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tv   Worldwide Exchange  CNBC  August 5, 2015 5:00am-6:01am EDT

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this is the second hour of worldwide exchange. i'm seema mody. >> i'm wilfred frost. here are your headlines from around the world. >> despite a blockbuster performance from its movie division with hits hike the avengers. >> pretax profits nose dive. investors remain cool and collected as the global banking giant promises to simplify the business. >> there's no stopping the dollar. the green back scaling the heights not seen in three months after the fed president says the central bank is on course for
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lift off in september. >> the stage is set for thursday's show down. the line-up for the first debate is revealed. >> coming up on the show, is apple becoming a roten stock. we'll explain next. >> we'll take a look at a luxury retailer looking to go public for the second time. >> also coming up on the show, putting your money where your mouth is. a leading investor from index ventures explains why food delivery apps make for a good investment. >> welcome to the show. yes, this is worldwide exchange. those comments really sending shockwaves across wall street yesterday. stocks ending lower.
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in fact, appleby far the biggest drag on the dow. the worst performing stock now tracking for its 5th consecutive down day. one of the reasons we saw the nasdaq underperform. in today's trade we have a dose of economic data plus earnings continue to be a focal point for investors. nasdaq up 8 points in premarket trade. the dow up just slightly. despite the sell off on wall street over the past two days s&p 500 only 2% away from its record high just to put the last two days moves in perspective. european markets some traders with a dose of optimism from the pmi and manufacturing number services and euro zone coming in at 54 versus the expectation of 5 3.8. if we take a look at markets, it's really the german markets that are the outperformer. dax up 1.13%. the french market with a gain of around 1% and keeping an eye on the greek equity index the third day of being open after being
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shut for five weeks. well at this point down about 3.4%. some of the banks continue to move to the down side and a quick look at the ftse 100 with a gain of around 22 points but not just for u. s. markets but european markets are going to be watching that u. s. jobs number as well because fed policy, the impact that has on global assets will be very important. >> and yesterday that was visible with the comments coming from mr. lockhart that said the bar to not raising rates in september is very very low. very hawkish comments coming from him. we saw a big slump after three days of gains and that was very much on the short end of the curve. we saw the yields for the two year spiking quite a bit. we're back to around 72 basis points and saw a spike in the ten year yield. that was less pronounced. the ten year german yield also rising currently at 67 basis points. let's move on to the currency markets.
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obviously the dollar getting a nice shot in the arm from those hawkish comments but the dollar is under a little bit of pressure today at least against the japanese yen but still higher against the euro but still below that 109 level. close to two week low and the aussie dollar seeing some profit taking after yesterday's rba rides. in the commodity markets, well, yesterday, finally commodities were able to capture their breath. that seems to be continuing today. the price is at 4589. brent crude up by half of 1% back above 50. let's also check in on markets in asia. sri is in singapore. sri. >> hi, carolyn. what's wrong with this picture. it is a robust session with mainland china equities. down by 1.6% despite the fact that the pboc reaffirmed it's commitment and despite the fact
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that the data on the july services sector pmi, 11 month high didn't really help sentiment but that tell mess that sentiment still remains quite fragile and this deleveraging process still has a way to go. a lot of people are talk about the down side potential still in this market around 3300 or 3400 as well. those are the key support levels. elsewhere, i wanted to highlight indonesia. we saw second quarter gdp from southeast asia's largest economy coming in sub 5% but it was a little bit better than a consensus expectation. so the market seemed to like that. the out performers today. the currency was resilient as well but it doesn't really change the longer term narrative. especially with fed normalization still looking very very weak. remember indonesia is a big commodities exporter of coal.
