Transcripts For CNBC Worldwide 20240704

We are live in beijing with the fallout. And how meta is planning to keep folks using the platform longer here is a hint artificial intelligence. It is tuesday, august 1st, 2023. You are watching Worldwide Exchange here on cnbc good morning welcome to Worldwide Exchange. Im frank holland. Lets kickoff with the new month of trading with the check on u. S. Stock futures taking a look right now. Lower across the board all three indices at the lows of the premarket it is early. The dow looks to open 88 points lower. This after stocks locked in a month of solid gains with the s p and nasdaq capping off five straight winning months. Longest such win streak since 2021 when it comes to yeartodate, the yousuperlatives get better. The strongest gain in the first rece seven months of the year for the s p. For the nasdaq, look further back up 37 y year to date the best since 1975. Big gains so far a lot of history made this market year. We are looking at the bond market the 10year treasury benchmark hovering below 4 . 3. 97 . Inverted yield curve is something to watch energy is coming off the best month since january of 2022. Wti back above 80 81. 50 lower right now, but significant gains with Oil Brent Crude at 85. 25 natural gas is making moves up 1. 25 . That is the set for the start of august now for the check of asia and europe is Arabile Gumede in our london newsroom. Good morning, frank. It is a story of gains in the month of july which was positive stateside. So, too, in asia the only dip is the nikkei in japan dipped marginally. Remember last month where we saw the bank of japan tweak the yield curve control policy which had some influence on the market 0. 5 on the negative and upside is where they decided to let things roll in japan the rest of the asian market is up hang seng is 6 higher in europe, we have a possiitive stance 1. 8 gain for the dax in july. It reached the peak levels in yesterdays trading picture. It did have the first negative session yesterday. The ftse mib out of italy is very interesting 5 gain thus far here. Italy is hitting the highest level since june of 2008 that is continuing the upward movement of positivity across the board in europe. Positivity in asia as well that will be question marks over whether that will continue for the month of august. Frank. Arabile, thank you. Arabile gumede turning back to wall street. Gearing up to kickoff the month to keep the track rolling. Data shows for the first 90 years of the dow from 1896 to 1986, august was the best month of the year rising at 1. 8 since 1986, the worse falling nearly 1 . For more on whether history may repeat itself, lets bring in Mark Avallone from potomac investments. Good morning. Do you see an august swoon . We may. Im not sure if it is related to the calendar im sure it is related to the r run up we had and euphoria not what i like to see as an investor where i want to see fair valuations for what the expected earnings are against reasonable flaginflation back d. The market is disconnected from 2022 and we were worried about rates and it effecting growth and tech that fell on its face. Conventional wisdom may be an evenemy here for the investor you need to be curious about the wage reports were getting of higher wages and question the quality of earnings were seeing and see Going Forward. You mentioned wages and that is something you are watching closely. We had the eci report from the department of labor. It showed a strong uptick in last five months with wages and compensation how do you see that weighing on the markets Going Forward . I think all this data were getting now is looking backwards. Yes, overall inflation has come down, but you are making a great point about the employment cost index. It has risen significantly had a little bit of positive movement in the last month or two, but that was before the massive Union Contracts with the united pilots and it made american go back out and give 1 billion to the pilots. U. P. S. And teamsters did a solid job for members which is what they are supposed to do. Now were looking at uaw negotiations even if you are not union and you see the 10 that the pilots got, you will look for a better ben papefits package. We have massive wage gains right in front of us you are looking forward at the forward impact is the issue revenue or margins or earnings . All three . What is the impact being and what is the impact to the market with the higher wages . That is a great question. It will not be no impact it will have an impact what will it be . Higher earnings . That could be at the cost of higher inflation at the least, it will be infla inflationary the worst case is it is inflationary and it hurts earnings im not sure higher wages have ever been a positive for corporate earnings in fact, a strong correlation with