tv Worldwide Exchange CNBC October 24, 2019 5:00am-6:00am EDT
zuckerberg defending the libra digital currency and his company as a whole and an end of an era at the ecb as mario draghi prepares to end his time as head of the ecb. "worldwide exchange" begins right now. >> good morning and welcome. your chart of the day has to be tesla. breaking out with a more than massive 17% gain that sharp move higher, we've levelled off a little bit. still a 17% gain for tesla shares on the heels of the
earnings announcement. we'll tell you more on that coming up. first, equity futures showing signs of stability if these futures hold, the dow would be up a whoping 35 points, s&p up by five marginal gains to start. watching now what is happening at the bond market the treasury yield checking slightly lower the yield 2.8% as well in asia trading, we did see a little bit popping up. the nikkei and japan trading up half a percent the shanghai composite about flat in europe, we have positivity there as well. looking at the german dax up as
well the ftse 100 up. we are watching that german play out go up. they did get data in regard to the overall factory. the top story this morning begins and ends with earnings. today is the busiest day of the season more than 45 companies in the s&p 500 are reporting. take a look at this board. twitter, comcast our parent company here, visa, southwest, amazon we prepare for the onslaught this is how we stand thus far with the earnings report if you take a look as of yesterday according to data from refinitiv, 124 companies in the s&p 500 have reported. if every other report comes in as expected, you can expect s&p 500 earnings to decline by
nearly 3%. on the other ide, can you see revenues up 3.2% digging deeper, here are some stand outs, first up, shares of tesla. those stocks are soaring as the company reported a surprise third quarter profits. even as revenues came up shy tesla is on track to deliver more than 360,000 vehicles it also says trial production of the model 3 has been started at its new factory in china it will be the best day for stock since 2013 and ford, cutting profit outlook following disappointing earnings that ceo blames on higher warranty costs and deeper
discounts. experiencing a bumpy launch of the newly designed explorer or lincoln afator stock 3 is microsoft easily reaching forecast on gains and revenues driven by continued strength in the cloud business sales growth slowed. microsoft up about a percent in the pre-market trade johnson&johnson making adjustments. we go now for all of those details. >> good morning, so johnson and johnson is reporting a cut as a part of the drug settlement that deal announced just before the federal style was set to start. that framework set to start in
pennsylvania, tennessee and texas. reports say under the settlement, j&j will pay $4 billion and others offered to pay $18 billion over an 18-year period broad support over the companies that have sued the companies johnson&johnson faces a number of lawsuits. the company allowing third quarter profit up to 66 cents a share or $1.81 cents a share they say no impact to the earnings you can see it is down about .6% on the year. >> thank you for that update when we come back, why mark zuckerberg is warning lawmakers about china as he defends his libra digital currency plus what congresswoman maxine waters had to say on the matter.
that is a live shot of our nation's capitol the site of a very contentious hearing yesterday involving congress people and mark zuckerberg from facebook what was supposed to be a hearing about facebook's cryptocurrency ambitions turned into a grilling over a wide range of topics. zuckerberg offered a warning to lawmakers. >> i think our surely risks if a chinese financial system becomes the standard in more countries then it will be very difficult, if not impossible to impose our sanctions or the protections that think we are right to want to have oversight around the world. >> oversight, a key question
there. joining me now, sara fisher a reporter from axios. many of us were glued to that testimony. what stuck out to you about what he said or didn't say during that grilling? >> i think the topics were so wide ranged, we didn't focus on libra. had they focused on libra, they would have figured outweig wayso get him cornered >> what do you mean? >> what will they be doing for ad revenue all that matter is what are they vesting in this. is oversight going to be over 35,000 people? or is it going to start out with nothing? we don't know because lawmakers
didn't spend enough time pressing him on it >> everybody else involved in this libra project have been faced with questions about what its intent is. what it can ultimately do. it is supposed to be a good thing to help move the money is that something lawmakers are keyed in a little more or are they forgetting that discussion as well? >> it is a key thing but gets confused one thing about this testimony, there was a lot of focus on nationalistic believes or things that would be good for america the problem is that the oversight is probably okay here in the united states it is in developing countries where people have never had access to digital wallets or
bank where it will be really hard to implement and have huge consequences >> the concentration of power of tech that has lawmakers really fired up one thing we heard was represent maxine waters who is heading up this whole committee she has some very strong views about why this is an issue and why big tech is under fire and other lawmakers are pressing as well >> elizabeth warren has already talked about, it should be broken up. she's opened an opportunity for us to take a look, discuss and make some decisions about it the decision now is in the air >> it is in the air. been in the air for a while now. how to spin their narrative to lawmakers. >> first of all, the national security thing will be huge. look for them to talk about ways to defend us
facebook has been doing a lot on the back end to ensure it would be very difficult to break them up they are combining the infrastructure between what's april, messenger and facebook. if they would come in to break up those companies they would argue that it is physically impossible to do it a lot of arguing that facebook would protect themselves in that access >> sara fisher from axio, thank you. coming up, why a new study may have you thinking twice about coming to work under the weather and busy signals why shares of nokia are being slammed. first, the end of the era for one key central bank the words, whatever it takes with resonate across wall street probably the rest of eternity.
