Transcripts For CNBC Worldwide 20240704

Which shoppers continue to buy essentials even as borrowing costs rise and inflation pinches their budget chinese property crisis deepens. Another company with openings to the sectors misses payments. The latest investments from beijing straight ahead later in the show, its not just the cost of tuition that continues to go up every school year living off campus is creating sticker shock for students and their parents. It is thursday, august 17th, 2023 youre watching Worldwide Exchange right here on cnbc good morning, welcome to Worldwide Exchange. Were going to check the stock futures. Theyre in the green across the board. Fractionally higher for the s p 500 and nasdaq at this hour, the dow will open 40 points higher h h losses picking up in the final hour of trading. Most people see serious risk for inflation that may require more rate hikes in the future back to back losses with the nasdaq leading the declines down 1. 2 the s p 500 closing at its lowest level in more than a month. The treasury yields really jump. The tenyear hitting the highest level in 15 years. You can see right now, the two year, 4. 97 the ten year at 4. 29 well talk more about that later in the show. Were also looking at the energy market, specifically oil the u. S. Benchmark has fallen below 80 a barrel fractionally higher. Brent crude at 83. 60. No movement in the Natural Gas Market the fed minutes are being felt in europe and asia today were in the london newsroom with much more on the trading. Im seeing a lot of red on that board. You know what, there was a lot more red up until a couple hours ago. We managed to recoup some of the losses you can see behind me the shangh shanghai composite in the green. This after comments came through from the chinese premier saying the country will actually work to achieve that 5 gdp target for the rest of the year more hopes of further stimulus to come. That turned things around. The heng seng is flat. Exports for july falling 3. 3 year on year that is the first monthly decline since february 2021. Keeping a close eye on the trade situation particularly with china. The australian index is down. 7 as commodities in focus. As for european markets, the picture is very negative across the board. 5100, about to breakthrough the 7,300 mark about. 3 weaker on the session today. Bea systems in focus theyre down 5 after looking to make a bid in the u. S. That is one company were watching that index is down. 2 the industrials in europe is the worst performing sector. Tech is also down. 2 . Some cyclicals coming under pressure the handover from the u. S. Was negative yesterday, that negativity continued into the european session frank . All right thank you very much. Lets get more from what we learned from the minutes mark is our first guest. Mark, thank you for being here lets get into the fed minutes higher forlonger that is the take away from the fed minutes. Very specific. Why do you think we saw the selloff in the last hour of trading yesterday . Do you think it continues today . Frankly speaking, frank, i dont think there is too much surprise in the fed minutes yesterday. We have three weeks of data that has come in. We have a core cpi at 0. 2 wages are coming down. There is no surprise that the fed is talking about inflation risk still being there at that specific point in time i think that risk is alleviating since. Theyre talking about a two side address to the economy i think the market was underrepresented in terms of growth, sensitivity and that was in the minutes as well. Were not surprised to see tech stocks selling off they are very expensive. You touch on rates. I want to talk about that. Look at the tenyear yield hit hitting a 15year high 4. 3 is the area of resistance for the ten year we crossed that now. Where do you think it goes from here how do you see it impact oing other sectors . We think there are sectors benefitting from the rise in yields the let me first point on the outlook. We think that yields over the next six to 12 months are likely to come down i think there is a growth sensitivity that is starting to come in with the fed we were talking about sort of lowering Interest Rates as inflation is coming down real rates are moving up i think there is a sensitivity i think well see fed cuts next year that brings the end of the yield curve down however in, terms of the sectors that you mentioned, i think financials is definitely underestimated banks 40 up on earnings trading six, seven times it is representing broader value in the equity markets. The laggers have great value and doing well when rates are relatively high. I think i want to put a finer point on that question about the ten year 4. 29, a 15year high where do you see the area of support for the yield . Do you think it falls below 4 or do you think it hovers around 4. 2 . We think it goes below 4 by the end of the year. Coming from ubs wealth management, we have clients looking for longterm investment returns through generations. When you look at 4. 