Transcripts For CNBC Worldwide 20240703

Tel aviv. Despite the massive runup in yields, why one huge part of the investment is sitting ontown sidelines. Well tell you why that could be changing. Its wednesday, october 11th, 2023, and youre watching Worldwide Exchange right here on cnbc. Good morning. Im frank holland. Lets take a look at stock futures. It looks like the dow would open up about 50 points higher. The s p and nasdaq solidly in the green. This follows a mostly higher session for stocksy ed that saw the russell 2000 post its fifth positive session in a row. Thats the first time it did that since july. You can see right here up almost 1 year to date. But important to note, theyre also belo e their 250day moving average. Were checking the bond market with the 10year coming off its lowest close since september. 4. 56. This is well below its yearhigh that it reached earlier this month. Important to note the 30year bond, a big indicator on Inflation Expectations and also Investor Confidence well off of its highs. It hit 4. 96 earlier this month. We begin with oil, wti, the u. S. Benchmark trading at 85. 74. Brent crude, 87. 43. Natural gas, up 1. 5 higher. Now we go to a news alert from washington. Theyre announcing sweeping new rules on junk fees. That inabout colludes banking, travel, leisure, and housing. The ftc is looking to ban businesses from charging hidden and misleading fees. Also the ftc is requiring them to show the full price up front. The examples include resort fees, car rentals, and much more. Theyre tapping others for charges for basic services for Checking Account balances or requesting loan payoffs. You can see bank stocks are actually higher. Were going to continue to watch the action on bank stocks. For much more, joining me now on the cnbc newsline is hugh son. Good morning. Thank you for being here. Thanks. Its good to be here. Give us a sense. This new regulation framework, what could this mean for regional banks and also banks and Credit Unions . This idea that people should be able to switch institutions, that they should not be trapped essentially at their banks and that they should be able to get offering through wider providers. This started in europe. It was known it was coming to the u. S. Its going to essentially propose to make it easier for folks to switch banks. Thats on the one hand. Thats supposed to spur competition. On the other, junk fees have been going on for a while. The banks have been proactively reducing Overdraft Fees in some cases from 35 to 10 or capital one reducing them and cutting them altogether. And then said they basically are doing that proactively. You know, this is the industry knows this is coming, and for the most part theyve been dealing with it. Thats how you see the stock reacting today. You mention the stock reaction. Were looking at some of the stocks. The big banks are moving fraction franceally higher. Were seeing the regional banks moving lower. These socalled junk fees, thats what the administration is calling them. How important are they to the top and the bottom line of the regional banks, again, that we see moving lower right now . Theyre a larger pro e portion of the revenue fees for smaller banks. You have jpmorgan, they collected 1. 52 billion in Overdraft Fees, which is a huge amount. From the banks perspective, theyre saying, hey, look, youre already raising capital levels. Theyre going back and forth on that. Youre already making it harder for us to operate in the regulation markets. Thats their you know, their main resistance to this. Theyre saying when is this enough . You guys have to keep pushing us out of these regulated businesses. All right. Hugh son, cnbc banking reporter. Appreciate it. We turn our attention about now to another breaking story were following this morning, secretary janet yellen speaking on the sidelines of the International Monetary funds in marrakesh, morocco, saying treasury does not seen signs of broad spillovers to stabilize the global economy. Yellen adding shes watching for potential Economic Impacts from the crisis in israel, but at this point, shes not seeing the attacks having a major impact on the economies. Well continue to. Roy the meetings and bring you the latest. We get a check of the top morning corporate stories. We have silvana with us. Good morning. Novo nordisk shares are higher saying it will stop the trial of ozempic almost a year early. The company says its independent Monitoring Committee has found the data was good enough and the treatment would succeed. Novo expects to release the results of the study early next year. Blackstone is in preliminary stocks with walt disney to acquire a stake in indias firm. It would make it the latest suitor where disney has been exploring a sale or joint venture. And exxonmobil is close to a 58 billion deal to buy pioneer natural for almost 250 a share. Something to watch. Pioneer shares moving almost 2. 