>> absolutely. as i sit here in front of the european central bank, preparations being made for mario draghi's last press conference rkthn't think we'll get fire wos is time around we'll talk about it in a few minutes. we'll be back after the break. so servicenow put your workflows in the cloud, huh?
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decisions are due out marking the final meeting for mario draghi we'll go live for a preview. this is very much the end of an era for one of the preeminent central banks. >> largely discounted as a market moving event because back on the 12th of september, we really got the big announcement from mario draghi. that was to take interest rates even further with a deposit rate of minus 0.5% and the announcement that we would recommence the bond purchasing program starting from the act of october. also trying to protect the banking sector
all of that is largely in the market the need for consensus and how do we heel some of the splits that have become unusually public that will be partially the legacy mario draghi leaves behind here. on one level, he will be celebrated by saying we will do whatever it takes to protect the euro he will also depart on a controversial note because people are questioning whether this negative rate strategy may be helping with the economic rate at all. that has caused this very public spat now on the future direction of interest rate strategy. what christine lagarde will have
to come in and help resolve. we imagine that today, he will maybe offer up a few words before she arrives as to how the governing council may come back together over governing policy here >> jeff, let's talk about christine lagarde. what will be first and foremost on the agenda as she starts to make that transition away. >> the analysts largely think that mario draghi has given her some air cover by introducing these new tools that he can allow christine lagarde to come in and bed herself down and get comfortable with the way the ecb operates before she comes out to be public about a change of
strategy one of the things she will go, let's be frank mario draghi is a technocrat, not a politician lagarde will be seen as getting all around the table and being one voice. the last thing you need is this division to undermine current monetary policy. questions are being asked about the ecb's commitment given that you have a number of northern european bankers christine lagarde will come in and try and calm some is of this as this data continues to weaken, we'll have to see how really committed she is to the whole concept of negative interest rates which is causing
a stir at the moment back to you. >> we are not even talking about the fiscal policy side of things fintech off the fast track why a new court ruling is creating movement. and amazon, can growth in the cloud out weigh risk all of that when "worldwide exchange" returns after this oss? prevagen is the number one pharmacist-recommended memory support brand. you can find it in the vitamin aisle in stores everywhere. prevagen. healthier brain. better life.
>> the busiest day of earnings season the sector faces growing calls for regulation shares of tesla reeves up after the company plunges estimates. one analyst is remaining neutral. and in a "worldwide exchange" exclusive, former minneapolis fed president tells us what policy moves the fed has to make it is thursday, october 24, you are watching "worldwide exchange" on cnbc. welcome back to the show thanks for being with us here is how futures are looking half way through the 5:00
eastern time hour. futures more up. s&p up about three points and nasdaq up by about 33. earnings, earnings, earnings everywhere roughly 50 companies in the s&p 500 reporting. including 3m, twitter, amazon, intel, visa. that's just a few. are the quantity of reports generating quality results let's bring in now director of global macroat fidelity investors. we are about a quarter through that earnings season what themes stand out in your mind so far. >> good morning, dom nice to see you. q 3 is a repeat of q1 and q2
10%. usually that number will come down so the numbers are good. companies are beating. they always do that. what i look for, they are beating yes, to what degree are they guiding down. so far, that's what is happening. >> this typically happens. expectations come down they really beat those lowered estimates. let's talk about those companies in your record highs and forecasting in your decline. what does that mean for a market near record highs? what does that do for the story drivi driving down markets >> if you deconstruct the return, it is basically dividends plus earnings growth
not anything to write home about we are at that 3,000 level chart wise where it does look like the market wants to go higher. the fed is looking at a cut and asset expansion. maybe that is a recipe for a rally at year end. >> thank you for those market thoughts we appreciate it back to the stocks today tesla posting a strong third quarter earnings report telling share holders its new giga factory in shanghai is now ahead of schedule. discussing shares of that model y that is due to roll out next year >> i've recently driven the model y, it will be an amazing
