The taxpayer burden. And later on, why President Biden is calling china a ticking time bomb. You are watching Worldwide Exchange here on cnbc its august 11th, 2023 good morning man welcome to Worldwide Exchange. Im dominic kamalachu. Lets look at equity futures we are moving marginally up or down p the s p is implied lower by two points dow implied higher by 19 the dow, s p and nasdaq are coming off a higher session on the heels of the upbeat cpi report week to date, it is painting a different picture. Look at the dow industrials. North of 1 declines for the Nasdaq Technology may be lower for the week, but small caps have it worse with the russell 2000 on pace for the worst week since late june. Down 1. 75 on the week to date basis. On the bond market, yields on the 4 level are still in focus with regard to the u. S. 10year treasury right now, it is 4. 08 the 2year treasury is lower at 4. 81 . The 30year treasury is below 4. 25 right now. On the energy, oil prices are on the move we are generally higher over the course of the near to medium term we see wti unchanged marginal declines for ice brent crude. National gas up 2. 99. And the july cpi data and investors are looking to the Producer Price or wholesale index which is out at 8 30 a. M it is expected to come in at 0. 2 just. 10 is the estimate on the headline and core readings compared to 0. 1 reading from last month lets get more insight into the direction of the markets and economy with seema shah and aneqa treon. Ladies, thank you for being here seema, we will start with the Producer Price index data will shed any further light on the inflation picture beyond cpi could it be considered a leading indicator . Thanks for having me on the ppi is important we put more focus than previous. The one thing that well be looking at here is going to be a deep dive into the component to impact the core cpi and knowing the fed is focused on that generally, the trend over the last couple months is clear. A softening inflation pace we are looking at optimistic hopes of getting to the 2 level. There is a deceleration which the fed is encouraged by. If that is the case, anika, if you look at the markets and given the Economic Data we have seen, things still appear rosy for the most part. We are seeing cooling off in certain parts of the market. Are you seeing anything disturbing from the rotation or mini rotation we have been seeing with parts of the equity markets . I think the biggest worry sign of the market is two things one, we have become absolutely obsessed with the shortterm monthly inflation print. You know, yes, the print was better than expected, because it was in line with expectations. Lets remind ourselves that core cpi north of 4 is significantly above the 2 mark. Lets remind ourselves of the fact of the hawkish behavior is going on and the labor market has stayed strong and economy has stayed strong. Lets figure out why i think that is one area and the other area is obviously the trickle through effect and transmission of Interest Rates going up that takes 12 to 18 months to work through we are still not there yet we compare that to equity risk premium in the markets which is narrow, that does raise some alarm bells. It does maybe that is one reason why among many factors we are seein the valuations especially in Technology Come down the way they are it is not all of technology and techrelated stuff, seema, if you look at the parts out performing, it is still Communication Services some of the bigger names in that as well. Is that something that should be something the bulls can hang their hats on . We are not seeing as much of a decline in some of the media related names out there . I think thats the important point. What investors are doing is they are looking at valuations. I think they are admitting the valuations are frothy. The thing with communications and Technology Given the close relationship with many of them is they are focusing on a. I. And the potential gains will be. The structure forces can be strong until the cyclical gets too much in the way. As anneka is laying out, that means bond yields are coming down they will not come down too much for a lot of the firms, the growth ones, will be pressured this is probably not the best p t best time to add exposure. You should look out and add quality and which companies have Pricing Power as the economy slows. There is a slant in the way people should focus on how to invest going forward. Seema, could i followup on that with you . Where are the most attractive parts in the market right now given that construct you laid out . It is a good question from the sector by sector basis, there is little in the way to differentiate between them within each sector, we are trying to dig deeper this is where it becomes important with active management should enable us to look out for where the opportunities set up as i said, it really about quality which is a boundary and which of the companies can withstand the economic pressure to build up in the coming quarters Pricing Power is going to be key. Inflation is coming down which Means Companies are not able to hide price increases they have been throwing on to consumers of the consumers that is what they should look out for rather sector by sector comparison anneka, we will give