the cost of wages and stock prices. Fair point. What are you looking at with opportunities . You are looking at the xli big one up xli up 17 in the past month it had a strong run we talked about it here. I think it is a beneficiary of the stronger economy, but the infrastructure bill. Interestingly enough, there is a high defense component in the industrial sector which we like because of the situation around the world. We feel there will be Strong Demand and Companies Like boeing and raytheon stubbed its toe they will have a big demand with russia and ukraine and other countries wanting in on drone warfare. I think the industrial has that tailwind if the economy slows. I think having a broad divers diversification here and not focusing on tech we are looking for items for viewers outside of the magnificent seven. And we have more to come including the word of the day and the chips powering the a. I. Revolution and the u. S. Military drone fleet. Hear what jerry storch has to say about consumer spending. We have a very busy hour when Worldwide Exchange returns. fan 1 there ya go thats what im talkin about josh allen is this your plan to watch the game today . hero fan uh, yea. I have to watch my neighbors nfl sunday ticket. josh allen its not your best plan. But you know what is . Myplan from verizon. Switch now and theyll give you nfl sunday ticket from youtubetv, on them. hero fan this plan is amazing josh allen another amazing plan, backing away from here very slowly. fan 1 that was josh allen. fan 2 mmhm. vo for a limited time get nfl sunday ticket from youtubetv on us. A 449 value. Plus, get a free Samsung Galaxy s23. Only on verizon. Welcome back to Worldwide Exchange. To a developing story and china announcing exmport controls ar drones to safeguard nationality security this comes on key metals used for a. I. Chips eunice yoon is joining us from beijing for more on the story. Eunice, good morning reporter frank, the export controls on the two key metals for the chip industry, as you said, go into effect today the authorities have been stressing that they are not targeting any one country and said the metal curbs are protecting the country they described this as a first shot and quoted experts saying they may hit entities from countries that cracked down on china which implies this could be retaliation in terms of the impact, it is still unclear. The expectation is that this would have a Ripple Effect through the chip supply chain not only for chipmakers, but suppliers and including those listed in the u. S. However, what we are seeing is that there is a pattern forming, though the chinese have been warning of counter measures. We have not seen impact except for what appears to be retaliation against micron and also now these export curbs. The concern, though, from the chinese side is that we could potentially see an impact of the chinese of a boomerang effect because in the past, about a decade ago, the chinese have retaliated against japan on rare earths and there was an increase of propduction outside of china there is a concern within the industries here that china, with this export curbs on the two metals, could see its market share decline over the years again, that is in the long term. Eunice, i want to ask about Something Else we reported on. Contraction and the chinese Manufacturing Sector state officials held a News Conference to study and formulate policies, but no clear indication of stimulus are you hearing anything new about possible stimulus . Reporter we are hearing more and more, but coming in drips and drabs. They will boost credit for finance and finance for some of the small and medium enterprises. Not a lot of detail on that as of yet what people want to see is more direct fiscal support for the companies as well as the consumers to really get the demand side more robust as opposed to the supply side one other note, frank, you mentioned at the top of the segment about the drones and chinese who with have announced export curbs on drones this is for National Security purposes and drones targeted are for military use, but the components which will be restricted could mean commercial use drones from china will also be impacted. Certainly a lot to watch. Eunice yoon live in beijing. Great to see you turngsing attention to tesla moving down in the market now 1 a preliminary evaluation is opening on the model 3 and model y after receiving complaints of loss of steering control and power steering coming up on Worldwide Exchange, the big money movers and why this stock is set to open up at a fresh alltime low. We have the morning mystery chart. Wl ve iwh wcome back f you co analyzing a nks data. No big deal . Go on. Well, what if you partner with ibm and red hat, use a hybrid Cloud Solution to connect data across clouds, then analyze all that data with watson. Okay, but