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The U.S. and China are competing for global leadership. The country who wins will define the world we live in. U.S. international assistance is vital to our national security. It helps prevent terrorism and avoid costly wars. It fights diseases and saves lives. It helps keep America as the number one economy in the world.
U.S. international assistance protects our interests at home and abroad. If America doesn't lead, China will. What does it mean to live a rich life? It means brave first leaves, tearful goodbyes, and everything in between. With over 100 years' experience navigating the ups and downs of the market and of life, your Edward Jones Financial Advisor will be there to help you move ahead with confidence.
Because with all you've done to find your rich, we'll do all we can to help you keep enjoying it. Edward Jones, member SIPC. I'm Frank Holland, and you're listening to CNBC's Worldwide Exchange. Our show is live weekdays at 5 a.m. Eastern. Listen in. Wall Street's at a crossroads as we kick off the busiest week of this earnings season, while the White House looks to write a new narrative around the president and tariffs.
It's called strategic uncertainty. So you're not going to tell the person on the other side of the negotiation where you're going to end up. And nobody's better at creating this leverage than President Trump. And in this final week of April, investors, they could potentially see the biggest one-month turnaround in Wall Street history. Take a look at Wall Street futures right now, slightly lower. It's Monday, April the 28th, 2025. And this is Worldwide Exchange on CNBC.
Good Monday morning. Thanks so much for being here with us. I am Frank Collins. Get you ready for the trading day ahead. We begin with the U.S. markets. The major indices coming off a four-day win streak. Take a look this morning. You can see we're in the red across the board, however, just fractionally lower, really. The S&P and the Nasdaq down about a quarter of a percent. You can see the Dow looks like it would open about 15 points lower. So, again, slight declines in the pre-market. But with that, we're going to take a look at the S&P 500 pre-market laggards. We're going to start with them first. Right here at the top of the list,
We are seeing SBA Communications pulling back about 4.5%. Ingersoll Rand, Alliant, McCormick, and Packard running out the worst performers. Then we have the leaders right at the top of the list, Waste Management. Perhaps a defensive play, not really clear. Those shares up about 2.5% right now, followed by Tesla. Those shares up more than 2%. We're going to talk about the EV market in just a second. Rollins, ConAgra, and Roper Technologies running out your best performers on the S&P.
It is a huge week for earnings with a third of the S&P and the Dow reporting. Two areas that will be closely watched, the consumer. We're going to start with that one. That's the first one. McDonald's reporting this week. No action in the pre-market. UPS reporting tomorrow, pulling back about a half a percent. Coca-Cola, Airbnb, and Booking Holdings all reporting this week. And then also we have tech from CapEx to the impact of tariffs closely watched. Also, four Mac7 names reporting this week. Taking a look at those, we're talking Apple, Microsoft, Amazon, and Meta. Also, Snap reporting this week.
insight into the digital ad market, something that will also be closely watched. You can see Apple shares are pulling back a third of a percent. Meta shares moving higher this morning, up just about 1% in the pre-market. Want to take a look at what has been a defensive trade goal. It's actually coming off
a losing week. Taking a look at gold right now, very fractionally lower right now, but you can see month-to-date pulling up about 4.5%. You can see that decline last week just pulling back a bit when you're looking at gold coming off a number of record all-time highs in recent weeks, though. Again, gold fractionally lower right now. Also take a look at the dollar. It actually broke a four-week losing streak as we continue to talk about that sell America trade. Dollar right now up just about
A 20th of a percent right now, or a fifth of a percent, I should say, month to date that you can see the big declines on the dollar. Dollar pulling back more than 4% over the last month. Again, a lot of people talking about that sell America trade. And we want to take a look at bond yields. Bond yields, they've eased a bit. The 10-year coming in at 4.26 right now. You can see over the last week the move to the downside when it comes to yields.
That's your setup now. Let's see how Europe is shaping up as this trading day gets underway. Our Juliana Tattlebaum is in London with a look at their early action. Juliana, you guys got a new set over there. A lot of excitement when it comes to Squawk Box Europe.
That's right, Frank. We do today the inaugural show of our new revamped Squawk Box Europe. So hopefully you caught it prepping you for Frank's show. Now let me get to markets. We've started out on the front foot this morning in Europe after a pretty decent trading week last week as well, which saw the stock 600 gain about 2.8%. The Zetra DAX in Germany gained nearly 3%.
5% last week. This morning, the gains continue. We've also, interestingly, Frank, had a lot of deal flow this morning. Mediobanca in focus. The company launching a bid for private lender Banca Generali for at least the second time, another step in its fight to remain independent. The Italian lender must now secure shareholder approval for the deal worth 6.3 billion euros. And you can see Mediobanca and Generali shares trading higher this morning. Deliveroo has also
also received a bid from DoorDash to buy the company in a deal worth £2.7 billion. The British food delivery company says it provided DoorDash with access to due diligence and would recommend the deal to shareholders if conditions were met.
Turn our attention back to the U.S. The White House appearing to continue its messaging shift around tariffs and distancing itself in the policies laid out by the president back on April the 2nd. Yesterday, Treasury Secretary Scott Besson saying there is some progress in the trade talks.
If there are 180 countries, there are 18 important trading partners. Let's put China to the side because that's a special negotiation. There's 17 important trading partners and we have a process in place over the next 90 days to negotiate with them. Some of those are moving along very well, especially with the Asian countries.