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so i think on balance with fed normalization, especially september rate hike very much on the cards there's malaysia and indonesia, both of their respective currencies have been trading at around 17 year lows. elsewhere, the markets seem to be in a fairly good form just ahead of the payrolls and what that is going to tell us about the rate hike time line. wilf back to you now. >> thank you very much as ever. let's talk about apple that lead the declines on wall street yesterday losing more than 3% to close below $115. the company still wallowing in correction territory down 14% from april's highs. >> now suppliers also got hit. some of the worst amid concerns about future iphone sales in china. now someone confounded by the slide is legendary investor and
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the shareholder said he was worried. >> it's been two or three years but, you know, it's a concern: i like to think it's a reaction but i don't know. i could put a hand on it but right now i can't. >> so let's pick up and talk a little bit more about this on apple now. one person also very disappointed made that incredibly bullish comment a few weeks ago. is this a slight correction or smartphones are saturated and should that part of business will valued like a dell and hp business? >> there's fundamental things at play here. iphone 6 sales may not be as strong as anticipated going forward. on the technical side it's below
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it's 200 day moving average. that's a selling signal so you have both factors working against apple shares down now about 15% from its recent highs trading in correction territory. we haven't seen such a move to the down side in quite sometime so this is catching many traders by surprise. i will also say china, this has been a big concern for investors. if the volatility continues and has an impact on consumer confidence in china are they going to buy fewer iphones going forward? china has been a big source of revenue growth for apple. >> you have heavy competition in china. so they're really trying to have some of apple's high but then i would also argue profit taking, technical levels but this is a stock that is incredibly overowned according to morning star some 5,700 different funds already own shares of apple. there's very few funds out there that still want to get into this place. where is that additional catalyst coming from? that's key. >> we have seen these sorts of
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corrections for apple over the last five years and the question always then becomes what's going to be the next big iphone or ipod product? and if you are a long-term holder of apple it's not because you think oh next quarter i think iphone sales are going to beat by 5% or whatever like that, you just believe in them as being the best innovator and that they will continue to deliver over the long-term. now the watch, the latest one, hasn't knocked the lights out so they do need something else to pick up the slack. >> maybe it doesn't have to be about product. maybe it doesn't have to be a new product that really moves the needle for apple. maybe it's capital return because that's something that has moved in the past but we now have the capital return story set up for the next two years so we won't get any new. >> i would argue against it. this is an innovative tech company. we need to see the best products delivered from the largest tech company in the world. the share allocation strategy has to be there. bigger dividend going forward
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but that should be the bullish view behind the stock. products and innovation. >> yeah. >> and the question at this point is what's next. switching focus to media, do disney's reporting profits on the box office success of age of ultron. they're expecting lower revenue in a drop in subscribers. mainly for espn. there's no plans to offer espn as an over the top streaming service. disney falling about 8% in after hours trade and could van impact on the dow this morning. walt disney shares down 5.6%. >> stay tuned today because bob iger will be speaking to the squawk on the street team in the u.s. that interview coming up at 15:00 cet. >> u.s. media earnings are due today. results from time warner and
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discovery communications out at about 7:00 a.m. eastern time followed by 21st century fox and cbs at around 3 pl eastern time. >> we had numbers from standard chartered out this morning and they made quite a big splash in the market. wild swings in the share price going into the numbers the share price was higher and then fell quite drastically when we saw the cut in dividend by 50% and then it rose by as much as 6% and the few minutes after and it is roughly 5 but still higher by 1%. let's get through the details here. 44% slump in profits. the focus is less on the numbers than on capital and on the strategy going forward. the capital ratio was fairly strong, 11.5% but there's no decision as to whether the new ceo will be raising capital but he said if we decide we need capital we will raise capital. also impairments for bad debts have more than doubled because this is a company very much exposed to asia and that's where
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loans and the quality of those have been deteriorating. a new strategy won't be unveiled until later this year and bill winlters says the bank has real challenges and has been too slow to take decisions. he will report on his broader strategic plans at the end of the year. he says mistakes have clearly been made in the past in lending decisions. loans that have been made should not have been made. >> let's take a look at the other top stories today. etsy's second quarter loss doubled due to higher marketing costs. they jumped because of product listing ads. the strong dollar could hurt demand for goods this quarter which could slow the pace of gross merchandise sales. etsy fell 16% in after hours trade. let's have a look at what it's doing today in germany. down just 1%. >> u.s. luxury retailer neiman-marcus files for an ipo. the second time in the past two
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years. the 100-year-old chain is backed by the canadian pension plan investment board and manufacturement. it offers 41 department stores under it's own name and the last call chain. the ipo comes amid a thriving luxury goods market. the north american sector is expected to grow this year versus 1.3% for the global market. >> still to come on the show, netflix takes the new title from google. we'll tell you more about that later on the show.
