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tv   Worldwide Exchange  CNBC  July 26, 2019 5:00am-6:00am EDT

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it is 5:00 a.m. at cnbc global headquarters. wall street weighing, the fed or earnings markets hover just below highs. growth at all costs, not enough to satisfy investors this morning. shares of amazon set to open lower. alphabet poised to make a huge move higher, among the headlines there a massive $25 billion stock buyback. we'll dig into that story. and a major trade warning from one billionaire hedge fund manager who says a deal with china is impossible.
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and apple inking a $1 billion deal with intel over its mobile smartphone business what it means for both companies. it's friday, july 26th "worldwide exchange" begins right now. good morning i'm dominic chu. the four main stocks we're watching this morning, it's about earnings and m&a, much more on these headlines coming up first here's how your money and the global markets are setting the day up stock futures indicating the dow will open up fractionally, just about 25 points or so. the s&p up by 7. the nasdaq just by 62 after stocks ended lower yesterday on fears the fed will not cut rates as aggressively as previously thought. for the week, the dow is the only major index still in the
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red. the bond market now is moving slightly stronger here that benchmark slightly higher, just a hair below 2.8% let us now go worldwide. on the asian side of things, the nikkei in japan down a half percent. the hang seng off two-thirds of a percent. the shanghai up a quarter of a percent. in european trading, some marginal strength here to start the day out there. the german dax up 0.2% the cac in france, 0.1%. the ftse 100 in the uk up a quarter of a percent we should know peripheral european economies like italy and spain taking it more on the chin off by a half to three quarters of a percent. to earnings we go. it's all about tech. so we turn of course to elizabeth schulze live in london to wrap it all up for us we'll started wi with amazon fit we have some moves here, but
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it's one where investor also pay attention to the down moves. >> that's right. we had a series of record profits from amazon over the past few quarters. this quarter and the second quarter, eps came in below expectations focus on whether amazon is returning back to its old model where it's more about growth than returning profit. sales were strong. you saw 20% sales growth compared to the last quarter a lot of that seems to be reflected from the investments that the company is making amazon said they would invest 8$800 million in the next day shipping the cfo said they put more into that and that is ultimately seeming to drive some of those sales the other key point here with amazon is aws. we saw a little bit of a slowdown in revenue growth with aws, 37% growth. it's the first time that number dipped below 40. still strong growth in the cloud unit there >> a big move there.
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let's get to alphabet. those shares trading higher after a solid quarter. growth in the cloud as always. we talk about the cloud. a knew buyback program what's going on there? >> this is a big announcement. a $25 billion stock buyback. something shareholders have been asking for for a while when it comes to alphabet and google big numbers in sales here. we saw 38.$38.94 billion in revenue. that was about 19% growth. big beat in profit, too. eps 14.21 in the second quarter. also looking at acquisition costs, always a key metric for google that beat expectations so generally the numbers looking strong google pointing to continued strength in the ad business. ads make up the majority of google's revenues. seeing strong growth there and growth in hardware and we've also talked a bit about those other bets strong number across the board you can bet a lot of this move upward that we're seeing in
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extended trading is thanks to that massive buyback announcement >> let's talk about pure play technology, not necessarily communication services intel opening its books. calming fears of a microchip slowdown and confirming a $1 billion mobile deal with apple for that modem business. intel shares on the move this morning as well. >> we're seeing a big move higher in intel shares this is a big announcement on the part of apple. this is apple buying a $$1 billion smartphone modem unit. so apple doubling down on this 5g play, that's what dan ives called it in a note this morning saying this is about the 5g devices that apple is starting to develop it's a little bit behind some of the competitors in the space, specifically on smartphones. we know that the number one and two smartphone sellers in the world which are samsung and huawei, make their own 5g chips in-house so this is a part of that effort
