tv Worldwide Exchange CNBC January 5, 2017 5:00am-6:01am EST
good morning. markets now a weak picture in the u.s. and a mixed bag overseas on the heels of yesterday's fed minutes. retail stocks plunge. soft holiday sales numbers sending shares of some of the biggest department stores sliding. and trump's tweets. we'll tell who is behind them and why they won't change when he's president. it's thursday, january 5, 2016. "worldwide exchange" begins right now. ♪ good morning. welcome to "worldwide exchange" on cnbc.
i'm sara eisen. >> i'm wilfred frost. it's throwback thursday, we're throwing it back to funk. >> i can't believe it's already thursday. >> neither can i. >> short week. >> short week. good to have you back. i don't think i said that yesterday. >> thank you. it was an extended new years weekend for me. >> let's get to the market action. yesterday was similar to tuesday. we saw gains, we saw the nasdaq lead the pack, up about 0.9, the dow lagging at about 0.3% of gains. the s&p in between. the nasdaq already playing catch up. it was the laggard of the big three indices post election. russell 2000 was strong yesterday. up at about 2.5% of gains for the week as a whole. we are expected to see profit taking this morning. not too much. about 16 points. the dow is called lower. the s&p 2 points. the nasdaq 5. yesterday, lots to focus on. fed minutes, we got goods orders
sales, after the market closed, bad retail releases. ten-year treasury note at this hour, kind of settled below the 2.5 level. pulled back a bit further. so we're seeing yields slip this morning, 2.43%. >> the dollar slipping as well. global economic data to tell you about, china's services pmi number rising to 53.4, the highest reading in 17 months. the latest evidence of a stronger chinese economy. let's show you what happened overnight in asia. hang high comp did close higher by 0.2%. hong kong, very strong. up 1.5%. the nikkei lower by 0.4%. also watching the chinese currency, big story overnight and over the last 48 hours. the spot yuan, the spot chinese currency in the market closing up nearly 1% against the dollar. that is a very unusually large
move. it's helped by gains by the offshore yuan. the real story under the hood is that china is moving and moving in a bigger way than we're used to to try to stem the currency's decline and try to stop the outflows from the country even in the face of what has been a stronger dollar, strengthening the yuan. what happens is that money rushes out of the country tshkc puts pressure on the currency. >> they're moving in a stronger way than people thought. the thought was we would see the yuan weaken, they stepped in hard. saw a 0.7% move today. over the last two days, it's the biggest two day moves, 0.7% may not seem that big, but it's a currency meant to be pegged and fixed. if we can bring up the dollar board. it's worth pointing out what this this has done against the dollar. dollar weakness against the yuan. as you can see, significant move lower against the yen by 0.5%.
the euro's higher by 0.2. that was 0.7% a couple hours ago. dollar weakness remains against the euro and yen. less than overnight. the pound itself is soft against the u.s. dollar. back to the picture on european equities. there's been data. uk services pmi coming in at 56.2, topping consensus. the reading accelerated to the highest level had 17 months. european equities are mixed. ftse 100 slightly higher at 0.1% of gains. on pace for the eighth straight day of gains. another record close yesterday. so as long as it holds on to the green, we'll get another one today. set for five straight weeks of gains. it's up nearly 14% since the brexit vote. along with that services pmi data, really surprising to see how short-term positive the rebound has been in the uk. all eyes on inflation, which
could be the thing to scuff that short-term recovery. >> as for the broader market picture, let's check out oil prices which did bounce back in yesterday's session. pretty flat this morning. wti crude sitting above $53 a barrel. 53.22. brent 56.38. down fractionally. natural gas popping a third of a percent. as for the dollar, wilfred mentioned the currency, it's worth reviewing. started off the year strong, now giving it back. partly on the concerns about strengthening chinese currency. either way weaker dollar, will it mean weaker u.s. stocks? the two have been marching hand in hand. unclear whether that matters. yesterday we got a big selloff in the dollar and stocks still marched higher. you would think the weaker dollar is helpful for multinational earnings. the two have been positively correlated on this idea of stronger u.s. growth. gold quickly, let's show you. i think we should swap gold for bitcoin with a record high price.
