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Stocks hold on to all-time highs as investors evaluate some winning strategies from the first half of the year. You can see here futures are ticking higher. In Washington, President Trump's one big beautiful bill heads back to the House where a rough road could be ahead for Speaker Mike Johnson as he works to shore up support in his own party ahead of the 4th of July deadline. And the countdown is on just one week until President Trump's tariff reprieve expires with few new deals on the table.
It's Wednesday, July the 2nd, 2025, and this is Worldwide Exchange on CNBC and streaming on CNBC+. Good morning. Thanks so much for being here with us. I am Frank Hollins. Get you ready for the trade day ahead. We begin with the U.S. markets. They are pulling back from all-time highs as investors, they start the second half selling tech. Considering the impact of the one big, beautiful bill passing the Senate and Jay Powell saying the tariffs have essentially delayed the Fed cutting rates.
In effect, we went on hold when we saw the size of the tariffs and essentially all inflation forecasts for the United States went up materially as a consequence of the tariffs. So we didn't overreact. In fact, we didn't react at all. We're simply taking some time. As long as the U.S. economy is in solid shape, we think the prudent thing to do is to wait and learn more and see what those effects might be. And again, they haven't really shown up.
And, you know, so we're for now we're waiting.
And on the back of those J-PAL comments and just everything else right now, take a look at futures. You can see they're higher across the board, up fractionally for the S&P and the NASDAQ. The Dow looks like it would open about 60 points higher or so. We're going to take a look at the S&P 500 pre-market leaders first. Right here at the top of the list, you're going to see Marriott shares up about 2.5%. Coinbase, Masco, Ross Stores, and Caesars running out your best performers. Then the other side of the coin, the S&P 500 pre-market laggards. Take a look at those. Centene pulling back almost 26%. Melina Healthcare, Nucor, Elevins Health,
and L3 Harris Technologies running out your worst performers. You see a number of health care names here on the board. We're going to dig into that in just a bit. I want to talk about what happened yesterday. Megacab tech names. They saw some pretty big declines yesterday. Take a look. Palantir, the best stock in the S&P year to date, dropping more than 4%. NVIDIA down about 3%. Tesla down more than 5%. We're going to talk about Tesla in just a bit.
You see actually up about one and a quarter percent, but Microsoft pulling back one percent. We're going to look at the action in the pre-market now. You're seeing here Palantir, a bit of a rebound. Shares up over a half a percent. NVIDIA basically flat, fractionally lower. Tesla up one percent. Apple up three quarters of one percent. Microsoft just a very fractional decline. We also look at currency.
The dollar moving lower yesterday at its lowest level since February of 2022. Taking a look, you see week to date the dollar pulling back about a half a percent. Right now, just a fractional move to the upside for the greenback. And we will look at treasuries as well. Yields move higher after the passing of the one big, beautiful bill in the Senate. It still needs to be approved by the House. But take a look. You see the benchmark moving up quite considerably, about seven, eight basis points from the levels that we saw yesterday at this hour. The two year at three point seven nine, the long bond at four point eight one.
All right, that is your setup. Let's now turn to Europe and see how things are going over there. Steve Sedgwick, he's live in London with a look at the early action. Steve, good morning. Yeah, Frank, on another day, I think some of the factors you've already mentioned, plus one or two I might put in there as well, might have sent this market down. But as you can see over my shoulder, actually, by and large, we are in the green. I mean, concerns about the fiscal budget in the States after the one big, beautiful bill not touching the sides. Concerns about the UK fiscal position after
after a really tricky night in Parliament for the UK government, which again has put their fiscal position in focus, not touching the sides. Those comments you mentioned there from Jay Powell about we're staying higher for longer because we're not sure about what's happening on tariffs and inflation, not touching the sides. So by and large, the same pattern we're seeing stateside, we're seeing it here in Europe as well. The gainers across the board, well, we've got autos gaining, we've got oil and gas gaining, we've got basic resources gaining, renewable stocks on both sides of the Atlantic,
kind of like what they saw in the one big beautiful bill. So they're hoping to get some impetus there and perhaps not as much punitive action from the final act as well. Banks also in positive territory here in Europe up 1.5 percent, a little bit of
M&A, we had been worried at one stage whether Santander, the huge Spanish bank, would be leaving the UK. Well, now they've actually doubled down on the UK and they've bought the assets of Sabadell in the UK called TSB for a couple of billion dollars as well. And so they've doubled down. And so that's giving the banking sector a bit of a push to the upside on the M&A there. If we have a look at the sector loser today, the
A couple of names in negative territory, including real estate stocks, are under a little bit of pressure here in Europe. We've got technology you just mentioned there, some of the big technology names. They are currently down eight tenths of one percent. And retail, because one of the biggest bakers on the UK high street is warning, wait for it, Frank, they're warning that actually sales would diminish because of the heat wave. The British...