this needs to meet our. Security standards . Yup. Compliance standards . Mmhmm. So they get the insights they need. Yup. In real time. Check. To make quick decisions . Check. Aaaand check. Thats the solution ibm and a global bank created. What will you create . Ibm. Lets create. man what if my type 2 diabetes takes over . woman what if all i do isnt enough . What will you create . Or what if i can do diabetes differently . avo now you can with onceweekly mounjaro. Mounjaro helps your body regulate blood sugar, and mounjaro can help decrease how much food you eat. 3 out of 4 people reached an a1c of less than 7 . Plus people taking mounjaro lost up to 25 pounds. Mounjaro is not for people with type 1 diabetes or children. Dont take mounjaro, if youre allergic to it, you or your family have medullary thyroid cancer, or multiple endocrine neoplasia syndrome type 2. Stop mounjaro, and call your doctor right away, if you have an allergic reaction, a lump or swelling in your neck, severe stomach pain, vision changes, or diabetic retinopathy. Serious side effects may include pancreatitis and gallbladder problems. Taking mounjaro with sulfonylurea or insulin raises low blood sugar risk. Tell your doctor if youre nursing, pregnant, or plan to be. Side effects include nausea, vomiting, and diarrhea which can cause dehydration and may worsen kidney problems. woman i can do diabetes differently with mounjaro. avo ask your doctor about onceweekly mounjaro. I was having relationship issues with my old bank. It was just take, take, take. So i moved to sofi checking and savings. Get up to 4. 40 apy, and up to 2m in fdic insurance. Sofi get your money right. Time for the big money movers. Share of yum under pressure after lower than expected Second Quarter revenue and issued a muted Third Quarter outlook. They will take plans of the Summer Season and look to open up 1,100 stores this year. Shares are down 3 . Now to the morning mystery start. Z chart zoom info taking a tumble ceo said they delivered another quarter of growth and Free Cash Flow generation. Zoom info with shares down low level 20 . Similar picture for Western Digital. Revenue outlook due to weak demand for the cloud business. The companys ceo says large Cloud Service providers are scaling back on spending to clear out excess inventory which is causing Western Digital to cut spending shares are down 1. 5 we are morne than halfway through the earnings season and there is a conflict with the consumer spending. We have data from the cnbc allstar team. In general, Strong Demand with travel with airlines with Robust International traffic and cruise operators reported solid rates and comcast with the theme parks and livenation also reporting record numbers i spoke to the imax ceo after earnings he noted a paradigm shift with spending the outlook appears to end there. Mcdonalds has a challenging macro environment and cocacola and pepsi reported an increase of bargain spending. 3m and whirlpool and Harley Davidson is seeing an impact on demand and affordability lets tie this together with jerry storch he is the former target vice chairman and head of storch advisers jerry, good morning. Good morning. Lets talk about the macro head winds harle harleydavidson and lvmh and whirlpool. Are we seeing a shift from goods to Services Continue and do you expect that to continue for the rest of the year we are absolutely seeing that it is not as simple as consumers doing well or poorly it is clear the consumer is stressed lets give you a framework shifting from goods to services. Shifting from wants to needs with the stress. You see that with the services purchases for housing and medical care a lot of goods for consumables are for food you overlay the pandemic rebound. Products did well during the pandemic home goods or toys when people were stuck at home are doing poorly now other things like going on a travel experience or the movies or concert those are doing great. Almost everything can be explained by that. Auto sales are up. You couldnt get a car during the pandemic that is a rebound effect everything fits in the framework. Catch up spending with autos and experiences. I want to talk about the payment companies. Visa and mastercard called the consumer resilient that means they are going through something. You mentioned they are stretched. Credit card rates at a record 21 right now. If you start to see the consumer weaken, what withareas do you ec to weaken and when you look out longer term, how does that impact the earnings in the market keep to the framework i gave you. Products with wants. Apparel will only get worse. Other discretionary products or big ticket items which are rates sensitive. Whirlpool. Buying Home Appliances it will get to cars when people have gotten the garages full it is pretty easy to figure out what is going to