With shares slipping in the premarket. And later in the show, why disney claims that rumors of espns demise may be greatly overexaggerated. It is thursday, october 19th, 2023. You are watching Worldwide Exchange here on cnbc. Good morning. Welcome to Worldwide Exchange. Im frank holland. Lets start the day off with the check on u. S. Stock futures. Take a look here. You can see red across the board. Dow would open up 125 points lower. S p and nasdaq are opening up lower as well. After the major averages in two weeks with the dow closing down nearly 1 . The s p and nasdaq losing more ground. Still worse for the douse w tra f ports closing down 3. 2 . This is seen as a recession leaning indicator. That sharp move lower is topping bond yields with the tenyear yield hitting the highest since 2007 and hoefveri below 5 . 4. 979 . The move in yields is moving borrowing costs. Look at the 30year fixed Mortgage Rate at 8 for the First Time Since 2000. Up 22 this year alone. You see it right there. Bringing all this back to wall street and Tesla Ceo Elon musk tying the rate risk and uncertain macro picture on the companys Earnings Call last night. Gauging the impact on it could have on his company and other companies. Im not saying things will be bad. Im saying they might be. I think tesla is a capable ship. We need to make sure if the macroeconomics conditions are stormy and even the best ship will still have tough times. The weaker ships will sink. Were not going to sink. You know, even a great ship in a storm has challenges. Well talk more about tesla later in the show. We will stick with earnings and turn to the big money movers. Netflix shares are surging ahead of the open after the beat and the streaming giant is hiking prices. Tech report Arjun Kharpal is joining me from london. Arjun, great to have you here. Reporter frank, the revenue coming in for the Third Quarter for netflix at 8. 54 billion against the bigger than what the market expected. Eps at 3. 73 per share. Bigger than 3. 49. The big number is the net subscriber adds. Much higher than the 5. 49 million the market expected. Investors were bearish going into the report. Can the company continue to show strong growth to justify valuation . For netflix, yes, it gave the investors what it wanted. The 6 6. 99 ad supported tier. They have 30 of new signups for the ad plan. On the password sharing plan, netflix is seeing low cancellations and healthy retention. The third thing was margins. Netflix expects fullyear margins at the top end of the range. In 2024, it expect margins to be between 22 and 23 , which is something investors wanted to see. Finally, netflix hiked prices in markets like the u. S. And uk and france showing its pricing power. All in all, the Company Shows it remains ahead of disney. People are still willing to pay for netflix amid the password sharing crackdown. Hence the premarket move, frank. Arjun, you say they gave investors everything they wanted except for one thing. The average revenue per user. Price hikes in the u. S. That will address the average revenue per user decline which hit the stock over the last month . Reporter good point, frank. That revenue per user or membership was down about 1 in the quarter. Interestingly, they forecast that in q4. That arm would be flat Going Forward. There is an improvement as well in that and clear investors looking for that to be boosted in the coming quarters. We are seeing the shortterm benefits of the ad plan and password crackdown. What does the mix of plans look like next year . Will more people buy the cheaper ad supported tier or pay for the premium subscription . That is key. That could dilute that arm figure the investors are watching for. The key Going Forward for netflix is continuing the subscriber growth. It was a big number. They are looking for something similar in the next quarter and they need to pull in the subscriber quarter on quarter. Arjun, thank you very much. Time for the check on the corporate stories with bertha coombs. Bertha, good morning. Good morning, frank. Taiwan semiconductor out with the Third Quarter report. Profits slid 25 year over year as revenue from chips used in smartphones and highspeed computers fell. That Beat Estimates and the Worlds Largest contract chipmaker expects stronger revenue this quarter. On capitol hill, theres no vote scheduled today to select the next sepeaker of the house after jim jordan fell short of the necessary votes for the second day in a row yesterday. 