Just just never happy, are we? We're not we're not buying enough cakes. We're not buying enough sausage rolls. We're not buying enough baked goods, apparently, because it suddenly got hot. Back to you. I love Greg's over there. When I was over there, you told me I had to try Greg's. It was pretty good. Very similar to our Dunkin' Donuts here. Steve Sedgwick. Greg's down 11 percent in the session. Yeah, I don't know what's going on. It's pretty good to me. Steve Sedgwick live in London. Great to see you as always. Thank you very much.
All right, turn our attention now to your big money movers watching the big banks today, hiking dividends and buybacks after passing the Fed stress test last week. Goldman Sachs raising its dividend from three to four bucks a share. Morgan Stanley and JP Morgan also raising dividends while also authorizing new stock buybacks. Bank of America, Citi and Wells Fargo also boosting their shareholder rewards.
As we mentioned, we're watching shares of Tesla this morning. They're higher in the pre-market after closing down more than 5% yesterday on Elon Musk and President Trump feuding once again, this time over the big, beautiful spending bill. The president firing back, suggesting the Department of Government Efficiency that, remember, Elon Musk basically started, should investigate EV subsidies. Not a good thing for Tesla's business, obviously. Again, Tesla shares rebounding a bit, up about 1%.
Tesla also expect to report second quarter deliveries today. Expectations are for an 11 percent drop year over year. We're also watching shares of Modelo owner Constellation Brands missing top and bottom line estimates for its most recent quarter on falling demand and higher prices for aluminum cans. The company did, however, reiterate its outlook for fiscal 2026. Shares of Constellation pulling back just about three quarters of one percent.
All right, turning back to the broader markets, U.S. markets are hovering right around their record highs, but the dollar, it's at its lowest level since February of 2022. As investors consider the path of rate cuts this year with the final version of the one big, beautiful bill will look like if and when it gets through the House and, of course, trade deals ahead of President Trump's July 9th tariff deadline. Joining me now, Mark Anderson, co-head of asset allocation and the chief investment office at UBS Global Wealth Management. Mark, good morning. Good to see you.
Good morning, Frank. Thanks for having me. So we listed a bunch of factors there. The market seems to be shrugging it off, at least right now in the pre-market futures are higher. In your mind, what's the biggest one of those things that investors should be mindful of and could potentially impact this market in a negative way?
So, first and foremost, we obviously have to acknowledge there's a lot of the risks that have been reduced over the last couple of months, both related to geopolitics, fiscal uncertainty, trade uncertainty. I think when we look into the second half of the year, we're relatively constructive still. But, Frank, probably the one thing we worry the most about is the same uncertainty that Paul was just highlighting before. That's a world in which we haven't really seen the impact yet on tariffs. We know that we're going to see an economic slowdown in the second half of
the year. We don't know the extent to which we're going to see an economic slowdown. We also don't know to which extent inflation is going to hit. I think at the moment, the market is basically pricing a little bit of a dip down in growth, a little bit of a move up in inflation, but ultimately central banks around the world, including the Fed, that's going to cut interest rates. And that's an environment that global investors are just very appreciative of these days. All right. So you're feeling fairly confident about interest rates, even though Jay Powell said tariffs
really seem to be the roadblock stopping the Fed from doing it. I also want to talk to you about the dollar. We were just showing the dollar chart a second ago, down about 0.5% this week, at its lowest level since February of 2022. What do you think that means for the upcoming earnings season here in the U.S., and what does it also mean for global equities?
I think from a U.S. earnings perspective, obviously this is not bad for some of those international companies, including a lot of the tech names that are generating a good part of their revenues abroad, translating into something which is quite constructive on a dollar note. So that means that for our global investors and our portfolios, we lean into AI-related companies, many of which are located in the U.S., and we also think that the U.S. equity market is likely to outperform some of its European peers.
The emerging market is another region that we like in this type of environment, typically with lower rates, weaker dollar, again, translating into a very solid earnings growth. And conversely, in places like the UK, broader eurozone, where some of those headwinds are going to come now with a stronger euro in particular, but also a European central bank that's very likely to be at the end of its cutting cycle for now.
With all this in mind, where would you put money? We're going to hit this a little bit later in the show, but the S&P equal weights kind of broken out. Where do you see the real action in the market? Is it a mega cap tech? Is it in the small caps? Perhaps I'm talking U.S. here. Is it perhaps just keeping it in momentum stocks? Names like Palantir that have really moved the market higher. Is it an industrials that have powered the market higher? Where do you see the biggest opportunity as we look at the second half of the year?