Also, the general reports the administration is creating a clear roadmap to help streamline at least some of those tariff talks, breaking out digital trade regulations and other, quote, non-tariff barriers as possible negotiating points.
The president also posting on Truth Social over the weekend, tying his tariff plans to taxes, claiming the money raised from tariffs, they could lead to significant tax reductions. But with the talks still in early stages, some retailers are making some drastic moves, including Chinese e-commerce giants, Xi'an and Timu. The fast fashion retailers are raising prices by more than 300 percent in some cases compared to this time last week, as tariffs between the U.S. and China continue to drive up costs.
We're going to expect to hear much more about all this when Scott Besson appears on Squawk Box later this morning. All right, turn our attention now back to the markets. It's certainly been a volatile month, but after being down more than 13% at one point, the S&P 500 is now just 1.5% lower in April. Scott Brown from Raymond James says if it can turn positive, this will be the biggest monthly reversal ever in the history of the market. The previous record was back in 2009 when the S&P fell more than 9%, and then that same month it finished up 8.5%.
Goldman Sachs also says for the first time in two months, the technical factors, they tilt net positive. Joining me now is Ryan Dietrich, chief market strategist at the Carson Group. Ryan, good morning. Good to see you.
Good morning, Frank. Thanks for having me back. Appreciate it. So we're going to get to what you're seeing in the market, which you call some bullish signals. But first, I want to talk to you about this potential reversal for the S&P. It would be historic right now, the S&P down about one and a half percent for the month. I think the real question is, do you think that we're on track for something like that? What you've seen from earnings season so far, does that set us up for more upside in the S&P in these next few days?
Yeah, as you mentioned, my friend Scott Brown there talked about this could be the second largest intra-month reversal ever. Now listen, we only have a couple more days this month. Maybe we don't quite get there, but to answer your question,
we think that was a washout we think it was a significant significant washout the upside is happening and we can get into some of the weeds of it here but we do think there's some more upside here and honestly frank we think the lows of the year are in and i know you know you can't make that for sure call but we can get into it some of the signals we saw last week along with this huge monthly reversal with all this negative sentiment like you just talked about before it came on look at europe look at some of the other parts of the world i mean they're you're like germany's
almost at an all-time high as we do this. To me, that's hard to think this is some global calamity when one of the most important stock markets in the world is floating at an all-time high. We think the U.S. probably plays catch-up the rest of this year, and we think lows might be in. All right, think of lows might be in. You're also seeing some very bullish market signals. We're going to show the audience the two things that you're really focused on. One of them is called the Zweig Brethera, so I'm going to have you explain that one. The other one is something that we all can see very clearly ourselves.
Last week, the S&P had three days up one and a half percent. So according to your research, after the S&P is up one and a half percent in three consecutive days, on average, the S&P gains 22 percent over the next 12 months, 100 percent of the time. So it has some very clear history of a positive trend. Do you think we're set up for the same thing this time around? And keep in mind, over these next 12 months, we have the end of the tariff pause potentially and we have some other trade policy that can come up a
A lot of outliers potentially that might change that historical precedent.
Yeah, you're not kidding. And also, we're getting closer to the midterm election year. Midterm years usually aren't that great. But listen, we do think the significant upside is here. We've been overweight equities all year. We have dialed that back a little bit, going into Europe, going into some low volatility, some other areas. But we think the stock's still going to do pretty darn good with what you just said. And like you said, the listeners understand three days in a row, up 1.5%. That's a buying thrust. And like you just said, higher a year later, 10 out of 10 times. It is what it is.
But the other one's at Zweig Breath Thrust. I know a lot of people on social media talk about this over the weekend. 19 out of 19 times, Frank, we've had a Zweig Breath Thrust. The stock market's higher a year later since World War II. What in the world is it? I'll keep it real simple. Looks at advanced declines on the NYSE. What we're looking for in this is extremely oversold. And then within a
two-week period, you go from extremely oversold to extremely overbought. Sound familiar? That's what we just did. It triggered on Thursday. Like I just said, six months later, never lower. A year later, never lower. Higher 19 times, I think like 22% or 23% on average a year later. These are just little clues, but any one of these by themselves, no. Just take a grain of salt. When you stack these on top of each other, one more just to add to the fun and the numbers on a Monday morning.
Three days in a row last week, we had 70% of all the stocks in an NYSE higher. So everything was higher also. One year after that, S&Ps higher 26 out of 27 times with up around a 20% average return. So when you stack these on top of each other with the earnings season, with the negative sentiment, yeah, Frank, we think, you know, you still, I know the headlines are the headlines. Last comment here. Wait, Ryan, before we get to the last comment, I want to ask you about one other thing. So you're seeing the bullish signals, but you're also giving me some mixed signals.
Because you told us you really like the Invesco S&P low volatility ETF. We're going to show it. It's actually underperforming the S&P since the tariffs were announced, if you go back to April 3rd. So you like a low volatility ETF, but you think we're set up for a bullish run. So why would I put my money in a low volatility ETF if we're set up for a bullish run? And why would I invest in this one if it's underperforming the market while it's been volatile? Isn't that the whole point of a low volatility ETF, is that when we see volatile times that it's going to outperform?