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welcome back. let's remind you of the headlines. u.s. futures point to a mixed open after the dow falls for the fourth straight session. disney loses it's magic after it lets down a blockbuster year for movies. full speed ahead. all eyes on tesla as elon musk's company reports after the bell. sprinting ahead. etfs are more popular than hedge funds with almost $3 trillion invested in the industry. this according to eft gi which just published new data showing in flows have reached a new record on a year to date basis. but investors are deserting the
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asia pacific and also gold which has outflows of more than $2 billion in july. joining us is deborah, managing director at etf gi. thank you for joining us. you're seeing a trend. people moving out of hedge funds toward etfs. is that performance based on feed based? >> it's both. hedge funds on average underperformed in each of the past six years the s&p 500. if you're paying 2 and 20 to get below s&p 500 when you can get an etf or 5 basis points why do you pay that? and they allow you daily liquidity and transparency. >> yes, efts have taken over in a year to date basis but since the hedge fund bubble burst in terms of can these guys always beat the market even on a down year, it's been quite impressive and is it going to be able to
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continue for them forever. >> they're rationizing where can i get them and where they can they're using them and where they can't they're migrating toward products. we're seeing significant upgrade in the use using etf as an alternative to hedge fund type products but also futures. that's another area where it's more expensive to use futures to etfs are being used as an alternative to futures. >> let's talk about how specific our basket of stocks are performing. lower oil prices have been telegraphed and lower earnings over the past couple of weeks. how has a commodity routes impacted them? >> they're a good barometer. you tend to see money going into
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other markets. so we have seen money going out of energy and money going out of gold with the price of gold going down. clearly what's happening with oil similar pacting investors although some investors will go short etfs which allows them to make a bet that they can make money by products going down but most of the money year to date we've seen an increase over last year. we're up 20% so we had $192 million in net new money. most of it going into equities. some into fixed income and net out flows overall. >> some are pointing out the weaknesses and risks. equities are still up and bonds are still up but what if the markets tank? is there liquidity that retail investors will get hurt dramatically? >> that's a good point. etfs are reflecting what the market does. if the market goes up the
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industries are going up and assets go up. when markets are going down the performance is going down if line with the markets. there is secondary trading of effs and retail investors can easily go in and out of etfs. we have seen they react well but there's no magical liquidity in etfs. it has to be opening in one market for large trades to happen. >> thank you for your time. managing partner at etf gi. >> coming up on the show we'll tell you the common link between pizza, your smartphone and a drone. why all those factors could actually make you money. that's coming up. don't go away. nsh more and more, data is visual. in fact, the number of mris has increased by ten percent a year. and a radiologist might view a thousand images to find one tiny abnormality in shape, contrast or movement. because it's so challenging,
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a research project is teaching ibm watson to see. in the future, it could help clinicians spot key patterns quickly and precisely. ibm watson is working to make healthcare smarter every day.