happen. The Company Standing for value and a big fan of walmart they out performed because they stand for value. Even tjx which sells clothing, tj maxx, they will do well it is hes toeasy to figure out dont use inflation adjusted dollars. It is funny money. Look at units. P g telling you units are down, but making it up on price. Jerry, why are we seeing strong results from experience companies . Hotels are up. International flights are up why are we seeing that if the consumer is stretched and you believe they are starting to weaken that is in the overlay category pandemic rebound we couldnt do those in the p pan pandemic we have pentup demand the year over year growth in the categories with the airliness an an come d accommodations are slowing. Lumping in travel with housing which is seeing great inflation or healthcare which is up sharply from pandemic rebound where i can go out and get the new knees i always wanted or rising prices. If you look at the data, it is straight forward. Jerry storch, thank you very much. To get the look at the headlines outside of business is Jessica Leyton good morning. Frank, a major tragedy avoided in memphis of a man approached the door with a gun after failing to get inside. He fired shots and no one at the school was hurt. Police shot and wounded the suspect at a traffic stop when he got out of the truck with his gun. He was taken to the hospital in critical condition. In the reversal of the trump era position, the headquarters of the Space Command will not move to alabama and remain in colorado of the the statement said the decision came after consultation with President Biden and senior military leaders. Earlier this year, the Biden White House said it was reconsidering the move to alabama due to opposition to the states near total ban on abortion the white house denies that was a factor. Now to a not so sweet situation on the california highway where a tractortrailer carrying 40,000 pounds of chocolate burst into flames. It forced traffic delays and caused a happy of chocolate to melt on the road the trailer separated from the big rig and the fire started officials were able to keep the fire from presentspreading to te nearby forest. Frank, glad nobody was hurt. I think that is the important part nobody was hurt. Jessica, great to see you. Straight ahead here on Worldwide Exchange, why elon musk will have to wait a bit longer to reshape and highlight the San Francisco skyline. If you havent already, follow our podcast on apple or spotify or oerth podcast apps. More Worldwide Exchange coming up after this break. Old school hard work meets bold new thinking. Partnering to unlock new ideas, to create new legacies, to transform a company, industry, economy, generation. Because grit and vision working in lockstep puts you on the path to your full potential. Old school grit. New world ideas. Morgan stanley. Let Innovation Refunds help with your erc tax refund so you can improve your business however you see fit. Rosie used part of her refund to build an outdoor patio. Clink dr. Marshall used part of his refund to give his practice a facelift. Emily used part of her refund to buy. I run a wax museum. Let Innovation Refunds help you get started on your erc tax refund. Stop waiting. Go to innovationrefunds. Com you really got the brows. It is 5 30 a. M. In the new york city area here is whats still on deck stocks set to kickoff a new trading month and the rally for the nasdaq. Earnings with the busy week of results with more than three dozen names on tap ca ramping up a. I. Ambitions. Meta looking to lean on the tech to keep more users on the platforms. It is tuesday, august 1st. You are watching Worldwide Exchange here on cnbc welcome back to Worldwide Exchange. Im frank holland. Lets check on the stock futures with the new month of trading. Futures are at lows of the session. Dow falling about 110 points lower at the open. Earlier, it was 88 points lower. Nasdaq and s p down. 30 stocks are looking at impressive gains for july for the year, it is better for july, the s p up 19. 5 that is the indexs strongest gain through the first few months of the year since 1997. For the nasdaq, we look further back up 37 year to date. The best first seven months to a year since 1975. Very strong start to the year. We are looking at the bond market we start with the benchmark 10year at 3. 96. Easing off the high of 4. 01. We want to talk about energy, specifically oil wti is basically at 81. 50 down. 50 . Brent crude is 85. 