No, you're right there. No, we've used it as a barbell. So to get real in the weeds of the models we run for our cars and partners, we've done some momentum barbelled along with low volatility. And that's that's maybe 15 to 20 percent of our portfolio that that that that
that barbell trades worked really well. So if the upside comes, momentum is going to do a lot better. But again, we've got international exposure. We've got, you know, U.S. exposure. I mean, there's still we're still over at equities. We're ballpark 74, 75 percent equities that are unconstrained models. We can do whatever we want. We were 90 percent this time when you and I were talking a year ago. So we've dialed that back with some other areas. But overall, we still think U.S. plays catch up here. Ryan, always a pleasure to have you on, man. Great stats as always. I love just kind of the insight you give us into the markets. You have a great day.
Thank you. Appreciate it, Frank. See you. We've got more to come here on Worldwide Exchange, including the tariff supply shock and if the administration's softening touch on trade may be too little too late. Plus, gearing up for the busiest week of earnings season and the names one market watcher says are a best buy ahead of those results. And then later, fueling the AI revolution, the options Amazon and Nvidia say are still on the table. A very busy hour still ahead. Worldwide Exchange returns. Stay with us.
The U.S. and China are competing for global leadership. The country who wins will define the world we live in. U.S. international assistance is vital to our national security. It helps prevent terrorism and avoid costly wars. It fights diseases and saves lives. It helps keep America as the number one economy in the world. U.S. international assistance protects our interests at home and abroad. If America doesn't lead, China will.
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And welcome back to Worldwide Exchange. President Trump and his inner circle, they may be dialing back the rhetoric around tariffs and trade from April 2nd's non-negotiable message to the current 90-day reprieve and calls for talks. But early indications from one forward-looking sector show the D.C. about face may be too little too late. We're talking about freight and transports. In the last 24 hours from the Washington Post and the Financial Times,
Officials within the sector are raising the red flag over the damage already done. From the FT, logistics groups say container bookings from China to the U.S. are down sharply since the introduction of 145 percent tariffs, with many holding off in the hopes of a Beijing-Washington trade deal. Bloomberg also highlighting comments from Apollo economist Torsten Slocke.
warning of COVID-like shortages and a potential supply squeeze. And The Washington Post highlights what it describes as the surging price of industrial machines needed to retool U.S. factories to fulfill the president's promise of a U.S. manufacturing renaissance.
Well, despite all the tariff shock, the Dow Transport is actually coming off a three-week winning streak. It's the longest of the year, despite somewhat mixed earnings so far. But the earnings from SIA, they led to a 2% drop for the transports on Friday. The less-than-truckload company closed 30% lower after reporting a drop-off in volume because of what they call macro uncertainty. The other LTL players and some other notable transport stocks, including FedEx, they fell in sympathy. But the question is, is this a SIA problem or is it a broader problem?
Well, this earnings season, Knight Swift reported a 24% increase in LTL revenue. Old Dominion, a pure play LTL company, also cited macro uncertainty. But revenue per shipment, that increased by 3% for that company. Also, recent economic reports indicated a pull forward of goods ahead of tariffs. And manufacturing PMI, that was actually better than expected. That sector generally generates about two-thirds of revenue for LTL companies, also higher margin freight. We're going to get a fresh read on various parts of the supply chain and freight flows with earnings this week.
UPS reports this week, CH Robinson as well. That's the top freight mover from Asia to the U.S. Also, XPO, another less-than-truckload trucker. That reports on Wednesday.
Another fresh trend facing a test in the face of President Trump's tariffs. That's nearshoring, moving key manufacturing centers as close to the U.S. as possible, including Canada and Mexico. But as we're learning from the auto sector, our trading partners to the north and the south, they may not be close enough. Joining me now is Moritz Pott, founder and CEO at Tima ETFs, which runs the Tima American Reshoring ETF.
Good morning. Thanks for joining us today. Morning, Frank. Thanks for having me on the show. So the tariffs, they just kind of created a supply shock for just about every company right now, just a shock in general. What does this mean for nearshoring or more specifically reshoring as what the president wants? Nearshoring is Canada and Mexico. He wants reshoring. So what's happened is that this year we've seen a dramatic acceleration in American reshoring. We've seen over 40 announcements just this year from reshoring projects.
spanning over $2 trillion of investment. And that's both from flagship American companies, including companies like J&J, Eli Lilly, but also international companies, companies like LVMH. So we're seeing that tariffs or the prospect tariffs is accelerating the American reshoring trend.
So I have to ask you, if we're seeing this renaissance when it comes to American reshoring, your ETF that really holds a lot of these companies that are going to enable this, why is it down 9% year-to-date? What's going on there? So what's happening is that industrial sector historically has been a cyclical sector. And investors are weighing off if there's going to be a recession, to what extent will a recession weigh on these companies versus how much of the business coming from reshoring will mute the historical volatility you see in a recessionary environment.
What we see, if we look at the company, we see we hear three things. Order books are longer than ever, balance sheets are cleaner than they have been, and at the same time, they're taking pricing early and they're not getting pushback in pricing. So companies are actually anticipating what's going to happen in an inflationary environment.
And above all, companies are making the decision strategically, we're going to reshore before we have the final outcome because we want certainty. Companies don't like certainty and what they control is where they manufacture. They're making the strategic decision to preempt any final outcome to already commit to reshoring today.
So tell me when we're looking at the CTF, again, down 9% year date in all fairness, but I would imagine there's some differential in performance of some of the companies in there. Like, for example, we just saw waste management shares up more than 2% in the pre-market. I've heard a lot of people say that's a reshoring play because if you build something, tear something down, there's going to be trash, there's going to be waste.