5 higher. Thank you very much. Coming up on Worldwide Exchange, we have the one word investors have to note. But first a clash of the fed heads, why Michelle Bowman said just this morning thats putting her view at odds with tuesdays talkers. Plus the climate in israel, what a Major Company is telling its employees as the conflict there enters a fifth day. And later, damning testimony as the sbf talri enters a second week. We have a very busy morning on Worldwide Exchange. Stay with us. Welcome to ameriprise. Im sam morrison. My brother max recommended you. So my best friend sophie says youve been a huge help. At ameriprise financial, more than 9 out of 10 of our clients are likely to recommend us. Our neighbors, the garcias, love working with you. Because the advice we give is personalized, hey, john reese, jr. Hows your father doing . To help reach your goals with confidence. My sister has told me so much about you. Thats why its more than advice worth listening to. Its advice worth talking about. Ameriprise financial. Every single day, businesses everywhere are asking the exact same question is it possible . Well, with comcast business. It is. Is it possible to help keep our Online Platform safe from cyberthreats . So we can better protect our Customer Data . Awwyeah. Absolutely. What else you got . Can we use predictive monitoring to address operations issues . Before they even exist . We can help with that. Can we provide health care virtually anywhere . We can help with that, too. Even out here. You, sir. Something on your mind . Is it possible to survey foot traffic across all of our locations . With wifi analytics . Easy. Order for nina can i teleport our guests to their rooms . Technically, no. Or power thousands of mobile checkins while thousands of other guests check out . Now that we can do. With the advanced connectivity and intelligence of global secure networking from comcast business. Its not just possible. Its happening. Welcome back to Worldwide Exchange. Taking ai look at u. S. Futures, indices are solidly in the green. Lets take a look at how europe is shaping up. We have our julianna tatelbaum. Shes in our london newsroom with much more on the early action. Julianna. Frank, good morning. Let me start out by saying were opening todays trading session after the best trading day of the year for the stoxx 600. Heres what we have right now. Green for some markets, red for others. A mixed start to trade today. Theres one getting hit hard and it lies in france. You have the cac 40 underperforming, down 0. 7. You can see the sector im talking about. Its Household Goods thats underperforming. Household goods down more than 2 . That has bounced off the lows of the morning. Outside of Household Goods, rew e tail also underperforming. Then a bit of a dropoff. Travel and leisure down. Utilities also faring well. Whats going on with Household Goods . Its the luxury names. Lvmh reports its slowed. Demand in europe and the u. S. Is slow while recovery in china has been uneven. Weve had recently a number of brokers downgrade luxury names in europe, but lvmh has remained a favorite. Its why weve seen such a dramatic selloff. Its filtered to other names. Hu ugo boss is down. Richemont down. Massive results after the close yesterday. Frank . Julianna, thank you very much. Julianna tatelbaum live in our london newsroom. Were going to turn our attention back to the u. S. The market is getting a boost from a number of fed officials. Among them minneapolis fed president Neel Kashkari says its possible. They may not need to raise rates, at least not as much. We heard that from Raphael Bostic and san franciscos mary daly as well. However, speaking in the last hour, fed governor Michelle Bowman says despite some progress on inflation, the bank may need to tighten policy further. Right now there are increasing odds the fed does not hike rates again this year. Theres an 84 chance of no hike in november and a 71 chance of no hike in december. Lets talk with vance howard. Great to have you here. Lets take a look at the situation. Were on pace for a winning week, the three major indices in the green. Bond yields fell and there are expectations of the fed pausing or at least not raising rates again in the next two meetings. In this current environment and also with the geopolitical uncertainty, how are you advising them to position . What are you telling them to do . Were still bullish. The trend abouts still up. I think you have to trade the trend. You need these pullbacks or buying opportunities. Youve got a tremendous amount of geopolitical risk out there, frank, as youve been watching. Youve got china saber rattling with iran and israel being attacked. Looks like were having some technical difficulties. Vance, were having a bit of an issue with your feed. I think were going to take the video off and have you keep talking. Please continue and pick up and well let you know if we have a problem. What weve been telling our clients, you need to have an active approach to investing because this passive investing approach may not at work if we get all right. Unfortunately i think were having some technical difficulties with vance. Werer going to thank vance for being here. Coming up on Worldwide Exchange, i speak with the head of the fourth Largest Pension Fund in the u. S. We get its take on the 5 rate risk and what hes doing with his fund that has more than 250 billion in assets under management. Much more coming up after this break. 