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here also just interesting to look at the moves in qualcomm, which are lower. we know that apple reached that licensing agreement with qualcomm earlier this year that will be extended over the next few years likely this is a move for apple to shift both employees, intellectual property and resources to their own company >> elizabeth schulze, thank you. investors are bracing for the busiest week of earnings season next week more than 150 s&p 500 companies and seven dow components are set to report in the coming week including apple, pfizer, verizon, qualcomm, chevron and that's just to name a few. first we have to get through today when we hear from the likes of twitter, also mcdonald's and more. joining me is aaron gibbs of gibbs wealth management. so, aaron, earnings season is still not over the hump, but
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there are themes developing. what is driving the trading action this season >> so one is that we've seen a slightly higher on the miss side just in the past week. and we actually noticed that quk q2 earnings expectations tanked. they looked like they would be flat, and they've gone back down to negative 1% so we're in contraction territory. that's from some consumer discretionary like amazon missing that have pushed it down so that's at least looking backwards, it's not looking quite as rosie as we initially thought. when you look at earnings estimates for the second half of this year in 2020, they're mostly stable and somewhat rising so it does look a little better. for the second quarter, it's not as hopeful as we thought >> you have been doing this for a good while you are a veteran of a lot of
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earnings seasons it seems like this is the playbook analysts always ratchet down expectations going into this earnings season. somehow magically these companies, no matter what they do, they tend to outperform expectations that's playing out this time >> what's different is we started off that way we started with negative 2% growth at the beginning of the quarter, then we got up to zero within three weeks and then this week, we went back down so that's unusual in that you're having this trend of going up and then back down usually it just tends to be revised down, then up, up, up. so it's unusual to see this choppiness in the expectations what has been probably the most indicative or the most important earnings report from a company so far for you in terms of like an indication of what's been going on >> so any of the big mega caps, they're big movers in the market by their weight. so amazon was important. facebook to me, i was looking at intel.
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i'm always focused on the semis in general they're very much global -- truly global players they are often forward indicators of global growth. they sell to all countries so for me seeing the improvement outlook from some of the semis it was so negative for most of this year. finally seeing some positive news come out of the semiindustrsemiendu industry they have become a proxy for u.s./china trade talks and trade relations. the semiconductor etf is already back to all-time highs off those. >> yes >> you spoke about looking forward. are there earnings reports coming up in the next week or two that you think you will be hyper focused on because it could provide more of that thesis on global growth or the health of the global economy >> finishing up the big industrials coming through next
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week and i would say facebook being another one that will be a big one. and though google had a good report, i'm still concerned about the regulatory overhang that they have any of those companies, how well the stock will do. >> oil and gas, i bring it up because of the middle east tensions, we know xnoknow exxon chevron have numbers coming out. how important is the energy sector to the overall bull thesis >> i'm not worried about their earnings reports you can see day-to-day any trade tensions we have with iran it moves the oil price and stocks follow so it doesn't matter really what they report almost that has been moving the market from the tail end day-to-day i'm more concerned about just overall sentiment on our international relations.
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>> erin gibbs, thank you very much >> thank you. when we come back, no china problems here. the one stock shrugging off the trade war, it's already up 80% this year alone and about to open higher even again today then one billionaire hedge fund manager warning a trade deal with china will never happen those full comments in a moment. later on, why one former retail executive says amazon's results may be part of a larger troubling trend. former walmart u.s. ceo bill simon will join us live. a very busy hour still ahead when "worldwide exchange" returns.