Are there other companies that you see as just net beneficiaries despite changes to trade policy, despite a slowdown in the economy? Yeah, so we're starting to see really three kinds of like brands. We see restoring beneficiaries, enablers, and actual assurers. And we're starting to see reshoring affect more industries. So we're starting to see announcements from medical companies participating in the reshoring space, but also from high-end manufacturing companies.
So what we've seen this year, we've seen a pretty indiscriminate sell-off across most industrials companies with the exception of waste. Take a company like Eaton Corp, which we expect will dramatically benefit from the automation electrification happening in reshoring. That's down double digits this year, but fundamentally a very strong business with a very strong pipeline.
Well, what you're saying seems a bit contradictory to some of the things that we're hearing from a lot of CEOs, especially on earnings calls. A lot of CEOs are saying basically it's hard to change where you source or where you manufacture when you don't know who's going to be the president four years from now. But you're saying some of them are taking proactive steps. How important are potential rate cuts when it comes to all this? Of course, we have a Fed meeting and a Fed decision coming up in about a week. Sorry.
So I think Fed cuts will help support the sentiment around making these big commitments. But these are ultimately big five to 10 year commitments. These are not commitments you turn off one year or another. If you just look at the biggest project to date, the Arizona TSMC project, that was an over $40 billion project. So when companies, CEOs, short term, there's a lot of noise, there's a lot of volatility. But what you think what CEOs are asking themselves is,
I don't know what's going to happen. What do I control? I can start to control why I manufacture. Do I make the commitment now over the next four years? I want to bring more production back home. Because what's clear is under Trump, reshoring is a mandate. Under Biden, it was an option. And under Trump, he uses the stick. And under Biden, it was primarily driven by carrots and incentives.
All right. We'll have to keep watching this trade. Again, your ETF, the RSHO, it kind of tracks nearshoring and reshoring in all fairness. But you're saying big push when it comes to reshoring. Correct. Ritz-Pack, great to see you. Thank you very much. Thanks, Mitch. All right. Still on deck here on Worldwide Exchange in the face of a global trade war. A look at two Chinese companies taking on their U.S. rivals with some new homegrown tech. Stay with us. That story and much more coming up.
Stripe helps many of the world's most influential companies grow their revenue and build a more profitable business. Whether it's Hertz making checkout a smooth ride for their customers, OpenAI answering unprecedented demand, or PGA chipping away at back office inefficiency, Stripe's financial infrastructure platform helps companies achieve ambitious goals. No matter what success looks like for your business, Stripe helps ensure the complexity of financial systems doesn't get in your way. Learn more at stripe.com.
A pivotal jobs report with the Fed decision right around the corner. Are tariffs and policy uncertainty taking a toll on the job market? Employment numbers and analysis. Squawk Box, Friday 830 Eastern and streaming on CNBC+.
Welcome back to Worldwide Exchange. Chinese tech company Huawei is ramping up to test its newest and most powerful AI chip. The Wall Street Journal reports the company hopes to replace some of NVIDIA's higher-end processors. Sources say Huawei has approached some Chinese tech companies to test the viability of that chip. The Journal says the development is at an early stage, but Huawei could have the first batch of samples by the end of May.
Turn to the Chinese EV maker BYD. Shares falling nearly 3.5% in Hong Kong today. After reported last week, its profits doubled in the first quarter as it continues to surge past Tesla. BYD is not slowing down when it comes to taking on its American rival. Our Eunice Yun has much more on that story.
This super fast megawatt charger. BYD claims that with certain models like this Han L, you could charge up as quickly as you would filling up at a gas pump. 250 miles in five minutes.
That's faster than Tesla's 200 miles in 15 minutes. At the moment, BYD's flash charger only operates with specifically designed power systems and is available just for two of its own models in China. However, the company says 500 are already built, with plans to roll out 4,000 across the country.
In addition, BYD has a new system that allows a car to use two plugs to charge up at once. The company hopes to run its competition off the road with autonomous driving, too. BYD says that it wants as many people as possible to use its self-driving technology, so it's offering it for free.
This DENZA Z9 is equipped with an advanced version of BYD's D-PILOT driver assistance program, or God's Eye in Chinese. With a click, it
It's capable of navigating the vehicle through China's crammed city streets on its own. The system, though, does require drivers keep their hands on the steering wheel and disengages if they don't. Another standard smart feature, helping drivers maneuver in tight spaces. Using this screen, I can angle the rear of the car to scooch in the small lane.
BYD is mainly known for its low and mid-priced cars, but these new advanced technologies, Frank, really help the company drive home its advantage with rivals such as Tesla. Number one, Eunice, that scooch in the small spot technology, I need that right now here in the New York City area. I mean, that's incredible. That was pretty incredible. And you look so relaxed. You weren't nervous at all. You just kind of slid into the spot. That was pretty impressive, I've got to say. Yeah, yeah.
All right. On a more serious note, the theme when it comes to Huawei and also looking at BYD, they're really trying to take on their U.S. rivals. How much state support are they getting? I know you and I talked about Xi Jinping meeting with a lot of Chinese tech companies just a few weeks ago, basically trying to send the signal that they have the support of the government. Is this getting a lot of support from the government, this idea of taking on these U.S. rivals during this trade war?