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. President biden said in a private phone call yesterday he urged israels Prime Minister to minimize casualties as israel continues its retaliation against hamas. The call comes after President Biden condemned the attacks and vowed support for its middle east ally. Kelly cobiella joins us with more. Reporter the fighting continues overnight from gaza into israel and the European Union is now calling for a humanitarian corridor in gaza as well as an end to the blockade on water, drinking water, food, and electricity to gaza, the u. S. Somewhat responsive to that. The u. S. Is in talks with israel and egypt about opening up some sort of safe passage in the south, that crossing from the south in gaza into egypt so that civilians can get a way from th bombing. People say they know that the bombing is coming, that they simply have no place safe to go. The United Nations is there. There are schools there, which theyre using as shelters, but the u. N. Says even some of those schools, about 20 schools so far, have been damaged as well. Very dire situation there. The shelters are overcrowded. Theres not enough food or drinking water. Here in israel, the number of dead continues to climb primarily because the military is going house to house in the south and they continue to find victims, and the families are still wondering what happened to their loved ones. Theyre handling over dna at quickly as they can, but slowly going through the number of bodies. Werer talking about hundreds of bodies from this event on saturday and try to identify them and then notify families. So many, many families here in israel are in this terrible limbo of not hearing from their loved ones since saturday and turning over their dna and simply waiting for a phone call, frank. All right, kelly, thank you very much. Kelly cobiella live from tel aviv. We certainly appreciate it. Thank you. While the israel h hamas wa continues, many are feeling the effects of the conflict. Corporations with israelbased employees are telling workers to stay home as they temporarily consider shutting down operations. Joining mu e now is our next guest. Good morning and thank you for being here. Good morning, frank. Thanks for having me. We want to thank you for taking time to speak with us during this very difficult time for you and your employees and your nation. I do want to ask you, how are you doing emotionally . Hows your staff doing emotionally, and how are you operations right now with so much uncertainty . So, you know, first and foremost our hearts go out to all the victims. Over 1,200 have been murdered. Were overly sickened by whats going on. This is not the first time israel has operated around under a crisis mode. Unfortunately israelis are used to working under crisis modes, and were constantly thinking about worstcase scenarios when were Building Companies. On a daytoday basis, were always thinking of worstcase scenarios, and were Building Companies out of those spectrums, right . Even our servers from most Israel Companies are now based in israel. Since covid, everyone has gotten used to working remotely. This is another example of how we work remotely. So while emotionally its very hard for everyone to work. Operationally, everything works as usual. Were hoping for better days. Im sure you personally have been impacted as many people in your nation have been. I want to ask you more about operations. You say i youre operating mostly normally and covid has prepared you o for staying at home. Is there a negative impact for your nation and also the conflict . You know, so, businesswise, nothing has been impacted because most are not working on the israeli market. The vast majority comes from the u. S. Market and some from europe. So revenuewise and operationalwise, we are prepared for that. Okay. And i think most of the companies in israel are in the states. Were looking at some of your partners, hbo, mcdonalds, gm, a number of blue chip companies. Looking at your stock in recent days, your stock along with a number of other israelibased stocks have taken a sharp decline. Apparently investors are concerned about the situation. What would you tell your investors . You know, in the past few years, the stock has outperformed dramatically. I think our investors, especially the american investors know how our company works. They know our market, our partners. I think this will not harm the company, and i think, you know, any anything were getting hundreds of emails and messages from partners, investors asking for our wellbeing, showing their support. So were very confident in that. Tal jacobson from perion network. Chppreciate your time. Mu more on Worldwide Exchange coming up after this. Please stay with us. We have great benefits from principal. So i know im taken care of. 