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welcome back to "worldwide exchange." good morning stock futures now pointing to modestly higher opens for the s&p, dow and nasdaq. the dow would open up by 27 points, the nasdaq by 63 and the s&p 7. a number of stocks already on the move. frank holland joins us with a round up of those morning movers good morning, frank. we're talking coffee, barbies and casinos this morning. we'll start with the coffee. shares of starbucks are trading higher, up more than 6% this
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morning. the chain posting better-than-expected quarterly results and raising full-year guidance same-store sales rose by 6%. results were driven by strong demand for its new beverages in the u.s. and in china. shares are up nearly 80% from last summer. mattel reporting a smaller than expected loss the toymaker saw strong growth in barbie and hot wheel brands investors are betting on mgm this morning the casino operator reporting higher revenue in the latest quarter. the ceo says he is confident in the company's 2020 targets back over to you >> frank holland, thank you very much for that. still on deck, why kyle bass says a u.s./china trade deal cannot be reached. and then game on the fortnite world cup is kicking off in new york city, if you think this is simply fun games, think again big money, $30 million is on th line for these gamers. stay tuned, you're watching
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about south korean weapons development. this as the trump administration remains committed to peace talks with north korea we're watching that. aran also test fired its own midrange ballistic missile in the latest show of aggression in that region. u.s. military officials playing down the launch saying it did not pose a threat to american or other western shipping or military bases that are in the middle east. and then to china, where high-level trade talks are set to begin next week billionaire hedge fund manager, kyle bass, on "closing bell" yesterday saying the odds of a trade deal with china are extremely low. >> every deal the chinese have signed with us since their ascension into the wto in 2001, china never lives up to their promises at some point in time one of our administrative officials has to hold their feet to the fire. and this is kind of the battle
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of cultures. the communist party doesn't want to submit themselves to anything measurable or enforceable. i don't think an agreement can be had >> a lot of big thoughts there for more of that interview and other comments, go to cnbc.com right now. and new development observe another story we have been tracking here for you on "worldwide exchange. today the trump administration will issue a ruling that could kill chevron's ability to do business in venezuela. it will decide whether to renew a special license granted earlier in the year extending chevron's ability to side step u.s. sanctions in that country chevron's production in its joint venture with pdvsa is not material, only about 42,000 barrels per day, but there is a concern that if chevron is forced out, it will lose something it can never get back, and that is the physical assets that it actually helped to build
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there. they would likely fall into chinese or russian hands juan guaido said he will protect the assets, but most believe he does not have the power to follow through on those pledges. we will keep you posted on this story as it develops here. a big one out of venezuela especially for big cap oil in the u.s. coming up, big news from washington, d.c. the house passing a bill to suspend the debt ceiling and set spending limits for the next two years. we'll talk about what's next and why investors should care. stay tuned, you're watching "worldwide excng ocnhae"n bc
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i'll pass. welcome back it's officially summer vacation for the house of representatives. members are set to leave town for a long recess. tracie potts joins us from washington with the latest there and the deal is done but is it done really? >> not really. some members are leaving having made a decision on that bill they passed it, but the senate has not. so there's at least 100 lawmakers staying here another week to try to get that done 46 days, that's how long lawmakers are on summer break. >> we will own august for the people we will own august, and make it too hot to handle for the
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senate >> the senate sticking around another week to pass president trump's 2$2.7 trillion budget deal that prevents the u.s. from defaulting on debt and boosting domestic and military spending >> this budget deal i think supports that and helps that i will vote for it. >> reporter: a big thank you from president trump to the house for approving the deal on their way out the door most republicans voted against it >> this will add substantially to our already 22 trillion dollar budget. >> let over from special counsel robert mueller's testimony, election security. mueller testified that russia is still trying to i flunsnfluence >> it's a highly partisan bill from the same folks who spent two years hyping up a conspiracy
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theory about president trump and russia. >> reporter: after the break democrats will continue the push to get copies of president trump's tax returns. then there's the big "i" word, impeachment. democrats are leaving still split on how to deal with that, whether to deal with it now or later. >> i would like to have a month and a half off as well. when we come back, strong words and a warning for am month from bill simon. why he says the company is becoming harder and harder to defend "worldwide exchange" is back after this (in dutch) it's happening..! just ok is not ok. especially when it comes to your network. at&t is america's best wireless network according to america's biggest test. now with 5g evolution.
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a prime problem. amazon's streak of record profits comes to a close as higher shipping costs hurt the company's bottom line. mega bucks softbank is launching a new 1$18 billion fund wait until you hear the target investment here's a hint, it's super intelligent. plus it's the song everyone is talking about still and no one can get it out of their heads. and this morning there's a new mix of old town road that's taking the world by storm. it's friday july 26, 2019. you're watching "worldwide exchange" on cnbc.