gold here is firmer, up almost 0.75%. >> almost parity between gold and bitcoin. >> amazing. gold is a much bigger market. jim mellon tweeting this morning, applauding those moves. i'm sure he's making good money on those trades. in terms of what to discuss today, fed minutes interesting yesterday. some people were essentially on the line, and they remain data dependent, so they will be reactive as opposed to pro active. so the market only pricing in two hikes as opposed to the third one that's been talked about, but with the fed just being reactive t has to wait to see the policy action. >> this is still a cautious fed and won't make assumptions on fiscal policy because wall street is excited about what to expect from the trump administration and congress. still references to gradual rate hikes, references to the
strengthening dollar and the risk that poses to the recovery, to the yuan, some of the volatility we've seen there. so add it up, and it painted somewhat cautious, not hawkish picture. perhaps why the dollar sold off. >> auto sales yesterday, much better than expected. the reason i bring that up now, we did see those stocks play catch up. they underperformed last year. yes, markets have taken off the first two trading days of the year, but not by the stocks that led in the post trump rally. autos yesterday leading the pack. last year laggards. gains but rotation. >> the other angle to bring in here is the waekneeakness in re after the bell. the warning from kohl's and maciemac macy macy's. it is somewhat of a confusing picture even though consumer confidence has been soaring.
that brings us to the top corporate story. the retail stocks are getting slammed. shares of the macy's, kohl's, nordstrom tumbling. kohl's down 15%. macy's down almost 9. this after macy's and kohl's reported disappointing holiday sales numbers. macy's saw same-store sales slip 2.1%. they also expect lower full-year diluted earnings, and released the locations of 68 out of 100 stores it plans to close. the retailer will also be cutting jobs. kohl's slashed its full-year guidance to between 3.60 to 3.65 a share after same-store sales in november and december also declined. the ceos identified macro trends in retail that could weigh on stores saying holiday season was
volatile. nordstrom taking a hit in sympathy. some of the executives talked to various news outlets overnight. the cfo of macy's, terry lundgren talked to stazzi, the blame goes to online. they say they're grow onlining , but not enough to yuf soffset t slower traffic at retail stores. >> kohl's, big cut in their forecast for full-year eps. that's why the stock is down 15%. coming into the session, we were saying how they have lower inventories. either way they were better positioned than previous holiday quarter. by cut in eps guidance. interesting that it comes out yesterday. amazon on the flip side saying they're about to open another brick-and-mortar store. it's like laughing in the face of other traditional retailers. amazon saying whatever, even if
it doesn't make money, we'll do it. a completely different structural difference. >> which goes back to lundgren, the ceo of plamra macy's point, the department store is not dying. they have to have more job cuts, more store closings in places that don't make sense. they're not seeing the traffic come in. they say they're strategically looking at where populations are growing and where they can bring people in with the right experiences, but so far these department stores do not have that balance. >> the fact that amazon are not making money in this area. they're just burning it to take market share that makes the margins across the whole sector tough. amazon and forever 21 reportedly weighing offers to acquire american apparel. both firms are in talk with financial advisers about submitting offers ahead of a deadline on friday. any successful offer would have to top a $66 million bid made by
gilden active wear. american apparel manufacturers its clothing in the u.s. so it could potentially move operations overseas. >> or it could be beneficial for amazon to say we're saving jobs in the u.s. we'll manufacture in the u.s. >> offset the "washington post." the labor department is taking on google. in an administrative lawsuit, the agency claims goggle held information requested by the office of federal contract compliance programs as part of an audit of google's equal opportunity program. they want google to be treated as a federal contractor to comply or stop federal contracts. in a statement google said it provided hundreds of thousands of records over the last year including compensation. apple removed the "new york times" from its app store in
