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tv   Worldwide Exchange  CNBC  December 19, 2016 5:00am-6:01am EST

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good morning. markets are rising. the dollar cools heading into the final trading week before the holidays with the dow 20,000 target within reach. apple appealing. the tech giant in ireland going on the offensive over the eu's $14 billion tax bill. and the trump transition. the electoral college is said to make the president-elect's win official in what is expected to be a drama-filled political event. it's monday, december 19, 2016. and "worldwide exchange" begins right now.
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good morning. welcome to "worldwide exchange." i'm sara eisen. >> and i'm wilfred frost. >> friday we saw little action for the entire week for the s&p. but importantly, holding its gains near record highs. the dow for its part rose for the sixth week in a row. and futures are indicating a positive start for u.s. stocks. dow futures are up 40. the s&p up 5. the nasdaq futures are up just about 5 points. this is the final full trading day of the year. as for the ten-year treasury note yield, we are off the highs where the ten-year yield went back to the high since 2014, but still, 2.58, you are seeing the money move off into the stocks. >> the final full trading week. >> what did i say, say? >> that would be nice. we would wind up for the rest of the year. >> we have a few more days.
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decent week for u.s. equities up a percent as a whole. they have managed to shrug off the fed rate hike as indeed the u.s. did as well. let's have a look today, not much action as you can see germany and italy slightly higher. the other mind indices are lower. in terms of asian trade, the nikkei just below flat. it has snapped what has been nine straight days of gains for the japanese market. either way, it still had six straight weeks of gains. but just marginally today. hong kong, more noticeably down as you can see. 0.8%. property companies there again suffering. they have since the fed rate hike since the idea that we're going to have hong kong marching higher in terms of rates because of the peg between the hong kong dollar and the u.s. dollar as the fit tightens next year. property companies have been a big loser in hong kong. and let's have a look at broader markets as well including oil, sara. oil prices are a bit higher.
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starting the week, 52.15. up a half percent. brent is also up half a percent. as for the dollar, a big story was the jump in u.s. dollar pausing a bit against the yen. keep an eye on that one. we are below 1.18 where we were last week. the euro is flat this morning, 10.0446/1.0446. so the strong dollar is staying near highs, but it backed off on friday. and today again the pound is 1.2466. a little weaker, so the dollar strength over there, i was just going to mention in japan the data overnight. the exports are also better, just barely positive thanks to a weaker japanese yen. the dollar has set the tone, the dollar and the treasury move. strong dollar, higher yield. so far that has not managed to derail stocks at all as they hold near record highs. and the question is going to be,
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does that get in the way? does geopolitical tensions and trade tensions get in the way? more back and forth in china which we'll hit, but clearly it is a reminder about the sensitive nature to the relationship. and everybody is bracing for it to get more tense next year when donald trump becomes president. >> it has not derailed equity markets in terms of a full pull back. certainly that is true. but the s&p and nasdaq were slightly negative for the week as a whole. and we saw rotation as a well. financials were on a tear upwards, but only on thursday. the financials underperformed. the worst sector was industrials. so two of the high sectors that have done well since the election didn't do so well last week. the best sector last week was telco, so one of the more defensive sectors. so yes, last week it was encouraging markets didn't fall much off the back of the fed rate hike, but there's been a pause. we're not marching so clearly high to that 20k target for the dow. and it will be interesting to see what the markets do from here as we finish out the year.