3 on the u. S. Ten year, close to 6 in u. S. Investment grade already competing with what we think is Long Term Return on equities, you start to get really good risk adjusted returns. A lot of our clients are starting to indicate they want to load up on bonds at these levels we do find it relatively attractive and less of a gamble than the expensive equity markets. You talked about the fed looking at inflation right now, were seeing wt iback below 80 a barrel. Youre bullish on oil. You think well see record demand this month. Were half way through the month. Oil is falling on slower china growth what is the catalyst for record demand this month . Thats right. Were bullish on oil if anything, we just in creased our forecast from 90 to 95. And we think the supply demand balances are moving in our favorite we have close to 103 Million Barrels per day of oil demand. Thats at a time when global supplies are at a twoyear low from opec essentially ensuring that the cuts are staying in place from that perspective. That is lifting prices we see that inventories in all the different ways were measuring is very levels we need to start to rebuild it that will bring back demand. China is on the weaker side. Weve seen a few weeks ago theyre indicating that growth will be stabilized we need to focus on that and that will bring Energy Prices higher you have a lot of confidence that china is going to be the catalyst for the oil prices. Spike in demand hit a record this month we have more confidence in the Global Economy which is driven by a resilient u. S. Economy. We also say we have faith in the chinese economy delivering close to the 5 of the target. You mentioned just before in the show here, the premier was out indicating they want to do it. And the more command driven economy, we think we have all the tools to essentially do that all right mark anderson, thank you so much for being here thanks, frank turning to the big money movers the Cisco Systems shares are higher youre seeing the chart. That red part is right after earnings ciscos Fourth Quarter results missed estimates but the stock drop was disappointing raising concerns with slowing growth however, it turned around as the ceo talked up ciscos market share wins and opportunities it has to be a leading supplier of networking gear for ai workloads. Lets bring in the director of Equity Research at Deutsche Bank good morning thank you for being here thanks, frank great to be on were just showing the chart. That red part is after the numbers were released. Investors didnt like the fullyear guidance then on the call, you see the reversal, moves to the upside. It was following when they released the product order numbers. Still down double digits year over year. Is that a big enough deal in your mind to turn this entire stock around yeah. Well, id say when you think about the down numbers, youre come offing a very, very difficult comparisons from a year ago id also say when you think about the seasonal moves, typically the fiscal Fourth Quarter, you have a company that grows product orders in the area of 18 to 20 the growth this past quarter was up north of 30 sequentially i thought it was a message around resiliency and demand that i think really helped buck that trend. On the chart, just to be clear, down 23 the quarter before the now its down 14 . Thats the 30 growth youre talking about. Still negative year over year. But sequential growth there. Also want to talk about where cisco showed a lot of strength that is networking system. That is where cisco gets about half of revenue. That is routers and switchers. 8. 8. 8. 125 billion. What does that really tell you about the ai opportunities that chuck robins has been talking about . The nearterm beat is relrelate to backlog theyre unable to ship out the rout routers and switches as it relates to ai, it is interesting to hear the company talk about 500 million worth of orders they have taken on opportunities specific to ai i think youre talking about 55 billion business 500 million in orders, youre scratching the surface it will take time. I think its closer to fiscal 25 before he this start to move the needle promising data points to date. All right one more question. Cisco seen as a read on global tech spending overall. The q1 guidance that, was interesting. Eps better than expected and gross margin better than expected what insight does that give us on tech spending i think in the interim, a lot of Companies Including cisco are benefitting from that elevated backlog. We had a resilient order trend for the better part two of years coming out of covid. As that backlog cushion begins to fade, there are concerns around the back half and prospect of growth going negative in the interim, order activity is fairly resilient. I think that speaks to the resilience in tech and it spending weve seen thus far all right going in the weeds a little bit. Backlog, deferred revenue, i like it. Great to have you here first on cnbc interview with chuck robins is 9 00 a. M. Eastern today. A lot of talk about the quarter and also about ai. That is 9 00 a. M. On squawk on the street a lot to come on Worldwide Exchange including the one word that investors need to know. And authorities in ground continue to assess the damage from the Deadly Wildfires in maui the Top Utility Company on that island reportedly looking at all its legal and Financial Options. We have details straight ahead and anxious investors in china are questioning how much exposure they may have to the companys real estate crisis after another Company Misses payments we have