24 republicans voted against jordan in round two compared to 20 in round one. Jordan can only afford to lose four votes to secure the job. Disney opening its books for the espn for the First Time Since reorganizing the Company Earlier this year. Revealing a 20 profit decline over the last several quarters. This coming as disney seeks a Strategic Partner to rebuild the business and facing challenging with cord cutting and increased sports rights fees. Disney is expected to release the Fourth QuarterEarnings Report at the beginning of november. Frank, i think the answer is clear. They need to get taylor swift in the audience of all of the sports games in order to raise their ratings. That is the magic bullet. That fixes the business model. Add the swiftie effect. Exactly. Im not sure its possible. She may be too expensive. Personally, i like shannon sharpe. Birt berth bertha, see you later on. And we look at the selloff of the u. S. Treasuries with the yield on the tenyear at a sixyear high. Investors are now coming to grips with the messaging from the fed that the rates may stay higher for longer. Today, jay powell is speaking to the Economic Club of new york. They are in agreement to keep rates unchanged in the next two weeks and we should hear more about that today. They mayit longer before cutting rates. 45 do not expect the first cut until the second half of next year or later. Lets talk about this with john stoltzfus. Good morning, frank. The fed is done raising rates and there will be cuts in 2024 . I would say there is always a possibility before the end of the year, if not at the next fmoc meeting. We think it is probable we will see the cut next year in the Fourth Quarter. We are believerer s in that. We believe the pauses will be longer or skips will be longer Going Forward. The fed is sensitive of working out its mandate. That is interesting. For all clarity, you are one of the biggest bulls on the street. I think you are the top one right now. You put out a note earlier this week basically saying higher rates are not really a problem for of the market if you look histo historically. You show a number of years. Well go to 2006 with the fed fund rate was higher and the market finished 13 higher. You believe we could set up for that same finish this year. I think so, frank. You have to remember in 2006, we were coming up on 2007 which was the recognition of the problems in real estate and among the banks. Histo historically, if you go back longer periods as well to the periods from 1971 and im looking at my notes to 1989, which was a period of higher rates than we have now and what you had is once the market gets accustomed to higher rates and the consumer does, it is not that they like it, but they live with it and adapt to it and you find profitability can continue and stocks with out perform bonds. It depends on the fed fund cycle. We are in a sweet spot here. Mostly through this hike cycle period. Thats a good sign for the markets to accept higher rates for longer and thats a good thing. Great overall note. We dont want to get in the weeds of that note. With that in mind, were about 12. 4 higher year to date right now. How does the quarter play out to reach that 13 range you think is possible or do we continue moving sideways or move up . Give us a sense of how you see it playing out. Of course, when we put in the target of 4,900, it was 6 upside from where the market was in july. From where we are now to get to 12 is a bit more of a challenge. We would have to say this, we think it is highly probable on what we see in terms of resilience in revenue and earning growth. This in the current Third Quarter in particular and what we get with indications and guidance. So far, not too bad. Analysts seem to be sticking to improvements as we go forward and the atlanta fed is looking for good gdp growth. There are reasons this could be possible. I heard thus far. Your opinion could change. John, great to see you as always. Thank you. Thanks, frank. More to come here on Worldwide Exchange, and the one word investors have to know today. First, a busy week for regional results. My next guest says this is a stock picture market for deals. Hack attack . No problems for sands popping in the premarket. And the latest on teslas Quarterly Report and the cyber trucks sluggish start. A very busy hour when worldwide chgererns. At ameriprise financia, our advice is personalized, based on your goals, whatever they may be. All that planning has paid off. Looks like you can make this work. We can make this work. And the feeling of confidence that comes from our advice . I can make this work. That seems to be universal. I can make this work. I can make this work. No wonder more than 9 out of 10 clients are likely to recommend us. Because advice worth listening to is advice worth talking about. Ameriprise financial. We love going to games, but good seats get pricey. So we use gametime. Gametime checks ticket prices in realtime and finds you all the best last minute deals. We got our seats twenty minutes ago for sixty percent off last minute tickets at the best price, in seconds. Download gametime now is it possible to fall in love with your home. Before you even step inside . Discover the Magnolia Home james hardie collection. Available now in siding colors, styles and textures. Curated by joanna gaines. Youre probably not easily persuaded to switch s mobile providerss. For your business. But what if we told you its possible