it is 5:00 a.m. here at cnbc global headquarters. here is the "five@5. we are going from the t.i.n.a. to the trade there are all in that natives -- alternatives to the stock. and warren buffett boosts stake in what is the top holding. and over to washington the debt standoff continues as the treasury reports cash holding has been cut in half. and the end of siri? what apple is doing to take on

chatgpt and other a.i. chat bochatbots and it is friday, may 19th, 2023 you are watching "worldwide exchange" on cnbc. good morning welcome to "worldwide exchange." i'm frank holland. let's kick off three straight days of gains with the nasdaq at the highest close since 2022 futures are green. nasdaq up .20% s&p and dow up this hour the nasdaq is continuing to out perform. it is this line up here that you see up 3.2% for the week it is on pace for its fourth winning week in a row.

if you think that is impressive, it is nothing compared to a pair of overseas markets. in europe, the dak ix is hittina fresh 52-week high the nikkei is closing higher now for a check on u.s. bonds with the benchmark 10-year treasury 3.26 rising as we inch closer to a debt limit deal. we see the 2-year treasury also higher right now at 4.22 something we continue to watch here energy, especially the oil market with the u.s. benchmark wti crude. it is up .50%. brent crude is up .50% natural gas is down .50% for a check of the corporate

stories is silvana henao >> good morning, frank let's start with warren buffett. he made have told cnbc's becky quick he doesn't want to control occidental petroleum new filing out yesterday show berkshire snapping up 3.5 million shares of occidental of $58 a share over the past three trading days it is boosting stake in the company to just north of 217 million shares or 24.4% of the company. this week's purchases follow a similar string of buys last week which total $130 million a group of tiktok creators is suing the montana state attorney general over the law of banning the download of the social media platform. in the lawsuit, the plaintiffs have more than 500,000 followers allege that the act quota tempts

to exercise powers over national security that monday does not have adding it likely violates the 1st and 14th amendments. and as negotiations continue over the u.s. debt ceiling, the treasury now says the amount of money it has on hand to pay its bills now at the lowest level since 2021 at $68.3 billion. treasury says a week ago, the balance was almost $155 billion. >> something we are watching we will talk more about that later on silvana, see you later on. thank you very much. sticking with the treasury and debt limit standoff, the white house releasing a statement saying the democratic negotiators are making steady progress and talks with republicans in avoiding u.s. default. this as the president is attending the g7 summit in hiroshima, japan

we have the latest with brie jackson in washington, d.c. and martin soong in hiroshima. brie >> reporter: they have two weeks to reach a deal. both sides are making progress, but there are concerns of concessions. president biden in japan meeting with the leadersof the world's largest economies as negotiators back home try to avoid an economic catastrophe >> we're not there i see the path we can come to agreement. >> reporter: while overseas, the president is receiving updates on debt limit talks. on thursday, vice president harris stressed what's at stake. echoing the administration warning that a first-ever government default could spark recession and cause the country

to lose millions of jobs and damage the country's reputation. >> this does not have to be a crisis our position is clear and system congress must act. >> reporter: one sticking point? the gop plan to impose stronger work requirements for social safety net programs likes food stamps and housing assistance programs >> it is in your court >> the president has to have the option to say these things go too far. they are not acceptable. >> reporter: a growing number of senate democrats are signing on to this letter calling on mr. biden to invoke the 14th amendment. that would allow him to raise the debt ceiling without congressional authorization. and treasury secretary janet yellen warned that invoking the 14th amendment could lead to a constitutional crisis. frank. >> all right thank you, brie jackson.