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♪ >> welcome back. thanks for being with us on cnbc i'm dominic chu in for brian sullivan let's check the other top headlines outside the world of business frances rivera is live in new york with the latest good morning happy friday >> happy friday to you a lot of lingering questions this morning after a massive arrest at a u.s. military base 16 marines were taken into custody after a sweep at camp pendleton, they face charges related to drugs and human trafficking. the marine corps said an additional 8 marines were taken aside to be questioned in the alleged drug offenses. a dangerous heat wave is burning up much of europe. unprecedented highs were recorded in france, the netherlands, germany and belgium. in paris, where it reached 108 degrees, the fountains next to the eiffel tower became a hot spot to cool off
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if you have not jumped on the fortnite bandwagon maybe a $30 million prize pool could change your mind that's the amount gamers from around the globe are competing for at fortnite world cup. more than 40 million people competed in qualifying rounds, only the top 200 have a chance of becoming a millionaire. this will all be live streamed on twitch.tv dom, those are your headlines. >> i have never played fortnite. have you >> never had it. my kid is itching to i'm like nope. pump the brakes on that. fbl >> for a shot at $30 million, i might take up fortnite have a nice weekend. let's get back to the markets. stock futures are indicating a higher open for the dow, the s&p and nasdaq the dow would open up by 54 points if gains hold into regular trading. s&p 500 up 10 points the nasdaq up by 71.
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on the bond side of things, the ten-year treasury note yield is moving just slightly to the down side 2.07% the last trade there two-year note yields at 1.68%. let's check on the asian markets. the nikkei off by a half of a percent. the shanghai is up a quarter of a percent. the european markets are generally positive, at least for the major borses the cac in france and the german dax are moving higher. the ibex and ftse mib in italy are moving to the down side. among the biggest corporate stories, amazon.com reporting its first profit miss in two years. deirdre bosa joins us live from the nasdaq this morning. the headline numbers were there, but what was it that stood out and why are invests reacting negatively to that stock this morning? >> the first profit miss in a long time and isn't it amazing
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we're sitting here talking about amazon profit? i remember the days when investors didn't care about that i guess amazon decided they were not ready to become the safe solid play just yet. it's back to doing what amazon does best, that's putting that profit back into the company on these big pricey bets. this time that one-day shipping which is costing more than amazon originally estimated. but the cfo telling investors we have been down this road before. first there was the move out of books, then the massive warehouse expansion, two-day shipping, fulfillment by amazon, all of these things were risky investments that ate into profits which has made amazon the powerhouse that it is today. investors do seem willing to wait for that payoff shares down less than 2% in extended trade however there could be different headwinds this time. cloud growth is decelerating major challenges abroad, particularly in india. they did say that they expanded
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prime members there. of course there's that regulatory scrutiny. >> deirdre, the amazon web services side of the equation there, 37% growth is still very, very good growth it's the first time it's been tracked under 40 in quite some time is there going to be more of an emphases placed on aws can it sellinvestors as the real driver of growth? >> that's a very good point. what amazon would say is they're coming off a much higher base. when you look at microsoft and google's numbers, their cloud units are growing much larger. amazon was the pioneer in this area it's worth questioning where momentum is going. aws has allowed amazon to make these big, risky bets. not just logistics, groceries, devices, ai. so if aws is no longer that growth -- or that profit
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machine, then you have to wonder what will fund these other initiatives. this quarter aws made up two-thirds of operating income that's incredibly important to the company and we'll see if that momentum steps up remember, we have that pentagon jedi contract worth $10 billion, that's a showdown between amazon and microsoft's cloud units. >> joining me is bill simon, former walmart u.s. ceo. we heard the rundown about the dynamic at play for amazon it's shifting much more away towards the cloud side of things but retail is still what we know it for is amazon still the place to go to when it comes to online commerce >> yeah, they're running their business model and doing a fantastic job of it. who doesn't like their stuff shipped to their house for free?