15. Bigger move to natural gas up 1 . Off the highs. Time for the check of the top corporate stories with bertha coombs. Bertha good morning, frank have you wanted to have a conversation with abraham linc lincoln . Meta is ramping up the latest artificial intelligence. The company is set to launch a range of a. I. Powered chatbots with different personalities the ft says it could happen as soon as next month interesting to watch meta has been designing the chatbots to have human like discussions with users to boost engagement with the social media pla platforms. The chart is up nine months in a row. Lawyers for the u. S. Virgin islands alleges to the federal judge that Jpmorgan Chase handled more than 1 million of payments for Jeffery Epstein to girls for settlements. The lawyers from the u. S. Virgin island Attorney Generals Office detailed more than 9,000 transactions paid out to epstein accounts from 2005 and 2019 tha were not disclosed in the mandated evidence window in the statement to cnbc, Jpmorgan Chase said, quote, there is no proof this is accurate it is the end of the road for the new x sign atop the headquarters norformerly known twitter. It was removed days after it was installed. The San Francisco department of building and inspections received many complaints about the safety and illumination. It was strobie strobing did not please the neighbors i dont know what is going on with that. The name shift is interesting. A developing story we will have to continue to watch bertha, thank you. Turning back to earnings as we kickoff the busy week of the season more than three dozen names set to report today. It is all about chips, drinks and tractors seema mody and Kristina Partsinevelos filed these reports. Starbucks is set to report after the close today. And li same store sales in the u. S. Is key for investors to watch in north america, store sales are expected to increase 8. 4 internationally, 22. 4 analysts did not breakout the chinese sales, but it is a metric for the coffee giant as it is the second home market last quarter, the company saw the samestore sales in china increase for the First Time Since the Third Quarter of 2021. Firms have indicated china recovery may be uneven and smaller competitors are crowding the land esclandscape and abroad in the u. S. , it is about the strength of the consumer and if starbucks is able to hang on it share. That stock is up over 2 on the year one of the weaker performers in the restaurant space caterpillar is set to report earnings with the investors focused on the caterpillar inventory levels the industrial giants China Business with 5 to 10 of sales with the deceleration of the countrys economy and that puts pressure on caterpillar or competition with local players on the ground. The other topic of discussion is caterpillars mining business where analysts are expecting margins to improve as Commodity Prices rebound take a look at the caterpillar stock which is on pace for backtoback monthly gains for the First Time Since january and near term numbers are likely to come up short with the Weak Data Center sales and slowing gaming market. Intels reports shows inventory levels are high and it is a real problem as Companies Use the i. T. To spend on new a. I. Chips rather than the servers. The cpus contribute 26 of the total revenue for amd. It is much of the reason why amd stock being flat in the last few months amd could differ from intel post earnings first, the cpu units wes went un the first quarter. Secondly, amd is set to launch its a. I. Chip in q4 this year. It already has hard orders from microsoft and amazon that chip alone could be seen as a catalyst for more bullish estimates if it is launched on time amd investors will have to look past the weakness and past the 2024 dream it is a matter of toughing it out first. Frank. Thank you to all three of them uber shares climbing as they set to report before the opening bell this morning. It has been a sdtellar year for uber on confidence over improving profitability and growth trends. Uber is outperforming lyft lets get you prepared with tom white. Good morning. I have to start with uber trading at 150 times forward earnings lofty expectations there what is the rating and price target and what do you expect going into this report buy rating on the stock 62 target it has been a great last several quarters for uber. The business has recovered nicely from the pandemic and economic reopening it is a share gainer you are seeing that reflected in the stock move so far this year. As far as what we expect investors to focus on this morning with uber, there are any number of kpi to focus on. The focus will be the u. S. Ride share business that is a function of what is happening in the competitive back drop. Uber made investments in the lower riding pricing which data over the course of the quarter suggested maybe uber was giving back share in the u. S. Ride share Market Investors will be focused on that lets talk about competition. Im using your data. Your data shows uber is 5 cheaper on shorter trips within the city wait times are less. I want it to be cheap and get there as soon as possible. How meaningful is that for the longt