that comcast business mobile can save you up to 75 a year on your wireless bill versus the big three carriers . Its true. Plus, when you buy your first line of mobile, you get a second line free. There are no Term Contracts or line activation fees. And you can bring your own device. Oh, and all on the most reliable 5g mobile network nationwide. Wireless that works for you. Its not just possible. Its happening. Welcome back to Worldwide Exchange. The tenyear yield hovering around 5 . You see the action in the market yesterday with a dip in the afternoon at 1 00. It moved higher throughout the day. The market is anticipating the jay powell speech at noon today at the Economic Club of new york to see what he thinks about the market and if the higher yields are doing the feds job for them. We will continue to watch that throughout the day and also watching the tenyear yield at 4. 97 right now. Time to see how europe is shaping up with Julianna Tatelbaum live in the london newsroom. Julianna, good morning. Frank, good morning. The downturn on wall street yesterday in stock markets have prese spread across the globe. In asia, all of the majors ended lower. Shanghai composite dropping 1. 7 . Steep losses in hong kong with the hang seng down 2. 5 . We had heavy selling in technology. The hang seng tech dropping 1. 9 . Nikkei 225 is dropping 1. 9 . In australia, the s p dropped 1. 4 . Seems to be a combination of rising geopolitical tensions and concerns of what is happening in israel and middle east and pared with the higher move in yields ac across the globe. Turning to europe, it is spread here downbeat as well. The dax doesnt look too bright, but the most resilient of the bun. Down. 40 . The two stocks to highlight is roche which is trading lower after the 6 fall in sales. The drugmaker is backing the fullyear outlook. Shares down 3 . In the auto space, renault plunging 7 lower after the carmaker reported slow sales voluming down from 13 in the first half of the year. Overall revenue came in consensus and clearly investors are concerned and the stock is trading down this morning. Frank, back to you. Julianna, thank you. Julianna tatelbaum live in the london newsroom. Time now for the big money movers. Thats three stock stories of the morning. Las vegas sands up on the Third Quarter revenue beat. Revenue from the macao properties rising several times. The company on authorizing a Share Buyback program of 2 billion for the fuirst time in three years. Shares up 5. 25 right now. The ceo will have more on this in the cnbcexclusive at 1 30 eastern time. Lam research with the Third Straight quarter of revenue declines. Sales dropping 31 . The ceo calling the software picture soft with exports with the u. S. And china a concern. P azions bank shares sayinge cost of total borrowing are rising. And they missed estimates despite increases from the previous quarter. Shares down more than 4 . Speaking of the banks, a number of lenders set to report today. That includes truist anding fifth third and keycorp. The regional banking etf recovering from the lows back in march, but still down 30 this year. Lets talk about this with Stephen Scouten from piper sandler. Thanks, frank. We referenced the bank etf. It has been six months since the collapse of svb pp. We had an interesting call on banks. Where are we now . We like to think we bottomed in may. We are about 12 after First Republic failed. It is hard to believe given how much more confidence and certainty we have in the environment today. If you have a longer term view, the Environment Group looks cheap. The problem is we are just now seeing some of the credit losses materialize. Investors are very wary to step into the group. We will probably still be a bit choppy for the near term. Ill get to the names in a second. You are the second guest saying the bank regionals are cheap right now. Is this time to rethink the banks . Yes. At these levels, the european banks dont look like that. From an earnings perspective, we are trading to a different discount from the s p. We need to know were not going to have massive credit losses in any huge hiccups to the income side. I think once we get to that level, whether that is one or two quarters down the line, that will be highly attractive to investors. You mentioned the credit cycle. Where are we with the credit cycle . You know, tightened, yes. The banks arent lending as much as they were 6 or 12 months ago. We have not seen much in the way of losses yet. We are starting to see quote unquote one offs at this point. I think it will take a quarter or two before we get confidence around have we seen the cycle and what the real depths of that is. We mentioned a number of names reporting today. Fifth third, truist and keycorp and texas capital. Is there a sense of one we need to watch or is there a top pick . Texas capital is one you had on the screen earlier which is interesting. It is a bank that is really cheap on tangible book value. It is a multiyear