let's go out now to martin soong who is with president biden at the summit in hiroshima, japan martin >> reporter: frank, good morning. the president arrived yesterday at 4:00 p.m. local time. air force one touched down at marine air station south of where we are in hiroshima. he hopped on board marine one to be choppered here. he met with the prime minister and president yun of south korea and the three sat down for a trilateral meeting before the big suppmmit so far. the president arrived and he made it. we talked about reports that because of the debt ceiling crisis, he may have had to cancel his attendance here at the summit in the event, he made it

what he will not make is canceled the second leg of the trip he was supposed to fly on to australia for the quad summit and after that on to papuanew guinea what is happening is antony blinken is flying on to papua new guinea and he will sign deals with them and maritime security and likely deployment of coast guard ships back in that area. back to you. >> and martin, we know the president is cutting the trip short. what is on his agenda before he heads back to washington >> reporter: good question we know from the leaders statement on ukraine that we were following earlier today that this is something the president has to sign off n. more export controls on russia this is likely the feature in the g7 communication on friday

it involves adding seven entities to the commerce black list and other new sanctions against entities and aircraft and vessels. all part of the efforts to try to tighten the noose around vladimir putin and deny him the ability to finance the war in ukraine. back to you. >> new development on cnbc.com volodymyr volodymyr zelenskyy also planning to attend the summit. martin, thank you. more to come on "worldwide exchange," including the one word investors have to know today. first, a run for the money with equities as the t.i.n.a. trade is looking to fade in the rear-view mirror more on the standoff ed mills from raymond james is giving us his point of view. later, deere stock getting love ahead of wall street.

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welcome back to "worldwide exchange." after a lackluster year for stocks and bonds in 2022, high quality income and t-bills and bonds are shining bright and offering better returns over u.s. equities. the three-month t-bill rising to

5.28%. highest since january with the rate higher on earns with companies in the s&p a new note from davis research pointing out after a decade of t.i.n.a., let's dive into this with lee baker. >> good to see you. >> let's talk about bonds. we were hitting on the yield with the three-month and one-month yield higher than that short-term bonds is higher because of that yield. tell us what witis the percenta right now today and how does it differ from a year ago >> the typical client has crept up we talked about the 60/40 portfolio. over of the last decade, it has been difficult to get the kind

of yield we need from the 40%. there was more allocation to real estate to get that yield we need from the 40%. because of what has happened in the last 12 to 15 months, we have been able to go back f, if you will, a decade ago, and do allocation it is attractive to people with the volatility to say listen, i can get 5% and it is really safe a lot of people are interested in taking that option. >> it was 40% a year ago what is it now when it comes to bonds? >> more like 45%. >> short-term bonds increased or spread out >> it is not short-term. it is spread out we are placing emphasis on shorter duration things have been ticking up. we are done with rate hikes, perhaps. don't know for certain with the possibility of recession in the offing who knows if we are looking at

rate cuts in the next 12 months? >> there is interesting. buffered etfs. etfs with down side protection, but have a cap to the upside in the environment, why should investors take a closer look at these? >> some of our clients say we can't afford to be out of the market, but i'm nervous. you know, we go through the process and explain here is an option for you we believe that at the end of the day, congress will get its act together and we will get a deal what if we don't what if things go down further than we expect here, you cut off the down side as far as equities are concerned and you still give yourself the opportunity for the upside it is one of the things appealing to people nervous and closer to retirement or in retirement. >> i think we all want maximum

upside i have to think about that one thing is portfolio protection is there a move you are telling clients to make outside short-term bonds in the portfolio without the volatility >> one things we have been doing with clients is a play to the down side. one of the things i believe and i'm not by myself is we are in a recession or we are headed that way although i think it may be mild exxon is a company i love and is a great company. if we roll into recession, i expect exxon to come off the highs. we're up $115 a share off $35 a share at the beginning of the pandemic you know, let's trim some of that let's take the winnings off the table and other stocks that might be a little more susceptible if the recession

materializes >> cash is not trash >> not at all. >> thank you very much for the audience, don't miss your chance to see lee and other economists at the virtual summit on june 15th they will discuss potential buying opportunities and tools you can use to generate returns and minimizing down side scan the qr code to register. ahead on "worldwide exchange," one job where pay is not only keeping up with inflation, but beating it. toyota goes back to the drawing board for the best selling pickup truck and david faber heads to the mount at citi field. our top trending stories when we come back. stay with us ♪♪ ♪when the day that lies ahead of me♪ ♪♪