product and will be very well received it is likely -- it is my opinion. i think it will outsell s, x and 3 combined >> he's optimistic he says $300 on the stock. good morning the $300 target is up. that will reflect that loop higher but you are still neutral on the shares. why? >> clearly the bulls are winning this round you can see by their reaction. it will remain a contentious stock. the back and forth will continue there is three things that will drive this stock you can look at the demand numbers we got in the results, preliminaries and production numbers. as we've moved onto the results
last night, more operationally focused. you start to see that the operational efficiency of the company. mostly with the model 3. gross margins moved dramatically some will say what will those prove in the benefits this quarter. rightly so, there were some of those things included in that to lease payments to full self-driving payments that came in we had payables increase at the end of the day, they are getting better at building the model three. that takes us to the point of okay, what happens next? >> yes, giga factory is ahead in shanghai your gross margins will come back down. we have to roll over to that now. >> so profitable and gross
margins are things that investors in the past have given companies the runway to go through. the sales mix. if everything is tilted more towards this mass market model 3 with lower margins, how much does that resonate with the stock now with q 3 closing this morning. >> what investors are going to look at is the model 3 there in the expansion. we are going from the high teens to low 20s getting to the model y, 70% is the same as the y so you get a lot more efficiency there. recently, we've been shipping model 3 cars from california to china. that takes a lot of working
capital. that frees up a lot once you get command filled in china. >> what is the thing you are looking for in terms of an update what is the biggest thing that drives the next thing higher or lower for tesla? >> the first is marginibility and second is demand a big part of future demand is coming from china. a lot of reasons why we should be cautious on that. the visibility into the demand is something we really work on and try to figure out what is real and what is not >> you are not the only one unsure about china coming up, the world's most valuable whiskey collection is up for caution bidding today.
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those shares off 7%. shares of nokia down today slashing its out look for 2019 and 2020 as they spend more time to fight off rivals. nokia is also halting dividend payments in that 5g infrastructure into european president mario draghi prepares to deliver his final decision what happens today could have meaningful impact here at home as our own federal reserve prepares to reach its decision starting the conversation with minneapolis's former fed president asking if he sees another rate cut ahead of next week >> i do expect the fed to cut
rates by another quarter percentage point when they meet at the end of october. i think the drivers for that kind of decision are the same as for the previous two cuts. i think they are worried about down side risk what changed so much is it political pressure is it something else >> one thing i'd rule out is political pressure as it was said publicly and i know from my own tenure, they don't pay any attention to the poll sicks they are focused on the economics. what you saw in markets, here,
i'll speak a little for myself, especially in bonds. you saw the risk internalize where are those coming from? i think they are emanating from the white house. i think the president is a huge source of economic uncertainty for the world. that is leading firms to cut back on investment and on and that the fed has to express. we have had weaker than expected job numbers as of late there is a school of thought where job numbers are going to be weak because we've run out of
workers. there is 700 plus million open jobs do you think it is a sign of a slow down or a need for workers? >> at some point, we'll get used to seeing nfp growth numbers that has to happen we won't have any workers left looking at the data points you've got to look at crisis and the main growth it has picked up
it is slow enough to make me think, boy, companies are not running out of workers because they would be bidding more for services and we'd see more wage growth on the other hand, i look at the fraction of people who are age 25 to 54 in the prime of their working life that have a job that's come back to where it was before the great depression but that is still not as high as it was before the mid-1990s still muted wage growth, giving reason that we could drive more into this economy. >> wage issues are one again. it is a very confusing time. there are so many millennials in the workforce.