hterm outlook for the s . That was data we published yesterday. A snapshot of where pricing was exiting july we looked at broad share pricing and wait times in the largest 20 u. S. Cities. Pricing can change on a dime both uber and lyft with opt myseopting pricing. Lyft was more aggressive on pricing and had lower pricing during the Second Quarter. I think it is something the investors need to keep an eye on it clearly impacts consumer Conversion Rates shobviously, uber has a food Delivery Business and other businesses how are those performing with the situation that visa and mastercard called the consumer str stretched . I think Online Food Delivery is resilient it has been a resilient category coming out of the pandemic the plan for uber is twofold it is expanding into new categories outside restaurants like grocery and retail and alcohol. Those continue to ramp nicely. They are continuing to prune or fine tune the markets theyre in uber exited a couple of food delivery markets in italy and israel last month. They are expanding and continuing to lean into growth there. They are also making sure they are not just investing in markets where they will not have a pathway to be a number one or two player. Tomorrow white from d. A. Davidson looking at uber shares moving higher ahead of earnings dont miss the cnbc interview with dara khosrowkara this morning. And coming up, the latest on the upgrades and downgrades. Nasa launching the streaming Service Later this year which will live stream missions and video series as it looks to transform the dig at thital pre. Taco bell is being sued by the amount of beef and beef filling in the mexican pizzas and crunch wraps according to the class action lawsuit. And miami is facing the ultra rich and it is facing septic tanks and landfill problems it is known as mt. Trashmore which will run out of space in 2026 the septic system is continuing to overflow and releasing bacteria to the miamis 2. 7 million residents. More on Worldwide Exchange after this we did this. Im so glad we did this. Im so glad we did this. Life is for living. Lets partner for all of it. Im so glad we did this. Edward jones my banking relationship was getting. Well, complicated. So, i broke up with my messy accounts and moved my money to sofi. Get up to 4. 40 apy, and up to 2m in fdic insurance. Sofi get your money right. Welcome back to Worldwide Exchange. Time for the morning call sheet. We start with citi downgrading Estee Lauder Citi saying it sees increasing risk with the recovery in asia shares of estee lauder are lower right now. Barclays raising rating on American Eagle moving it to overweight. Barclays saying the sales profit reset would set the estimates for next year to more achievable targets. And kbw lowering the rating of sofi on the better than expected Second Quarter results stock surging 22 yesterday. It believes the valuation is overshot the fundamentals earning outlook. Time for the global bri briefing. The Australian Central Bank keeping rates unchanged. It provides them more time to look at the impact of the Interest Rate hikes. Inflation has slowed down in the Second Quarter the bank announcing another 2 billion in stock buybacks. Shares moving higher more downbeat Economic News in china. This as factory activity fell in contraction territory last month. Coming up here on Worldwide Exchange, the one word that every investor needs to know today and why the next guest is continuing to sound the alarm on red flags in the market as we start a new month of trading more wodwe exancorlidchge ming back right after this. please dont go by harry casey, Richard Raymond finch please dont go please dont go please dont go please dont go dont gooo dont go away preorder now and get a free storage upgrade. please dont go power e trades easytouse tools, like dynamic charting and riskreward analysis help make trading feel effortless. And its customizable scans with social sentiment help you find and unlock opportunities in the market. E trade from Morgan Stanley. With powerful, easytouse tools, power e trade makes complex trading easier. React to fastmoving markets with dynamic charting and a futures ladder that lets you place, flatten, or reverse orders so you wont miss an opportunity. E trade from Morgan Stanley welcome back to Worldwide Exchange. Time for the wex wrap up. China announcing export controls over access to technology between the u. S. And china. Bp is repurchasing 1. 