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just on the bond market as well, 2.64 was the high the ten-year hit on thursday. we have pulled back from that level. >> 2.58, around that. >> was that high level something that impinged on stocks and didn't allow them to go higher? keep an eye on that. and i mentioned the geopolitical word of caution that we'll talk about. and there's also the big consensus around stronger stocks heading into 2017. beerends, they always look at the top strategist predictions for the year. everybody's bullish. a lot of the different strategists like the financials. in other words, is this becoming a crowded consensus trade, especially as we march to dow 20,000, is that going to be sort of the front page story that some of the pros look at to say, wait a second, there's too much hype here. >> and one of the other questions people keep bringing up now is how much is the retail investor involved in this rally so far? is it led by institutionals with the big leg as other people get involved, or are they taking
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part in this? it's had a lot of coverage in this. >> they are participating a little more so than they have been. >> well, in terms of a negative view, i have an op-ed coming out on today. so that will offset this because -- >> your own op-ed? >> my own. maybe it's your must-read tomorrow, we'll see. >> i didn't know that. bearish on china? >> bearish on pretty much everything, we'll see. gold prices, just to round off the markets for you, they have been down. the nikkei has been up six weeks but the gold has declined six weeks. that tells the own story. >> a stronger dollar. there's a fair amount of economic data this week. and the final trading week of the year. wednesday, really it starts in full. lookout for existing home sales for the month of november. thursday, jobless claims. november durable goods. the final estimate on third quarter gdp. and november personal income. on friday, it's november new home sales and december consumer sentiment. several companies are also reporting this week including
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carnival, darden restaurants, general mills, fedex, nike, bed bath & beyond. and the data starts to get interesting, because now we are starting to incorporate post-election data. and so far what we have seen in terms of real-time data, the confidence numbers, home builders, business sentiment, consumer, all way up after the election along with rising stocks. we'll see if it translates to the numbers. >> and some of the comments from the bank ceo is picking up as well. we'll be focused on that. in other news, china has agreed to return a u.s. navy research drone that it snatched from international waters last week. a navy survey ship was recovering two of the young gliders near the philippines when the chinese ship took one. the pentagon said it engaged with china to secure the return. but president-elect trump tweeted saturday night saying china should keep the drone and says it's not that interested, let them keep it, he said. moving on to corporate news,
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apple intends to formally launch an appeal against the european union's $14 billion tax break this week. ireland is channeling the ruling accusing them of misinterpreting irish law. the country's new arguments were publish in a three-page summary paper and offered details on how it plans to appeal the new decision. they plan to publish a new version of the ruling this week. it's getting a lot of attention on both sides of theatlantic, and both sides seem pretty confident that this appeal could stand. that could bring a lot of issues and questions for the european commission if the appeals work. >> it's all technical now. we knew they were going to appeal, this was highly political and they were gearing up for a fight, both apple and ireland. by the way, the treasury, the u.s. treasury under president obama backing apple. so you knew there was going to be some sound argument when it came to the appeal. and in other global news this morning, iran and airbus finalized the 100 jet deal
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expected to be signed in the coming days. and the first part of the order should be delivered by mid-january. the timing is key because the aircraft delivery could come before the inauguration of president-elect trump. he has voiced opposition to the nuclear deal which could derail the purchase. just last week iran finalized a similar deal with boeing. and we know that a number of members of congress are against this iran/boeing deal. they don't want it to go through and have expectations. at least some, specifically on the republican wing. the republican wing want that deal to be scrapped under president-elect trump. and this deal, specifically, with boeing as well. they don't want to have anything to do with what they call financing state terror or meeting iran in any way on that. >> as we discussed before on the show, of all the potential international agreements that obama was in favor of and trump was against, this is harder because it has u.n. security approval and existing strong allies like the u.k., germany,
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france, et cetera, approved russia and china as well. in terms of the actual boeing deal itself, airbus is doing deals with iran. so this would be such a clear example of how he could hurt u.s. business. if he scuttles that, i imagine they just double the size of the airbus deal. so it's a good example of how there are winners and losers from this type of approach. we'll see what happens to the deal moving forward. and fairfax financial has agreed to buy allied world assurance for $4 per share or $4.9 billion in cash and stock total. fairfax will pay $44 in its own stock to allied donors. and samsung reportedly plans to use rival lg chemicals batteries in their smartphones next year. this is according to the korean paper that would diverse their supplier base following the failure of the galaxy note 7. and now to italy's banking
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crisis, the country's ten-year bond yield falling to one-month lows earlier this morning after monte dei paschi made a last-ditch attempt to raise $5.2 billion to avoid a state bailout. they would offer new shares between today and thursday. the shares of the bank itself clearly suffering today quite sharply down 9% given that there is an attempt -- >> it's a last shot at the markets? >> a private bailout. either way, the sense of calm that you're seeing across the market, i mean, bnps shares down 8%, but italy's only slighter negative today. the bond yield is moving the other direction. it's a positive side. >> nobody thinks it will be a crisis? >> it's relaxed at the moment. there are a lot of issues in italy and europe readily said for 2017 economically and politically, but it is calm at the moment. that's a good thing. apple in ireland as we mentioned are challenging the eu tax ruling. we'll take you to europe for an
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update. plus, go ahead. >> yo u go, sara. >> and the u.s. postal service says the biggest mailing day of the year is today delivering roughly 16 million holiday cards and packages this holiday season. take one.