85 million entering the workforce replacing the more seniors. the 25-year-old coming in replacing a 59-year-old, it is not a sign of bad things, just that you don't get paid a lot when you start working >> that's right. where you pick that up is that in productivity growth has slowed people who enter the workforce, the skills they have are not as developed as those who have been in the workforce for a long time having said that, if you look at how wages behave relative to productivity so how much firms are paying out, that still remains low
relative to where we were. that is a sign that there is room for the market competition that, yes, firms always complain that they can't find workers the proof is always in those wage numbers >> all right, for more on the conversation including his take on tax reform. head over to cnbc.com. new this morning, a ruling by a federal judge has dealt a big blow to trump administration efforts to get technology firms on the fast track to banking system this has to do with whether or not smaller fintech companies can become banks quicker >> right this is the idea of how merky or
challenging it is for these companies to move up >> take us through what exactly it means the proposal means the office of the comp controller could grant these licenses to offer traditional services but the judge says, no, you can't do that why would they want to prohibit these guys >> the idea was that they could fast track the process taking a long time some of these start ups are venture capital. right now, they use big partnerships they might not need insurance to do what they are doing now whether lending or payment they don't need all of the aspects of being a traditional bank the judge in this case said that
they don't have the authority to really grant this type of bank charter. >> who benefits from this? the states a big win who said you need to go state by state. if you aren't going to every state, there is a potential for fintec companies to go around in regulation they are saying, if you do that, it takes forever it is a longer process >> how has the capitol environment changed given this ruling >> it was very exciting. they thought this was a big deal there has been multiple lawsuits this is one of many. we've taken a step back and said, okay, they probably won't get bank charters.
they are still making money and getting customers. you see apple and goldman sach you can do everything a bank can do they are still pouring money in this so far, we have seen about $12 billion of funding people are still looking at it as a profitable space. >> one of the hottest spaces out there now. thank you for that big story now, one of the top stories on our website. >> tell us what else you've been talking about today. >> do you ever come into work when you are feeling a little sick >> i do all the time it is controversial. i wait for my bosses to tell me to go home >> a survey found that 90% of
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>> i'm not i'm more of a tequila attorney >> on deck, amazon makes a push into the health care sector with a brand new purchase amazon and twitter are out with reports today. a top analyst will break down growing concern of that potential crack down when lddexcng ruretns right after this i'm part of a community of problem solvers. we make ideas grow. from an everyday solution... to one that can take on a bigger challenge. from packaging tape... to tape that can bond materials to buildings... and planes. one idea can unlock a breadth of solutions. at 3m, we are solving problems that improve lives.
and in the south, they could start doing the same today >> amazon is buying the startup health navigator which provides services to digital health companies. becoming part of the amazon care group which launched last month. >> xilinx offers a weak forecast due to the china trade war more big earnings on the way today, twitter reporting in a few hours. the social media company expected to boast solid numbers. later on today, amazon has increased scrutiny and calls to detour profits joining me noun, head of technology and media training. joel, let's do twitter because it comes up first, what are you
expecting with this report >> good morning. twitter has been under pressure. snap's reaction yesterday led to some selling pressure on twitter. it seems to be a little bit of a coin toss. they are going through some health conditions cleaning up the platform continued potential ad budget as they are phasing out some of their ad legacy products i think they've done a tremendous job that seems to be the key, potential ad budget and what we'll see in terms of the monitised number any upside to that 142 is what the stock needs you've got
elections will be good >> 100%. i think you have the 2020 election, olympics in japan set up for the solid outlook for 2020 still a platform where people are still attracted to again, i think the health initiatives is going to help the better retention rates and engagement trends that will continue to attract the advertising dollars. >> amazon today, microsoft
reporting strong growth for azure. what does amazon need besides aws to do well >> that's the key there. everyone knows the focus is still on aws most are expecting 37 to 38% growth it would be fantastic if we saw 40% plus that will trigger some buying. amazon has been under since 2019 they have told us that 2019 will be a year of investors any time you see that word vest ratchet up another thing with amazon as well, no doubt regular overhang.
mutual funds have been trending. netflix is in its own little world. what they say on the regulatory front on services and in 2020 from an investment point of view >> that does it for "worldwide exchange," this morning. "squawk box" picks up coverage right now. >> good morning, tesla shares are soaring after the company posted a surprise quarterly profit and said some key projects are ahead of schedule get ready for a roller coaster ride of quarterly reports. we'll hear from dow, southwest airlines, twitter and our parent company comcast to name a few. and we'll assess the chances that libra makes it off the
ground skbauc "squawk box" begins right now. >> announcer: live from new york where business never sleeps, this is "squawk box. ♪ >> good morning, everybody welcome to "squawk box" here on cnbc, we are live from the nasdaq marketsite in times square the dow was up yesterday about 45 points despite some disappointing results. those components ended up higher the dow indicated up by about 31 points up by close to five and the nasdaq up by about five. no changes are expected. this will be the final news conference for ecb president mario draghi incoming president christine lagarde will