So, we look into the second half of the year and apologies for sounding like a broken record here potentially. We do think that AI is the game in town over the next couple of years. So, that's one of our transformational investment opportunities that we keep talking about. When we look at U.S. companies specifically, we haven't broken sort of the 10% adoption mark of AI when we survey companies. So,
If we go six, 12 months back, that number was around 5% of companies using AI. Now it's close to 10%. That number is only going to go higher. So AI and tech is still a place that we really like to look at.
Power and resources is another one. So a lot of the companies that are benefiting from this AI transition, so companies that can help create the metals that are going into these processes, more efficient use of electricity, etc., battery developments and so forth, that's something that we find very appealing as well. Mark Anderson, good to see you as always. Thank you very much.
Thanks for having me. We have a lot more to come here on Worldwide Exchange, including two hot takes on what's been a pretty rough 2025 for shares of Apple. We're going to speak with Fundstrat's Tom Lee with his outlook for the stock, plus why health insurance giant Centene is sinking ahead of the open. We showed you this earlier. Shares down about 26% right now. Look at that chart. It definitely has to do with their guidance. We're going to have much more on that, some downgrades as well. But first, breaking down the winning water strategy for 2025. We're going to speak with one CEO at the center of all.
All of it. A very busy hour still ahead when Worldwide Exchange returns. Stay with us. Is it time to reimagine your future?
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Welcome back to Worldwide Exchange. Utilities wrapping up a strong first half of the year. Outperforming the S&P is more than 5% gain. Water stocks are some of the biggest winners. The iShares water management multi-sector ETF up nearly 16% so far this year. One standout, Washington-based water management company, Itron. Take a look at those shares. Those shares up more than 22% this year and hovering just below a 52-week high. So what's behind this upside move? Joining me now is the president and CEO of Itron, Thomas Dietrich. Thomas, good morning. Thank you for joining us.
Morning, Frank. Great to be here. All right. So let's kind of dig into your company. Your core business seems to be managing rising water demand in a sustainable way. What does that mean for your customers that include a lot of utilities here in the U.S. and utilities overseas in Europe and Asia?
Well, ITRON is blessed to call more than 8,000 utilities and cities all around the world. We do business in about 110 countries. What we really work on is the efficiency, resiliency, reliability and security of distribution systems for utilities and cities. So whether it is electricity or whether it's gas or water or smart city applications, we're really all about trying to make that a little bit more efficient, preserve those natural resources
and make sure that the consumer is getting the experience they desire. We do business in four out of the five top metro countries all around the U.S., and electricity is our fastest-growing area, although water is super important to what we do.
So I want to talk about more of the water side of things. I would imagine when it comes to your water management business, you're seeing a tailwind with the build out of data centers. They need water for cooling and things like that. We're also seeing another emergence of technology in the nuclear space. A lot of these small reactors that are at least planned to be built here in the U.S. Do you think that's already priced into your stock, the potential business there?
I don't think it is. I don't think it is. Look at the U.S. economy. It's fueled on energy and we need water to survive as a species. So electricity has been flat from, let's call it roughly 2000 to 2020, where there really was not a lot of growth. When it comes to what we see for the next 30 years is minimum two percent.
some estimates as high as 6% or 7% annualized growth. And this is a massive, massive difference for what utilities need to work on in the years ahead. This is really an area that we can help with. We find with the deployment of our technology, you can eke out an extra 10% or perhaps 20% of capacity of your existing network by operating
reducing leaks in water or finding extra the extra capacity on electricity system to really fuel that growth for the economy at large. You mentioned electricity. The grid here in the United States, a lot of people talk about it being aging, not really able to handle this, the spike in demand that we see not only from data centers, but just from our everyday use. And then if we see a reacceleration of EV sales, that could continue to put more pressure on it. When we're looking at the grid,
What exactly does a company like you do to help just keep power going? I mean, you just kind of mentioned it. And what does that business mean? Like, what's the exact thing that you are doing when that generates revenue for your company when it comes to grid management?
Right. So we sell technology and software that goes into the distribution grid. So call it that last mile of the system. And as the grid becomes much more complex, as load growth increases on the generation side, you have a mix of fuels. Sometimes you have a gas plant. Sometimes you have solar or wind, which creates a variable amount of generation capacity.
Out of the edge of the grid, you've got more EV chargers. Every charger is the equivalent of a small house. Houses on the grid don't move around. EVs, they roam around the town, and once in a while, they plug in and turn on with the same load of that small house.
How do you solve that complexity as a utility? How do you make sure you provide reliable and efficient and, of course, cost-effective power? What we do as a company is really make sure that you can get visibility into what's going on in the grid and deliver the power to where it needs to be by coordinating all of these assets.
So our technology really is a strong, robust communication network. And then all of the endpoints that allow you to manage that load and deliver power efficiently. You know, Thomas, we're out of time. I want to ask you one other quick question. I know you're on the board of OnSemi, but when we're talking about all this, are you using artificial intelligence? And if you don't mind me asking, what are you buying? What chips are you buying? I mean, how does this all happen? Is this manual or is this AI? I mean, how does this all work?