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good morning. welcome back to "worldwide exchange." we are looking at slight gains at the moment, it bucks the trend of what we are seeing elsewhere. asia is soft, europe is mixed. we are expecting .20% of gains when they open the dow. last week we saw the dow continue its sixth straight week of gains. it ended the week up 0.4%. the nasdaq was slightly negative for the week. the best performing sector last week was telcos. the best performing sector for the year as a whole is energy. we'll look at oil prices. it's been their rebound since the debts we saw in december and january that helped the energy sector rally for the course of the year. we are up 0.4%. 52.1 on wti crude. sara? in corporate news we mentioned that apple in ireland are challenging the eu tax ruling. as expected, louisa bojesen is joining us from london with
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more. what did we learn today, louisa? >> well, essentially, just recapping the points you have said. we still need the details to emerge, but the european commission, they are basically accusing ireland of avoiding international tax rules by letting apple park the profits in exchange for jobs. that's what the whole thing is about. apple will formally be launching this appeal this week against that record $13 billion euro tax demand coming from the european union, and that is relating to payments in ireland, which is the european headquarters of apple as you know. so according to a senior exec, apple is now saying they have been singled out because they, quote, convenient target that they generate a lot of headlines. so apple is being singled out to make a statement so other companies don't do the same thing. but the irish government, they have been backing apple since the very beginning. they are arguing that the eu, they misunderstood and misapplied laws to apple. so back in august, the european commission, they ruled that apple's deal is essentially the same as the lead steal aid. so they are demanding they repay
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all this money so they unwind the doings that otherwise have been put in place. a woman is heading this up, she's the european commissioner and happens to be a former danish economy minister. she said the apple irish tax, that's the equivalent of a tax rate of 0.005%. that's through 2014. so that's what she's saying. the general council of apple is saying, again, apple is singled out because of its success and is unfair. we're getting more details on that throughout the week on that case. thank you very much for that, louisa bojesen. goldman sachs agreed to pay more than $56 million to settle a class-action lawsuit accusing it of ringing the benchmark. the proposed settlement comes after seven other banks agreed in may to pay a combined $324 million to resolve the case.
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the suit claims they rigged the fixed rate to help structured debt securities. in other corporate news overseas, volkswagen is facing a deadline to tell a federal judge in san francisco by today whether the company has reached a deal with u.s. regulators and attorneys over its diesel admissions scandal. last week the judge said the two sides had made substantial progress and postponed a hearing to give them more time to negotiate. the deal would involve the remaining 80,000 desill cars that were not covered by the settlement. when we come back, a group of senators calling for a special committee to probe the allegations of russian election hacking. but first as we head to bank, here's today's national forecast from if weather channel's kelly cass. >> hey, good morning, sara and wilfred. it's the monday before the christmas holiday. and we do have bitter cold temperatures as you're trying to wrap up that christmas shopping or do some traveling across the
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country. make sure you pack lots of layers here for chicago. it's going to be 14 for a high there. and 29 degrees for a high in new york city. so many people not even getting up to the freezing mark for a high temperature. we're above freezing in atlanta, but at 48 degrees is below average. there are a few showers that we're tracking from the outer banks of north carolina all the way down to ocala, florida. the middle part of the country is quiet. just cold for this time of the year, but warmer than we saw over the weekend. and we have another system pushing into the northwest. that means temperatures in the mid-40s with a mix of rain and snow for seattle and portland. 69 degrees for los angeles. that's a look at your national weather. we'll be right back. manage my portfolio. since i added futures, i have access to the oil markets and gold markets. okay. i'm plugged into equities- trade confirmed- and i have global access 24/7. meaning i can do what i need to do, then i can focus on what i want to do.