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(vo) if you've had thyroid eye disease for years and you can't get any shut eye because you can't shut your eyes, it's not too late for another treatment option. to learn more visit treatted.com. that's treatt-e-d.com. welcome back to "wex." three stock stories of the morning with applied materials with the second quarter beating est estimates. they expect third quarter sales to decline it is dealing with a glut of inventory and slump of chips shares of farfetch is rallying with a narrow first quarter loss as sales topped forecast and keeping guidance for merchandise at $4.9 billion. and finally flowers foods expect

sales to fall below wall street forecast it said it has a softer start to 2023 flower says it plans to launch more product outside of bread. shares down 4.5% we are watching shares of deere this morning as they prepare for q2 earnings the next hour investors are keeping an eye on the report over crop prices and interest rates on farmer purchases and labor costs and the economy. the bigger tell is from the performance of stock down double digits despite the price target of $475 a share and zero sale rating despite bullish sentiment, investors are not singing praises of the sector. it is under performing in the

bro broader market just look at the technology sector out per fforming by a wide margn joining me to discuss is michael shlisky. >> good morning. >> michael, you were one of the most bullish of all analysts 520 for deere. i know you are watching farmer income specifically with corn we will show the estimate with farmer income. $500 an acre right now it is a sharp decline year over year down 38% year over year. what does that tell us about deere's report >> frank, that is correct. it is down 38% over the prior year however, i find $507 per acre which is the best time for farmers. that sounds like it is down a

bit, but cash coming in at the end of the year for farmers to go ahead to buy more equipment next year. >> that is why you are bullish on the stock good sign for farmers. i want to talk about the difference between tech and industrials. tech performing. how does tech impact deere and other sectors, specifically a.i. >> it is interesting deere has taken a big first step and i would say beating the market in the new innovations. two examples for you in early 2022, they re vealed the first autonomous tractor it doesn't do everything, but it is starting out slow and small quantities imagine the car on the road that is autonomous. that is dangerous with issues there. the autonomous tractor is in an open field and it is safer it should see more adoption than autonomous automobiles

as far as the overall fleet. the other interesting for deere is introducing autonomy and a.i. in other farm function spraying for weeds more example. you used to have a giant sp sprayer, but now new technology on the tractor and you can go through and scan and say that is a corn leaf and that is a weed leaf and just spray enough to kill that one weed leaf. that can save farmers up to 2/3 on the pesticide and herbicide cost >> i know savings get poured back into farm equipment which helps deere. give us a sense with industrials. what is the outlook for the rest of the year? >> at this point, deere and other aeg equipment names have

good backlogs. good 2021 and good 2022. they had supply chain problems and high demand. dear has been unable to deliver on the high demand it has good backlog for this year and into 2024 there could be some down side here, but nothing tremendous >> michael shlisky, thank you. anybody watching right now, you see we are showing you pictures of president biden in japan right now. about to take a photo in a moment here at the g7 summit on cnbc.com, we have breaking news that volodymyr zelenskyy is planning to attend the summit. we will continue to show you pictures from the summit and president biden throughout the show as we head to break, watching hong kong listed shares

of alibaba sinking in overnight trading as they missed sales estimates for the quarter and laid out a cautious tone for the year ahead. follow our podcast if you miss us, check us out on pod podcast apps "wex" will be back in a moment

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new york city area we are just getting started on "worldwide exchange. the debt ceiling talks adding to hopes a dealcould be made. ed mills from raymond james is standing by. the tech sector continues to move higher and then apple looking to stop the workers from using unsanctioned a.i. tech as it looks to develop its own chatgpt rival. it is friday, may 19th you are watching "worldwide exchange" here on cnbc welcome back i'm frank holland. let's check on the u.s. stock futures. as we mentioned earlier, they are in the green the dow jones industrial average is moving a bit higher nasdaq higher. a strong start to the early part of the trading day

s&p and nasdaq on track for positive territory this week you see the move here. the nasdaq is the best up 3.2% on the week. a bit of a swing here at the end of the week. all of them poised for a gain. we are looking at the bond market and yields. we start with the 10-year treasury 3.62 moving higher this week. another thing to note is the 2-year treasury at 4.22. that is moving higher this week. we turn to energy and oil with the wti benchmark. basically $72.50 brent crude is $76.50. natural gas is falling this morning down 1.25%. we have been talking about it all long morning. the end of the t.i.n.a. trade and some calling the t.e.r.a. trade. there is no better example of

what is happening in two key overseas markets joumanna bercetche is in the london newsroom with the look at both joumanna, good morning >> good morning, frank stoxx 600 is close to the 15-month high. there is one index with a lot of focus which is the dax in germany. the level is 16,258. the all-time high is 16,290. we are very close to breaking through the all-time high. let's take a look at the heat map of the dax and how it is playing out. we have seen a bit of a charge back for some of the key german industrials. that is a bit surprising given the macro concerns that we have been talking about over the last year industrials really have led back the charge that is something to watch another index we are watching closely as well as the nikkei. we are not talking about a