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House republicans are voting over replacing Kevin Mccarthy as speaker of the house and the ramifications that choice may have on the global stage. And the fresh task of the ipf market as birkenstock plays it safe. Its wednesday, october 11th, 2023. Youre watching Worldwide Exchange right here on cnbc. Welcome back to Worldwide Exchange. Im frank holland. We pick up a check on u. S. Stock futures with all three major inabout disease coming off a third day of straight gains f. Theyre solidly in the green. The dow would open up about 50 points higher. The win streak even longer for your the small cap. The russell 2000 rising more than 1 yesterday. You see it right there, its fifth straight day of gains, putting it back in positive territory, you see it right here. Importantnt to note, the small caps are trading below their twoday moving average. Well have comments from Michelle Bowman that despite progress on inflation, the central bank will probably need to tighten Monetary Policy further to restore price stability. We also want to get a check on the bond market this morning following bowmans comments. We begin with the benchmark ten year at 4. 56. Still well below its yearhigh. Also important ornlt to know the 30year, this is a good gauge on expectations of inflation and also Investor Confidence. We also wantlet to look at the energy market. We begin with wti, down, taking a dip lower than when we started the show, down more than a third of a percent, trading at 85. 63 a barrel and brent crude, 87. 32. Still up over 1 . Thats a look at the u. S. Markets. Now were going to get a check on some of this mornings top corporate stories. Our Silvana Henao is here with those. Good morning. Birkenstock is set to begin trading on the New York Stock Exchange today pricing its stock at 46 a share with an 8. 6 billion value. A third of that cash is going to repay debt, with the rest going to private equity owner. Europes internal market commissioner is giving elon musk 24 hours to respond about to concerns over misinformation being spread on his x platform regarding the war in israel. The letter comes after dozens of researchers, news organizations, and other groups have documented a rise of misleading, false, and questionable content on x, creating confusion about the current conflict. Failure to comply with the commissioner could lead to fines worth about 6 of xs annual revenue. And in the second week of the trial, damning testimony from sam bank man freeds exgirlfriend and former ceo of the Sister Company alameda research. Caroline ellison who has already pleaded glet to a number of charges and is cooperating with prosecutors says bankmanfried directed her to commit her crimes and is the man solely responsible for the loss of billions of dollars in customer funds. Her testimony will continue today, frank. All right. Silvana, thank you very much. Turning our attention now to washington d. C. , where House Republicans are slated to cast their votes to pick their next candidate for House Speaker behind closed doors today. This vote coming just over a week after the vote to remove Kevin Mccarthy. Emily wilkins joins us now. Emily, good morning. What can we expect in todays proceedings . Well, good morning, frank. Theres a lot of uncertainty how today is going to unfold. We do know the House Republicans as you said, theyre going to vet this morning on who they want their nominee for speaker to be. Last night members heard from jim jordan and steve scalise. They made their pitch on why they should wind up being the speaker nominee. Neither currently has enough votes to win the gavel. Members are pretty divided between who they actually support. A lot havent even said who they will back. Congressman mike garcia who representing the district that voted for biden in 2020 and, therefore, is very critical to the republicans keeping the house in 2024, said he could back either candidate. I think both of them understand the big picture here and this is a fight to save our country. I dont have doubt both of them are going to be able to raise money, both of them will be able to go to the swing districts an ld help people out and fight the good fight. Kevin mccarthy whose name was floated by several members hoping for a comeback says he does not want to be nominated for speaker today, that its going to be a race between scalise and jordan. Thats not the only thing republicans have to decide on. Right now whoever gets the majority backing them becoming the candidate for speaker, but republicans, they do not want another 15 rounds of votes for speaker like we saw in january. So members could decide to stay behind closed doors until one candidate gets 217 votes. That is the amount needed to become speaker. So its not clear how long its going to take to actually elect a speaker. Some lawmakers say its go toung be done today. Others have said it could take much longer. Frank . Emily, obviously its like a lot of geopolitical issues playing out right now. How is the crisis in israel playing to this vote . Well, frank, obviously the house is completely paralyzed. Theres not really anything