china in a statement apple said we've been informed it is in violation of local regulations. as a result it must be taken down off the china app store. once the situation changes, apple will offer the app again. the "new york times" has asked apple to reconsider. the website has been blocked in the mainland since 2012. former snapchat employee is suing the company saying it misled investors and partners to drive up the ipo. the employee who previously worked for facebook also claims he was fired for being a whistle-blower. the suit saying snapchat lured him to run the new user and engagement team by falsely venting user growth. snap inc says the suit has no merit and is made up by a disgruntled former employee. some drama there ahead of what is expected to be snapchat's big ipo year. coming up on "worldwide
these three indices, up about 0.8%. the dow the laggard, still up 0.3%. s&p somewhere in between. autos did well after strong auto sales. those stocks had been laggards in 2016. the retailers this morning weighing heavily. the likes of kohl's down about 15% in premarket after a disappointing sales announcement. despite that we're pretty much flat in the premarket. oil prices, they snapped a three-day losing streak yesterday. today they are just below flat. 53.2. sara? >> some individual stocks to watch here this morning. alexan pharmaceuticals says an internal probe prompted by allegations from a former employee found drug sales were valid but the company found a weakness in internal controls over its financial reporting and blamed some senior managers for not setting the appropriate tone. sonic same-store sales falling in the first quarter. the fast food chain warning that
the current quarter will be tighter but sales and margin also pick up in the second half of the fiscal year. a u.s. judge says volkswagen and former ceo martin winterkorn must face an investor lawsuit in california over the company's diesel emissions scandal. the investors are mostly state and local pension funds who say they lost money when the scandal became public. the vw market cap fell by $63 billion. when we come back, foreign cyberthreats top the agenda on capitol hill today. a live report is next. first, as we head to break, today's national forecast from the weather channel's jen carfagno. on this thursday, our weather map is packed. we have a little bit of light snow which will be impactful to the morning commute stretching from kansas city, already picked up a couple inches to st. louis, cincinnati, indianapolis, and eventually overnight tonight. new york city, d.c., not enough for advisories out. by the end of the day into the overnight that could be the case. in the south, you don't see it,
winter form watches are up for the snow that will start tomorrow afternoon and evening across parts of the southeast. more on that tomorrow. and the west, our big system continues to come in here. denver getting snow. more than a foot of snow into the foothills in colorado. big impacts for the morning commute in salt lake city. the cold, windchill advisories up across the northern plains and midwest for the feels-like temperature 20 to 30 degrees below zero. that's your coast to coast forecast, i'm jen carfagno. "worldwide exchange" continues after this. s eew' gonny blsbua 'goer banforerei's t
welcome back to "worldwide exchange." let's get you up to speed on market action. pressure on u.s. equity futures early after two strong days forced stocks opening the year opening solidly. futures down about 24 points. s&p down about 3.5. nasdaq down about 8 points. as for the action in currencies. a lot of talk about the strengthening chinese currency. up almost a full percent today. unusual as china steps in to stem outflows and currency weakness that is pressuring the dollar here. the euro 105.12. dollar weaker against the yen. the pound flat, 1.2304. i should say bang-on flat. >> you should. though it's not. >> oil is also sort of flattish,
53.22, under more pressure for brent after a rebound in yesterday's trade. >> don't know if we can bring up asia's trade, the nikkei didn't like that stronger yen, but relative to the move we saw in the yen, the nikkei's decline is pretty good that's because we had decent data out. japanese, australian, chinese services pmis trongstronger tha expected. >> even the chinese data was strong. >> i remain -- wasn't very strong. i remain skeptical. both japan and china's data has been decent but tepid. not off the charts. >> moving in the right direction, but credit led in china and yen weakness led in japan. the question is how sustainable is this throughout the year. >> we'll take it. >> not derailing u.s. equity markets. now, to the trump administration, and what is on his agenda today.