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welcome back to "worldwide exchange." dow futures are up about 40 points. the s&p futures are up 6. the nasdaq futures are up 6 as well. the s&p and nasdaq, a little change from last week to this week, the dow continues its march higher. the sixth week in a row. we continue to eye that 20,000 level. haven't hit it yet ever. but keep an eye on it. we are more than 100 points away. we'll see what happens later on in the session. as for the currency market, remember, the dollar ran up to a 14-year high last week. that dominated the trading action. it's taking a bit of a pause. the dollar is backing off, for instance, against the japanese yen. though it is just barely
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stronger against the euro at 1.0446 down to 1.03 last week in trading. and the british pound is also weaker against the dollar. we'll start to watch how that influences the trade. it's hurt gold and some other commodities like oil, but oil is stronger this morning. indeed, sara. the reason we didn't hit 20,000 last week is because mike san to santoli said he was off on holiday, but now it's allowed to hit 20,000 this week. the latest on the electoral college meeting today is going on, let's go to tracie potts with more. >> reporter: the russian hacking is hanging over this election. all eyes are on the electoral college vote today. this afternoon 538 electors
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gather in state capitals across america to cast official votes for president. donald trump's chief of staff claims some have been intimidated and harassed. >> we've got electors that are receiving 200,000 e-mails. >> reporter: the director of national intelligence denied a request from some electors for a briefing on russian hacking before they vote. there's been no evidence connecting hacking to trump, but hillary clinton's campaign chair is still raising questions. >> what did trump inc. know and when did they know it? were they in touch with the russians? >> the conversations never happened. >> reporter: top democrats and republicans on capitol hill want a special senate committee to investigate. >> we need to get to the bottom of this. >> the investigation should be tough, strong and bipartisan. and should have access to all materials, classified and not. >> reporter: and a new nbc news wall street journal poll shows 55% of americans, more democrats than republicans, are bothered by russian interference. but nearly half have no opinion on whether the president-elect
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is too cozy with vladimir putin. some experts say a counter cyber attack may not be the best move. >> once you get into that kind of an escalation, we're in truth, more vulnerable than they are. >> reporter: mr. trump continues his working vacation with meetings this afternoon at his florida estate. in our poll, 50% approve and 41% disapprove of his transition so far. and a trump spokesperson says they are still working on separate the president-elect from his business. back to you. >> tracie potts in washington, thank you. and representative mick mulvaney is an outspoken critic of former house speaker john boehner. and in other political news out of washington, john mccain and three colleagues sent a letter to mitch mcconnell calling for a temporary select committee to probe alleged russian hacking. the senators say it will be too
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hard and inefficient for existing congressional committees to investigate the issue because too many claimed oversight. the topic was a popular one on the sunday talk shows. here's incoming white house chief of staff reince priebus. >> i think he would accept the conclusion if these intelligence professionals would get together, put out a report, show the american people that they are actually on the same page as opposed to third-parties through "the washington post." >> the office of the director of national intelligence is currently preparing a report and some findings are expected before president obama's term ends on january 20th. now to sports and "sunday night football," the tampa bay buccaneers took on the dallas cowboys with the best record in the nfl. tampa bay had one last chance to tie or win the game, but dallas intercepted the pass late in the fourth quarter. the cowboys went on to win 26-20. improving their record to 12-2 for the season.
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>> not bad at all. when we come back, this morning's big headlines and a round-up of the top markets. and the top trending stories, including hillary clinton spoofing the classic "love actually." it was not hillary clinton but her impersonator on "saturday night live." stay tuned. you're watching "worldwide exchange" on cnbc.