a live report from beijing. And the shift fell on the trucking business after yellow goes out of business i talk to the ceos on two trucking firms how theyre moving to fill that gap. Ave a very busy hour ahead when Worldwide Exchange returns. Stay with us my cpa told me i wouldnt qualify for the erc tax refund, so i called Innovation Refunds. Their team of independent tax attorneys will work with your cpa to determine if your company is eligible. [whip sound] take the first step to see if your Small Business qualifies. Huh. How long have you been tracking our cars value with carvana . Take the first step to see if just, like, 7 months. Should we sell it . We hold. Hold. Silver vans are going for more right now, should we. Hold. Our low mileage is paying off. You think we should. Hold. Depreciation is really heating up you think. Hoooold hooold hooold. Hold we just dipped 2. 5 hooooooold now im on it. Im, on it. Already sold to carvana. Go to carvana and track your cars value today. All right. Time for a check on this mornings top corporate stories. We have those. Good morning good thursday morning British Defense group bae systems is buying an Aerospace Business for more than 5. 5 billion they have more than 5,000 employees with more than 60 of those holding u. S. Security clearances its products including Spacecraft Mission payload and antenna systems. Hawaiian electric is reportedly exploring its legal and Financial Options with restructuring firms following the devastating wildfires maui the wall street journal reports lawsuits have been filed. Alleging the utilities actions contributed to the fires more than 100 people have been killed with the death toll expected to rise earlier this week, s p global cut the debt to double b minus and placed it on credit watch negative a federal judge has rejected a proposed settlement in a Class Action Lawsuit over the rash of thefts of hyundai and kia vehicles across the country. The judge says the settlement offers inadequate relief to Vehicle Owners the proposed settlement is valued at 200 million and covers approximately 9 million hyundai and kia vehicles made between 2011 and 2022 that dont include bush button ignitions to prevent them from being stolen. A big issue here in the new york city issue. There were tiktoks showing people how to steal them sfwl a big issue. Turning our attention to china. Woes are mounting due to the crisis in the property sector. Latest issue popping up this week is the leading trust firm with exposure to the sector missed some payments and now investors are becoming increasingly frustrated. We have much more on this story. Thanks, frank i just came back from the beijing office of that trust firm the company has set up a Registration Desk there to appease some of the many investors who are showing up there demanding for their money back in the past 24 hours, videos that reportedly show investors angry and visiting that office emerged as well as as have been censored on line. When we went there, there were about a dozen investors who are very worried and, in fact, quite agitated about the situation staff told us the financial products, many are fine. But there are several others that wont be paid back because of what they said is the liquidity issues of some of the underlying investments now in terms of those investments, they have sizable exposure to the Real Estate Industry thats one reason why theres been greater concerns about a contagion effect there were several hundred inquiries filed about their exposure to not only this company but Country Garden which as you know is the Real Estate Company that is now facing default and really revelling investors around here and around the globe. We can see theyre rattled. Were looking at chinese property stocks now down between 3 basically flat right now i think the question is are there any signs supports are going to take any steps to alleviate and resol of this crisis well, the investors that we saw definitely want that to happen there have been several reports now that some investors are considering taking their case to the financial regulators in fact, we went to visit the offices of the financial regulators and found that there was a very heavy police presence, heavier than normal around the financial watchdog. Perhaps because of this concern and also in terms of what actually has been said the chinese premier yet again pledged that china would reach its annual growth targets but didnt really give any detail as to how thats going to be achieved thank you very much all right coming up, we have this mornings big money movers including one big bad stock thats plunging after posting a wider than expected loss there is more to come. Its your stmyery chart this morning. Of more after this all right. Welcome back to Worldwide Exchange. Its time for the big money movers the shares rising after the Chip Design Company topped expectations and offered upbeat guidance due to an increase in investments. The founder and ceo will will step down and become executive chair at the end of the year and will be replaced by the current chief operating officer. Shares of wolfspeed plunging following a wider than expected q4 loss they forecast more losses to come due to significant factory startup costs last month wolfspeed said the supply chains