Yeah, largely today, our systems are deterministic, so they are not AI in the field today. We're doing work with our customers today to do proof of concepts for deploying artificial intelligence out at the edge of the grid. And a perfect application of that would be anomaly detection to understand what happened. Was that event that I just saw
a car crashing into a telephone pole or was it a normal event in the electricity grid. By being able to differentiate that, you can provide a much, much better quality of service and make sure you're rolling a truck to the scene of the crime to be able to fix an outage much faster. That type of growing capability would be added to machine learning, which is already well used in the forecasting space in the years ahead.
We aren't quite there yet, but I'm sure in the years ahead, this will be a growing part of our business. All right, Thomas Dietrich, we got a conversation there. President and CEO of Itron, thank you for joining us. Great to see you. Thank you. Still on deck here at Worldwide Exchange, a billionaire buyout boost. The stock set to pop at the open, courtesy of Toma Bravo. We're back right after this. Is it time to reimagine your future?
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All right, welcome back to World Wide Exchange. Let's get a check on some of this morning's top stories. Silvana Hanal is here with those. Silvana, good morning. Hey, Frank, good morning to you. Well, Paramount settling a lawsuit filed by President Trump over a 60 Minutes interview aired on CBS last October. Now, the president sought $20 billion in damages, alleging CBS deceptively edited an interview with then Vice President Kamala Harris to tip the
the scales in the election. Paramount will pay $16 million with the money going towards Trump's future presidential library and not pay to him directly or indirectly. And the settlement doesn't include any statement of apology or regret. Meanwhile, Figma is filing for an IPO. The maker of design software plans to list shares on the New York Stock Exchange, but didn't
didn't disclose the number of shares it will offer or the expected price range. Last year, Figma was valued at more than $12 billion in a tender offer that allowed employees and early investors to cash out some of their holdings. The IPO has been expected after regulators in Europe and the U.K. blocked an attempted takeover bid by rival Adobe that was back in 2023.
And shares of Verint Systems are jumping on a Bloomberg report that Toma Bravo is in talks to buy the maker of call center software. Verint has a market cap of just over $1 billion based on yesterday's close. Now, Bloomberg says Verint is working with an advisor, but there's no guarantee the two sides will reach a deal. Verint and Toma Bravo have declined comment, and we're seeing shares in the pre-market up close to 12%, Frank.
Silvana, thank you very much. See you just a little bit later in the show. All right, turn our attention now to shares of cybersecurity giant Cloudflare. Right now in the pre-market, they're up just about 1% after closing down more than 5% yesterday. The company released a first-of-its-kind tool that will allow Cloudflare customers to block AI companies from accessing content without prior authorization. I spoke with CEO and founder Matthew Prince in a CNBC exclusive on the rationale behind the move and what he hopes to accomplish.
As the world is shifting from a search-driven web to an AI-driven web, less people are reading the actual original content. Instead, they're reading derivatives of the content. And that means that if you're a content creator and you're creating value by either selling ads, selling subscriptions, or just getting the ego of knowing people are reading your stuff, all three of those things are going away in an AI-driven web. You know, just to kind of use some of the popular terminology, you're saying we're going away from a blue-link economy due to zero-click searches.
And we're looking at that shift right now. It seems like content companies, they want to protect their content. Great for them. What's in it for Cloudflare?
You know, I think the first thing is we've won a lot of new customers as a result of this. These are customers that said we didn't have a solution in the past to be able to stop these AI crawlers from being able to take our content. We're the world's best at being able to detect bots, stop bots, and make sure that you have control of your content, whether those bots are, again, being run by hackers and spammers or they're being run by AI companies.
We're very good at detecting them and stopping them, and so we've won a number of customers. I think the second thing is that over time, we believe that there's going to be a marketplace that develops here that is going to be what monetizes the AI-driven web. And if Cloudflare can be the company that helps develop that marketplace, we think it's a substantial business opportunity for us.
Prince added his company is detecting uptick in cyber attacks primarily from China and Iran, focusing on telecoms, electric grids and financial institutions, as well as cryptocurrency firms. You can watch the full interview on CNBC.com and hear more from Prince, including how his company is mitigating a tariff impact.
All right, coming up, we've got much more. But first, we're going to do a quick check on the Dow Transports coming off their best day since May, following the Senate passing the Trump tax and spending bill. Week to date, the transport's up more than 2%. Names like FedEx, UPS, Union Pacific, CSX, and Old Dominion rising between 2% and 4% yesterday. Taking a look this morning, transports don't generally move in the pre-market, but we are seeing a little bit of action. Old Dominion up about 1.25%. UPS up about 0.5%. We'll be right back after this break.
