Af reporting after the close today. And the one central bank cutting Interest Rates despite inflation. This as we an wait the latest fm the bank of england. First, amd and qualcomm coming up short and giving investors new reasons to worry it is thursday, august 3rd you are watching Worldwide Exchange here on cnbc good morning welcome to the show. Im dom chu in for frank holland. Lets check in on stock futures. Losing steam we are sitting at or near session lows for the futures market s p is implied lower by 15 points Dow Jones Industrial average lower by 100 nasdaq down by 60. You can see a sharp leg lower right around when europe just started trading and it has been drifting lower since here. We currently stand at 4,520 for the s p. This was all after a rough day for wall street on the heels of the fitch downgrade. Nasdaq posting the worst day since february right now,. 50 to the downside. S p down 1 . Some conviction in the move lower based on volume. By the close yesterday, spy closed at 1. 933million shares which is below 71 million. That is a huge amount of volume. Similar for the qqq. Tracking 20 million more shares yesterday than its average over that time span checking the bond market yeel yields across the board highest since november of last year. The 10year treasury yield is below 4. 15 the 2year treasury is 4. 2 in energy, oil prices contributing to the story. You think some of the downdraft and some would be under pressure they are to the downside today wti hovering at 80. That is off. 25 similar for brent crude which is 82. 96 red arrows here at home. Lets check out overseas with Arabile Gumede in lundondon and sherry in asia arabile, is it red to start the day . Two hours after the opening bell here and down we go pressure seen from s p 500 in trade in the u. S. And that trade followed to the european picture. 1. 5 down for the ftse 100 same for the ftse mib in india it had been the story of chips much like qualcomm, infineon has brought out numbers and saying that demand outlook is not looking too good for the business they he ave gone down. That share price down 10 today. Another european chipmaker going down 3 for ami. The sentiment held the same then negative across the board. A lot of sectors holding down negative counters. Tech stock leading the downturn. That is followed by autos and resources which are around 1. 5 weaker today even the banking stocks which bucked the trend in the Early Morning trade. It is negative it is still earnings that we are following and that bank of england decision later today 25basis point hike anticipated, but 50 basis is still in play. Dom. Arabile, thank you for the update turning to the action in asia. Sherry chang with the latest in hong kong. Good evening, sherry good morning, dom we saw some pairing back earlier losses in japan and china. Showing some bucking the trend after the behavior with the selloff. Closing higher by 0. 9 for the day. We have another uscheck on the chinese economy. Coming in with 54. 1. That is an expansion for the seventh straight month on the currency board, the yuan strengthening against the u. S. Dollar for the most part, it was the Dollar Strength on the currency board. In japan, nikkei 225 was the standout down 1. 6 we are waiting for the Market Reaction for nintendo earnings we talked about the 50 year beat when it comes to revenue. It was about the zelda boosting sales for the switch and then the super mario movie helping the numbers. It has closed flat in tokyo trade. Dom. Chery, thank you. Tech is closing down 2 wit the premarket trade the qqq with the nasdaq 100 is down 2 for the week so far. Arjun kharpal joins us with the tech story arjun, it was a tough day and tech was at the tip of the spear. Does it have legs to the downside dom, good morning tech is getting hit with a double whammy. Fitch had the downgrade and the runup in tech and if that can continue for the rest of the year there was an excuse here for profit taking. Earnings have been a mixed picture. Meta and alphabet did well and concern with microsoft and broader chip sector with a load of attention for qualcomm guidance which missed expectation. We have gone from a chip shortage to a chip glut and weak demand for the end products like smartphones and laptops. Companies have too much inventory, i. E. , too many chips. Many signalled the second half of the year will see recovery, but qualcomm guidance has dlthrn that into doubt. The overall economy is an issue as well. Arjun, you led me to it it is the main event as we gear up for amazon and apple after the closing bell today the stocks make up a large portion of the s p and more on the nasdaq 100 what exactly are we going to expect after the closing bell from those stocks . For apple, the market is not expecting huge things. The thing to watch is the iphone numbers. Analysts expecting revenue to fall 1. 7 year on year to 39. 