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. hellofresh is preparing to go public. the latest to tap the equity market. it could take place as soon as october. that according to reports. despite stiff competition, technological advances are creating big opportunities in this space. that's according to our next guest whose latest big investment in delivery, another food delivery service. let's get the word. martin a pleasure to have you on the show. they have dramatically trained the way young professionals
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consume food these days. why do you see opportunity in delivery? >> it's a new generation of delivery service. it's all about ordering online and aggregated demand for restaurants. and then they're going one step further and operating a fleet of independent drivers which are delivering to consumer. they allow restaurants that couldn't deliver before to offer a delivery option. >> the big question is what happens if amazon or uber get into this business. would that be game over? >> i think food is a very specific vertical and you need to integrate with the restaurants to have the menu and a special fleet of drivers to operate in very high density areas. it's a slightly different model and challenges from the other, either grocery shopping or others. >> you talk about how online has already disrupted so many
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businesses. you said online penetration of food delivery still only at 1%. that's astonishing. >> we think it's the very beginning and we are still investor where they're growing very very nicely and they already escaped so it shows how deep the market is. food is one of the largest markets and as you said, online is very early. i think one of the reasons why is that you need, you know, some mobile cost structure to make the delivery happen because food is fresh and, you know, you needed the cost structure to make that happen and that just happened in the past few years. >> the u.k., specifically london is an intensely competitive market. this huge competitive pricing pressure in groceries. what about in your business? are you feeling that same degree
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of pressure? >> not really because it's a high fixed cost, low variable cost market so restaurants is very happy to get orders from delivery. it's pure margin for them. they already have their kitchen and staff and ingredients. so for them it's just a great way to increase bottom line. >> so online in restaurant space you think it enhanced margins where as in the groceries it's been a real margin killer? >> yeah, that may be the case. >> public investors are watching china and greece very closely. as a private investor, how important are these external factors to you when you're making an investment? >> you know, on average, we make investment for 5 to 7 years. so we are very, very long-term players. we bet on very long-term trends. it can go all the way to 15, 20,
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25%. so, you know, we bet on the very long-term future and so looking at the day-to-day, what's happening in the market, we are more immune to that. >> you're actively invested in the french start up, do you know the name of france's tech ecosystem? >> i don't know. >> it's called la french tech. that's the term you use. martin a pleasure to have you on. thank you so much for joining us here and discussing the opportunities across europe. meantime, motorola solutions received a $1 billion investment from silver lake partners. motorola hopes it will help it accelerate the shift to selling to a broader emergency communication system. they spun off the mobile phone business back in 2009.
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motorola is expected to announce the deal when it reports earnings before the opening bell. >> the central bank decides whether to raise interest rates next month. that coming up at 7:30 a.m. eastern on squawk box. don't go away.
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a loose connection at disney. shares tumble as the cable business sheds customers. this despite a blockbuster performance with hits like avengers. >> standard chartered slashes it's dividend in half. investors remain cool and collected as they promise to simplify the business. >> there's no stopping the dollar. the green back scaling to heights not seen in three months after the fed president says the central bank is on course for lift off in september. >> going public again, neiman-marcus files for ipo as the 100-year-old retailer seeks to cash in on the thriving north american luxury market. it was those hawkish comments from fed president of atlanta that sent the dollar higher. u.s. stocks lower. in today's trade we're seeing
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minor gains and losses in today's market. the dow down fractionally on the day. seeing a gain of around 3 points. the tech heavy nasdaq up in premarket trade. a lot of focus on apple in correction territory down about 14% from its recent highs. when we take a look at the european markets the focus is on earnings plus economic data. services number coming in at 54. higher than 53.8. we're also looking at the xetra dax at 11,576. slightly below session highs. german private sector expanding at a moderate pace in the month of july. 53.8. we're seeing a gain of around 1% as well for the french equity index and keeping an eye on the greek stock market after being closed for five weeks. a lot of volatility and big sell off in greek stocks and it continues here on the third down. we're down now by around 3.7%. how do you make money in these
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markets? this is with a investors have been telling us this morning. >> emerging markets, yes, there's a weakness in currency there but from really deteriorating fundamentals so we don't think we would hike to stay away from those assets. >> there's other ways to generate income. so they're growing their dividends very, very rapidly. you have been discussing the percent of which house prices are elevated but there's a short fall in the number being built. that's a good place to work. >> there's a lot of things going on in europe. we love the banks there and we're heavily overweight i think. in america a slight overweight there. obviously it's a hedge against higher interest rates. in general the economy we think underlying is is fine. some swings in the dollar and the banks are well capitalized as well.