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good morning. the market futures point to
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another positive session on the street as the dow rides the longest winning streak in over a year. and china versus trump. a state media outlet calls the president-elect clueless. we'll take you live to beijing for a reaction straight ahead. and late-night laughs. "snl" channels "love actually" in an electoral college spoof trending everywhere. we'll bring it to you in a few minutes. it's december 19, 2016. you're watching "worldwide exchange" on cnbc. we don't share a lot of things but one thing we share is "love actually" in terms of taste. movie tastes -- >> i like this song. do you? >> it's great. welcome back to "worldwide exchange." i'm sara eisen.
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>> i'm wilfred frost. i have not watched "love actually." well, not this year. >> it's one of the best christmas movies. "notting hill" is one of my favorites from hugh grant. after the dow outperformed the nasdaq and the s&p last week, dow futures are pointing to a higher start again, 41 points higher. the s&p futures up 6. the nasdaq futures are up a little more than 6 as well. some of the breaking news in terms of data in asia overnight, japan's november exports following .4% followed by the weaker yen and a better recovery in overseas demand. the polled economists are expecting a 2% decline. imports there fell to 8.8%. but that was better than the forecast of 12.6%. the trade surplus narrower than expected at 153 billion yen.
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tomorrow the bank of japan unveiled the final policy of 2016. and data ahead in china, november new home prices rising .6% from the previous month slowing from october's increase. as for how the markets did overnight, hong kong falling a full percent ending at a multi-week low there. the shanghai comp also negative, just barely. and japan's nikkei holding up. it did break the winning streak. >> we have export and import data from japan coming in slightly better than expected as well. there was european data to hit this morning. the german ifo index reporting the business economy in germany was strong. it increased from 110.4 to 111 points in december. and not having much of a positive impact on the european trade, i would say. the dax is pretty flat. france down a third of a
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percent. italy outperforms as the troubled oldest bank of the world starts its share sale. >> exactly. bmps is down itself. we'll look at the broader markets, the oil prices are up this morning. just above $52 a barrel, i believe. 55.39 for brent crude. energy is the best for forming sector. that's down to the fact that oil prices are significantly higher than they were on january 1st. we'll have a look at the ten-year treasury note. the high last week was on thursday, 2.64%. we are just off that now. just below the 2.6 handover. the same is true of the short end of the curve, we peaked at 1.2% in the middle of the week and we are below the short curve. the dollar reacts to how the yields are moving, it slipped a little bit today after a decent week last week. the index, the broader index is up 1.25% for the week, the fifth
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positive week in six. but today, you can see the dollar slipping a little bit, particularly against the yen. it's actually a little higher against the pound. gold prices are seeing six straight weeks of decline in face of the stronger dollar. slightly higher this morning at 1139. the story from china over the week, in global news china agreed to return that u.s. navy research drone that it snatched from international waters last week. meantime, chinese state media today taking a new shot at president-elect donald trump. our eunice yoon is joining us with the latest on the back and forth. what is the chinese perspective at this hour, yoeunice? >> reporter: well, the chinese are downplaying the u.s. drone saying the u.s. and chinese militaries are in direct talks to negotiate the handover of the
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drone. the foreign ministry also attempted to cautiously defend beijing's actions saying china's navy had a responsible and professional attitude to identify and ascertain this object. if you discover or pick something up from the street, you have to examine it. that was a different tone than what we saw in the state media, which was both defending beijing's actions to seize the drone more strongly and also mocking donald trump. the people's daily called the u.s. survey ship a serial offender, spying against china. the press also more broadly mocked donald trump for his tweets saying that beijing should just keep the drone, they called that emotional. and also said that he was a president-elect who only adds fuel to the fire. now, trump has indicated that he does want to be much more aggressive on policy toward the south china sea. and i spoke to a couple analysts who said that beijing is showing
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restraint officially, but that if he does follow through with this aggressive stance making it his policy, we would see beijing taking its own action. and some of the ideas out there is that beijing could recall its ambassador or that it could actually cut diplomatic ties. we're seeing also in the state press that they are trying to steer donald trump away from confrontation saying that trump should take president obama's advice to think through what the consequences are. this is according to china daily, before upending long-standing policy. >> eunice, the same state media outlets, how have they been reacting to donald trump's win over the last couple weeks? >> reporter: well, there's definitely been an escalation and concern over his more hawkish remarks. a lot of that is because the south china sea is a very sensitive topic for beijing. they use it in their messaging