you the last word here what is the most attractive and unattractive parts of the market given what you are seeing right now . I agree with what seema said. We have an investment manifesto. Lets look for three things. It is simple strong u. S. Come piecetive pos corby competitiv expertise. And back management aligned with strong shareholders. Thats the way forward which takes more work. Hopefully yields have more return in value. It seems like stock picking is the name of the game in the second half. Seema shah and anneka treon, thank you. Lets get to the corporate stories with Pippa Stevens and Supreme Court blocks the Purdue Pharma settlement on hold after the provision that protects the Sackler Family from liability from lawsuits. The Supreme Court added in the decision it will hear a challenge to the 6 billion settlement reached back in may just over 100 days into the strike, Union Representing writers and alliance for the studios will be back at the bargaining table today in a statement to the members of the Writers Guild of america, the president of the alliance of Motion Picture and Television Producers asked to meet with the negotiating committee. This is the first meeting since august 4th that was not a bargaining session, but a session to talk about talks. And Sam Bankmanfried is returning to new york citys court today. Prosecutors asked a judge to revoke his bail claiming he tried to harass a key witness in his fraud case he has been under house arrest at his parents home in palo alto, california since the extradition from the bahamas so many twitter in the ftx case, dom. It is crazy and personalities. Thank you, pippa a lot more to come on Worldwide Exchange, and the one word investors have to know today. First, a closer look at the buyback slowdown phenomenon rocking wall street. And set for retail earnings. Why falling inflation could actually be a bad thing for the sectors bottom lines. Later on, more on the hollywood strikers and what todays talks could mean for fall production schedules. A very busy urho when Worldwide Exchange returns from this commercial break feel the power of osteo biflex®. 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She has no clue that im here. She has no clue whos in the helmet. Are you ready . Im ready alright. Xfinity rewards creates experiences big and small, and onceinalifetime. Welcome back to Worldwide Exchange. U. S. Futures are searching for direction. Dow implied higher by 21 points. Lets see how europe is shaping up for that, we turn to Joumanna Bercetche in the london newsroom with the early action and Key Headlines in europe. Good morning, joumanna good morning, dom the hand over from asia was not pretty you see broad based losses ftse 100 trading lower despite the good gdp number. Cac 40 is down. 80 . The french index for the week is the out performer. The sentiment is negative. Lets take you to one stock in particular that is ubs. Big jump in the stock price. Up 5 this morning after the company decided to voluntarily remove the loss protection it had with the swiss government and national bank. Con ffirming the taxpayers will not bear the risk from the collapse of Credit Suisse. This is the strong reaction to the stock place. Vote of confidence and uk gdp data here with the bounce in the sterling up. 30 after gdp growth came in stronger in june with 0. 5 rise for the month. Much higher than estimates in terms of yields, we see good reaction in the yield curve. We are seeing yields move higher 10year gilt at 4. 45 the curve continues to steepen as the market comes to terms with the bank of england approaching the end of the hiking cycle, but economy resilient. Dom. Joumanna bercetche in the london newsroom. Thank you. Earnings season is wrapping up and buybacks are pacing for the slowest quarter in a year as Companies Pull back on spending. Pippa is here with more on that story. Dom, buybacks are pacing to be down 36 year over year and on track for the weakest quarter since covid in 2020 according to bank of america. 11 sectors slowed repurchase shares since last year with energy Companies Pulling back the most real estate also seeing a drop the slowdown comes as Earnings Growth decelerates companies have less cash flow at their disposal the spike in rates means focus is shifting to Balance Sheet improvement. Companies want to pay down debt rather than shoulder higher costs of t costs. There is cash hoarding taking place due to uncertainties that said, some companies are buying big attech with apple and alphat and microsoft with the most buybacks and followed by chevron and exxon. These are the largest companies, so it makes sense they top the list a different picture emerges if you look at who spent the most of market cap. Dxc technology at 8. 