tracie potts joins us from washington with more. good morning. >> reporter: good morning. we're actually focusing today here in washington where president obama and lawmakers on two different committees here are getting briefings on allegations that it was russia trying to hack democrats and others before the presidential election. >> reporter: today america's intelligence experts present president obama with the report he asked for. details and evidence supporting their belief that russia hacked democrats to influence the presidential election. >> those same intelligence agencies are the ones that targeted the state department, white house and joints chief of staff. >> reporter: the senate foreigns relations committee and the armed services committee also get closed door meetings today. president-elect trump questions whether the intelligence community has hard evidence against russia. >> there's a stark line that's been drawn. the president-elect will have to determine who he's going to believe. >> reporter: mr. trump's
skepticism is creating a tense relationship with intelligence agencies that he'll soon oversee. >> i find his kind of disrespected to the thousands of intelligence professionals who keep this country safe frankly flabbergasting. i don't get it. >> given some of the intelligence failures of recent years, the president-elect made it clear to the american people he's skeptical about conclusions. >> reporter: those same intelligence experts will brief president-elect trump in new york tomorrow. mr. trump says his briefing was delayed because he thinks authorities are still trying to find the evidence to support russian hacking. but at least two intelligence officials have said sano, that briefing was scheduled for friday originally. >> tracie potts, thank you for that. we will hear -- we heard from donald trump's incoming press secretary yesterday who offered more insight into the
president-elect's use of twitter. sean spicer said in a discussion that he and other communication advisers are not consulted before trump sends out a tweet. he said it is a misconception that trump tweets randomly saying is he a stra tetegic thir and will communicate directly with the people. >> i suppose mr. spicer's role is somewhat reduced from previous press secretaries. >> i think it is enhanced, he has to explain every tweet. we're about two weeks away from inauguration day. the stage for the event being built outside of the capitol building. today we get to see what the tickets to the ceremony look like when they're revealed by senator roy blunt of missouri. tickets are free. you can request them from your senator or member of congress. to sports, butler knocked off top-ranked villanova 66-58.
good morning. in a new day, jobs in focus. retail wreck. some big names getting hit hard on weak holiday results. and the auction of this 500 pound tuna is today's read on the japanese economy. we'll tell you the astronomical price paid. it's thursday, january 5, 2017. this is "worldwide exchange." ♪ good morning. welcome back to "worldwide exchange" on cnbc. i'm sara eisen. >> i'm wilfred frost. it's throw back throw, throwing it back with some funk. a bit more old school than our normal selection. good morning. >> we usually throw it back to the '90s. >> let's check in on the global markets. pressure on the u.s. equity futures after two strong days of
gains. a pretty strong start to the new year. dow futures down about 30 points. s&p down about 4 points. nasdaq down about 10 points. there is positivity in europe, though movement has been small. german dax down about 0.2%. ftse up about a percent. italy and spain going strong. the classic underperformers are outperforming this morning, down 0.2%. as for the action in asia overnight, hong kong finished higher by 1.5%. shanghai comp up 0.2%. stronger services numbers than were expected even with the strengthening yuan which caught people off guard. 1% move higher versus the dollar. the nikkei in japan closing lower by 0.4%.
responding to the stronger japanese yen despite what has been a bit stronger data coming from that part of the world. >> yeah. in general, asia has been strong today. only the yen that slightly derailed the nikkei. as for broader markets, oil prices snapped a three-day losing streak yesterday. they're up again fractionally this morning. >> that's a turnaround here. >> exactly. down a bit earlier. 53.3 on wti is the price this morning. almost bang-on flat. things are never actually bang-on flat. >> you just enjoy saying it. you enjoy hearing it. ten-year treasury note, yields slip the start of the year. slipping again this morning, 2.435. reminder that the high point on that yield was 2.64 in the middle of december. some way away from that at the edge of that chart just ticking down. dollar board, as sara mentioned, the chinese yuan strengthened significantly.
the biggest move the yuan has ever made against the dollar over a 48-hour period. that in perspective as a pegged currency. so the move of a spent over two days is big for a pegged currency. not that big for a free-floating currency. dollar weakness against that currency spread across to others. we've seen dollar weakness against the euro and yen. it has softened, that weakness, over the last few hours. the euro was stronger by almost three quarters of a percent earlier. now just 0.2%. the pound a bit softer against the dollar at 1.23. gold prices are slightly higher. almost a percent higher offsetting that dollar weakness, 11.73. >> the labor market is in focus on today's agenda the december adp employment report is out at 8:00 a.m., calling for 165,000 new private sector jobs to be created.