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it's going to become increasingly challenging for them nearly 70% of operating income came from web services if you filter that out, if you take out the income for advertising, and a chunk that is made in brick-and-mortar through whole foods, or at least there was, worldwide retail business is operating break even at a loss the international business loses money on sales, and it's no wonder regulators internationally are looking at them >> when we talk about price competitiveness, losing money, it feels like those are practices you do to gain market share. we know walmart and amazon are in a heated battle over that i want to bring up something quickly here over the past week treasury secretary steven mnuchin called out the competitive dynamics with regard to online commerce, specifically with amazon listen to what he had to say
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>> i think it's very good that the attorney general is going to look into this i think it's an important issue. i look forward to him reporting back to the president and hearing his recommendations. i think, as you know, if you look at amazon, though there's certain benefits to it, they destroyed the retail industry across the united states there's no question they limited competition. there are areas where they hurt small businesses it's not a one size fit all. >> destroyed the retail landscape. those were the words from treasury secretary mnuchin with regard to amazon are they destroying the retail landscape? >> you know, a set of facts could be put forward that would support that they price below cost -- north america, in north america they priced at or below costs for many, many years and didn't make
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money. it's questionable today whether the online money part makes money. during that time, circuit city went out of business, linen's and things went out of business. and during that time prime went from 99, to 109, to 119. the north american business grew $6 billion and lost money. while their op income went down in north america they're going through another cycle of it. the cfo on the call said we're reinvesting to drive one-day prime shipping that will put pressure on retailers to give them a sophie's choice do i want to go out of business because i lost sales by not matching them on price or do i want to go out of business because i matched them on price and i have not
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been able to make profit because they support their retail business with web services a set of facts could be there. the narrative that they delivered this quarter fits in to what the treasury secretary was talking about. it's tough to compete with them when they're not making money and pricing below cost on online retail >> you raised some points that regulateders and lawmakers are looking at but at the same time we had frank luntz on "squawk box" questioned, yesterday and he was saying america, the consumers like amazon what is it going to take is there a disconnect? do you think that these antitrust concerns will amount to anything for amazon >> not right now who doesn't love free shipping to your house in two days or one day that's awesome, right?
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i use it all the time, everybody does but there's consequences to it as the expenses go up, the price goes up eventually, prime has been going up in price really, if you think about it, it's not possible to ship things to your house in one hour and do it at same price or cost that can make money if retail it's not possible. the delivery person walking from the street to the front door, if you add up the cost to all that, you can't make money on that on a $3 box of breakfast cereal i don't know that regulateders will take that on. if the retail landscape keeps getting impacted and the weaker keep dropping out, it gets down to be this battle between the behemoth on the online side and
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walmart on the physical side it gets to be a complicating factor i think then regulators have to look at it when that happens, it's hard to tell but this quarter is the poster child for that >> bill, there's been more of an emphases by walmart and amazon placed on how many small businesses and third party sellers are on their marketplace platforms. is that a trend we see continuing does that help competitiveness overall for businesses that don't have access to the bigger markets like amazon and walmart has? >> in a way it does. that's an added benefit for both of them. you know, you could ask is that competitive to have your sales be dependent on your competitor? >> yeah. it's a big deal for sure one that we'll be watching thank you both for that robust conversation on amazon.com and walmart for sure thank you for that there are two other big tech
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movers this morning. shares of alphabet up sharply, moving up. quarterly revenues jumped 19% driven by strong search and youtube ad sales alphabet up 8% premarket intel looks to be a winner the company's latest results beat the street and its raising its forecast as well the report calmed fears of a global chip slowdown the company also announced its plans to sell the majority of its modem business to apple for $1 billion intel share ths up 5%. do you agreement of never misplacing your phones, keys or wallet again that's a big promise made by this company, tile an exclusive interview with the ceo is next on "worldwide exchange."