15-month high for the stoxx 600, but actually seeing a 33-year high now for the japanese index. up .80%. it has taken a long time to get back to the early 1990s levels we are finally there again let's take you to the top performer in the session today no surprise toanyone the reason the nikkei is doing well is on back of the electronics and the moves in electronics as mega cap big tech stocks do well in the u.s., we are seeing the similar move in japan. one reason the nikkei continues to go from strength to strength. frank. >> joumanna bercetche live in london thank you very much. time for the check on the top stories including apple getting tough on outside a.i silvana henao is here with that and more good morning >> good morning, frank apple is restricting the use of e external use of a.i. according to the wall street journal

apple is making the move over fears workers who use them could potentially release confidential data apple is carrying out a.i. efforts buying a number of start ups. lazard ceo ken jacobs is preparing to step down the decision by jacobs who will remain at the firm and continue working with clients comes after lazard reported a loss in the first quarter and warned of the uncertain outlook for the year former obama official wpeter orszag is expected to become ceo. and twitter is accusing microsoft of using the use data in unauthorized ways in a letter to microsoft, musk's attorney laid out claims saying microsoft may be in violation of the agreement over data use.

a microsoft spokesperson tells cnbc the company will review the letter and respond appropriately. frank. thank you. turning now to the story we have been following all morning long. president biden and other leaders in japan gather for the family photo after he will head to a working dinner with other leaders. we will watch for any new developments right now, we mentioned president biden posing now with other world leaders with the so-called family photo at the g7 in japan. now back to the u.s. and the debt ceiling talks while president biden is in japan for the g7, the white house revealing that negotiators are making steady progress in reaching a potential deal. mccarthy noted optimism saying the house could vote on a deal as soon as next week the treasury department in the meantime is revealing the money

it has on its hands to pay bills which has fallen to the lowest level since 2021 it is down from $155 billion from a week ago and now stands at $68 billion. we have ed mills from raymond james here with more >> good morning, frank >> is june 1st the earliest now or is that data from the treasury change that >> maybe june 1st. probably june 1st. that is a big concern i have and i have been following the bipartisan policy center because i feel they do the best work on this on june 1st and june 2nd, there's $97 billion due. unless the cash balance that treasury starts going up over

the next week, that will put a ton of pressure to get it done by june 1st. if they are able to get through the $97 billion on june 1st and june 2nd, it may be until july we have to worry about this. this is the big part of the negotiations the daily look at the cash balance at treasury to see how much pressure is on negotiators to get a deal done this weekend and pass something next week or do we punt this. >> ed, you had me nervous. you said made with four es on the end. it may have been creeping before june 1st you said june 1st at the earliest we may have wiggle room. >> it is the payments and how much is coming in. i think there was a strong sense that june 1st was a bit of an alarm bell from treasury you get a sense from mccarthy's comments yesterday that they are looking more and more at june

1st as potentially that date and have a lot of pressure on them the concern i have for the market right now is to the extent that it is, you know, going along right now. this is d.c. almost every single time we get into the negotiations, something falls apart before it comes back together so the the next step i'm watching is when does one side say this is too far and we can't support this and we go through the negotiation in the press with the markets open and in terms of can the deal get struck and do we need to do one more thing before this gets across the finish line? >> ed, you are playing my emotions first we have time and now the deal may be shaky. we have seen recent optimism from the white house and mccarthy let's be positive. let's say there is a deal. what does it mean for the markets or a sector to the