not be impacted by chinas restriction of a metal used in its products the company focuses on scaling materials and device capacity in fiscal 2024. All right. Turning to the transports. Rivals of the bankrupt yellow continue to outperform the market and have made major gains since the bankruptcy of yellow i spoke with both ceos yesterday about the impact of the 5 billion in freight yell ow moved in 2022 now moving to other carriers the largest ltl operator in the u. S. , fedex and thats where multiple Companies Put shipments on the same truck. You can see the surge this quarter for names like xpo up 22 . There was a report this week with a 6 increase in july volume and double digit increase in volume month to date. Big surges where we saw record volumes. Customers include starbucks and home depot the ceo expects elevated volumes to continue through the Holiday Season we saw single will digit increases up to the disruption i expect from there you see that Going Forward. What youre seeing is that redistribution across all the competitors in the marketplace and i think the efficient operator, the one that could absorb that capacity consistently, those are the ones that are going to be longterm beneficiaries of this. And nationally, weve seen a clear upswing in spot trucking rates in recent weeks since the first reports of troubles at yellow we also spoke with old dominion. The ceo says were exiting a freight recession. The suppliers are telling us that the inventory levels are getting low. And they hope to build those inventory levels back up and be ready for the chris tmas season. Were hearing positive things from them. Were also hearing positive things from tesla. Theyre looking at increasing their production also spoke with the ceos about diesel prices that have risen over the past month. They expect this to be a tail wind for the top line and bottom line because of fuel surcharges for the customer thats lead to some incremental profit. Still ahead here on Worldwide Exchange, airlines, bulldozers and shippers, oh, my the industrial sector has lagged this year. There are still opportunities ltainvestors find upside. Wel lk a lot about that when we come back my cpa told me i wouldnt qualify for the erc tax refund, so i called Innovation Refunds. Their team of independent tax attorneys will work with your cpa to determine if your company is eligible. [whip sound] take the first step to see if your Small Business qualifies. Nice footwork. Take the first step to see if man, youre lucky, watching live sports never used to be this easy. Now you can stream all your games like its nothing. Yes thats what im talking about. [ cheers ] running up and down that field looks tough. Its a pitch. Get way more into what youre into when you stream on the xfinity 10g network. Nice footwork. Man, youre lucky, watching live sports never used to be this easy. Now you can stream all your games like its nothing. Yes thats what im talking about. [ cheers ] running up and down that field looks tough. Its a pitch. Get way more into what youre into when you stream on the xfinity 10g network. It is around 5 30 a. M. In new york city. There is a lot ahead on Worldwide Exchange. Looking for a bounceback futures are high they are morning following two Straight Days of losses for the major indices. And wall streets hoping earnings from the biggest retailer and dow component walmart will help. We dig into what might help or hurt that companys results. And if you thought rents were cooling off. Well, just ask a college student. Its thursday, august 17th youre watching Worldwide Exchange right here on cnbc zblr goo good morning. Taking a look at where we were earlier this hour. Fractionally higher for the nasdaq and s p we also get the bond market ach t after the ten year hit 4. 29. Were seeing the twoyear note approach a 5 yield. Something well continue to watch. All right. Time now for a check on this mornings top corporate stories. Hey, frank. Good morning paramount global is reportedly abandoning plans to sell its majority stake in bet media group after concluding a sale wouldnt generate enough money to meaningfully deleverage the balance sheet. That is according to the wall street journal bet which includes vh1 and bet Cable Networks received bids for the stake ranging from 2 billion to 3 billion with shaquille oneal, 50 cent and tyler perry among the initial bidders. Chinas internet regulator is reportedly in talks with Companies Including walmart and paypal over beijings new Data Security rules as it looks to reassure global businesses about the ability to operate in the country. Bloomberg says officials from the Cyberspace Administration of china have met with dozens of International Firms about the new regulations ahead of the november deadline with talks ranging from creating a fast approval mechanism for transfers and developing a white list for data categories. And new numbers from fidelity showing the amount of people with at least one Million Dollars in their 401 k accounts has grown by nearly 25 so far this year putting those savers in the top 1. 