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tile, the company that makes those popular square-shaped location tracking tabs helping you find your lost keys, your
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wallets, much more, announcing a new round of funding this week as it looks to broaden partnerships and fund international expansion. joining me in a "worldwide exchange" exclusive, the tile ceo and former gopro coo cj p prober what will you be doing with this new money? >> tile launched about five years ago to address a real and every-day pain point, the pain point of loss. there's all sorts of stats that validate how significant this is for customers. the craziest one is people spend on average a year of their life looking for lost items so we launched devices initially to help people find keys, that's expanded to wallets, pets, kids jackets, all sorts of things fast forward to today we sold about 25 million devices
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>> so you're also integrating it with other products. i have a smart key chain that has your technology in it. is that something you will be doing more of? you can pair your devices with other consumer goods as well >> that's right. so that's a core part of the investment case. the reason that we raised $45 million. a big focus is to embed our technology into third party devices. any product that has bluetooth, there's 30 billion bluetooth devices expected to ship over the next five years can be tile updated with a software update that's a key focus the other couple areas that will big are international growth our main focus has been the u.s. market we're seeing great traction in
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amia, we've grown the business 160% over the last quarter, but have not invested there. international growth is a big focus and a ton of opportunities for new products and services to expand on the existing offering. >> the product itself, is there a way to look at what you could be expanding it towards? i know from a perspective on my point, i tiled my dogs just because, you know, i put them on their collars just in case they get out of the yard. i also put them in my golf bag when i travel. what types of things will you be looking at with regards to products you envision being a part of that ecosystem going forward? >> the opportunities for us are endless. we envision a world where consumers can keep track of all the things they care about we've been really fortunate to see the growth we've had the form factors that we offer today don't really enable all of
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t the use cases consumers use the products for we have seen consumers using duct tape to stick tiles to things we have opportunities to grow the form factors of the devices, drive the embedded business we talked about and enable mobile based services that add peace of mind to the service. do you have a timeline in your mind for going public at any point? >> right now our main focus is really just building a great set of products and a great set of experiences for customers. so we're not thinking about that my philosophy is we build great things for customers, we enable a great business, that's going to lead to value creation for our shareholders and we'll figure out the rest over time. >> my wife says she still can't find her phone, maybe we'll work on that as well.
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>> you should know you can reverse ring your phone by double clicking on your tile >> i will het hlet her know tha. >> thanks very much. on deck, markets are hovering near all-time highs, can the good times keep rolling? a pair of experts weigh in next. but first can't get this song and sound out of your head? it's been at number one for 16 weeks. you won't believe who the singer teamed up with to boost its popularityve en more the old town remix coming up ahead. moving is hard.
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it is time for your executive recap. the house has passed a bill to suspend the debt ceiling and set spending limits for two years. it goes to the senate which is expected to okay the legislation and then send it to president trump's desk for his signature.
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softbank is launching a new 1$108 billion fund to invest in companies developing artificial intelligence technologies. a number of major companies are expected to participate in the vision fund 2. the list includes apple, microsoft and foxconn. australia is considering more regulation of google and facebook the country's fair trade watchdog completed an 18-month long investigation into multinational digital platforms and is recommending tighter oversight. the group found for every $100 spent on advertisers, 47% of it goes to google, 24 to facebook, and $29 to other players time for the top trending stories. frank holland as always here with those >> dominic, let's get to it spacex successfully launched its 18th mission to the space station last night the fall done 9 rocket blasted off filled with supplies for the
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iss. after dispatching the cargo, the booster rocket successfully returned to earth. morgan brennan has done a lot of work on this, the space economy could be a 2$200 billion industr by 2040. this one, not a roller coaster, a hit parade. rapper little x is not satisfied with having the number one song in america for 16 straight weeks, he's releasing multiple remixes. the latest one featuring bts instead of old town road, it's called soul town road. >> of course it is >> the verse includes a pun about homeys in the back, in the u.s. that's slang for friends. but it's also a korean ranching tool fitting for a country tool >> when did lil nas become lil nas x.