What I want to do is and what I will do just sometime prior to the 9th is we'll send a letter to all these countries. We'll send a letter and we'll say we would consider it a great honor. And this is what you'll have to do to shop in the United States. We're like a department store to shop in the United States. And you'll pay a 25 percent tariff. We wish you a lot of luck. And that's the end of the trade deal.
That was President Trump earlier this week talking tariffs with the pause in them now just one week away from expiring. The White House is looking to lock in some new trade deals ahead of that deadline while downplaying hopes of an agreement with one key ally. Welcome back to Worldwide Exchange. I'm Frank Holland. Coming up this half an hour, we're going to have the very latest on trade talks and former Commerce Secretary Carlos Gutierrez on the actions he sees the White House taking after that 9th of July deadline.
But first, we'll get you ready for the trading day ahead. We'll begin with the U.S. markets pulling back from all-time highs. As investors, they start the second half of the year selling tech, considering the impact of the one big, beautiful bill passed in the Senate. And also, Jay Powell saying that tariffs have essentially delayed the Fed cutting rates.
In effect, we went on hold when we saw the size of the tariffs and essentially all inflation forecasts for the United States went up materially as a consequence of the tariffs. So we didn't overreact. In fact, we didn't react at all. We're simply taking some time. As long as the U.S. economy is in solid shape, we think the prudent thing to do is to wait and learn more and see what those effects might be. And again, they haven't really shown up.
And, you know, so we're for now we're waiting. And I'm back to those J-PAL comments and just everything else. Take a look at futures higher across the board. The Dow looks like it would open up nearly 80 points higher. Taking a look at small cap futures as well. Yesterday, the small caps finished almost one percent higher right now in the pre-market up about three quarters of one percent. Also, we want to check your Nasdaq 100 leaders and laggards. Take a look at some of those names you see right here at the top of the list.
Strategy up just about 3%. Right now, Bitcoin also trading at about $107,000 a coin. Merat International about 2.5%. Raw Stores, Constellation Energy, and Old Dominion, big transport name here, less than truckload company up in the pre-market up about 1.25%. Then the NASDAQ 100 laggards as well. Watching those.
You see Adobe Inc. pulling back about one and three quarters of one percent. American Electric pulling back one percent. Intel, ASML and Dexcom running out your worst performers on the Nasdaq 100. This morning, we're also watching shares of Tesla. Sales of the company's China made EVs ticking up last month by just under a percent from a year ago. That snaps an eight month losing streak. Tesla shares right now.
up about 1% after falling pretty hard yesterday, down about 5% yesterday on the back of Elon Musk and President Trump reigniting their feud. Also, the president saying this might be possible that Doge, remember the agency that Elon Musk basically started, might look into EV subsidies, which would be bad for Tesla's business. Week to date, the EV maker pulling back about 6%. We're also looking at currency this morning. The dollar moving lower yesterday, now at its lowest level since February of 2022. Taking a look, week to date, dollar pulling back about 0.5%.
Right now, a fractional move to the upside for the greenback. Also looking at treasuries, yields moving higher after the passing of the one big beautiful bill in the Senate. It still has to pass the House. Still yields move higher. The benchmark moved up about seven, eight basis points from the levels that we saw yesterday.
We're also checking the early trade over in Europe. Take a look at the action over there. Steve Sedgwick told us, surprisingly, maybe to his surprise, we're seeing kind of a lot of green on the board. The stocks, the overarching index up about a half a percent. The CAC, the best performer, up over 1 percent. The FTSE up just about a
quarter of one percent as well. Also watching shares of Bestas and Orsted, two alternative energy names rising on the Senate's approval of that Trump tax and spending bill. Analyst at Citi saying the Senate version provides significant relief for wind. Take a look at these shares.
Vestas up about almost 10 percent. Orsted up just under 4 percent right now. Also checking the Asian market closes. Also looking at markets in Singapore hitting an all-time high. The Nikkei actually pulling back about a half a percent. The Hang Seng up over a half a percent. The Shanghai Composite flat, fractionally lower. The Kospi down about a half a percent. And down here, the FTSE straight times up just about a half a percent.
All right. That is your setup. Now we want to turn our attention to D.C. and Capitol Hill. The president's tax and spending bill heading back to the House after Vice President J.D. Vance was brought in for the tie breaking vote on the Senate's version yesterday. Republicans rushing to get the bill passed before their self-imposed Fourth of July deadline. NBC's Alice Barr joins us now from Washington. Alice, good morning. Does House Speaker Mike Johnson, does he have the support he needs to pass the Senate version of this bill?