they can do right now on the floor. They cant pass a resolution. They cant pass additional funding until they get a speaker in place. So thats definitely put pressure on lawmakers to come to some sort of decision here. Yesterday we heard President Biden say, hey, when Congress Gets back, when about the senate comes back next week, he is going about to be sending a request. And lawmakers will have to figure out whether they want to pass funding for israel separate from another funding request from ukraine. How they bundle that together, what it looks like, beforer any of that happens, they have to decide on a speaker. Emily wilkins live in d. C. Emily, thank you very much. For much more on todays speaker vote and the dysfunction, lets bring in our next guest. Great to have you here. Emily gave us the setup. Give us a sense. How do you view this vote for speaker on the republican side at least . Are you expecting it to take a long time, and who are you expecting to come out as the winner . The first thing, frank,s is the procedure al vote, which sounds like theyll increase the threshold to make it 217. The interesting part here is jim jordan is pushing for that raising the threshold to 217. Steve scalise wants to keep it at the simple majority. For scalise, he thinks it will be easier to get this earlier on and that would create pressure on the conference to coalesce around him. While jordan recognizes scalise would have a better chance of getting the simple majority, but he thinks the longer they keep it behind closed doors, the pressure would build and he would be able to pick off people to get to 217. So like everything in washington, process trumps substance. I do want to ask you. You believe if jim jordan is selected, that reduces the odds of us having a government shutdown. Explain that. Why is that . Its really interesting. While Kevin Mccarthy was still in power, we were in a shortterm negative of a shutdown but longterm positive they would get by the april 30th before the sequester would kick in, that they would hit the numbers that they would have for the spending numbers in the debt level. With the change in speakership, mccarthy, though, he struggled with how to manage the hard right part of his conference, he actually in his heart agreed with the democrats and Senate Republicans on the big ticket items like fy 24 spending. But jordan and scalise, but particularly jordan, do not. They probably would be happy with accepting the 1 cut, but where jordan came out with a plan last night, what he told the conference was, lets take a clean cr from november 17th when the current one expires all the way up to april 30th, and instead of using shutdown as the leverage, lets use the leverage of the 1 sequester. Mccarthy offered that and they revolted. Thats because they trust jordan more than mccarthy will stick with that. Of course we have the conflict in israel and also funding for the war in ukraine. How does this impact both of those . Again, this is the first time in history the speaker of the house has been removed. Sure. Emily, i think, you know, pointed out rightly that this adds pressure once they make the formal request, which is expected next week for the israeli aid. The House Republicans are warning them not to comply. It seems to us a beacon that politically it makes sense for biden about to combine them inaboutishly or at least to urge his allies in congress to push for that, even if they have to separate it to move the israeli aid quickly. Trying that at first would show that, one, the contract between republicans and democrats, and, two, it would send a message overseas. Stephen myrow, thanks for being here. Turning now to a market flash this morning, its on walgreens, shares moving higher right now. Our Bertha Coombs joining us with much more on this story. Good morning. Good morning. Walgreens is announcing that veteran Health Care Executive Tim Wentworth will be its new ceo. Walgreens chair saying the board wanted someone with deep Health Care Experience and went woct had that. He was a ceo of a Company Acquired by cigna in 2018. He stayed on and served as head of cignas Health Services division and then retired in 2021. Now, wentworth told me that the chance to lead an iconic brand like walgreens lured him back to the csuite. He said its a massive platform. That i touch almost 10 Million People a day. It needs someone that can come in tand take the great team tha they have. The announcement comes five days after roz brewer stepped down. Le there was home care and others that pressured profits at a time when covid sales have lagged. Last quarter walgreens earnings missed for the first time in three years. Tomorrow wentworth gets a frommer start with the new fiscal year. He starts on october 23rd. Frank . Bertha, thank you very much. Our Bertha Coombs with that market flash. Again, walgreens shares moving 1 higher. Our weeklong series, diving sectors and rising rates, it rolls on. Were going to talk to the kr ceo of one of the largest. Thion plans in the u. Swi his strategy, higher for longer. Were back with more Worldwide