Oh, absolutely. I mean, in terms of actual financial support, very difficult to say. But in terms of the overarching support from the government, it's definitely there. Just in the past couple of days, President Xi Jinping held a very important leadership meeting, and one of the sessions was on AI. In fact, he was
calling on the leadership to really prioritize overcoming what he described as the challenges to achieve core technologies, including AI chips. So he was talking again about the independence of AI as a system when it comes to hardware and software and that the Chinese really need to embrace these. And the messaging was seen here as very bad for Nvidia and happened to be very good for Huawei.
All right. Are you in a shoe with the scooch and the story? Great to see you as always. Have a great day. All right. Coming up, Elon Musk and what could be the second largest private funding round of all time. We'll be back right after this. People have been picking up bearish bets at a pace not seen or rarely seen over the past decade. So that tells you that people are really trying to hedge their bets ahead of this earnings season.
That was the Wall Street Journal's Gunjan Banerjee on Worldwide Exchange last week on the growing bearish sentiment within the options market heading into the earnings season. It's a big week for earnings, including four of the MAG7 members reporting. Welcome back to Worldwide Exchange. I'm Frank Holland. Coming up this half an hour, we're going to dig into that busy earnings picture and the stocks our next guest says are on his shopping list before the results.
But first, to get you ready for this trading day ahead, we begin with the U.S. markets with the major indices coming off a four-day win streak this morning. Taking a look right now, you're seeing a bit of a mixed picture right now. So the Dow moving up higher, looking like it would open about 20 points higher right now. The S&P and the Nasdaq just fractionally lower right now. And with that, we want to take a look at the Nasdaq 100 pre-market laggards and leaders. We start with the laggards first.
You're seeing PACCAR, PD Holdings, Qualcomm, NVIDIA and Paychex, the worst performers on the Nasdaq in the pre-market. And then you have the Nasdaq 100 liters, of course, on the other side. Tesla, those shares moving up more than 2%. We were just looking at some of that BYD technology, one of its big rivals.
Roper Technologies, Keurig Dr. Pepper, Meta Platforms and AstraZeneca rounding out the best performers on the Nasdaq 100 in the pre-market. Again, Meta reporting its earnings this week. Shares up over three quarters of 1%. So we're also watching the broader market. Of course, that's the S&P month to date. At one point, it was down more than 13%. You can see right here, down more than 13%. Now,
If it manages to turn positive, it'll be the biggest monthly reversal ever and the largest move from negative to positive within one month since all the way back in 2009. You can see month to date right now, S&P down about 1.5%. So we're going to continue to watch this. It could be a historic reversal when we're looking at the S&P.
Also, we'll look at gold this morning. Gold's coming off a losing week. Maybe investors shifting away from the safe haven trade. Right now, you see gold pulling back about a quarter of a percent. Important note, still month-to-date, gold up more than 4%. We're also looking at the dollar this morning, the dollar breaking a four-week losing streak. Maybe investors moving away from that sell America trade. You can see the dollar month-to-date pulling back 4%. Right now, it is fractionally higher. We also look at bond yields this morning. Bond yields easing just a bit. You see the benchmark, the 10-year at 4.26 right
Now, OK, that's your setup. Now we're going to check out some of this morning's top stories. Our Silvana now is here with those. Silvana, good morning. Hey, Frank. Good Monday morning to you. All right. We start with Bloomberg reporting that Elon Musk's XAI holdings is in talks to raise roughly 20 billion dollars in funding. Now, the report says if completed, this would be the second largest funding round ever.
ever for a startup, trailing only the $40 billion raised by OpenAI earlier this year. Now, the transaction would value XAI, which recently combined Musk's AI and social media businesses, at more than $120 billion.
All right, Amazon and Nvidia telling a group of oil and gas executives all options are on the table to power their AI ambitious, including fossil fuels such as natural gas. Now, the tech and energy industries gathering at a conference in Oklahoma City this past week to discuss how the U.S. can meet the energy needs for data centers.
Amazon and Nvidia both saying they're committed to slashing carbon emissions, but Amazon says many advanced technologies won't come online for years and it needs steady and secure power. Now, Amazon up just slightly higher in the pre-market, Nvidia down about 1%.
And a cross-Atlantic deal in the drug sector today. Germany's Merck is buying U.S. biopharma Springworks Therapeutics for about $3.9 billion, or about $47 a share. That's a 26% premium to Springworks' price on February 7th. That's the day before the first reports of a potential deal between the two companies. Now, Springworks specializes in treatments for cancer and rare diseases, Frank.
So, Lana, thank you very much. All right. Turn attention back to the busiest week of earnings. About a third of both the S&P and the Dow, they're reporting their earnings this week. That includes for the Max 7 members. We're talking Apple, Microsoft, Meta and Amazon. We also get names like UPS, GM, Visa, Coca-Cola, McDonald's, ExxonMobil and Berkshire Hathaway. For a look at the top stock picks ahead of earnings, let's bring in Matt Powers, managing partner at Powers Advisory. Hey, Matt, good morning. Good to see you.
Morning, Frank. Happy Monday. All right, Matt, we got to start off with the MAG-7. That's kind of the big earnings this week. We've got four of them. Do you have a top pick when it comes to the MAG-7 and give us the reason why?
Yeah, I mean, the common theme, it's a huge week. You said it, the common theme this week is tariffs. And you're going to hear about them nonstop. I mean, huge earnings week. And, you know, Amazon's no different. So, you know, this week, Friday, they report. And we're going to pay attention to, of course, potential tariff impacts and some of the color on this. But, you know, they're looking at revenue, 8% growth over last year and earnings jump of 40% earnings per share.