Frank, he says he believes he's on the right path and President Trump is urging House Republicans to stay united behind the bill, funding his biggest priorities from mass deportations to extending the Trump tax cuts. But some House members aren't happy with changes made in the Senate that they now have to sign off on. This morning, the big bill back in the hands of the House with the pressure on to get it to President Trump's desk by Friday. I think it
WILL BE EASIER IN THE HOUSE THAN IT WAS IN THE SENATE. TO MEET THE TIMELINE, THE HOUSE CAN'T MAKE ANY CHANGES TO THE SENATE VERSION. SOME MEMBERS ALREADY RAISING OBJECTIONS, AS SPEAKER MIKE JOHNSON PROMISES TO PASS THE PRESIDENT'S DOMESTIC POLICY AGENDA. WE'RE WORKING THROUGH THAT, TALKING TO ALL MEMBERS AND ALL CAUCUSES AND EVERYBODY ELSE. BUT WE REMAIN OPTIMISTIC WE'RE GOING TO LAND THIS PLANE. PLANES POSING PROBLEMS OF THEIR OWN, WITH STORMY WEATHER CANCELING FLIGHTS ACROSS THE COUNTRY.
Some House members hitting the road. Let's go deliver on President Trump's agenda. To make it back to vote as soon as today. We're going to drive overnight. Including Democrats united in trying to stop what they call. This one big ugly bill that will rip.
healthcare away from millions of Americans. It all comes after the Senate narrowly passed the bill with a tie-breaking vote from Vice President J.D. Vance. Vice President votes in the affirmative. All Democrats and three Republicans voted no, including Senator Rand Paul, who criticized a carve-out softening Medicaid cuts in Alaska to win over Senator Lisa Murkowski. To get the vote of the Alaska senator...
Billions and billions and billions more were added. My response is I have an obligation to the people of the state of Alaska. Do I like this bill? No. Because I tried to take care of Alaska's interests. The Medicaid cuts aimed at offsetting the bill's extended Trump tax cuts, plus no tax on tips and overtime and funding for defense and deportations.
Objections in the House are split, with some fiscal conservatives concerned the bill doesn't do enough to cover its costs. It's projected to add more than $3 trillion to the deficit, while moderates worry about the Senate version's deeper cuts to federal aid, with more than 11 million Americans expected to lose their health insurance. Frank? Alice Barr, live in D.C. Alice, good to see you as always.
All right. Turning to President Trump and his tariffs. The current pause set to expire in just one week. President Trump yesterday suggesting the U.S. could reach a trade deal with India. The president reiterating he's not thinking of extending the deadline to the July 9th deadline and expressing doubt a deal could be reached with Japan, threatening to hit the American ally with tariffs of up to 35 percent. For more, let's bring in Carlos Gutierrez, former Commerce Secretary and a CNBC contributor. Carlos, good morning. Good to see you.
How you doing, Frank? Morning. So what do you make of this? We're about one week away. You were very confident earlier this year this would all be resolved sometime around now. You said sometime around the middle of the year. What do you think of the progress we've seen so far? Well, I continue to think that the back half of the year, a lot of this will be resolved. But where we are today and, you know, the question is, why haven't we had more deals?
July 9th is coming up and we really have only had the UK, right? And with China, we've gone back to where we were. There are two variables that are impacting this, Frank. One is the complexity of these deals. You know, every country has to negotiate and has to prepare for negotiations with the U.S. The U.S. has to prepare for about 15 or 18 countries, the most important ones.
These countries have 30, 35 teams, dozens of teams put together to carve out negotiation positions. We have a small group of people, Secretary Besant, Ludnick, USTR Greer.
In addition to that, the Trump administration is going after the most difficult issues. These aren't low-hanging fruit. This is the most difficult trade issues with each of these countries, and that's just delaying things. So I believe that the most likely—and there are a lot of scenarios here, Frank, that can happen in July— the most likely is that we will see reciprocal tariffs on some countries.
We mentioned Japan. That's come up in the last 24 hours. India is still a possibility. The president mentioned yesterday India, but
There's a lot to sort out with India. India is a very protectionist country. The European Union is going to be very tough. So we'll probably see reciprocal tariffs on some countries and regions, and the others may stay at 10 percent for a while. That's one scenario, and I think that's probably the most likely. All right. So these deals, again, on the quote-unquote reciprocal tariffs, very important. The EU one especially, I would think, was one of the more important ones.
What does this say to China, in your mind, about those negotiations? The president can't get these deals done with Japan, India, the EU. Does it make a final deal with China more difficult? Yeah, you know, it's interesting. But China, over decades, the one thing that China has wanted is for us to reduce, get rid of export controls. And this is the one time where they may be able to negotiate something because we want rare earths.
And China now wants a reduction in export controls. That is the big issue today. There are a lot of other issues, tariffs, et cetera, but that is the primary issue. And they may have a deal. And if they get a deal on export controls, again, something they've wanted and something that is a sign for them of confidence in China, that can open the door to additional negotiating positions, which is good.