recovery story. That is interesting. I think a lot of investors will look at truist with the hikccup the last couple years. Truist is paying a 7 dividend. It is the names which have been stressed and if you see stability there, it gives you more confidence in the group moving forward. Stephen scouten, thank you very much. Coming up on Worldwide Exchange, we turn back to netflix to get more on the blockbuster report and my next guest says it has a lot to prove when it comes to one key metric. Were back right after this. This halloween, trick or treat yourself to the blendjet 2 portable blender. Its to die for. Blendjet 2 gives you monstrous power for a delicious smoothie, shake, or frappe anytime, anywhere. Cleaning blendjet 2 is scary easy. Just blend water with a drop of soap. Recharge quickly with any usb port. Boogie on over to blendjet. Com and order yours today. Welcome back to Worldwide Exchange. Turning to a developing story. President biden returning to the u. S. Today following the trip for israel and voicing support for israel as it continues to fight hamas. The president will make a primetime speech at 8 00 p. M. Eastern time today. Jay gray is live with us on the ground in tel aviv. Jay, good morning. Reporter frank, good morning. One thing the president did not do during the brief p visit her is speak with the arabic allies and make the trip to jordan. He hoped to talk about the spread of the conflict and concerns about that. Unfortunately, as thousands poured into the streets following the deadly blast at the hospital in gaza, the idea is now acknowledging the fighting has spread along the border with lebanon. These are their words with significant escalation with skirmishes with hezbollah along the border. This morning, antitask missiles fired into the kibbutz near the security fence. We know the ideal of artillery fire is responding to that. There is a build up the troops and equipment and the fighting is escalating along the border. That is a big concern across the region and globally since the fighting began here. We do, frank, expect to see more protests spilling into the streets this weekend. I have been hearing about humanitarian aid making its way into gaza. What is the latest on that . Reporter it looks like that was a win for the president during his visit here. Israel and egypt saying they will allow humanitarian aid, specifically food, water and medicine, to move through the Border Crossing at rafah with egypt and 2 Million People caught in the middle of the fig fighting. It is desperately needed and the white house had pushed during the president s trip here. 20 trucks will be the first group in. That will likely start some time tomorrow. They are having to repair roadways near the Border Crossing that were damaged during the israeli bombing flights there. The u. S. Has promised 100 million in humanitarian aid for those trapped in gaza right now. Im sure that will be part of what the president talks about this evening. Nbcs jay gray live in tel aviv. Jay, great reporting. Thank you. As we head to break on Worldwide Exchange, the big con ssumer stat. 1. 6 billion. That is how much consumers spend less each month astute student payments resume. We have the market flash on coinbase. The Crypto Exchange telling cnbc it has picked ireland as the main operational and regulatory hub in the regulatory union. Coinbase is looking for the expansion in the eu as it faces regulatory pressure in the u. S. Much more Worldwide Exchange coming up after this. Meet gold bond daily healing. A powerhouse lotion that moisturizes, heals, and smooths dry skin. With 7 moisturizers 3 vitamins. And. New gold bond healing sensitive. Clinically shown to heal moisturize dry, sensitive skin. Gold bond. Its 5 30 a. M. In the new york city area and theres a lot more here on Worldwide Exchange. A very busy trading day with earnings and comments from jay powell and the hunt for the clues on the feds next move. Futures are facing pressure ahead of the open. Netflix subscriber shocker and they are signaling an optimistic road ahead. A different story for tesla. An earnings double whammy. It is thursday, october 19th. You are watching Worldwide Exchange here on cnbc. Welcome back to Worldwide Exchange. Im hollanfrank holland. We check on the u. S. Stock futures after the rough session for wall street yesterday with all three averages slide not red for the week. Futures are continuing to be under pressure. The dow is off the lows and nasdaq is tipping into positive territory. S p rising from the lows of early this morning. Bigger moves for the dow transports and russell 2000. Shedding 2. 5 . Both are seen as a indication of the recession. Russell in negative territory for the year down 2 . The sharp moves in stocks as bonds continue to surge once again. The tenyear yield hovering at highest level since 2007. It is just below 5 . The twoyear note over 5 yield at 5. 