But how much is sustainable? I mean, Amazon is at the heart of the tariff storm, no doubt. I mean, they had a short-term surge in commerce, but we're looking to see if consumers are borrowing from some of that future demand because of tariffs and
It kind of sets up for an uncertain second half of the year for them. But AWS, the cloud side, continues to grow and be a driving force. But they paused some of their data center expansions. $100 billion in CapEx is earmarked for this year, which is pretty hefty. But with their earnings report, we're looking for Jassy's tone on the consumer, future CapEx.
and just really actual plans for handling tariffs. Short of it is the key is valuation. They're trading at 30 times forward. I mean, it's way below their five-year average, so the stock's cheap. All right. So, Matt, I just want to understand. So you're saying you would feel confident buying this stock ahead of earnings because there are a few landmines here potentially for this stock.
The cloud business, there could be a slowdown. These companies are not necessarily impacted by tariffs, but they are impacted by growth. And then on the other side, the retail business. A lot of the items that you see on Amazon on their marketplace are subject to tariffs. So no concerns about those two areas?
No, not buying ahead of earnings, no. And yes, definite concerns in those areas. You know, it's, you know, they've got different parts of their business, but with the consumer, you know, there's obvious concerns. And, you know, it's the tariff, it's the uncertainty around tariffs. We just don't know where it's going to go at this point. So, you know, not in a hurry to buy it. The stock is cheap, going back to that. So...
We were talking earlier in this show about some of the earnings this week, kind of talking about exposure to the consumer. McDonald's is reporting this week. Also, booking holdings, kind of a look at the travel trade. You're also looking at Starbucks. What's your take of Starbucks ahead of earnings?
Starbucks, the short of it is they're still in that turnaround plan stage. And it's-- you know, Nikhil, we're looking for color on what he'll have to say about this and where they stand, kind of in the midst of the turnaround taking shape. But they continue to invest in their long-term growth initiatives, which are improving speed and the customer experience. But I mean, they're a true cyclical. They're not Tesla. They're not Amazon. They're not at the top of that sector. So valuation has moved down recently.
But we're just really with Starbucks, we're looking to see where they stand on their turnaround plan with regards to what's going on with the consumer in general. All right. We also have Coca-Cola reporting ticker KO. We saw a bad week for Staples last week. What's your take on Coca-Cola going forward?
Regardless of last week, Coke, against just the broader market weakness so far this year, it's the top performing stock in the Dow, up 18% year to date. They do face some headwinds, there's no doubt. They're just shifting consumer preferences towards a healthier lifestyle, make America healthy again, GLP-1, weight loss drugs, but they've got some ongoing portfolio diversification involving Fairlife and things along those lines, but
Yeah, I always talk dividends, Frank, where it's a dividend aristocrat, 2.8% yield. There's a lot, there's potential growth coming in the years. And they've got a strong international exposure, which also mitigates some of that geopolitical and uncertainty of regulatory risks. So just watching for signs of some of their sustained demand.
Cost management on tariffs and things along those lines. All right. One last one I want to talk to you about is Caterpillar. Some management change there. Their CEO, Jim Ump, will be stepping down. Longtime CEO taking the reins. As you look at that company that faces a lot of, I guess, threat from tariffs and also the trade war, what are your thoughts about that going into earnings?
Yeah, great question. You know, Joseph Creed's taken over, so there shouldn't be any disruption, should be stable there. But with that, I think that they will remain cautiously optimistic with their guidance. You know, it's global growth concerns, like you said, could soften demand. You know, obviously, they're fully aware of that.
You know, cyclical sectors like construction, mining, energy are all going to be affected. But we'll just pay close attention on how management plans to navigate just some of the uncertainty in that area. All right. By the way, Caterpillar shares down a half a percent. Another aside, I've met Jim Ubleby. He's a Worldwide Exchange watcher. So if you're watching, congrats on the retirement. Matt Powers, thank you very much for the stocks to look at ahead of earnings season. Thank you again. You bet. Good to see you. All right. Coming up here on Worldwide Exchange, better skies ahead. Details on this morning's new bullish call on Boeing when Worldwide Exchange returns. Stay with us.
And we'll get to Worldwide Exchange time now for your morning call sheet. We start with HSBC downgrading its rating on Eli Lilly shares of Lilly down about one and a half percent right now. They call the risk reward around the stock not as attractive, citing potential economic sensitivity to the adoption curve for GLP one drugs.
Upgrading its rating and price target on Boeing, moving it to outperform and $218 shares of Boeing up about one and a third of a percent. The aerospace giant is making the progress it needs to on the back of last year's Alaska door plug incident, according to analysts.
We also went on a stock that we talked about earlier in the show. That's Morgan Stanley upgrading SIA to equal weight. It says the post earnings reset and maybe more structural than cyclical. But now they believe the stock is at a fair value shares of SIA. They're up about a half a percent in the pre-market right now. Just for some context, SIA now trades at about 17 times forward P.E. Its rivals XB and Old Dominion about 25 and 27 times.
All right. Coming up here on Worldwide Exchange, we've got the one word that every investor has to hear today and the stock pick that every investor needs to know. Plus, a big shift taking shape in housing. Our Diana Olick breakdown breaks down what it means for the sector's critical spring season. We'll be back right after this. And welcome back to Worldwide Exchange. Taking a look at futures right now. You can see the S&P, the Nasdaq, just very fractionally lower, very close to flat. The Dow just fractionally higher, very close to flat right now.