5 billion of shares in the next three months despite 70 drop in the Second Quarter toyota shares are edging higher after doubling the operating profit and it benefit from sales with the weaker yen. 40 of backtoschool p shoppers will use financing this year and 27 of consumers will use credit cards cvs is cutting 5,000 jobs as it focuses on Healthcare Services cvs is is cutting travel expenses and vendors and business initiatives. And exxon is in talks with volkswagen and ford and other automakers to provide lithium for the ev batteries to take advantage of the surge of lithium demand and diversify beyond fossil fuels. And five straight months of gains and the dow is up four of last five months lets bring in victoria fernandez. Great to have you here. My pleasure. I want to talk about the past 25 years or so where august has been weak. Down almost 1 what do you think . Are we setting up for an august swoon . We could be, frank. I would say over the last couple years, the market hasnt pe performed in the way it historically has i dont think we can all automatically see that will come through. The consumer and job market was a Strong Foundation in the economy even in the face of signs we shouldnt be as strong as we are. I would not necessarily say rely on the fact that august is traditionally weak we need to wait and see with the data and if we see Central Banks pull back with the reserve bank of australia this morning, that could be a boost for the equities we have seen a lot of bullish moves. You are taking on a different take what is the wex word of the day . My word of the day is resistant. I think it shows the equity markets have resisted some of the signs that we have seen out there that tell us we probably should be in some type of a mild recession at this point. Obviously, we have the yield curve and if we put that aside, look at the rest of the leading Economic Indicators down 15 months in a row. The money growth signs are down. I know from a higher level, but still the level that we have seen lei and money growth come down is something we have never seen without going into recession historically you have a consumer, still strong, could be weakening im concerned about margins with companies. A lot of people are saying this is the bottom of earnings and we will go higher from here we have to be concerned about margins. The equity market is still moving higher. It is resisting the negative pulls we see. There are signs the consumer is weakening you are seeing signs of recession. One thing that is contrary to that is low unemployment unemployment is low. We see a tight labor market. We see wage growth how do you see that long term impacting the strength of the consumer and markets with Companies Earnings as wages move higher it is a doubleedged sword, frank. You want the consumer to be strong and want them to be out spending and labor market supportive at the same time, that is telling the Federal Reserve that perhaps what they are doing moving up to 5. 25 on the fund rate lead to strength . That is pushing us closer to the edge of the cliff. That is a concern we have. We say it takes fed rate hikes 12 months to work through the economy of the that m economy there is more we need to feel. That is the reason we are a little bit cautious and see more of a rifsky bull market. You are also looking at tech plays outside of the magnificent seven. Some consider them a. I. Plays. Adobe and oracle what do you like about these stocks we are trying to look for plays in the tech space with a. I. Adobe and oracle the cloud space with oracle and adode with a. I it will be helpful you can see it in other names. You look at the lam research feeding into the a. I we have been buying with the valuations and quality of earnings that is key. You can still have tech exposure, but not pay the high multiples and valuations of the tech names very interesting. One of the other picks is applied materials. Why do you feel that is a good play for today you know. It is part of the same story we are looking at names with strong earnings and great management teams which have been through volatile markets that fits with the tech exposure with the valuation that seems reasonable we have to leave it trehe that will do it for us on Worldwide Exchange. Squawk box is up next. Thats what you get from the Morgan Stanley client experience. You get listening more than talking, and a personalized plan built on insights and innovative technology. You get grit, vision, and the creativity to guide you through a changing world. Good morning stocks closing out july on the positive note. We get you ready for the first day of trading for august. We will have the earnings alert with caterpillar and pfizer. And lights out in San Francisco. X taken down after backlash from city officials and neighbors. It is tuesday, august 1st, 2023 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. Im becky quick along with Andrew Ross Sorkin with mike santoli. Lets look at u. S. Equities. There are red arrows dow futures down 100 points. S p futures down 12. Nasdaq down 49 that is after a pretty impressive july which stacks up to an unbelievable year to date. Dow and s p up 3 for the year in fact, the nasdaq was up 4 for the month