The company is not giving up a fight. We look at the intersection of politics and big money. And breaking records on the fourth largest economy, putting the stocks rally at risk. Later in the show, the boeing stock wipeout continues as the growing concerns grow for investors and wouldbe hires. Its march 13th, 2024, wednesday, and youre watching Worldwide Exchange right here on cnbc. Good wednesday morning. Welcome to Worldwide Exchange. Thank you so much for being here with us. Were going to get you ready for the trading day ahead. We kick off the hour. After a solid day for stocks yesterday, we saw the s p close at the 17th recordhigh of the year. A bit of a mixed picture. The dow opens up 25 points higher. The nasdaq a little hdown. And take a look at yields. The benchmark moving just about four or five basis poimtss from the level we saw it at yesterday. Were looking at energy, specifically oil, riding a foursession losing streak. Were seeing a bit of a bounceback. Wti and brent crude both up almost 1 . Thats your morning setup. Lets get a check of our top corporate stories. Silvana henao is here with those. Good morning. Reporter good morning, frank. House lawmakers are set to vote on a bill that would force tiktok owner to divest from bytedance. It would ban the app from the u. S. The vote coming as the report suggests tiktok, quote, exhaust all legal challenges before it considers any type of divestiture with a sale being the option of last report. If the bill passes, the house, the senate would still need to vote on it. Meanwhile the pentagon is reportedly pulling out of a plan to spend as much as 2. 5 billion on a chip grant to intel. The move if confirmed would put the focus on the commerce didnt to make up the short fall. The move threatens to limit the total amount intel had expected to get in federal funding including another 10 billion from the chips and science act. Right now shares are slightly lower in the premarket. Down about 1. 25 . Cit citadels ken griffin thinks the fe fed should move cautiously when it comes to cutting Interest Rates. Speaking in boca raton, florida, with cnbc yesterday, griffin echoing what we heard from jpmorgans Ceo Jamie Dimon a day earlier, saying the worst thing they could end up doing is cutting, pausing, changing the r direction back toward higher rates quickly. That would, in my opinion, be the most devastating course of action they could pursue. Griffin is saying investors can play the markets in two very different ways. Youve got the magnificent 7. Youve got this incredible story thats just ripping through the equity market about the transformative changes coming with ai. And much of the market is at earnings that are far more in line with historical averages. This is a moment in time when you can in some sense, you can sign up for big bold you know, these companies are changing the future, or you can put your money to work where its much more in line with historical averages and it has a different profile. Joining us now is chief Investment Officer dan gerut. Would you agree thats the proposition that investors are facing right now . I dont think its that its not safe. Theres a lot of markets picked over. Isnt that safe as opposed to it rising 2 last year. I look at it differently that theres more upside. A lot of companies are away from the mag 7 and some of the companies where there is excess valuation, were about to shift fiscal policy again Monetary Policy, rather. So, you know, some of the things that were headwinds in terms of being restrictive are going to become tailwinds, and that should be better for your lower priced multiple stocks. I know youre focused on valuation and bullish on the small caps. I do have to point out, the russell 2,000 trading at 24 times forward earnings. The s p only 21. Why are you worrying about that . Thats not a fair comparison. You have a lot of biotech and Early Stage Technology companies that many of them are prerevenue and are lossmaking companies. What im saying is focus on profitable companies. Theres a lot of profitability within the russell, and those are much more reasonably valued. How do you balance theed you that higher for longer is tougher for the caps. Some have less cash obviously. Small caps is not going to have the same cash on hand that an apple is going to have. Generally theyre seen as more Interest Ratesensitive. How do you balance your thesis . Were higher for longer and pes are higher. Markets discount the future. Its always been that the fed was going to begin to cut rates most likely by midyear or just after midyear, and that seems to be how its going to play out. Certainly yesterdays cpi data reinforces the fact, and i think ken griffin is 100 right. You dont want to make a policy mistake at this point. Cutting too early and then having to go back and fix things in the future is going to cost a lot to the economy. All right. Dan veru making a case for small caps. For more on whats driving the markets, you want to head over to cnbc pro at cnbc. Com pro for more. Were looking at the asia markets. Hang seng, shanghai, theres a Historic Union wage. Nippon steel agreeing to an almost 12 raise. Honda going up 5. 5 high. Mitsubishi agreeing to a record pay increase. This is bolstering the case for japans central bank to begin raising its rates at its policy meeting next week. Joining me now is the senior japan economist of Goldman Sachs, tomohiro ota. Thank you for being here on a day like this. Thank you for having me. By the way, toyota doesnt buy a perj, ba u they offer workers record bonus payments. Auto industry obviously a key industry in japan. What does it mean across all industries and what does it mean for the meeting coming up next week . We have seen Major Companies announce wage hikes. Most companies accept the wage height request. We know that. They announced that the average base wage growth quest by the trade union was 4. 