upside >> frank, does permitting reform get included in the deal if it does, that super charges everything congress did last year on the inflation reduction act. a lot of things positive for clean energy and legacy and for it fuels getting that macro -- fossil fuels. getting that macro spend out of d.c. is a positive the thing that weighs against this, if you go back to 2011, the low of that year wasn't in the lead-up of the debt limit and downgrade of u.s. debt the low of that year was in october after the debt limit deal because the budget cuts that were proposed were much greater than anticipated and the impact to gdp was viewed to be negative from the 201812011 a lot of budget cuts never we know into effect

we are watching -- never went into effect. we are washtching closely as everyone is anticipating recession. we are wondering what it does for the forecast on the street and is that a leg down p with te pull forward of recession. that is why biden doesn't want to go too far. >> ed mills, thank you coming up on "worldwide exchange," retailer inventories are shrinking, but for all of the wrong reasons. why home depot and others are sounding the alarm and top trending stories toyota is upgrading the pickup truck on the tacoma to increase the sector they have been the leader in swael

sales for 20 years, but market share is now down from a decade ago. inflation worries not hitting kids' piggy banks. allowance is 8% a week parents wage gains over the past year is a concern. and fresh off the interview with elon musk, david faber threw out the first mitch for the mets game yesterday at citi field yesterday. the mets went on to beat the rays mets winning consecutive games for the first time in a month. more "worldwide exchange" coming up after this. ♪ the biggest ideas inspire new ones. 30 years ago, state street created an etf

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welcome back to "worldwide exchange." time for the morning call sheet with the biggest upgrades by the firms you know we start with morgan stanley upgrading shake shack price target moving from under weight to even weight shake shack agreement with investor capital and potential catalyst in the coming years for the optimistic outlook rbc with the out perform rating on planet fitness. the company's model delivering strong earnings in a normal

post-pandemic environment. and jpmorgan chase upgrading bloom energy from neutral to overweight the pull back on the stock is overdone shares of bloom energy is up 6% this morning shifting to retail and an issue for more sounding the alarm on shrink. specifically organized crime with target is the latest name to reveal the true financial impact of the problem this week. courtney reagan joins us now with more. >> frank, good morning target is taking a risk. home depot is calling out shrink from organized retail crime since 2019 the cfo told me shrink from theft is the biggest issue this quarter. theft shrink has been called out by walmart and target and dick's and ross stores in recent

months it is hard to know exactly how big the issue is this week, eric adams said retail theft was up 42% from a year prior and an it is increasing and the annual law survey estimates the retail shrink was $3.7 billion more in 2021 than 2020. why is this happening? it makes it easier to sell on social media and thieves change and create accounts and profiles online options drive items resold and not necessarily the most expensive the inform act goes into effect on june 27th requiring online markets to collect and disseminate seller information orc rings instructing criminals to steal below the threshold in many areas which is between $1,000 and $1,500 in many

states areas with higher thresholds have higher cases of orc retailers instruct employees not to intervene for safety reasons. a home depot employee was confronted with thief last month and ended up with a death. and theft does dent profitability, but lowers tax revenue and could raise prices and annoyance for shoppers 60% of consumers noticed more items locked up or have security tags on them frank. >> you are seeing more and more of this, courtney. if you look online, you see videos from california where people are running out of stores you mentioned some states with higher levels of this. are there areas in retail seeing higher levels? >> i think it is categories like

personal carry teme items and ts easily resolved. a survey found 11% of the goods are luxury items it is easier to resell toothpaste or deodorant. >> is there tech out there you mentioned things are locked up is there tech stores can use to prevent this >> some told me about unlocking electronic goods at point of sale basically making them inoperable until the point of sale and purchased. like a drill, for instance that is only going to be on the higher value electronics you can't make a deodorant inn opener able. there is a.i. to help identify areas of the store or goods more highly stolen. license plate identifiers and technology that can be deployed.

you have to make sure the shopping experience is okay for the honest shoppers. >> absolutely. courtney, i always see the razors locked up at the supermarket. i never thought about it who is stealing a razor? now i know courtney, thank you. ahead, the one word every investor needs to know today our market panel of inn erin gis and tiffany mcghee will layout the case for you. and the bear case of stocks and now is the time to sl.el more on that we'll be right back. ♪ ♪ this is rochelle, who gives you a shot. ♪ ♪ rebecca is there when you feel not so hot. ♪ ♪ this is larissa, who's feeling glown up. ♪ ♪ and this here is winnie, who zhuzhed up their cup. ♪