We also look at the Dow gainers right now in the pre-market. You see Boeing right there at the top of the list. Those shares up about one and one-third of a percent. Boeing just getting an upgrade from Bernstein, raising its price target to 218. UnitedHealth, Amazon, and P&G running out your best performers on the Dow. Then, of course, we've got the laggards. NVIDIA shares, they're pulling back about 1% right now. Caterpillar, Johnson & Johnson, and Honeywell running out your worst performers.
All right, now turning to the U.S. housing market. The housing market is facing a big shift taking place right in the heart of an all-important spring selling season. Our Diana Olick joins us now with much more on this story. Diana, good morning.
Good morning, Frank. Yeah, the story in housing has been record high prices, and we saw yet another one in March on existing homes. But the price gains nationally are slowing down quickly. And in several major markets, they are now lower compared with a year ago. Take a look at these numbers from Parcel Labs, which runs real time price data. Miami, Atlanta, Tampa, San Francisco, Nashville and Minneapolis are now negative year over year. And Austin,
a major pandemic migration market is tanking and other large markets like Phoenix and Denver are right on the verge of falling negative. Now, another report from Redfin showed home sellers gave concessions to buyers in 44% of sales transactions in Q1 of this year. That's up from 39% a year earlier
and just shy of the 45% record high at the start of 2023. Those include money toward repairs, closing costs, and/or mortgage rate buy downs, but not price cuts. Now something else in the March numbers, the median price of a newly built home was slightly lower than that of an existing home. That is not normal. There's usually a price premium for new construction.
Part of this is builders lowering prices and offering more low priced homes and a still relatively tight and very overpriced existing home market. Remember, home prices are up over 50% in just the last five years. Again, something else that's not normal. Affordable price appreciation is not happening. So even with builders cutting prices,
And more supply coming on the existing home markets. Buyers have actually hit the pause button right at the height of the all-important spring market. And builders are reporting recent quarterly earnings have all said demand is likely to get worse in the coming months. That means we're likely to see more cities, Frank, in price decline.
All right. So the price decline idea here is interesting. We actually had a guest on last week that said inventory is up and the growth of price increases is starting to slow down. He said that was a good thing. But it sounds like you're saying we're seeing a lot of stagnation. That's actually not a good thing.
Well, it's a good thing depending on if you're a buyer or a seller. If you're a buyer, great. Prices are coming down. That makes it more affordable. If you're a seller, that's not great because you want to get top dollar for your home. It depends, obviously, market to market. But we are seeing this stagnation. In fact, we were at Open House over the weekend in Dallas, and we spoke to several people who said, yeah, they want to buy. They see the house they like. There's plenty of inventory, but they're waiting. They're nervous about the economy. They're nervous about their own jobs. And
And they're nervous that if they have to sell a house to buy another house, they're not going to be able to sell. You know, we just showed a graphic. Are you talking about buy downs when it comes from the builders? I believe is at 44 percent. The record's back in 2023 at 45 percent. Do you think we're going to set a new record this year? Because there's certainly a lot of economic uncertainty. A lot of people just nervous about the economy. It seems like there's going to just need to be some other incentives to get people to make that big leap.
Yeah, I mean, builders are going to continue to do buy downs aggressively and they pulled back a little bit last year on it, but they're doing it more aggressively again. But remember, that cuts into their margins and there's just so much they can do, especially when they're trying to pencil in lower priced homes, smaller homes to get people in. They still have to run a business and their costs, of course, are going up. Yeah, there's also the tariff impact when it comes to home goods and building goods and building materials. Dan Olick, great reporting as always and great to see you. Thank you very much.
Coming up here on Worldwide Exchange, the Max 7 members set to report this week that our next guest says is their top stock ideal. We're going to reveal our mystery chart coming up right after this. And if you haven't already, follow our podcast. If you miss Worldwide Exchange, check us out on Apple, Spotify or other apps. We'll be right back after this.
Welcome back to Worldwide Exchange, turning back to the markets in a busy week on deck for investors, plenty of economic data as well as earnings. Taking a look at futures right now, sort of mixed right now. You can see the Dow just fractionally higher, the S&P and the Nasdaq both fractionally lower. For much more, let's bring in Victoria Green, G-squared private wealth founding partner and CIO. She's also a CNBC contributor. Vicki, good morning. Good to see you. Good morning, Frank. Vicki, let's start with your word of the day.
It's Thunderstruck because we've got to get ready to rock and roll. It's the classic ACDC song, you know, and it's got that great opening riff. And that's how I feel this morning. Pre-features like the da-na-na-na-na-na-na-na-na. Because we are going to just blow it away this week. You've got 147 S&P 500 companies reporting a PCE. It's jobs week. Everything's happening this week. So I really do think you've got to pump yourself up on the way into the office, listen to a little rock and roll, and get ready to be thunderstruck.
OK, I'm not familiar with the song, but Vicky, I got to say, I think finances you're calling not music. Just just to be clear, as we talk about earnings, we got some of the mag seven reporting this week. Is there one of those that you think is especially indicative of market sentiment? Is there one of us going to reveal just how investors are looking at tech in the broader markets overall?