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now disney reports a record 3rd quarter profits on the box office success of avengers age of ultron and improved performance at its theme parks. they're expecting lower revenue from a drop in subscribers mainly for espn. bob iger says there's no plans to offer espn as an over the top streaming service. it fell in after hours trade and clearly they're off by 5.5%. joining us live from los angeles is the senior media analyst. thank you for joining us. it's probably middle of the night for you. do you think bob iger is wrong in not taking espn to the ott streaming? >> it's hard for me to second guess iger looking at the performance of disney right now and i think the whole over the top aspect of it, i think with
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espn, that could be a big play for them but there are broader strategies involved so i don't know that i'm answering your questions specifically but i do know that for disney with their movie division and we precisely measure movies and tv everywhere and when we hook at their movie division they're doing an amazing amount of business worldwide in north america and certainly with their networks, espn and abc, they and plus the theme parks disney has this incredible world view that gives them access to, you know, an audience all over the world in all different aspects of entertainment. >> one of its biggest hits of course was frozen. can it continue to milk profits from the movie frozen and ocf course upcoming frozen 2 or at some point will it have to let it go? >> i don't know if they can ever let this one go. no, i like that. and, you know, we looked at in terms of our small screen
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analytics, we looked at frozen, $300 million on dvd and blu-ray sales and out of the 71 weeks, it was in the marketplace that it's been in the marketplace on home video, 69 of those weeks that movie frozen has been in the top 50 performers. so frozen they have the sequel coming up. certainly that's a big deal for them. that is a franchise that will bear fruit for a long time. you also have merchandising potential there as well. they have the marvel division which they had great success with with age of ultron that kicked off the summer of 2015. that film earned $1.3 billion worldwide and they have the pixar franchise and that brand and inside out, $623 million worldwide and ant man that earned over $300 million worldwide. so when we look at the overall picture in terms of the movie
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side of things both on the big screen and small screen the future looks bright indeed and there's star wars coming in december and that is going to break records like we have never seen. >> let's talk about that. how significant do you think that purchase of lucas films and the star wars franchise will be for doisney? will it move the needle? will the earnings be with them? >> i love that too. you guys are great. yeah the earnings will be with them. this is a movie opening in december and if you think about it, the top two earning films of all time opened in december. and this is going to join those ranks. most certainly it's going to break the all time december opening weekend record. we've never had a movie in north america open with over $100 million in december and this will happen with the next star wars and then that movie can
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play very strongly into the new year of 2016 where it's a bit less competitive than let's say the summertime frame which we're in right now. so that movie, look, the purchase of lucas film is just amazing for disney to add to disney animation, pixar, marvel, so under this whole umbrella of brands that they have t sky is the limit and this is, i think, star wars will bear fruit for the next 10, 20, even 100 years. this is a 100 year plan for disney with all of these various properties and then these properties go to the small screen and there's product placement. there's products that they can sell associated with star wars, frozen, all the marvel characters and really it is just a boom time at disney for all of these movies. >> paul, great to see you. thank you for having fun with us this morning. disney's number two in terms
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of the north american market share this year, universal, of course nbc owned is still number one. >> there you go. content is king. disney ceo bob iger will be speaking to squawk on the street team in the u.s. that interview coming up at 9:00 a.m. eastern. >> upsetting news for everybody. another hollywood power couple is calling it quits, kermit the frog and miss piggy announced their separation on twitter on tuesday saying they'll continue to work together on television. the franchise is being rebooted on abc in the u.s. this autumn. at a tv critics panel kermit says it can be tough to work with your ex but he has moved on. his new girlfriend is a new pig that also works there. they seem to think they can make it work. >> we'll see. all right. netflix is letting new parents take as much time off as they need during the first year after their child's birth or adoption.
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the company will also allow employees to return on either a full or part time basis. the benefit is generous even by silicon valley standards. google which ranks among the best maces to work offers 18 weeks of paid maternity leave and up to 12 weeks of baby bonding time during your child's first year. >> so we want to hear from you on this topic. what's the best perk of your job in we have been asking you throughout the show. a number of you have got in touch, including richard that contacted us to vent about the lack of perks. however not everyone is complaining. one viewer says he wants to keep the best perk of his job but it's a secret. he dropped us one hint saying that his wife is is his boss. i'm not sure what he's imlying on that one. maybe he gets extra time off. do join the conversation here on worldwide exchange. get in touch with us. >> and still to come on the
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show, the luxury retail market is thriving, especially in the u.s. as one chain known for its lavish christmas catalog decides now might be the right time to go public. don't go away. worldwide exchange, we're back in two. ked my dentist if an electric toothbrush was going to clean better than a manual. he said sure... but don't get just any one. get one inspired by dentists. with a round brush head. go pro with oral-b. oral-b's rounded brush head cups your teeth to break up plaque, and rotates to sweep it away. and oral-b delivers a clinically proven superior clean vs. sonicare diamond clean. my mouth feels super clean. oral-b. know you're getting a superior clean. i'm never going back to a manual brush.