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stock exodus is now recommending selling the s&p at 4,200 that is the level you should sell. the latest inflation from japan is above the central bank target raising the chances the bank of japan will tweak stimulus plans this year. a committee by india's court says it doesn't see a failure with the adani stock failures or sell off following the short seller report. filings out yesterday show warren buffett increased stake in occidental. berkshire snapping up 3.5 million shares of occidental boosting the stake in the company to more than 24%. tiktok creators is suing the montana attorney general over the ban in the state

the plaintiffs claim they will exercise powers of security it does not have. and shares surging of farfetch after the first quarter loss farfetch keeping guidance at $4.9 billion. it say lis a lighter day an are at the end of the earnings season foot looker and deere report today and fed president john williams speaks this morning and fed chairman jay powell at 11:00 a.m. after the close, the fed releases the report which traction assets and liabilities of banks the s&p is at the highest level since march.

you see futures in the green as well let's bring in erin gibbs and tiffany mcghee ladies, great to see you friday morning. >> good morning. >> erin, i'll start with you recently, a big run up with the nasdaq and a winning streak with the nasdaq and s&p how do you feel about this ral a -- feel about this rally? is this sustainable? >> this has been going since mid march. i think the past year we had a nice two weeks of consolidation. i think having a rally for the last couple days does feel sustainable. however, we are getting a little expensive when it comes to valuations when the outlook is a bit iffy, to say the least, when it comes to profit and expectingpectatio

margins, i don't want to get too expensive. i don't think we should get out of the s&p completely. we need to be selective over which stocks we include. >> bank of america said get out at 4,200 agree or disagree or you are saying there is a later point you get out? >> i think if you are in the s&p 500, we are at 19 times forward earnings i don't think it means you necessarily have to have a crash, but it is fair valuation. i don't think you need to add more to the s&p 500. you need to be more selective about which stocks can still have a little more value and upside and run >> okay. tiffany, how are you feeling about the run up with the nasdaq and tech are you a believer in that we were talking about people and bank of america being one of them saying this is a bubble

that could burst over the hype of a.i >> that's a lot, frank listen, i'm thinking about earlier where you were talking about the debt ceiling that is a concern. what we were talking about is volatility my clients are institutions. we are in this for the long game we really are thinking about portfolio protection we are talking about that and i would be remiss if i didn't mention the fact that the five-year treasury is at 3.68. the 10-year treasury is at 3.65. it is not exciting, but from a portfolio protection standpoint, i like it and i'll take that all day long in a volatile market. >> tiffany, you are leading me to interesting stuff you obviously watch "worldwide exchange." let's go through your thesis with portfolio protection. what are you advising? >> first, we're investing in

bonds and treasuries on the equity side, investors should think and consider having a set formula for selecting stocks our formula is growth, quality and income first, don't abandon growth in volatile times you may find great deals second, strong companies tend to weather storms better. the third in terms of income look for companies with strong track records of paying di dividends. look for companies increasing dividends. that is an indication they have a positive outlook for the future no company wants to be the company to increase dividend and only cut it relatively sooner. that's the formula one other thing that investors should consider not doing is don't try to index your way

through volatility there are so asset classes and areas where active strategy is more efficective >> erin, what is your number one pick you would advise clients to put money into today >> so, i would say two chipotle and starbucks are two of my topi picks strong cash flows. that is our thesis strong cash flow and quality selective. >> ladies, thank you very much enjoy the weekend. that will do it for us on "worldwide exchange. "squawk box" is coming up next thank you for watching what if buildings could tell you how they could be more efficient? i'm listening. well, with ibm, you can use software to help you connect and analyze data— from hvacs to elevators to lights. what if we use ai-driven insights to pinpoint inefficiency? yep. and act on it. saving energy, money...

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good morning futures in the green so far, but a long way to the opening bell and more fed speak expected before the day is done we have a preview. disney's feud with the florida governor hitting home retail industry crime problem. the solution to slow down the shrink in inventory. it is friday and "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc we are live from the nasdaq market site in times square.