6 of all the fidelity accounts. The Vice President says the one Million Dollar milestone remains a target for many workers in the u. S. But that many may need to save even more due to rising costs and stubbornly high inflation, frank. All right thank you very much. We appreciate it turning our attention to retail walmart shares getting a boost ahead of the second Quarter Results due out in the next few hours. Wall street staying generally more optimistic on walmart xpard to target and macys compared to target and macys. Theyre getting more Revenue Streams from the ad business for more what to expect this quarter, im joined by the Equity Research at jeffries. Corey, great to have you here. Thank you so much for having me were going to dig into this one. Walmart hit a 52week high a couple days ago. Trading around that 52week high and youre very bullish on the stock. Give us your rating, price target, also, what is leading you to have a really bullish take or estimate on samestore sales that is so much higher than consensus youre at 6. 4 the street is at 4. 6 . Thats a big difference. Were buy rated we reach substantial upside from 160 today we think it could be 190 or upside cases over 200 we see really significant upside for three main reasons as we head into the quarter, id say as we focus on samestore sales, two on margin and three on the outlook, all are relatively bullish first on samestore sales, you mention that were at 6. 4 of thats versus the street of around 3. 7 . What we did is we took a look at alternative data sets that give us really actionable insight into traffic, into basket size and composition and to web data and all informed with a 90 correlation around what should be a six plus percent samestore sales target that is a 19 upside. Possibly even more 19 upside from here we keep talking about this stretch consumer a big part of walmarts business is the grocery business. We have stressed consumers theyre spending more on groceries. What are the other catalyst thats push this stock higher . You have a stretched consumer below private label. That is 20 of the u. S. Sales. That is growing at an expanding rate that is also higher margin, too. It should help to drive the profitability ahechltd ad you have walmart plus or advertising that flow almost essentially directly to the bottom line and should drive outside profitability ahead as we think about walmart coming from a 4 operating marge continue to 5 over time how would this report, you mention its a discounter, it sells at a price and competes on price. How does this report compared to what we saw or what you think it will compare to what we saw from target i think to juxtapose the two, very simply, target posted comp sales declined in the Second Quarter. Walmart, youre likely to scomp sales up in the mid Single Digits there will be an upward i had revised outlook on walmart today. You touched on this a minute ago. Some of the tech when it comes to walmart, technically walmart plus and marketplace businesses, very similar to amazon where they not only sell their goods, they sell other peoples goods talks about the tech influence going on walmart and ai. Some think that will help the walmart plus business because it sources products in the right places and predict what consumers want. Absolutely. I think Artificial Intelligence is really going to help bouie better margins and more predictable sales for walmarts ecommerce business Going Forward. One thing that relates to technology is actually as it relates to automation in the Distribution Centers and over time, over the next three years, should help to reduce automation and fulfillment costs by 20 all right shares are moving higher before the report, youre very bullish on the stock what is something under the radar that investors are not paying attention to but should look for in this report . One thing that i think is important to key in on is especially after what was very robust amazon prime day is walmart plus week. The opportunity for ecommerce specifically to drive upside to sales into this quarter. So, for example, we took a look at app data as i mentioned earlier that looked at walmart app usage throughout the walmart plus week and what we saw was that walmarts ecommerce business was up 30 over that period really . And the businesss run rating at a 30 growth rate this was 8 billion in 2015 and now 80 billion this year. It ten xd in eight years. Walmart shares up 1 ahead of the report coming up here on cnbc, you dont want to miss the interview with John David Rainey at 11 30 a. M. Eastern i saw you working both cameras doing it like a pro. Great to have you here. Thank you turning our attention now to sectornomics from airline to defense contractors and heavy equipment makers it is home to a wide range of stocks were looking under the hood for this months report. Cyclical. Economically sensitive and many of the names that were going to talk about have been beneficiaries of a broader economic narrative that is shift ago way from recession and more shifting away from recession and forget about a soft landing, maybe even growth. If you look at the industrial sector overall versus the s p 500, the white line, the s p 500, the industrials though, the orange line. Underperformers so far it was fairly close from the beginning of the year and widened out a little bit more since just about the spring. About april, or may or so. Keep an eye on that underperformance weve seen things to the upside. Weve seen General Electric do the heavy lifting here