25 . The 30year long bond over 5 . This is an Inflation Expectation and Investor Confidence indicator here. The rates on the 30year fixed mortgage hitting the highest level since 2008. You see the big one up throughout the year with yields running 22 for the year. The big number is mortgage at 8 right now. We want to talk about the Energy Market with oil coming off a nearly 2 gain for wti and brent. Both on pass for backtoback weekly gains. Brent crude down 2 . That is the u. S. Setup. We go back to the big money movers. Netflix shares are up over 13 after topping bottom line estimates and surprising to the upside when it comes to subscriber adds due to the password sharing crackdown. Net flflix is raising prices one tooesh tiers in the u. S. And france. Joining me now with more is alex kant kantrowitz. Good morning, frank. Is that growth sustainable . It is to some extent. Netflix has surprised on the upside to the subscriber growth with the password crackdown. How long will that Initiative Last . It will go for a little bit longer, but netflix cannot ride that in perpetuity. The results in the short term are very good. It will not take forever. You can only crackdown on so many passwords until there is nothing left. Thats true. You are hanging on something analysts hit on. Looking for growth outside of the u. S. The average revenue per user or membership is declined by 1 . That hit the stock over the last month. Is that a big concern Going Forward in your mind . It is a concern. Part of that is moving people to the ad tier and part of that is the international expansion. With netflix, when you look at it, can it continue to grow at pace . It has shown it has been able to do it, but revenue came in line with expectations. It may be less than what wall street was expecting. The stock dropped 20 quarter over quarter. I dont know if netflix has done enough to answer the questions. One question i have for you, but the ceo said there are groups of borrowers the company hasnt targeted yet with passwords. The company doesnt say you can no longer use netflix. It tests and notifies and it will work through that pool of folks over time. Thats why you dont see it all show up in a single quarter. Thats why this is a tactic that is working and it has a few quarters left to work. It is not something where you get the subscriber juicing in perp perpetuity. They reversed that trend and the stock is running up on the back of the success. It is atactic and that will not work forever. You have a lot of confidence in netflix in the nearterm future. I know a lot of people say it doesnt have a lot of sports. With the actors strike continuing, is that a headwind for netflix Going Forward . I think it is. I think netflix will potentially look into it. It would be foolish to not look into Live Television and sports. You are on the max app, you can open up cnn and watch cnn in the middle of the big news event. Netflix, where is that . I think it would be a huge opportunity for netflix to go into ports. It is expensive, but it has something fellow streamers dont or struggling to find which is free cash flow. Use that money to buy sports rights. Apple tv is doing witit with ml. Alex, great to have you here. Alex kantrowitz. Thank you. We turn to another earnings company. Tesla shares falling after the ev maker missed on revenue and earnings for the First Time Since 2019 as it works through lower delivery numbers. The stock was flat following the release, but took a sharp turn lower during the Earnings Call when elon musk struck a pessimistic tone saying he is moving through the current environment with a degree of caution. I am still somewhat scarred by 2009 when General Motors and chrysler went bankrupt. Well, that is now 14 years ago, but that is seared into my mind with a branding iron because tesla was just hanging on by a thread during that entire time. Joining me now to discuss is george gianrikous. Were having audio problems. Maybe there is something you can hit . Can you hear me now . Were not doing that commercial, but yes, i can hear you now. Speaking of hearing. We heard elon musk a short time ago. We didont really hear him down like that. What did you make . Is an issue of a couple of things. Interest rates are going up. You pointed it out in the monologue earlier. That impacts the cost of buying a vehicle for people. Tesla disclosed their aim is to try to keep the Monthly Payment flat for people. That is why they keep reducing the price of vehicles. We have geopolitical issues across the world. He mentioned in that clip he is scarred by what happened in 2008 and 2009. I think that is accurate. It was reflected in the call yesterday. These Earnings Calls are events. We wait for them. I wait for them every quarter. It is exciting to listen to what he has to say about what is going on in the world. This struck a different tone than what we are used to. It was sober and a reflection of what is happening in the world and reflection of what they have done to the price cuts to keep up with the Interest Rate