9 billion. They will focus on a few key ar areas as well as the numbers in china. The market is weak in china, but apple is holding steady. For amazon, the aws cloud figure as well which is key after microsoft and google posted 20 plus growth for their cl cloud divisions, what will they come up with amazon has wasrned that customer are spending in cloud. The key for the giants is the Forward Guidance as it has been this whole tech earnings season. How does the rest of the year look and will they pick up the pace those are the questions, dom arjun with the latest on apparle and amazon and tech downgrade. Thank you. Lets get a look at the top corporate stories with silvana henao. Silvana. Dom, good morning shares of abinbev rising after the Second Quarter profit miss of 14 the sales have been falling since april over a social Media Marketing trcontroversy for the bud light products apple says it wrapped up 10 billion in deposits for the highyield savings accounts after launching with Goldman Sachs. This report is that Goldman Sachs is considering exiting the partnership with American Express to take over. And novo and lilly is facing lawsuits over ozempic and mounjaro a case from a 44yearold woman who suffered severe vomiting after taking the drug. There are other clients with the same allegations novo said it is not aware of the lawsuit, but notes that gastro issues is a known risk for people with diabetes, dom. Thank you. More to come here on Worldwide Exchange, and the one word investors have to know today, but first, fitch makes the case in the u. S. Downgrade in the exclusive interview where jamie dimon is taking it with a grain of salt. And keeping a hawkish tone we look to the bank of england as it is set to release the latest policy decision. And later on, robinhood not we rewarded after the quarterly trade. We have more after this break. Ss both large and small, communities and the people who live and work there grow and thrive. Were proud to call these places home too. Theyre where we put down roots, and where together, we work to help move everyones financial goals forward. Pnc bank. What if buildings could tell you how they could be more efficient . Im listening. Well, with ibm, you can use software to help you connect and analyze data from hvacs to elevators to lights. What if we use aidriven insights to pinpoint inefficiency . Yep. And act on it. Saving energy, money. And emissions. Yup. Thats a big one. Now youve built Something Better for everyone. Thats the sustainability solution ibm and a Global Real Estate company created. What will you create . Ibm. Lets create. Even qt elements and secondly, and more importantly for us, concentrate on the debt ceiling and debt ceiling debate. The fact the government havent been able to come up with meaningful longterm solutions to deal with fiscal issues it doesnt matter that much the markets decide, not the ratings, to make the decisions number two, they point out the debt ceiling crisis and things likes that number three, the american public, this is the most processed nation on the planet there are countries rated higher than us at aaa, but they live under the enterprise American Military system. That is ridiculous so, that was Richard Francis from fitch on cnbc talking about the strip of the aaa rating and then jpmorgan chases Ceo Jamie Dimon saying he disagrees with the decision and the market is not taking the fitch downgrade. The s p with the worst day since april. Bond yields with the 10 20 and 30year bonds hitting the lowest level since last november. Lets talk to janet and joanna ladies, thank you for being here maybe janet, we start with a Bigger Picture here with you im curious how much you think this downgrade has to do with the severity of the drop we saw yesterday or was it just a reason for people to hit the sell button because it has been a great run in 2023 . Good morning. Thanks for having me that is the reason the rally this year is pretty significant. It is driven by with the tech sector and the variations hold high we will fall compared to the bond yields. That is one of the reasons for investors to take something off the table. Especially with the labor markets yesterday which suggest the fed has to keep rates higher for longer. Higher for longer is the overall theme and what we are prepared for joanna, if you look at the fixed income markets and how it reacted so far, it is interesting. If there is a downdraft ahead and the conventional wisdom is u. S. Treasury bonds and those that market is the place people go for safety, where is the disconnect and why are rates heading as high as they are if the prospects for the economy and safety overall are in question i think what with we are seeing even with yesterday and the other parts of the year is this seems like a familiar story. Markets are reacting to an event. We had so many events in 2023 from Bank Failures to debt crisis what we have seen is the resiliency of the u. S. Economy and the stress is putting rates at historical highs. We are nearing the end of the fed rate hiking cycle. It is very clear and we take a little bit of a view and we dont see the recession happening in 2023. That is consensus across many other banks and other views in the market what is important for people to focus on is we are starting to see a shift in flows moving away from the short side to cash. People have been parking cash and also considering credit and other risk factors i think some are rede ready to t back in. We see reaction to the downgrade with the results yesterday, but these results can changes quickly. Economic resiliency