.i. is a catalyst, but ever sunince rate cut expectations are pushed out means these stocks are under pressure. >> i think as the market factors that in, there could be

short-term krcorrection. >> okay. jump in. that's a theme of your notes you gave us. where is the place to jump in? you said magnificent seven, finance the alials and energy. down 2% since the bank earnings. is this the time to jump in or will you see a bigger decline if you jump in later? >> we have to look at it on a case by case basis. the market is poised for a correction. some of the opportunities are emerging already, but as the market falls further, there will be more opportunities. in the financials, we like jpmorgan chase over here because they reported earnings and disappointed on the net interest income, but overall earnings were good. fact of the matter is when you get rate cuts, the net interest

income compresses. revenues in areas like investment banking go up like with goldman sachs. a stock like that is what we would advise. we would wait in other areas. the market is hardly down right now. the sentiment is beginning to turn. >> we have to leave it there. thank you very much. on any type of dip, you buy magnificent seven. great to see you. for more on what is driving the markets, head to cnbc pro for insights and analysis. we have more ahead on "worldwide exchange," including the one word that investors have to know today. first, boeing defending against another whistleblower and concerns over its 787 dreamliner jumbo jet. shares of lifenation a

livenation are crashing. and latest selloff with your big money movers. a a a a very busy hour when "worldwide exchange" returns. stay with us.

welcome back to "worldwide exchange." time for the latest with pippa

stevens. >> mike johnson holding a conference with house republicans to layout the measures to fund israel and ukraine and taiwan. johnson is bouncing threats from the party members against pressure to provide more support to israel. shares of livenation are tumbling after the anti-trust lawsuit is filed. it is expected to allege it used its dominance to under mine the competition. boeing is pushing back on the whistleblowers over the safety of the planes of 777 and

the dreamliner. it could eventually break apart mid flight. during the media briefing, two executives described how the panels are fitted together. suggesting the composite skin is nearly impervious to the metal fatigue. the former boeing engineer is expected to testify at a hearing tomorrow. the shares are flat. frank. pippa, thank you very much. time for the big money movers and kristina partsinevelos also has those back at hq. >> good morning. tesla is lower this morning. the ev maker is laying off 10% of the work force as it prepares for the next phase of growth. it is a way to reduce costs and increase productivity. shares of trump media are

sliding which allows it to register millions of shares, but not change the amount of shares preventing trump from selling in september. you may have assumed the outstanding shasres increased with the moves. watching stocks today with blackberry coming off the worst day since january. this is the biggest loser with okta and zscaler. companies you used to cover often. >> you know, i still do. great to see you. coming up on the show, microsoft ups the ante with the investment with the focus on international efforts. the full story and a.i. headlines coming up after this.

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welcome back to "worldwide exchange." we turn to the push around the boom of artificial intelligence. microsoft announcing it will invest $1.5 billion in the uae firm g42. the chief of google plans to spend $100 billion over time

developing a.i. tech. that comes at the conference yesterday when asked about the reported $100 billion super computer planned by microsoft and at openai. and baidu's erniebot now has 200 million users. let's bring in the chief innovation officer at ey. jeff, great to have you here in london. >> thank you, frank. >> we are spelling out all of the companies using a.i. how will this impact us in the workplace? you put out a survey saying 61% of companies are uncertain around gen a.i. >> what i'm seeing is everybody is excited about a.i. and gen a.i. specifically. they will invest heavily into

the space. if you look at the industry today, 99% of them said we are investing in a.i. 70% said we will accelerate investment in a.i. if you look at the banking industry alone, 60% have already started accelerating investment. that is why you see the large investments by the tech companies. >> this is fascinating. every financial vservices compay is investing in a.i. it has the lowest level of skepticism. at the same time, your report states blind optimism and hype in tech can be counter productive. the more enthusiastic? >> we live through the hype cycle with every technology. we look at the promise of the technology. we get excited about the

imagination. i get excited about the technology and what's possible. you start piloting it and you see what works and doesn't work. you drop off on the excitement. >> you are talking about the metaverse. >> as reality starts to hit you, you start to understand what it can and can't do. we're going through right now. we're in the pilot phase. all of the industries and companies are piloting these gen a.i. efforts. they are excited about the potential and possibilities. i think some time soon, we will see, people starting to understand the reality of where the technology is here. it still needs development with privacy and scale ability and costs. the tools around it. we will see that development and you will see the long-term b benefits from a.i. >> how is ey using a.i.? tell me about the human c comp component. i don't do much else with this