increases. Looking at tesla shares down 5 right now. After what you heard and the numbers with the misses and metrics and revenue and gross auto margin, has that changed your price target for tesla . We brought down our price target a little bit to reflect more of a slow ramp in unit growth and gross margin improvement. Long term long, long term, it hasnt changed a lot. Think about what has happened in the uaw trying. That puts tesla on better longterm footing. Underneath the surface, they are improving a. I. Technology which improves the full self driving offering which will result in higher Gross Margins for the Company Long Term and improve the 25,000 robo taxi. That is about the price people speculate it will come out at that price. In your mind, you said you are keeping the buy rating and target of 267 . Correct. 15 upside from now. With the pressure on the auto business with the competition from china means you are buying tesla . We see tesla as a largecap tech company. It is disrupting the auto business and the robot business. You look at netflix. Is that a Media Company or Technology Company . A Technology Company that we see. George gianrakis. Thank you. Coming up here on Worldwide Exchange, it is not just tesla under pressure. Details on what has chinese ev makers pulling back. We wiltel ll you why when Worldwide Exchange returns. Stay with us. This here is shelly, who wrote you the script. And this is fernando, searching savings with a click. Say thanks to julia, who knows about your dose. And hi to rebecca, who keeps track of the most. This is a stranger in line youre highfiving. Rodrigo, he never stops thriving. These are the folks you depend on for meds, keeping you healthier and one step ahead with 85 of scripts 10 bucks or less, you could save cash and feel blessed. Cvs pharmacy. Healthier happens together. Welcome back to Worldwide Exchange. Time for the morning call sheet. Goldman sachs upgrading best buy to a buy with the potential demand to drive upside for the retailer. The companys current valuation is not taking that into account. Shares of best buy up 2. 5 . Another upgrade from jefferies on crowd strike. Raising it to a buy rating. Few names in the cyberspace are positioned to capture cloud tailwinds. Shares are up 1. 5 . Make it a threepeat. Jpmorgan chase raising first solar rating with the risk reward prospect to a favorable position. It has the best possibility for medium growth. Shares up over 2 . And time now for the global bri briefing. We start with the Taiwan Semiconductor sliding 25 as revenues from chips fell. That Beat Estimates in the Worlds Largest contract chipmaker with stronger revenue this morning. And chinese property giant Country Garden misses the final bond payment which could lead to a wave of defaults in its international debt. This comes as the company is denying the founder and chair has left the country. In a statement on wechat, the two are both, quote unquote working normally. Kno nokia is cutting 14,000s after reporting of a plunge in the Third Quarter profits. We are watching shares of ev maker tesla after an disappointing results. Li auto also falling between 3 on 9 . Coming up on Worldwide Exchange, one word that every investor needs to know today. And bracing for jay powell with the latest speech coming later today. If you miss Worldwide Exchange, you can follow us on spotify or our podcast apps. More Worldwide Exchange after this. He past, i would lose 20, 30, 50 pounds just to gain them over and over again. In one year, ive lost five sizes, and im on my way to lose another three. With golo, i can do it. announcer change your life at golo. Com. Thats golo. Com. With gold bond. You can age on your own terms. Retinol overnight means. The smoothing benefits of retinol. Are now for your whole body. Plus, fastworking crepe corrector diminishes wrinkled skin in just two days. Gold bond. Champion your skin. Meet the portable blender we can barely keep in stock. Blendjet 2 gives you icecrushing, big blender power onthego. So you can blend up a mouthwatering smoothie, protein shake, or latte wherever you are recharge quickly with any usb port. Best of all, it even cleans itself just blend water with a drop of soap. What are you waiting for . Order yours now from blendjet. Com before they sell out again well come back to Worldwide Exchange. We have the wex wrapup. Elon musk is considering blocking access to x in europe after a growing number of tech regulation. Costco says the longtime ceo is stepping down an and the chief operating officer will take over on january 1st. Google will produce the smartphone in india next year following the likes of apple and samsung. The wh group which owns Smithfield Foods is working with the u. S. And banks and could list as early as next year. And open a. I. Is in talks to sell shares at 86 billion valuv valu valuation. The report adds the terms could change. And disney is revealing profits declining for espn after the business reorganization. The revenue is down 4. 