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>> now down 14.5% from its recent high. fundamental reasons like the earnings report plus also pointing out that the stock is trading below the 200 day moving average. we'll have to see at some point in the bargain hunters get in. >> indeed and china concerns for the smartphone market which is supposedly the last big area of growth. we'll have to watch that down over the next month. let's move on one of the older and more well-known u. s. luxury retailers is pulling a trigger on an ipo as pry rivate equity backers get set for details. >> neiman-marcus is looking to return to the public markets after a decade of private ownership filing for an ipo for the second time in the past two years. the 100-year-old chain set a fund-raising target of $100 million although the final target will likely be different.
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the company has not yet hired investment bankers to lead the ipo. they own 41 name sake department stores in north america as well as bergdorf goodman. it has its annual christmas category filled with fantasy gifts such as a boeing jet and hot air ballooned. they filed for an ipo in 2013 but instead decided to sell the company for $6 billion. niemann which is headquatered in dallas reported a loss of $147 million in it's most recent fiscal year although revenue rose 4% to $4.8 billion. 22 quarters of positive same store sales growth although it struggled during the financial crisis. nearly 40% of its customers have a median household income of more than $200,000 and more than three quarters are women.
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the north american luxury retail market is thriving. the sector will grow 4.1% this year versus 3.6% for the global market. shares are up 18% since they debuted on the london stock exchange last year. niemann was one of the first luxury retailers to make a big push online and now gets a quarter of its revenue from online orders but it faces increasing competition from the likes of amazon and rejuvenated sachs fifth avenue. >> back to you. >> thank you very much. >> rick perry is dealt a big set back. he's the most prominent candidate to be left off the main stage on thursday night. fox ranked the candidates based on their results with just the top ten making the cut. >> line-up donald trump, jeb bush, scott walker, ben carson,
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mike huckabee, ted cruz, rand paul, marco rubio, chris christie and john kasich. they may appear earlier on thursday. >> boeing reportedly lost a big satellite deal worth several hundred million due to the uncertainty of the u.s. export import bank. abs cancelled it's order last month citing the expiration of the bank's charter in june and boeing looking like this. we're up by 0.4%. >> switching focus, would you like to be able to fly from london to new york in under two hours? i would. airbus is taking steps to make super fast passenger flights a reality. it filed a patent for a hyper sonic plane that would soar above the atmosphere propelled by rocket boosters. but the plane is unlikely to be taken off any time soon. experts predict it will take decades for the son of concorde
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to come. >> can i just say how amazing it was? it would be twice the speed and came in the early 70s. >> until it crashed. >> well, fine but in the early 70s think how advanced that is. 45 years on we still haven't found anything that matches that kind of pace astonishing the advancement in flight. >> it was incredibly expensive. >> it was but most business men if they were able to commute from new york to london couldn't care. it was very efficient. >> two hours would be great for the business community. so many people back and forth. >> do you know who travelled on concord more than any other man? my father. a mixed open after the dow falls for the fourth straight session. disney loses magic after espn lets down a blockbuster year for movies and full speed ahead all eyes on tesla after the company reports after the opening bell.
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worldwide exchange. we're back in two.