Exchange coming back in a moment. vo explore the world the viking way from the quiet comfort of elegant small ships with no children and no casinos. We actually have reinvented ocean voyages, designing allinclusive experiences for the thinking person. Viking voted worlds best by both travel leisure and conde nast traveler. Learn more at viking. Com. Welcome back to Worldwide Exchange. One huge part of the Investment Community is still sitting on the sidelines despite the massive runup. My next guest says that could all be about to change. Stephens myers, the deputy comptroller for the new york city retirement system has the fourth largest public pension plan in the u. S. With approximately 257 billion in assets under management, serving about 800,000 current and retired Public Sector sector workers. Stephen, good morning. Great to have you here. Good morning, franks. Lets talk about the runup. You have the geopolitical conflict. But when you look at the rising rates, is this a concern or is this an opportunity . I think its both. I think its a concern that when rates move this dramatically, this fast, oftentimes something breaks. Weve seen that over the course of my last 40year career that these abrupt moves can cause problems in the market race. I think bonds, obviously with base rates higher, the significant amount of yield that you can invest just through u. S. Treasury investments. On top of that, you have Investment Grade and high yield credit spreads which have won now a little bit. Its about 125 over base rates and high yield about 420 over. So we actually will i think that those levels are compelling and that fixed income is attractive at these levels. Steven, i notice you said this could be an opportunity to step in. It sounds like you havent already. You see a lot of pension funds. They havent gotten into bonds despite yields higher. Why higher . Thats a great question, frank. Were in bonds, so were a longterm strategic investor. We actually adhere to a strategic allocation that we actually set every three to five years over the market or Economic Cycle and that process is ongoing at this point. Weve had some legislative changes in new york state which also applies to the city where were going to increase our allocation to assets meaning private equity, infrastructure, core, real estate, hedge funds, and the like. Im looking at some of your allocations. You have 7. 5 in two areas that are pretty interesting right now. 4. 1 on Opportunistic Fixed Income and the other 3. 3 in tips. Right now are you looking to possibly expand your portfolio and give us a sense. Exactly what is Opportunistic Fixed Income . Its a fancy way of saying alternative credit or private credit. We actually like that area a lot. Typically i those are floating rate obligations. Credit spreads are widened out. You can achieve 10 , 12 over time, and we are looking to increase our allocations there. The other asset class you mentioned, tips candidly has underperformed expectations despite the fact that weve had high inflations peaking at 9 to the tune of 2022. What weve experienced is that tips tend tole respond more to Inflation Expectations longer term, and yet they still have a duration exposure thats made it challenging. So despite the fact weve had historically high inflation in recent history, they actually underperformed last year. So we tend to favor core fixed income over tips. We like credit, as i said, both public credit, high yield investment trade as well as high market. Youre about to make investment decisions. You have a lot of obligations to your members. We mentioned 800,000 of them. Are you more bullish on equities or bonds and when we look at bonds, is it shortterm or longterm . Id say relative to where they were priced, theyre attractive. Base rates moving higher pro e provides a nice balance for the portfolio. Although what weve seen, weve seen an increased roup between equity and prices. It was a little bit challenging last year in which you had equity sell off and bonds sell off significantly. A lot had to do with the selloff of rates. In march of 2020 we had 10year as low as 51 basis points, so thats theres not a lot of room for price appreciation there and not a lot of carry. So with base rates moving higher, carries increase for solvereign debt as well as yiel. It helps make the payments to our beneficiaries, planned beneficiaries. Steven meier from the new york retirement system. Thank you very much for being here. We appreciate your time and insight. Coming up on Worldwide Exchange, we have the one word that every investor needs to know today, plus rbcs Amy Wu Silverman why the significant seven need to hold the line for the broader markets. As we head to break, cnbc is sharing hispanic hair garage. 