But I suspect that China will stay around 30 percent for now. I don't think a China deal will be negotiated quickly. But those are the two variables, rare earths for the U.S. and export controls with China really desperately wants. The European Union, if I can just say, we are after the toughest of issues. We want them to reduce their to take out their value added tax law. We want them to change their anti monopoly law.
We want them to change food regulations. That's very tough. This goes beyond auto tariffs. So that just makes it even more difficult. All right. Carlos Gutierrez, always good to see you. Thank you very much. Thank you. Thanks, Frank. All right. We're just about a week away from revealing America's top states for business. CNBC's annual rankings for 2025. One key factor we're looking at, the cost of insurance, which varies widely from state to state. Scott Cohen has more from the epicenter of the national insurance crisis in Southern California.
Frank, this is Altadena where the Eaton fire killed 18 people and destroyed some 9000 structures. The damage still here is still horrific. Also in Pacific Palisades where the Palisades fire killed 12 people. But there is some rebuilding going on and people are getting insurance, but it is expensive.
Statewide, according to the online insurance marketplace Insurify, Californians are looking at a 21% increase on average this year. It can be even higher in fire-prone areas like this one, and it is not as if people have a choice. I very, very rarely get questions anymore about why rates are changing. I normally just get emails from people saying that they're very thankful that the rate didn't change by as much as they thought it would, and they're thankful that they still have coverage.
California premiums are not the highest in the nation, not even close. That distinction belongs to Florida, followed by Louisiana, Oklahoma, Colorado and Texas. And those numbers start to change what it means to own a home. It's kind of really eating into the idea of homeownership.
homeownership being a really stable, essentially cost-capped long-term bet, especially if you live in a state like Florida or California or even Texas. Insurify is helping us with some of the numbers in our 2025 America's Top States for Business study. These are the cheapest states, Vermont, Alaska, New Hampshire, Maine, and Delaware. We are factoring those numbers and the increases into our cost of living category. You can read more about our study
at topstates.cnbc.com. The top states for business revealed on July 10th. Frank? All right, coming up here on Worldwide Exchange, look at whether the next six months may offer a better picture for the market's worst performing sector this year. That's consumer discretionary. We're going to show you the stocks our next guest likes in this space, including one that he calls the NVIDIA of retail. That's coming up next. Stay with us.
Welcome back. Check out the S&P retail spider or XRT, which rose 3% yesterday. That's one of the best gains since mid-May when the U.S. and China agreed to pause their tariffs for 90 days. But the consumer discretionary sector is still coming off a very poor first half of the year, the worst performing sector in the S&P 500. Let's talk more about the state of retail and the consumer in the second half with Scott Mushkin, founder and CEO of R5 Capital. Scott, good morning. Thanks for joining us. Morning.
Right. So we just teased this. You said there's an NVIDIA of retail. What name would that be and what makes it the NVIDIA of retail? Well, it sounds a little bit crazy and especially the name I'm going to say, which is Walmart. You know, that's our top pick. We had a buy on it for about three years, took it off for a couple of months and then have reestablished it as a buy. And it's actually, again, our number one pick. Things are really changing at Walmart. I can kind of get into into that if you'd like.
Well, I want to get to more of the broader sector, but we teased it, so we had to talk about it. When we're looking more broadly at the sector, you can kind of loop back around to why Walmart's the NVIDIA of retail in your mind. How important are tariffs when we're looking at the second half of the year for this sector? We're just talking about being a week away from the reciprocal tariffs. And also, there hasn't been a final deal when it comes to China. Do the reciprocal tariffs, do those weigh on the sector? Does the final deal with China, does that weigh on the sector? Give us a sense.
Yeah, I mean, we're just kind of cautious on the sector overall. I mean, I think tariffs are definitely a factor here. We look at it as an import consumption tax. I heard your last guess.
I think we're going to 10%, 20%, 20%. But if you look at just the theme of what the administration is doing, and you look at the history here, I mean, we've had durable goods since 1995. It was 5.5% of real spending. It's now 13% of real spending. Are we going to 15% or 16%? We don't think so. You also have the secondhand economy movement. You have
the reshoring movement. So tariffs are definitely a factor, but we look at all of discretionary items. Another good figure is you look at furniture. Since 1995, volume purchases of furniture up 250%.
So we don't think consumerism is dead in the US. In fact, we think they're really trying to get more of the fruits of the economy down to the bottom 90% and be much less dependent on a top 10% purchases or consumption of imported goods.
But we do wonder where that money, if this is successful, ultimately gets spent. And we're cautious on discretionary, generally speaking. In the next six months, again, I think that caution is still there, even though the sector underperformed. You have very low population growth. You have tariffs coming on. So
You know, we remain very cautious on the industry. And then one other thing I would point out is competition. Talked about talked about Wal-Mart, Amazon, Costco, the big three that are just consuming a lot of oxygen in the room. Scott Mushkin, we got to leave the conversation there. Thank you very much. Very good to see you.