iphone other than call and text. >> we started our a.i. journey eight years ago. it has been a long time for us. in gen a.i., we have a platform we released called eyq. it gives employees an enterprise to chatgpt function. 75% of our employees go to it every month. it is 300,000 people every month. >> that is a high level of adoption. >> very high level in a short t timeframe. people arie doing it more than once a month. we are excited about this. we are doing summarized documents so people can read things faster. >> i can feel the excitement. it is good to meet you. i hope to talk to you again. >> thank you, frank. as we head to break, we have

shares of doc martins sinking in trading and cutting outlook for the fiscal 2025. it warns revenue could drop to are 3-third of what it made las ye. more "worldwide exchange" coming up after this.

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and 10:30 a.m. in london. here's what's on deck. the dow's losing streak hitting six in a row. we talk to a top finance at adviser on the advice he is giving to clients. the latest look at big banks. bank of america and morgan stanley is on deck in the muddled picture so far. the second large of the economy he iis showing signs of life. it is tuesday, april 16th, 2024. you are watching "worldwide exchange" here on cnbc. welcome back. i'm frank holland coming to you from cnbc london. we pick up the half hour check with the stocks coming off another tough session.

s&p and nasdaq closing down 1%. the dow extending the losses to the sixth straight session. the dow is off the lows and s&p is lower. monday's losses is adding to the tough start to the month. the s&p down 3%. the dow down 5%. we are looking at the stocks leading the dow lower. intel down 18%. boeing down 13%. home depot down 12%. united health reports in a bit and that is down double digits. we are checking the bond market as treasury yields are mohoveri at the highest level in six months. we continue to watch the moves and impact on the overall markets. we are looking at energy and oil holding at $90 a barrel. brent crude is falling a few

cents below the $90. wti is falling down one-third. we are looking at other commodities. gold is continuing to move higher. gold is up 15%. trading at 2,3 the $2,385 an ounce. and look at cocoa. it is up 150% for the year. let's turn attention back to stocks and wall street bracing for the third down session in a row. the major averages are off the record highs. this is the fear gauge which pops to the highest level since october on fears of inflation

following the hotter than expected retail sales report. to help us dig through the noise is andrew grinstead. celebrating 45 years in business with $2.5 billion in assets. good to talk to you from london. a lot going on in the world. specifically israel and iran. as you talk to clients, how big of a factor is that? >> it is not too big of a factor yet. hone honestly, i don't think we had a lot of client calls. >> okay. not too much about that. not yet. i want to go to your research. you are saying the s&p has a

one-year return. q1 return of 11% including dividends. you are saying your clients, with the great returns, are talking to you about the u.s. debt level which in all fairness, debt is escalating. why is that a concern for your clients? >> i think a couple of things. the election coming up and they know there could be volatility because of that and secondly, you know, if you look at the u.s. deficit situation, we have been running north of 6% deficits with low unemployment. if you look back to the chart since 1970, we are running a pro cyclical deficit program right now. that's problematic. i think clients sense that there is something wrong with 6% deficits with unemployment as low as it is. they are asking where would we

be with inflation or the u.s. consumer if deficits were typical if this range of employment would be 1% deficit. i think that is problematic. >> it is not an irrational fear. we were showing a chart saying it is increasing $1 trillion every 100 days. i want to say the bifurcated economy with consumers doing well. middle income and low income consumers are not doing well. why is that a factor for the portfolio? >> consumers drive the u.s. economy. we are always out looking for cracks. we're starting to see cracks with the lower half of the u.s. consumer. if you look at delinquency rates

and multifamily or delinquency rates in credit card loans and stuff like that, that is a problem. these folks are still showing inflation in auto and insurance and things they need. now with the middle east situation, as we talked about it and if gas continues to go higher, that helps the consumer. they drive the economy as much as the upper half. the upper half is enjoying asset price inflation. they still have the wealth effect and feel like everything is fine. we see cracks in the lower half of the sumu.s. consumer. >> we had a guest saying they expect a recolleccorrection com. when you talk to clients -- are you telling people to take money off the table or a correction sayis

a buying opportunity? >> i think a lot of advisers are long-term investors. we expect volatility. we expect corrections on a remember b regular basis. we haven't had one in a while. they had the right asset allocation for a longer term view. we have been telling people not to get overly enthusiastic about equities. you mentioned 25% over the last 12 months. north of 11% last quarter. that draws people into equity markets. we are aware of folks doing that. right now, fixed income markets are attractive. you know, we don't want people to dessert the asset allocation. >> andrew, we have to go. when you talk about bonds, quickly, short term or long term? >> we are starting to extend duration. you get 4.65 on the ten-year