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let's have a look at european markets and we're in the green today managing to shrug off what happened state side yesterday. quite significant gains on continental europe. germany and france over 1%. athens down once again third day of open trade since that five week closure but the declines yesterday much more muted than they were on monday. ftse 100 up 0.2%. >> let's get you a run down of what to watch this trading day in the u.s. july adp report out at 8:30 a.m. eastern. we also get trade deficit figures and ism services index. time [ inaudiblediscovery
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communications. now interesting if you look at u.s. futures we're now a bit higher in premarket trade. the dow up about 7. nasdaq up about 8. apple shares up slightly in premarket trade. still trading in correction territory one of the 13 stocks, in fact, on the dow trading 10% or lower from recent highs. >> back to earnings, etsy second quarter loss doubled due to higher marketing costs. they jumped 77% because of spending on product listing ads. the company says the strong dollar could hurt demand for goods this quarter which could slow the pace of gross merchandise sells. they fell 16% in after hours trade. germany off by one. >> shares in coach climbed off recent lows after it's q-4 earnings beat consensus estimates. revenues were down 12% compared to last year but they offered signs the company's turn around process is gaining momentum. >> there's u.s. retail earnings due before the end of the week. second kwar results from ralph
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lauren and kate spade later today followed by children's clothes retailer before or after the bell. tomorrow michael kors reports around 8:00 a.m. eastern time. so let's bring in the cnbc retail analyst to get the low down on which you should own. let's start with ralph lauren. do you think this is a good buy stacy? >> ralph lauren has plenty of issues and the first thing to look out for when they report today is their talk about the tourism hit. the europeans are no longer coming to new york and spending those luxury dollars because of currency fluctuates so i would be cautious here and number two they have big exposure in europe and they're talking about raising prices second half of this year so i would watch out for push back on the price increases. >> a challenging year for coach. down about 19 to 20% but growth coming in at 5 or 6% for the
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year. that left some investors a bit confused. >> yeah, that's a bit of a fuzzy map here. coach comps are down 19%. michael kors who is reporting tomorrow comps were probably down mid singles to high singles and coach is talking about their expectations for the handbag market this year. so you put those two companies together and there's no growth in the handbag sector here. so i still think that management expectations particularly for coach are a bit high year. >> stacy, if handbags are suffering is that money going elsewhere or is it a general decline in spending across the high end retail areas? >> it's interesting. a year ago this is the sweet spot. this is where everybody wanted to be. it's gone from high single growth to high negative single growth just in a year period and i think the consumers have been
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exhausted. there's a lack of newness in the product category. michael kors is looking like that too. everybody has one of the bags. they look very similar to last year's product. so i think the consumer is looking at exciting categories like footwear that continues to be a stand out category whether it's nike or skechers and even uggs is doing some interesting new product this year. >> stacy, just in the last couple of minutes you told us that the consumer is exhausted. it's really tough to raise prices so neiman-marcus filing for an ipo. the high luxury market, is this the right time? many consumers are still struggling. >> yeah, you know, it's an interesting time here but i would really focus -- one of the sectors that's been performing the best is the off price sector. so, you know, they certainly have the neiman-marcus discount chain so that's an opportunity here. but it is an interesting time that as tourism is really taking
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a hit in the united states, that a luxury player can choosing to go public right now. but i think there's some opportunity in that discount luxury space. >> another big factor to consider is gas prices now at 275. the lowest average for the month since 2010. got to wonder how that's going to help the consumer if at all. we'll leave it there. thank you for running us through some of the big retail names reporting this week. u.s. futures right now indicating a higher open. of course we have some important manufacturing data coming out in the u. s. this after the china services number coming in better than expected. here in europe also in line with expectations. >> that's all we have time for on today's show on worldwide exchange. thank you for watching. i'm wilfred frost. >> i'm seema mody. next up is squawk box. we'll see you tomorrow.
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good morning. disney's kingdom taking a hit. the stock tumbling on a weak outlook and slow down at espn. shares down 8% this morning. jobs in america, the first read of the week. the adp employment report, a warm up for the big number coming on friday and making the cut, 10 republican candidates making it to the stage for tomorrow's first gop debate. how the unlucky 7 will have to serve as the warm up back before the big show. it's wednesday, august 5th, 2015 and squawk box begins right now.
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♪ >> live from new york where business never sleeps this is squawk box. >> you'll know in a second why we're playing that song. welcome to squawk box on cnbc. becky and andrew are off today. before we get to the report, the markets and the slue of earnings we have break up news. kermit the frog and miss piggy called it quits. they say they will both continue to work together on television as the muppets which will air this fall on abc. i sense a pr stunt here. their personal lives are distinct and separate and will be stored in different boxes. but the relationship does span over 30 years. more developments on this. they're piggy -- >> this is a cross


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