and corporate fundamental strength and structure change in rates. Joanna, you mentioned the flows and where you see the action i like to followup on that, if i could. If you look at the rates picture right now, it sets a scene are you seeing anything with high yield or municipals where do you see straight duration on the u. S. Treasury side of things or are there opportunities elsewhere . We see people move out on the curve in treasuries to set up for 2024 in the trades people anticipate rates going down some time in 2024 the other thing which is compelling is everybody got 2023 wrong. On the equity side or fixedexcet it was hard to put that money into the market. If you consider the quecredit i high yields, you are looking at returns up to 8 the ccc side of high yields has outperformed by 11 . People are gauging if the economy is going to take a turn and they want to get back into the risk sector. This is higher up in the cap t capital structure. Janet, ill give the last word to you. Over the course of the last year, we spent a lot of time talking about the anticipated recession. One that will not come to fruition, at least at face value, is there a threat to see one in the next six months because it catches people off guard. You can look at the soft landin landing. We know the labor market is lagging. There are a number of indicators that suggest that with contraction in pmi the inversion of the yield curve which is intense and we cant ignore the signals that the market is telling us i think we are still relatively cautious in terms of the risk factor i think that would be Monetary Policy remaining high and conditions higher for longer as we await this to happen. Janet and joanna, thank you very much. Ahead on Worldwide Exchange, getting set for the biggest day of earnings. How the two top sector analysts are trading apple and amazon l t te. Theap alofhat coming up when we return after this break. Im a veteran of 23 years. I served three overseas tours. I love to give back to the community. I offer what i can when i can. I started noticing my memory was slipping. I saw a prevagen commercial and i did some research on it. I started taking prevagen about three years ago. I feel clearer in my thoughts, my memory has improved and generally just more on point. Prevagen. 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Tell your doctor if youre nursing, pregnant, or plan to be. Side effects include nausea, vomiting, and diarrhea which can cause dehydration and may worsen kidney problems. woman i can do diabetes differently with mounjaro. avo ask your doctor about onceweekly mounjaro. Old school wisdom, with a passion for whats possible. Thats what you get from the Morgan Stanley client experience. You get listening more than talking, and a personalized plan built on insights and innovative technology. You get grit, vision, and the creativity to guide you through a changing world. Welcome back to Worldwide Exchange. Im Jessica Leyton here are the headlines former President Trump will be arraigned on criminal charges going the indictment from the grand jury on the attempt to overturn the 2020 election in several posts on social media, trump questioned why prosecutors did not bring the charges after the events of january 6th over two and a half years ago. An con now to a tragic discovery in the rio grande a lifeless body found stuck in the buoys that authorities put in the river the cause of death is not known. We know that mexico has de denounced texas for the placement of the barriers and the Justice Department is forcing texas to remove it Robert Downey jr. Is handing the keys to his car collection ironman is giving away six vintage cars away. You dont have to drop a dime to enter, but you can donate to his foundation for more entries. The sweepstakes opens next year. Dom, back to you jessica, thank you very much. Time now for the big money movers. Qualcomm reporting Fourth Quarter guidance below expectations earnings did beat with the slump in the smartphone sales and slowing chinese economy weighing on the chipmaker analysts expecting shipments of new devices to decline further this year. Clorox is offering a full year line of cost cutting. The company calling the consumer resilient as it adapts to higher prices and water filters with the projections of the mild 2024 recession. And robinhood reporting a boost in the Interest Income with the higher rates and profitability for the First Time Since the ipo. The focus for investors is the transactionbased revenue decline of 5 as well as the drop of monthly active users to 10. 8 million 1 million viewer compared to the previous quarter. Straight ahead on the show, waiting on amazon and why my next guest is keenly focused on Profit Margins and comments around Artificial Intelligence well be back after this break ya go thats what im talkin about josh allen is this your plan to watch the game today . hero fan uh, yea. I have to watch my neighbors nfl sunday ticket. josh allen its not your best plan. But you know what is . Myplan from verizon. 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The one Major Central Bank actually cutting Interest Rates despite surging inflation. Its thursday, august 3rd, 2023. You are watch wing Wor