ge up 75 on year to date basis. Single best performing industrial stock in the entire s p 500 versus, you have fedex on the transportation and logistics side of things, up 53 . And then pentair those are the outperformers. The laggers, they were the outperformers last couple of years. Most of them are like new orthr grumman and Norfolk Southern also in transportation down about 15 as well. The narrative is very interesting with regard to where were seeing that out and underperformance its no the necessarily one Industry Group specifically. Defense contractors have been real lagereds so far this year, frank. Over to you. Thank you dom chu with sectornomics. Parents, listen up if you think your rent is too high, wait until you get a look at the bill for your kids off Campus Apartment more worldwide change coming up after this. Its time to head pack to college but that has students and parents hold oing on to the wallets. Like so much of the u. S. Housing market, its getting priceyer. We have much more on this story. Yeah. Apartment rents overall are cooling off a tiny bit one type of apartment is doing just the opposite. Thats off Campus Student housing apartments not dorms but apartments built specifically for students by Developers Like american campus communities, gray star and landmark Student Housing depending on the region of the country is 2 to ten times multifamily rent growth that is according to crbe. Up from 7 year over year in the northeast to nearly 13 in the southwest. The ceo of landmark says its all about supply and demand. If you look at the top 200 or so universities in the country which are the universities in which we target, you see very stable and enrollment growth and there is only a limited amount of land close to the universities that can be developed. There are significant barriers to entry the net result of this has been very consistent and stable cash flows over a long period of time one more barrier to entry right now, of course, is the cost of capital. Now for investors looking to get in on the growth, there are no longer any publicly traded Student Housing reits. Both landmark and acc are part of blackstones nonlisted reit very interesting that off Campus Housing is more expensive. When i went to college it was basic off Campus Housing was a house that somebody converted. Now its amenity based and a lot nicer. Is that a factor in the rents being higher absolutely. I mean, a lot of these off Campus Housing buildings have, you know, inif i ti pools and they have latte bars in the lobbies and they have all kinds of, you know, Granite Counter tops in the kitchen and flat screen tvs i know this because my son was in one so, thats why youre paying the priceyer rents the kids want to be very close to campus. They get all at men tis and get to be where they want. If the parents with afford it, then theyll do it as the landmark ceo said, the buildings are for, you know, people who can pay for them. Theyre on the wealthier side of things for housing but, again, the prices continue to go up there is just how much can people pay absolutely. My cousin went to school down south. They had a lazy river in their apartment. I had a cinder block door always great to see you great reporting. Thank you time now for your morning call sheet we begin oppenheimer, the latest to weigh in on nvidia ahead of Earnings Report next week. The firm reiterating the outperform rating and raising the price target to 500 from 420 supply is a curb on nearterm growth, oppenheimer says nvidia is benefiting from broad and robust ai demand well talk about ai a lot throughout this entire year. Shares of nvidia up 1 all right. Citi remaining positive on apple going into the expected launch of the iphone 15 next month. Recent checks on the supply point to the potential for a strong replacement cycle they believe there is plenty of excitement around faster charging features and the iphone 15 they have to add something there. Apple shares basically flat right now in the premarket all right time now for your global briefing. We begin with south koreas president getting set to leave for the u. S. To attend a summit with President Biden and japans Prime Minister to discuss security measures for north koreas growing Nuclear Threat that will be held in maryland tomorrow it mark the first time the three countries meet for a stand alone summit japan posting the first monthly decline in exports in mor demand exp export plunging 37 marking the eighth monthly decline one word that every investors needs to consider today. If you havent already, follow our podcast. If you missed out worldwide exchan exchange check us it on apple and other podcasts 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. Icy hot. Ice works fast. Heat makes it last. Feel the power of contrast therapy. So you can rise from pain. Icy hot. Welcome back to Worldwide Exchange. You see the sun is just about to come up in the new york city area london, a really Beautiful Day under way there. Looking down there at washington, d. C. A live look at the capitol again, the sun not up yet. Congress not back in session just yet and hong kong, end of the day there. All right. Time now for your wex wrapup. Cisco shares are moving higher despite disappointing revenue guidance the company is poised to gain more