4 billion from the first quarter. And here is what to watch on the economic front. The weekly initial jobl lless claims and home figures. Several things to watch with results from at t and American Airlines and csx. Jay powell is set to speak this afternoon to discuss the outlook on the economy and monetary policy. Investors will be closely watching the Powell Comments with the increasingly dovish tone from officials around the potential for further rate hikes. That tenyear rate prices in higher for longer hovering a hair below 5 at 4. 96 . For more on this, lets bring in Kevin Simpson from capital wealth planning. Good morning, frank. You are focused on the moves in the day ahead. You, like many others, are looking at powells speech later today. That is the most important economic event of the week. We have seen for the past two weeks, one fed speaker after another coming out and saying in no Uncertain Terms that the bond market has been doing its work for us. If the fed chair comes out today and echos that same chorus, it could signal the end of the rate hike cycle. That is what the stock market is expecting. That is what the stock market is pricing in, frank. It explains the resiliency that the stock market has shown in the face of the tremendous headwinds. You could see a runup on that type of dovish speech. However, on the other side, lets say that doesnt happen and it leaves open the idea that the fed is still potentially going to raise rates again before the end of the year. That would be a shortterm catalyst to disappoint the market. Maybe longterm rate hike would not hurt. The dow and s p are off the lows from early this morning. We are talking higher for longer. What is the wex word of the day . Resilient. The market has been resilient. I know were off the september highs. Seriously, frank, if you look at all of the things that are negative with high energy and high inflation and horrific attack in israel and uncertainty in washington. In the face of all these things, the stock market is resilient. The resiliencylies in the belief that the fed is done raising rates. They cant cut until they are done rising. All eyes today at noon. They cantcut until they stop raising. We are looking at competitive dividend stocks. In the short term, are you looking at bonds or dividend paying stocks . We are always looking at dividend paying stocks. The difference is the dividend growers. If you own Companies Increasing Dividends every year because they are increasing earnings, you are talking about the hedge against inflation. If you are locking something in at 5 or 6 , as great as that is, if you factor in a 3 inflation or 2 inflation, you are getting a 2 or 3 real rate of return. That is better than you have seen in the past 12 years. There is no inflationary hedge against it. Bonds feel a lot better and now for us it will always be about dividend payers. You say the jay powell speech is the big moment for the week. How would you play today . Would you make any moves before he speaks . If he is as dovish as we believe, what would do you after that . I dont think we want to do anything before then. If we get a dovish speech and the market rallies, we will right covered calls. We wouldnt expect a massive rally. Thats what the market is expecting. If we get a hawkish speech and the market pulls down, there are a few positions that are under valued and we will be buyers of the market in the afternoon. What are the picks . I think the stock we are looking at today specifically is u. P. S. Ever since the last quarter earnings and the teamsters deal, this is under pressure. I think wall street has it wrong. They have oversold the stock into what i believe is a mistake. This is a company that increases dividends by 13 every year for the past five years. Thats consistent. They have 2 Share Buyback. The dividend is over 4 . Kevin simpson, it is great to see you. Thank you. Thank you. One last look at the futures. The nasdaq tipped into positive territory. Moving higher right now. That will do it for us on Worldwide Exchange. Squawk box is coming up next. Thank you for watching. 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 [ cheers ] yeah woho 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. Good morning. The futureses coming off the lows of the morning. The tenyear yield hitting another 16year high. The market is getting ready for more fed speak. A caution flag for tesla while it is full speed ahead for netflix. We will tell you whats next. And President Biden set to address the nation tonight after returning home from tel aviv and pledging support for israel in the war with hamas. It is thursday, october 19th, 2023. 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 with Steve Liesman and an mike santoli. I think the market will listen closely. Im not sure it will get the guidance it krcraves. If you look at the fed probability and shortterm rates, you will take it. There is lot of uncertainty with