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domestically. in fact, president xi xinping has been using the south china sea to whip up nationalism because he's trying to portray himself as a defender of china's interests against the west. and that, according to a lot of analysts here i speak to, makes it much more difficult for him to negotiate something with trump or to back down on this issue. and if you couple that with the fact that the chinese economy is slowing down. and there is also expected to be a political reshuffle next year, it just makes it that much more difficult for president xi who wants to project himself as a strong leader. >> eunice yoon, thank you very much for the update from beijing this morning. wilfred, i just wonder, both of our must-read stories get at this topic. but how trump is going to -- if he's going to be as aggressive on the military side as he is indicating he will be on the economic side. because so far on the campaign trail, what he was really hitting at was china as a trading partner and unfair
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practices and trying to steal our jobs and not doing fair trade. and this brings a whole new element into it when you're talking about naval drones and the military and patrolling the south china sea. >> yes, i think as you rightly suggest, that is not his intention to be confrontational, but if you use up goodwill on the economic side, it gives you less maneuverability on the military side. the areas like the south china sea and things like that, we'll have to see what happens. a lot of the southeast countries are very concerned. in other global news, this is another intersection between geopolitics and business. iran and airbus finalized their 100-jet deal. that deal is expected to be signed in the coming days. and the first part of the order should be delivered in mid-january. that timing is key since the aircraft delivery could come before the inauguration of president-elect trump who has voiced opposition to the nuclear deal which could derail the purchase. just last week iran finalized a
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similar deal with airbus' big american competitor boeing. >> and quite a few european-based companies are ahead of the curve than the u.s. companies in terms of deals with iran. you have the other telco companies, the automakers getting in there already. the deals are going to happen no matter what. president-elect trump, he scuttles the likes of a boeing deal, they will be able to step in on that. >> if you scuttle the iran nuclear deal, that could put the european company deals in jeopardy including airbus. >> but it is hard to do that because of their allies in iran already operating there. >> big question mark. and apple intends to formally launch an appeal against the european union's $14 billion tax bill this week. ireland is also challenging the ruling accusing the european commission of overstepping and misinterpreting irish law. the country's new arguments were published in a three-page summary paper and offered new
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details on the landmark decision. the european commission is expected to publish a new version of the own ruling later this week. and time for top trending stories today. the tributes are pouring in over social media to celebrate the life of zsa zsa gabor, the former beauty queen and actress passing away yesterday at the age of 99. larry king taking to twitter to say, there will only be one zsa zsa gabor and i liked her a lot. piers morgan tweeting, rest in peace, zsa zsa gabor, 99 years old. nine husbands, miss hungary and hollywood star. what a life. and actress barbara eden writing, rest in peace, zsa zsa gabor. she and her sisters were lovely ladies who were fun and delightful to be around. meantime, on "snl," kate mcginnis minute reprising her role of hillary clinton. she spoofed the movie "love actually" on the doorsteps of the republican voter in the
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hopes of swaying her electoral college vote. ♪ ♪ >> that is so good. >> so good. >> if you have watched "love actually," you cannot love it. it was exactly like the keira knightly reactions. i love it. honestly, i'm surprised by this as well. i knew it was one of my favorite movies, but they nailed it. >> it was a good spoof. ezekiel elliott had a unique
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touchdown celebration during "sunday night football" last nights. this is trending for sure. after scoring, the dallas cowboys running back jumped into the giant salvation army kettle behind the end zone. there he is. the celebration has the internet buzzing about his timely plug for the charitable organization. the salvation army tweeting, zeke made an important contribution for the dallas cowboys tonight. can you contribute to the millions in need? >> a good opportunity. >> he was mostly praised for -- that was siri. he was praised for how he handled it. i don't think the nfl took too kindly to it. >> either way, it was a nice touchdown. and a nice initiative, hopefully, to send positive stuff to the salvation army. still to come, today's must-reads. we'll look at the european equities which are mixed. a little bit of green, a little bit of red. gemny is up 1.5%.