market share and is confident in its ability to capitalize on future ai opportunities. Shares of worldspeed plunging following a wider than expected loss. They report more losses to come. Lenovo shares also dropping after posting a drop in revenue due to on going slump in Global Demand for pcs they mark the Second Quarter of sales declines and comes after the Company Reported an annual decline last year. First annual decline since 2019. Hawaiian electric is exploring its level and Financial Options with restructuring firms following the devastating wildfires in maui the wall street journal says lawsuits have been filed alleging the utilities actions contr contributed to those fires and walmart is promoting the ceo of the sams club unit heres what to watch today weeklyas the infrastructure bill, the ira bill and so forth. We look at some tail winds there is an opportunity. I think, frank, its not just what you own as rates are moving higher its also what you should be weary of one thing that were more negative about is the Real Estate Market. Really . You know, youre hitting on two things we talked about earlier in the show. Its like youve been watching the whole hour what is it about the Real Estate Market that has you concerned with rates going higher . When you say concern, does that mean youd be a seller today if possible yeah. I always watch the show, frank weve been overweight on real estate most of this year there is this refinancing on debt those yields are going to put down a lot of pressure we saw the Real Estate Market or in the market destabilize the last few months. The high rates will put renewed pressure on that area. And then outside of real estate, if you think about it, we have seen the u. S. Dollar move up another headline today is china. Weve been negative on emerging markets for some time. Were basically with a zero allocation and global Asset Allocation last year we think thats going to be under continued pressure we use any rallies on the markets to stay underweight. A lot of equities and before youre saying its about yields. Looking at the two year as well. Yield at 5 . Is this changing your thought about when it comes to fixed income strategy . You would advise clibents to pu more money in a fixed income yeah. We look the barbell strategy we like that short end of the curve and get in at 5 and there is a lot of momentum in that ten year breaking above the high you dont want to be too aggressive as yields continue to move up, we think there is some value in longer term bonds out to about ten years. Even if yields continue to go up, because of that coupon that youre getting, that income coming in, that will offset any price losses up to about 475, 480 on the ten year. One more thing to ask you about. Wall mor walmart reports after the bell it is a bellwether of retail how will this instruct how you tell your clients to invest in retail Going Forward yeah. I think retail walmart does do a decent amount of selling for essential goods. The i think overall theyll have a fine story about what theyre seeing in trends its not going to change our view, per se i will will say that the discretionary sector is something were overweight not just because of the underperformance in retail but this he have the big growth names out there as well. We think that sector does fine great to have you here as always thank you very much. Thanks, frank bring let you go, were going to take one more look at the futures right now. Take a look at futures dow trading close to the highs of the morning right now up just about 70 points. The s p 500 up fractionally about. 15 same story for the nasdaq right now. We also want to look at the bond market we mentioned the ten year hitting a 15year high yesterday. Right now looking at the benchmark ten year at 4. 29 also watching the two year that yield just about at 5 . And our big money mover this morning, cisco those shares moving higher in the premarket. Right now cisco shares up almost 3 big reversal after the Earnings Report dipped into negative territory and then on the call chuck rob ins talk about ai opportunities and released the call about product orders. Improving sequentially we saw that turn around in that stock. Again, cisco shares up almost 3 thats going to do it for Worldwide Exchange. We have squawk box coming up next thanks for watching. So you can e 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. Good morning, a day after fed minutes showed that central bankers are still leaning towards more rate hikes to fight inflation. But happening today, walmart set to report. Well tell what you to expect from the retail giants quarter. And then fall travel trends. We have a Real Time Data update from hopper on the best bargains for your fall get away if you have one planned. Plan to plan one its thursday, august 17th, 2023 squawk box begins right now. Good morning welcome to squawk box right here on cnbc were live at the Nasdaq Market site in times square kelly evans is back for an encore performance becky is out today i its nice to see you we have a lot going on the next three hours. U. S. Equity futures looking positive 70 points up on the dow. Stocks fell in yesterdays session. This after the fed minutes showed that central bankers are largely concerned that inflation would fail to pull back