3 . So basically all the companies except those that request otherwise, its going to be high. 4. 3 , which is much higher than last years number, which was 2. 5 . So but one observation, this is a very preliminary number because we have just seen around 50 Companies Press release that on this friday, friday the 15th, theyll announce more numbers by correcting the wage data from roughly 800 companies some of most likely announced on friday 4 be at 4. 3 . We think the wage hike will be higher than 3 , which is higher than our forecast we made last year, which is 2. 5 . So okay, so, tomohiro, let me jump in for a sense. Way. To get a sense for the investors. What does this mean for the commerce and the markets. We had our guest on yesterday who was bullish for the nikkei. Then the central bank agrees to raise rates, he believes that would lead to more foreign investment. Does that make sense to you when were talking about japan, that the wage increases are kind of a domino, that leads to rate hikes by Central Banks and wage hikes by foreign investors. Yes, the strong number clearly indicates the probability for the boj to raise the rate sometime soon, maybe either massachusetts or april. Its significantly higher at this moment because the bojs communication is still insufficient as a signal for the march hike. So even though we have less than a week to the Monetary Policy meeting. This is the first rate hike in the last 15 years. We believe that the boj should provide Clear Communication ahead of the big policy change. So thats mainly why we still expect an april hike. But it just feels very important that the higher wage growth is very good milestone for the sustainable inflation, which the boj want to achieve. Thats the story indeed. That boj story coming up in just a few days. Tomohiro ota, thank you very much for your time. Weve got a lot more to come on Worldwide Exchange including one word investors need to know. First while inflation seems to be coming in line with expectations, there are some areas that continue to be a cause for concern. Plus, a big payday for oracle founder Larry Ellison after the companys best day in more than two years. And then later we head back to capitol hill for a look at todays house tiktok vote and the future of billions of dollars in business between the u. S. And china. We have a very busy hour still ahead when Worldwide Exchange returns. Power e trades awardwinning trading app makes trading easier. With its customizable options chain, easytouse tools and paper trading to help sharpen your skills, you can stay on top of the market from wherever you are. E trade from Morgan Stanley power e trades easytouse tools make complex trading less complicated. Custom scans help you find new trading opportunities, while an earnings tool helps you plan your trades and stay on top of the market. E trade from Morgan Stanley my name is oluseyi and some of my on favorite momentst. Throughout my life are watching sports with my dad. Now, i work at comcast as part of the team that created our ai highlights technology, which uses ai to detect the major plays in a sports game. Giving millions of fans, like my dad and me, new ways of catching up on their favorite sport. Welcome back to Worldwide Exchange. The markets shrugs off yesterdays hotter than expected cpi data, not meant to derail the fed to cut the Interest Rate by midyear. Inflation remains stubborn. Gasoline and rent accounts for more than 50 of the increases in february. Lets talk about how inflation is impacting the Housing Market as were in the heart of the spring home buying and selling season. Good morning. Great to have you back on. Good morning. So nice to see you. In this report, one of the things were highlighting from the cpi report, the inflation data rose, but the growth actually slowed from the month before. Give us a sense. How can we read this, and also i want to take your temperature. How is the selling season going as far as inventory and willingness of buyers to pay . The overall challenge we have in housing is a tightness in inventory. Theres a shortfall nationwide, and so thats really having an impact on housing, on prices, and obviously the fact that Mortgage Rates have doubled since where they were is also having an impact. Thats kind of put us in a little bit of a gridlock in housing, but i do think the Spring Market will be better. Were seeing good product come on, and were seeing busier open houses, so all signs are pointing to a better market in 2024 versus 2023, but it has been a tough go, i will tell you that. Last year was not an easy Housing Market. You say its been a tough go. We take a look at the Mortgage Rates, a few basis points under 7 . Is that the new normal . Weve heard some people say we expect it to be a pretty strong season. Is there a level we can get these Interest Rates at that people would be more willing to jump back into the market and also sell their houses . We talked about ed yesterday, that 60 of people have a rate under 4 . I do think this is the new normal. We were so used to cheap money for so long, i think the consumer has finally accepted and stopped resisting the 2 and 3 thats gone, so this is the new normal. Rates are at a decent place. Historically theyre at a low. Its an opportune time to get in there. If you see something you like, i would encourage the buyer to get in there and buying the house they like. I dont see rates going back to 2 and 3 until i dont know when. This is still historically low Mortgage Rates. So historically low Mortgage Rates, but i think to most people looking to buy a house, especially firsttime home buyers, its double. Its shocking. Almost 7 . The other part