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Can we provide health care virtually anywhere . We can help with that. Is it possible to use predictive monitoring to address operations issues . We can help with that, too. With the advanced connectivity and intelligence of global secure networking from comcast business. Its not just possible. Its happening. Yellen adding shes watching for the po e ten chal impact from the conflict in israel but does not see any Major Economic impact at least at this point. Blackstone in early talks to acquire stakes in indias arm as they join a venture partner for its digital and tv business. Shares of both companies up fractionally right now. The president of Country Garden resigning as they grapple with debt and liquidity concern. Shares of that stock, however, up, just about 4 right now in hong kong. And exxonmobil reportedly set to buy Pioneer Natural Resources for nearly 60 billion or about 250 a share, which would make it the largest deal this year and exxons biggest purchase since they bought mobil back in 99. Shares of pioneer up almost 2. 5 . Novo nordisk is announcing its halting its trialle saying its found enough good data to ensure the treatment will succeed. Those shares up more than 3 . All right. Heres what to watch today. Weekly mortgage app in Producer Price index on tap this morning and another busy day of fed speak with governor Christopher Waller and bostic and Susan Collins all delivering speeches. Those fed speeches a key focus along with fresh inflation data and strong speculation heading toward another rate hike pause. Joining us now, Amy Wu Silverman. Amy, good morning. Its always great to have you here. We mentioned theres a lot of dove issuing fed speak. With that in mind, whats your w. E. X. Word of the day . Its a little bit of the opposite of that. Its tailrisk. The remember i say that, obviously the geopolitical events in the last few days have really changed the tail possibilities that are in the mar market. Er when we first saw Russia Ukraine happen, we saw it spike to 35. We havent seen anything so far. Amy being a bit of a contrarian. Weve seen stocks rally a little bit. Theyre the best performer out of all of the indices. What do you make of that . Is that the easing of the bond yield pressure. Look. I think that has a lot to do with it. I do think growth versus value small cap versus large cap, these kinds of trades are ones that invests have been hoping works for a long time. Its something our own strategists have called for from a valuation perspective. I think its a little too early to tell right now. Weve seen them go ahead and lose momentum. Well have to see if that continues now. I do think when you look at it, its also just a question at this point of valuation. You know this time during the day we like to focus on moves looking ahead. With the idea that bond yields are moving, what picks are you looking at that are more investable in light of more bond yields. Yeah. You know whats interesting is conversations weve had with clients since last week and today. Theres just this question of have we really seen a bottom in these ratesensitive sectors . You saw these massive selloffs last week in your tlt, in your utilities, in a lot of consumer areas that would be hit hard as the rates go higher. Frankly the geopolitics plays into this because theres some question whether the rate easing will happen more. I do think people are starting to ask, look, have we seen a bottom and if thats the case are the same rate sensitive sectors i mentioned before, the ones we can finally have an upside, and people are starting to look at that. Both moving. Ive got to ask you about the mega cap names, the magnificent seven, nvidia, alphabet, et cetera. Right now, whats your view on them . Look, these are names where when you look at option sentiment, more than less theyre sanguine. I think the risk out of china has caused a downside to the hedges. On the overall basis, youre not seeing screaming or warning signs. A lot of what we talk about is just math. That constitution of names, the magnificent seven, are what will hold your line. If theyre still okay, its hard to see how youll have a brutal selloff in the market. Amy wu silverman, always great to have you here and have your time and insight. Thank you. Taking a look, in the green. Looks like the dow would open up 60, 65 points higher. Both the s p and nasdaq up just under a quarter of a percent in the premarket, but as always, we say its pretty early right now. Now were going to toss things over to squawk box. Thank you for watching. This is a clustomer. It happens when Marketers Group all their customers together. 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It would apply to hotels, concerts, and even banks. Its wednesday, october 11th, 2023, and squawk box begins right now. Good morning. Welcome to squawk box right here on cnbc. We are live from the Nasdaq Market site in times square. Im becky quick along with andrew ross sorkin. We are here today. Joe is out for the next several days. We have been taking a look at whats been happening with equi. Youre looking at green arrows once again this morning. Dow futures are up by about 60 points. The nasdaq indicated up by about 51. Then youve got treasury yields that i believe have been pulling back slightly if you want to take a look at some of this. Yeah, the 10 year is actually now back to 4. 56 . The 2year is back to