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we're back in a couple minutes. ♪ we're drowning in information. where, in all of this, is the stuff that matters? the stakes are so high, your finances, your future. how do you solve this? you don't.
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you partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. morgan stanley.
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welcome back to "worldwide exchange." time for today's must read stories. my pick in with t""the wall str journal"" is entitled china tests u.s. resolve. china taking a u.s. navy underwater drone and then returning it over the weekend. trump tweeting about it.
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basically industrials bracing for more tension between the two. and here's how the piece is summarized. chinese leaders may think these shows of force will intimidate the trump administration the way they did mr. obama, but they are likely to have the opposite effect. mr. trump doesn't separate economics from security issues. and the chinese are playing with fire. they argue in their act to do this that they specifically zero in on chinese behavior that is trying to intimidate the neighbors and establish themselves as a powerful force in east asia. >> interestingly, we both think this is an important issue. but for a different take on this is perhaps who is the one playing with fire. my pick is in the "financial times" entitled donald trump's collision course with china. edward writes, without releasing
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it, the u.s. electorate appears to have opened the gates to a new cold war. one of the reasons the u.s. won the original one was its skill at breaking china away from the soviet block. a lot of different approaches here, but this is definitely an area to watch. and certainly what is true in this article is that china is infinitely stronger than it was in history to pick a slight argument battle. >> it's true. there's no clearance answer who holds the leverage and who is, for instance, playing with too much fire in the relationship. all we know is this is the most important economic relationship on the planet. the two world's biggest economic consumer powers, one and two. there are all sorts of factors, for instance, china holding so many trillions of dollars of treasuries and u.s. dollars. and the business ties between the two. it's something we'll talk about in the new year. >> i'm sure it is. still to come on "worldwide
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exchange," the dow is soaring 8% as the index marches to 20,000. we'll get market thoughts from julian emmanuel straight ahead. your path to retirement may not always be clear. but at t. rowe price, we can help guide your retirement savings. so wherever your retirement journey takes you, we can help you reach your goals. call us or your advisor t. rowe price. invest with confidence.
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we are approaching the top of the hour. that means the team is getting ready for "squawk box." andrew sorkin, how are you? >> good morning. we have a new research proposal out on what it means to invest in the company for the long-term and in the country. we'll have a conversation with walter isaacson from the aspen institute. and then james quinn,
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tiffany's former president, is going to join us on all sorts of things that i need to ask about how that store down the street next to mr. trump's house is doing this holiday. >> i was there the weekend before last, you have to wait in a line. there's one line to go into trump tower and one line to go into tiffany. it has to be disruptive. >> and a final, steve eisman is going to join us from "the big short." not the actor, the real guy. he'll be here at 7:00 a.m. >> good stuff. looking forward to "squawk box" in nine minutes' time. meantime, we'll discuss what to expect for the market trading day. and the week ahead. the dow hitting six straight weeks of gains. the longest positive run since november 2014. joining us to discuss whether it can hit 20,000 this week is julian emanuel, the executive at ubs strategy. we focus on the target and pause a little bit for the general
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bullishness from last week. but the dow is in positive territory. can that go to 20,000 before the end of the year? >> the markets tend to get quiet the last couple of weeks in the year. and we suspect you'll go sideways. we'll have 20,000, but will you go roaring on through? that's probably going to wait until the new year more than likely. >> when it comes to what stops the march higher end stock, what sort of factors are you looking at? >> well, history is a pretty good guide here. if you think about it, the market has been on a tear. up 11.5% from the overnight lows when donald trump gave his victory speech. when you have that strong post-presidential rally, very often the market sits back and digests. and at 19.2 times the earnings, that's likely going to be the case this time. we're at the upper end of valuation, certainly over the less tenures. >> we are talking about china in