I think both Apple and Amazon will be key. I think Meadow is similar to Google, so we're hoping for some good results from them. I mean, overall, you've got a broad base, you know, where you have IT spending with Microsoft, you have discretionary with Amazon. I think possibly maybe Amazon's the biggest barometer because they hit the discretionary spending, they hit trade and tariff. You know, they've got a little bit of everything for everyone, as well as everybody's watching Apple and China sales and how that's all going to go down and their commentary there.
All right, we're showing Meta right now. By the way, Meta moving higher in the pre-market today. Meta's actually your pick for us today. So why is Meta your pick today ahead of earnings? What's giving you confidence to make this a buy ahead of earnings? I think that's
that's being a little bit too brought down by concerns on the Chinese ad pullback. Yes, Taimou and Sheen probably have less spending, but it's only about 11% of their revenues come from China. And we look around and we say they were growing number of ads. They're growing their pricing power per ads. They have some of the highest engagement across all social media platforms. And more and more frequently, people are going to social media versus search for recommendations. We think Meta is so well positioned there. And
possibly also we could get a reprieve on the capex, maybe not spending that 60, 65 billion. That'd be crucial. And rolling back the losses in reality labs, we saw some layoffs announced from there. So maybe I'm better saying, hey, we no longer want to take unlimited losses in reality labs. Those are good things for investors. The stock has just been hammered the last two months after the what was it, 20 straight days it went up. It definitely gave all that back
Plus, we're looking for good numbers, 42B in revenue, and we think they're going to clear this little bit of a lower bar. All right. To your point, by the way, Metashare is down about 5.5% year-to-date. We're also going to get a number of other companies reporting that are going to give us a look at the consumer. We looked earlier. It was like UPS, McDonald's, Coca-Cola. Are there one of those that you think will give us a very clear read on where the consumer is at right now?
McDonald's. I think they are really, really pinpointing what the people are willing to spend. If we see them come out with more value meals, which was well-liked, I think that's just showing, again, how much the consumer is under stress. I think they're a great barometer of what the spending power is that the average American consumer continues to be. All right.
I don't know if you were watching earlier, Vicky. We were talking about what could potentially be a historic reversal this month when it comes to the S&P. At one point, S&P down more than 13 percent. Right now, it's down about one and a half percent. If it manages to turn positive, it'll be the biggest one month reversal ever. What does that say to you about this market right now that we can go from those lows to potentially a positive territory in one month?
Yeah, volatility is back. I mean, it's been an extreme month, as you pointed out. You know, we're now we were down 20 percent. Now we're only down about 10 percent off our highs. And it's but it's so news and data driven. And that is what makes this market difficult. And that's why we advise investors not to panic and sell, because things are happening so fast. And if you miss those rebound days, you're
That's extremely painful for your overall total return. So even though it was really miserable this first part of April, seeing these rebounds, you've got to be willing to take a little bit of short-term pain because we're going to get jerked around by headline news. You know, expectations right now have been all good news. We're going to get deals done. We're possibly at peak tariffs, and we'll get those rolled back.
with China. You know, Bess's commentary on, hey, there's a lot getting done potentially in Asia this week. We think the administration's desperate for an economic win this week coming up on their first 100 days. And so all of that is good, positive news, as well as, hey, you might actually get tax reform through and earnings haven't been terrible. So we switched from this
Everything's doom and gloom into good news, which is fantastic for the markets. You know, speaking of good news, by the way, J.P. Morgan out with a note earlier today from Dubrovko Lakos. I want to read to you part of what he said. It actually kind of ties back into the idea of the S&P reversing into positive territory.
He says, in part, we believe the cuts to Q1 earnings are conservative, setting off for another quarter of a four to five percent positive EPS surprise on resilient demand, including front loading effects from tariffs better than expected net income margins and strong capital reinvestments. Do you see this earnings picture picture being a similar setup right now that we could be set up for a surprise, which I imagine could possibly help the S&P push into positive territory?
I do, because I think Q1 is a little bit safer than the rest of the year. Obviously, Q1 came before all of the extreme tariffs. And so Q1 has been a lot stronger than people anticipated. However, there's so much concern. You know, if you look at what's coming through, the number of ships in the ports in the West Coast, this potential supply chain, car crash that we're going to experience the next three to four weeks if we don't get a deal done. You know, there are concerns on what does the rest of the year play out for you. So, yes, Q1 has beaten that bar, and that's good.
But the concerns on how resilient these earnings are, if we see this massive shift in supply chain issues that we could potentially see if we don't get ships coming in from China in the next few weeks. All right, Victoria Green, your pick for us today is Meta. We also got a little sample of your musical ability. I'm going to leave it there. Great to see you as always. I've been told that's bad. Great to see you as always.
Here's what to watch this week. A busy one for economic data highlighted by the monthly jobs report coming up on Friday. We also get the latest look at PCE home prices, pending home sales and consumer confidence. It's also the busiest week of earnings with four of the mag seven members reporting. We also get a look at a number of other companies. We're talking UPS, GM, Coca-Cola, Caterpillar, McDonald's, Exxon Mobil and Berkshire Hathaway. That's coming up over the weekend.
All right, one more quick look at futures right now. Taking a look at futures, kind of a mixed picture still. The S&P and the Nasdaq fractionally lower, the Dow fractionally higher right now. And that's going to do it for us here on Worldwide Exchange. Hope you have a great day. You've been listening to CNBC's Worldwide Exchange. You can always catch us live weekdays at 5 a.m. Eastern.
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