1 followed by marathon and expedia and discover and marathon. Now many Energy Companies have variable dividends. A fixed component they pay and total payout is driven by something they scale from quarter to quarter or half year to half year is that a trend that continues with the variy of prices . It is noticeable if you pull back on that the dividend is the private and raising that is more challenging. That Dividend Strategy has been prevalent with upstream players. We might see a pullback in that area and tapping the brakes a bit as companies question what will happen with oil prices. Of course, they are up in the last month, but a lot of questions remain and around the 80 Level Companies are doing well flexibility is important whether it is the variable dividend or buyback. Shareholder returns pippa, thank you ahead on Worldwide Exchange, big money movers and why this air taxi stock is flying high ahead of the open bell we are back with the mystery chart after this of the after this i needed someto help me gain clarity. So i was in the pharmacy and i saw a display of prevagen and i asked the pharmacist about it. I started taking prevagen and i noticed that i had more cognitive clarity. Memory is better. Its been about two years now and its working for me. Prevagen. At stores everywhere without a prescription. Welcome back to Worldwide Exchange. Time for the big money movers. Archer aviation flying high. It reaches agreement to make boeings wisk as it looks to bring the first all electric selfflying air taxi to the u. S. Market Archer Aviation up 12 and flower foods reports 9 rise in sales due to higher pricing it has a boost in sales with customers beginning to acclimate to higher prices flower foods up 3 right now and we might as well make it three. Savers Value Village shares with a boost after the 4 boost in net sales and 5. 5 increase in terms of percent store sales the thrift store stating this is due to a shift in spending trends with value and sustainability amid the surge of popularity for thrifting up 4 premarket. Now to the developing story as thousands of hawaiian residents and tourists struggle to escape maui as fires continue to sweep across the island the death toll this morning stands at 55 it is expected to grow cnbcs jay gray has more reporter investigators are not sure what sparked the blaze, but it is clear what fed the intense flames Drought Conditions on the island providing the fuel winds gusting to 85 miles an hour pushing the fire faster than teams can control the power went out yesterday at 4 30 or 5 00 a. M. The gas station blew up at 3 00 and since then, we have been trying to out run a fire reporter some forced into the ocean to escape the flames there was no escape for the historic town. We drove by from the resort we saw everything was gone we were thankful we made it out of that. What we have seen today has been catastrophic. Reporter like many areas across the island, where all that is left is rubble and ash fire storm pushing hundreds to shelters and most with a few things they could carry during their rush to safety. Local people have lost everything their house, animals and it is devastating. Reporter tourists at the core of the islands economy are told to stay away for now. The airport packed with thousands forced to cut vacations short. Scrambling to find any flight to get away from the flames it is scary to see the wildfire coming your way. Not something i experienced. Reporter the National Guard joining p the fight to make sure the place that many call paradise isnt lost. Jay gray, nbc news thank you, jay. Lets get a check of the other headlines outside of the world of business. We have nbcs Jessica Lleyton in new york good morning dom, good morning members of the former president trumps legal team and jack smiths team are meeting in court. They will discuss what trump can say publicly about evidence gathered in the investigation of the alleged 2020 election inter interference his attorneys are arguing for a less restrictive order saying it would muzzle the former president. Trump has pleaded not guilty to all the charges. Fivetained in iran have been transferred to house arrest and may soon be freed. Before they can come home, iran will get 6 billion of oil revenue which is restricted to humanitarian needs it could take weeks before the deal is finalized and americans are back on u. S. Soil. And dunkin has new brews for coffee loevers to try. You have to be 21 years old. Canned alcoholic coffee and teas they are not on store shelves yet. Dunkin teamed up with harpoon brewery after partnering three years ago to bring customers coffee flavored beer cheers essica, thank you very much still ahead on the show, virgin success it is sweater weather. Mcdonalds and scrapped tesla comes backo tlife in ukraine. We have the latest trending stories when Worldwide Exchange returns after this its almost 5 29 a. M. Eastern time across the river in had new yore have a lot ahead on Worldwide Exchange. We are going for two stocks trying to extend the modest gains on the upbeat cpi report futures are modestly higher right now. Investors bracing for a busy week in retail with home depot, walmart and more set to report results. We look at the health of the consumer and inflation story and inconvventory and names on your Shopping List. Just over 10100 days into t Writers Strike, looking to get hollywood back online with talks. It is friday, august 11th, 2023. You are watching Worldwide Exchange here on cnbc welcome back to Worldwide Exchange. Im dominic chu in for frank holland. Lets check on u. S. Stock futures approaching 5 30 a. M futures are big for the Dow Jones Industrial average the s p is higher by now it is flat. The nasdaq down 11 points implied. A modest open expected here. Turning to the earnings story of the ret