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terms of antagonism between the u.s. and china, more broadly, though, on china, is that a risk for the u.s. stock market in 2017? at the moment, we're focused on domestic factors it seems. >> it absolutely is. you know, the data from china has been mixed. clearly the geopolitics is going to continue to be an issue. donald trump has made no secret about his desire to be unpredictable. that's part of the mix. it's consequently for the stock market, that means greater volatility. but it doesn't, by any means, mean an end to the bull run. >> how do you protect yourself from the sort of headline risks, geopolitics, trade and other uncertainties? >> it's really a question of patience. if you look at the last couple of years, we have had the volatile episodes where the market sells off. and subsequently recovers. we certainly had it again the night of the election and had it during brexit. if you think about it in january and february, we were down
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around 1800 as opposed to 2250 in the s&p 500. so really the key is to be patient, to feel like you don't necessarily need to sell into weakness, and to try and just be opportunistic to the extent. because with tax reform, we do think that there are going to be opportunities that crop up during the new year. >> julian, in terms of your role as head of derivative strategy, volatility has been pretty low during the recent leg up. so is this a good moment to be buying some protective derivatives to offset the run we have recently had? and what is the best strategy there? >> if you have had a good year as many have had, certainly with this last run, it would definitely be prudent to be buying a little bit of protection. because again, come the new year, the tendency actually tends to be to sort of sell and pair down the winners. and perhaps buy some of the
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laggards. you have had great runs in financials and great runs in the index. and again, we do think you might pause a little bit. >> you mentioned if we get tax reform, that would create opportunities, winners and losers. where do you see those opportunities? >> well, very much so when you speak about the potential for repatriotization. health care has been a large sector forgotten in this post-presidential rally and are trading in very attractive evaluations. and which have the greatest casual balances -- >> isn't that a one-time thing? why would you want to look for the repatriotization winners who get the prolonged earnings relief? >> because they are trading at 25 and 30 earnings right now. to us, because the capital markets are as healthy as they are, and because regulation is likely to be less in the new year rather than more, that's
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going to encourage companies who are bringing money back home to do more m&a, to pay out more to shareholders, and that is a big positive. >> quickly, what about banks? they are beneficiaries of what you just mentioned but they have shot up a lot. >> we continue to like banks. basically if you look at it, the negative sentiment surrounding the financial industry that goes back to the financial crisis has been so pervasive and evaluation so depressed that we really do think that is the beginning of the broader rally. >> julian, thank you. always good to get your thoughts, especially on a monday morning ahead of the trading week of ubs. only a minute left, what are you watching today? >> i think to see if the market can continue up this week, generally, of course the dollar and the bond yields have softened a little bit from where they were post fed meeting. does that give markets a little more of a positive spur? >> i'm going to watch your area of the banks because it's really been goldman sachs help lead the charge of the dow in the outperformance.
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can we hit 20,000? futures are positive, which means we are on guard for it. >> we are definitely on guard. cnbc will have it covered all day. "squawk box" is next.
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good morning. the dow 20,000 is within reach heading into the final trading week before the holidays. u.s. equity futures again pointing to a higher open on wall street. the trump transition. today 538 electors gather in state capitals to make donald trump's presidential victory official. the latest from the transition team straight ahead. and "star wars" spinoff "rogue one" logging the second best december opener ever. we'll tell you how much the movie brought in worldwide. and we are waiting for the big "sing" opening on wednesday.
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it looks good. it is monday, december 19, 2016. and "squawk box" begins right now. live from new york where business never sleeps, this is "squawk box." >> good morning. welcome to "squawk box" on cnbc. i'm andrew ross sorkin along with joe kernan and michelle caruso cabrera. overnight in asia, we'll show you what is going on there. you're looking at a bit of a down picture. pretty much across the board, finally, we'll take another look at what is happening in the european markets. we -- i don't want to argue we are keying off of that because that's a mixed picture. finally, take a look at crude. if we could, you're looking at wti now at


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