yield. those are great numbers. we are starting to move in that direction. >> thank you, andrew. great to see you. thank you for being here on the show. >> thanks, frank. turning back to geo po politics. officials tell nbc news they expect any potential response by israel over the iran attack over the weekend to be limited in scope and likely involving strikes out iside of the countr. contessa brewer has the latest. good morning. >> good morning, frank. the markets are doing the calculus of how the standoff with israel and iran plays out. insurers took action months ago. in january, global carriers

started writing in clauses around war because there is an estimated $10 billion in exposure at stake in and around israel for political risk and terrorism policies alone. marine insurance has soared. impacting shipping costs. charges 10 to 15 times higher if you ship through the red sea and suez canal. aviation insurance is the same. remember, the war exclusions are still present. a major reinsurance business is impacted. the ceo said he is weighing the risks for assets and liabilities. on the liability side, this is the exposure for the customers. on the asset side, investment portfolios are conservative. they are made up of bonds which

can be impacted by economic shifts and changes in interest rates and foreign exchange. it is the swiss re and hannover re has limits on exposexposure. the risk monitor warns the escalation in the middle east will impact business plans and the premium rates and risk management. frank. >> contessa, when you talk to the insurance companies, do they see warnings from the broader economy? >> yeah, because already as i said if you have shipping insurance sky rocketing, what it means is you are taking longer for most of the shipping to go around the horn of africa. that impacts the supply chain and costs. if you look at the issue of trade credits and this pressure

that gets put on cross border trade. what the oac says we are likely to see this spark renewed inflation at a time when countries around the world are trying to get their inflation lower. they are ringing the bell about supply chains and trade and about inflation. >> contessa brewer, thank you very much. coming up here on "worldwide exchange," we are digging through a mixed picture for the second largest sector. what our next guest is watching with marchorgan stanley and ban america reporting. and we have a live shot from the olympia in greece. the olympic torch just being hit. e ymre back in just a moment. tholpic torch just lit and

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welcome back. time for the global briefing. asia closing lower despite the chinese economy pulling out a surprise with the first quarter gdp physifigures. we have eunice yoon with more. >> reporter: thank you, frank. the q1 gdp coming in at 5.3% against the 4.6% expectation.

the march data raised doubts about theo outlook. the retail sales and industrial production missed. new home sales fell at the fastest clip since 2014. it saw investment drop 17% year on year and sales 24% year on year. a fixed asset investment for the quarter came in stronger than expected. a lot of the money going into the manufacturing sector and the promotion of china tech export. this is dismay of the trading partners including the u.s. as well as europe. germany's chancellor has been in china and criticized the china overproduction. >> a lot of overproduction concerns in china. you are on the round, eunice,

any word of fresh stimulus measures or does this gdp report show moves are not necessary? >> reporter: there are folks watching an april bureau meeting. this is the leadership meeting for the month. there isn't a lot of expectation there will be a whole scale change. that is because of the comments we heard from xi jinping who was dismissive of the criticism of the excess capacity. he has been arguing the chinese mass production of evs and lithium batteries and solar panels helps global inflation and climate issues. china has long been accused of flooding global markets by using anti-competitive subsidies. it looks like that won't change. we are seeing in state media

that officials had been describing the charges of excess capacity by the u.s. and europe as fake news. that is an indicator that authorities are feeling sensitive about the issue. >> eunice yoon live in beijing. great to see you. turning attention back to the u.s. morgan stanley and bank of america are expected to report this morning. the beats could fail to prop the stocks up. shares of citi and goldman sachs are down in the last week despite beats across the board. joining me now with the expectations is steven biggar. steven, good morning. i want to touch on something we have not talked about on cnbc, but deposits and deposit risk. jpmorgan chase and wells fargo saying they had lower deposits. we have bank of america coming

up. what is your expectation? >> good morning, frank. this has been a worry spot for banks since the march failure of last year. that will continue to be an issue not just deposit runoff, but higher deposit costs for deposits that stay. it has produced pressure on the net interest margin. i think that is one of the reasons why typically as a bank analyst, you hope for higher rates. banks are asset sensitive and benefit from higher rates. at this point, the rates have worn out their welcome. a double-edged sword there. >> i think they have worn out their welcome with consumers as well. one other thing we have been talking about is commercial real