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>> i never heard him before this song, but i expect billions of streams. >> you put k-pop in there, you will get that. thank you very much for that. 2350u9 chfutures pointing tr open for the dow, s&p and nasdaq investors are awaiting the busiest week of earnings coming up in july, a jobs report next week as well and a fed policy decision joining me now is mark tepper and joseph fami. a roundtable, if you will, a tribunal of markets. because you're in studio, joe, let's start with you the markets as they are set up now, should we be at record highs and are record highs to come >> i think the market will head higher for four main reasons, technicals, fundamentals, interest rates and sentiment of course we'll have the normal
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pullbacks and corrections along the way, as long as the big institutions support this market, as long as the fed is giving us an interest rate environment, i would stick with the trend. >> the fed is a big part of that story, but the fed is always going to be a part of it earnings a driver of this as well this earnings season shaped up more tepid than previous ones is that slowing earnings momentum a cause for worry for you and your clients? >> actually, you know, earnings season, so far so good everything has been better than feared so we're seeing lots of companies right now beating and raising. analysts were expecting an earnings contraction, but we're seeing year over year growth of 3% in order to extend this bull market we need earnings to contribute
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my concern is that q4 earnings expectations are still at 10%. that seems really high given trade tensions i would expected those to come down, which will put downward pressure on stocks throughout the year then analysts are expecting 10% growth in 2020, which i think is overly optimistic. >> so mark brings up a good point. you mentioned fundamentals are there, technicals are there. interest rates are there what is constructive for the markets? we seem to be slowing out, the record highs are there but we're not climbing at the trajectory we were over the course of the past two, three years. >> at the end of the day it's the pension funds, mutual fund funs, hedge funds that are buying millions of shares and controlling the markets. so far this year we've seen very little selling from the big institutions, telling me that at
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logical and normalsupport levels they continue to support the market maybe heading into august or september, the two traditionally slower months, we might see a pullback or digestion in the markets, but while they continue to support the market, why would you argue when they're the ones who control it to begin with >> what would cause a selling mentality to the down side what needs to happen for these big institutions -- who manage money for small investors like me, what would it take for that market to move lower and get that selling pressure going? >> i would say as earnings expectations begin to come down, that's going to exert downward pressure on stocks you have three forces moving the market you have the fed it seems like the fed will cut next week. they're pricing in four cuts over the course of the next year that's a positive. trade, we still don't have a
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trade deal that's a headwind. as far as earnings go, yes, this earnings season has been pretty good so far. however, you know, we are concerned that expectations over the course of the next several quarters are high. however over the last 60 years investors would have done extremely well had they owned stocks when monetary policy was easy and avoided when policy was tight. annual returns on the s&p 500 excluding dividends while policy is easy, which is where we'll be after the cut next week, 9.7%. annual returns excluding dividends while policy is tight, 0.9% it is important to stay invested you have to stay in u.s. equities >> we have about 20 seconds left here what are the places in the market you look at as leading indicators for the next leg? >> technology is still strong as well as one last point i want to make about what mark said, earnings and interest rates controlling the markets. the key is the statement and the
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upcoming meeting next week if they cut and give a hint that they'll continue to cut, that will be good for the market. if they say one and done, we may be in a consolidation period over the summer. >> thank you very much for that robust discussion on the markets. that does it for "worldwide exchange" this morning futures pointing higher. qux sq "squawk box" begins right now. good morning you probably already know this a tale of two f.a.n.g.s, alphabet surging on a strong quarterly performance and a big stock buyback. amazon shares are falling after missing earnings expectations. we'll dig through both company reports. and we have big market drivers over the next three hours including a report card from twitter and mcdonald's and our first look at second quarter gdp. first at the second. it's friday, july 26, 2019 "squawk box" begins right now. ♪
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live from new york where business never sleeps, this is "squawk box. good morning, everybody. welcome to "squawk box" on cnbc. we're live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. let's look at u.s. equity futures. yesterday a big down day for the markets. the biggest loss that we've seen for both the dow and the nasdaq in a month also the dow closing at a two-week low despite that still looking at the dow on track to be just below break even the s&p 500 and the nasdaq are both on track to have their third positive week out of the last four. this morning you are seeing green arrows across the board. dow futures indicated up by 60 points s&p futures up by 10 the nasdaq up by 72. yesterday was the busiest earnings day we've seen so far this season. there were 52 s&p 500 reporting. earnings parade continues today. we have

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