of this Inflation Report is rent. Rent went up 6 as well. Does that motivate people to buy or is the high inventory rates what stops them from making the transition . I think its all circumstantial. I think the fact that rents have canted to go up may change peoples minds from renting into buying. They can do all these things and its i theirsversus renting, which is tell prey. Were seeing people pivot and get off the sidelines. More people are wanting to get into the market. Were seeing millennials buying homes, which is the biggest part of the market. All signs point to people getting into the market versus waiting. The last question before we let you go, inventory. Is there any hope and would that generally be deflationary when it comes to prices or is there still penalty up demand that people would be willing to pay up . Its a challenge. Its a mixed bag of both. Little by little, its incremental. Remember the Housing Market is cyclical. Little by little were seeing more come on the market and sellers and buyers are acknowledging this is where rates are. And if they want to buy or sell, that i have to get into the market. It a is go ing to take time for the deflationary to take place, but i think we have to be patient. Its slow and steady in housing. Its just not a quick switch. Its like inflation. It takes time to get us to a better place. It takes time to find the right house. It used to be bidding wars. Now the question is can you even find one. Bess freedman, good to see you. Good to see you too. Coming up, how coinbase is taking advantage obit dof wn. We have your big momoney move. Theyre coming up right after this. vo what does it mean to be rich . Maybe rich is less about reaching a magic number. And more about discovering magic. Rich is being able to keep your loved ones close. And also send them away. Rich is living life your way. And having someone who can help you get there. The key to being rich is knowing what counts. As an independent financial advisor, my promise to you is simple. As a fiduciary, i promise to put your interests first, always. I promise that our relationship will go well beyond just investment decisions. Its the intersection of your money and your life where we can make the biggest difference. [announcer] Charles Schwab is proud to support the independent Financial Advisors who are passionately dedicated to helping people achieve their financial goals. Visit findyourindependentadvisor. Com grunting at Morgan Stanley, old school hard work meets bold new thinking. laughter at 88 years old, we still see the world with the wonder of new eyes, helping you discover untapped possibilities and relentlessly working with you to make them real. Old school grit. New world ideas. Morgan stanley. Welcome back to Worldwide Exchange. We start with coinbase announcing a debt deal following its recent stock surge. You see shares are up in the premarket. Buyers with notes will have a 30day option to purchase up to 1 million more. Shares of coinbase benefiting from renewed optimism around bitcoin, jumping over 300 last year. Bitcoin hitting a fresh alltime high. Take a look. Right now trading at 73,000, basically 450. Bitcoin up 70 to date. Oracle, the shares are up fractionally this morning, this after the Cloud Company beat the recent quarter, adding 15 billion to founder Larry Ellisons fortune. Owning shares worth about 146 billion. And adidas reporting flat sales compared to the prior year. The retailer says the topline focuses on sellin on lower prices. While gross margin was up, negative fx effects, higher costs and discounting weighed on profit. Shares of adidas down about 1. 5 . Were turning our attention to the latest cfo ceo survey. This is our exclusive read on the thinking of corporate financial decisionmakers. Nearly half believe were on the path of soft landing. The other half of the respondents had kind of mixed views with 15 forecasting a recession this yearing another 15 saying that recession has already happened. This is the highest read on soft landing confidence in the past five quarters. In q12023, only 16 of cos were on the path of soft landing. 22 say the central bank is doing an excellent job. A 6 56 say theyre doing an okay. No one gave the fed a poor grade. In 2023, 17 answered poor. A pce report and jay powell testified on capitol hill saying in part rate cuts are coming. With that information these financial decisionmakers have rate cut expectations that are largely in line with the market, forecasting a cut between june and september. Important to note, no cut in the march to may meeting, but they did see a scenario where they would not cut until 2025. The feds go is to get it down 2 . A quarter say it will happen this year but the overwhelming majority say the inflation fight will take until 2025 or possibly even longer. Time now for a check on more of this mornings headlines. Nbcs Frances Rivera in new york with the latest. Great to see you. Hi, frank, good morning. A historic president ial rematch is in the work as the fresh round of primary results are in the works. They have each won enough delegates to become the presumptive nominees, essentially setting up a sequel to the 2020 election. Meanwhile the House Majority is getting smaller. Ken buck will be stepping down next week. He said he will not be running for reelection this year, but his early resignation took some of his colleagues off guard. Colorado governor pollack says a special election will take place june 25th to align with the already scheduled president ial primary. The new york jets have lost Aaron Rodgers once and could lose him again. The fourtime nfl mvp tops kennedys short list for vice president. Jesse ventura is also on that short list. Apartly that ive been in contact with rfk, and Aaron Rodgers talking regularly i