estate. we had a ceo on a few weeks ago. what do you expect with the commercial real estate? >> commercial real estate loans have gotten a lot of headlines, obviously, but they have not turned problematic. they are setting aside a bit more with loss provisioning and tightening underwriting standards. when these come due for renewal, you have less cash flow from the properties with higher vacancies. it's a slow train wreck, not a high-speed crash. broadly speaking, loan loss revisions are robust right now. stle they have coming down. banks are pleased with the quality. >> you have a buy on goldman sachs and morgan stanley and

bank of america. do you have one that is a top pick? >> jpmorgan chase tends to be the standout. standout on loan growth and the market share appreciation they get across the investment banking. great management team. even without the first republic addition last may, they showed greater loan growth. it tends to get the kudos from most analysts. morgan stanley has a great business model. wealth management doing rate. asset values up 20% in the past year. investment banking is about to embark on a bit more durable activity after false starts in 2023. we look for better activity there. >> stephen biggar, thank you.

coming up on "worldwide exchange," why recent market xte ulence is not shaking th ne guest's confidence with stocks. we're back right after this break.

welcome back. time for the "wex wrap-up." we start with microsoft investing $1.5 billion in g42. giving it a minority stake in

g42. in washington, speaker mike johnson will bring spending bills to the floor as a way to break the deadlock over a $95 billion foreign aid package. the department of justice suing live nation. the doj alleging anti-competitive practices. shares are down 6.5%. boeing defending the quality of the 787 dreamliner after the whistleblower claims they took shortcut. shares of boeing are higher. international paper is buying uk rival ds smith for $7 billion. they agreed to merge with mondi with the internationalpaper purchase. and meta ceo mark zuckerberg

claimed he hit fad facebook's harmful effects on children. and we get earnings from bank of america and morgan stanley and pnc and johnson & johnson and united airlines. we will have jay powell speaking this afternoon. before that, don't miss our interview with ecb president christine lagarde at 9:00 a.m. let's look at the trading day ahead and bring in david katz. david, good morning. i'll jump into it. looking at futures lower right now. what is your "wex" word of the day? >> unsettled. a number of uncertainties that the market is dealing with. whether israel and iran or interest earnings season. this causes the market to be uncomfortable. you have the downside over the

short term. >> what do you expect from jay powell this afternoon? a lot of anticipation about the rate cut path. the market is sold off on the higher than expected retail number which gave investors a feeling the rate cuts were pushed further out. >> we don't think he will say anything that significant new. we think he will talk about the fed ultimately lowering rates, but not in a hurry and looking at data as it comes in. we feel it gets pushed out a little bit. that coupled with the good economy leaves us upbeat about the stocks for the year. we expect volatility along the way. >> your upbeat about stocks. i'm not saying it sayis a big report, how do you see that impacting the day ahead for industrial production? >> the market could be hyper

focused. hyper data is good and that could spook the market. we think the key is turn the noise down in terms of the current economic data and try to focus on 6-to-12 months. >> you are not chasing rallies. you give us picks today. amgen is a big. why amgen? >> amgen is a good long-term buy owe bio-tech company. they also have a play on the weight loss drugs and you are not paying for it. contrast that to eli lilly which is steeper . >> david, we will toss things to bertha coombs with the earnings alert on united health. frank, united health revenues beat expectations at

$99.8 billion against $99.3 billion estimate. that was led by the optum service division despite the health care unit cyber attack. it is complicated on the bottom line. it is unclear if adjusted earnings of $6.91 a share is comparable to the consensus. that adjusted number is 25 cents per share impact for part of the business disruption and costs from the hack, but excludes costs for advanced payment and interest-free loans due to the system outage which the company says tops $9 billion. united is reaffirming the full-year outlook despite the 30 cents share impact from change disruption costs. those are the headlines. >> united health up over 1% right now. futures right now are in the

red. anyothk u to bertha coombs. that will do it for us. "squawk box" is coming up next. thank you for watching.

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good morning. earnings alert. we have quarterly results from united health and johnson & johnson and morgan stanley. house speaker mike johnson plans to split the vote for

foreign aid bills. and caitlin clark is the top pick in the wnba draft. she won't be getting a big pay take. day. it is tuesday, april 16th, 2024 and "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 melissa lee with andrew ross sorkin. joe and becky are off today. let's look at equity futures at this hour. pointing lower across the board. s&p is down eight points. nasdaq is down 27. as for treasury yields, all eyes on the ten-year yield. we are just about there.