Good seeing you. Thanks, Frank. 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, shares of Centene selling off ahead of the open. Details on what's fueling this dramatic drop. When Worldwide Exchange returns, shares of Centene pulling back more than 26%.
Welcome back to Worldwide Exchange to check on a few stories that we're following this morning. We're watching the big banks today after passing the Fed's stress test last week. Goldman Sachs raising its dividend from three to four dollars a share. Morgan Stanley and JP Morgan also raising dividends while authorizing new stock buybacks. Bank of America, Citi and Wells all boosting their shareholder rewards as well.
Peter Thiel and a prominent group of tech billionaires, including Anderle's Palmer Lucky, are reportedly backing a new U.S. bank to fill the financing void left from the collapse of Silicon Valley Bank. The bank, Erber, has applied for a national bank charter and plans to serve tech businesses focused on AI, crypto and defense. Reuters reporting Intel CEO is exploring a big change to his contract manufacturing business in an effort to win major customers.
The reported shift in its foundry business would involve no longer offering certain Intel technologies to outside firms. And shares of Centene, they're sinking in the pre-market after the health insurance giant pulled its 2025 earnings forecast. The move coming after the Senate yesterday approved the biggest cuts to Medicaid since its inception back in 1965.
Amazon founder Jeff Bezos just unloaded more than 3 million shares of the e-commerce giant, valued at nearly $737 million. The move was part of a prearranged plan allowing Bezos to sell up to 25 million Amazon shares through next May. All right, coming up, ready to rebound. Could Apple shares be set to take off after a dismal start to 2025? We've got Fundstress Tom Lee. He's here to weigh in on that and his top ideas for the second half. We'll be right back. Stay with us.
Welcome back to Worldwide Exchange. Stocks are pulling back from record highs to start the second half. Right now, futures are higher across the board. The Dow looks like it would open just about 80 points higher. With that, let's bring in Tom Lee, Fundstrat Global Advisors, head of research and CIO, also a CNBC contributor. Tom, good morning. It's great to have you here. Yeah, great to see you, Frank. Why don't we just dig into it, Tom? What is your word of the day? Why don't we start there? Our word of the day is skeptical. Okay, and we're using the word skeptical to
Because as we're starting the month of July and at the S&P 500 is up 5% year to date,
I think investors are looking at the rest of the year and are quite skeptical because they're saying, well, perhaps President Trump's not going to extend the tariff exemptions in July. The Fed has a meeting at the end of this month. And I think despite the fact that there's favorable seasonals for the month, I think investors want to still sort of not own the stock market. And I think that's one of the reasons this is the most hated V-shaped rally ever.
really, in the last few years. All right. So you're saying it's still a bit of a bearish sentiment. According to your research, it's about $7 trillion of cash on the sideline. You say for the second half, you buy a number of things, small caps, financials, large and regional banks, industrials, Max 7 and Bitcoin, but also washed out stocks. I want to find out, do you think Apple is one of those washed out stocks? Because Fast Money was talking about it yesterday. I want to play what they said yesterday about it and get your take on it as well.
So we are thinking you can catch 6%, 7%, 8% from here. And the setup, to my eye, looks right. It's the first real action from Apple that is bullish in a long time. We've seen that long-term underperformance, but also lower highs, lower lows up until kind of right now. And we have right now a breakout from what looks like a short-term triangle formation. Triangles, I think, are the highest probability setup that we can see.
And so with the price objective that you can derive from the triangle, you could get Apple to about 238, which is even better, 14, 15 percent. Tom, also, Jeffries upgraded Apple this morning as well. So first, is Apple one of these washed out stocks you're talking about? And what do you think of that technical take?
Well, it certainly doesn't surprise me. I think investors have been frustrated with Apple for the past year or so because they've been waiting for Apple to do something bold in AI. But I think patience is going to pay off for Apple. They're going to have an opportunity to look at what kind of AI models work the best for them. And at the end of the day, I think their customers will remain fanatically loyal. And so if we're starting to see, as Carter pointed out, higher highs and
higher lows, I wouldn't be surprised if Apple is going to make a comeback. It is a company that we think has, you know, really established itself with its with consumers. And it is a granny shot in our granny shot ETF. All right, Tom Lee, we got to leave the conversation there. Great to see you, as always. Hope to have you back very soon.
One more look at futures before we let you go right now. Futures higher across the board. The Dow looks like it would open just about 80 points higher. The S&P and the Nasdaq make some fractional moves to the upside as well. Also want to look at Centene. We were telling you about this stock earlier today. Healthcare giant pulling back very sharply on the back of the passing of the one big beautiful bill and some cuts to Medicare there. A number of stocks moving in the pre-market. That's going to do it for us here on Worldwide Exchange.
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