8:30, weakly jobless claims number followed by the december isn services index at 10:00 a.m. monsanto, walgreens, boots alliance and constellation brands report earnings today. steve liesman will sit down with the president of the san francisco federal reserve bank, john williams, in an exclusive interview on "power lunch" this afternoon. 1:00 p.m. eastern. this is ahead of tomorrow's jobs report. the top corporate story, shares of macy's, kohl's and nordstrom tumbling after macy's and kohl's reported disappoi disappointing holiday sales. retail report courtney reagan joins us with more. courtney, sum up for us the main sentiment behind the data we got late last night and any insight from calls you've been having. >> hi. good morning. it's disappointing. there's not a lot of other ways to color this story right now. at least from what we're hearing
from macy's and kohl's, which we know don't paint the pick hturer all of retail, but for november and december, down about 1.2%. as a result both are luring their full-year earnings guidance. a lot of the strength came during that black friday weekend, that's what we're hearing. during that final week before christmas. as you know, both of those weeks are very promotional, so shoppers get free discounts but that also compresses the margins for retailers. so that's where some of the problem came in for earnings. i spoke with terry lundgren of macy's, he said we were disappointed. that that early momentum we saw didn't carry through to the season. he said apparel was better, cold weather merchandise was better this year compared to last year, but not enough to offset the softness we saw in the center core categories, the hand bags,
makeup, accessories and watches. those are the weak points there. so that's disappointing. we heard similar things from kohl's. >> it's disappointing especially to see it come on the heels of a stock market at a record high, consumer sentiment that has spiked since the election, business confidence up. is this a department store only phenomenon or will this trickle into other parts of retail and consumer? >> that's a great question. i think it's interesting because many of the early reports we were seeing was saying it was a strong christmas. from everything that we know, consumer spending and sentiment is strong. but we also know department stores have been in a state of secular decline. so i think this may be a retail or stock or individual brand specific story, not necessarily all across retail and a great read on what consumers are doing. because i don't think we can discount the other data points that we've gotten to show that
consumers are spending. we know they're spending in different ways. even terry lundgren said double digit growth online for macy's and bloomingdale's, and he called that business booming, but says those are more expensive sales to a retailer with as many stores as macy's has. i'm not sure we can paint all of retail and a consume wr with a broad brush to say we should be worried, but it's a pain point that will continue. >> thank you. amazon announcing plans to open its first manhattan book store. it is expected to open in the spring in the time warner center. the online retail giant has been making a push into brick and mortar. it first opened a book store in seattle in 2015. it has two others. plans are in motion for a store in chicago and massachusetts.
a lot of people might be -- a lot of people in the book store industry might be upset about that after the rise of amazon hurt their actual business. constellation brands will be an earnings report to watch before the bell. landon dowdy has three things to watch. this is very interesting because of the mexican tie-in. >> the street is looking for constellation brands to post earnings of $1.72 a share on revenue of $2 billion. here are the three things to watch. first trade policy risk. since the u.s. election, the primary risk for importers shifted from nafta to new tax policies this could personalize imports via a border adjustment. analysts at merrill lynch believe constellation has manageable aggregate policy risks. second, while many remain cautious on the stock, the street expects management's commentary on the third quarter to be positive, albeit
temporary, that's due to gains in beers brewed and imported from mexico. and the third thing to watch, guidance. you wanted to see whether management will increase earnings guidance given the top-line pace in beer and the windfall in the mexican peso which means lower u.s. costs for imported beer. look at the stock. shares of constellation brands down about 6.5% in the last three months. it is time for some top trending stories. bernie sanders u.s. senate appearance going violent while challenging the republican plan to repeal the affordability care act, sanders brought along a giant board showcasing a tweet from president-elect trump. the tweet dated may 2015 reading i was the first and only potential gop candidate to state there will be no cuts to social security, medicare, medicaid, huckabee copied me. photos of sanders speaking along that blown-up print of the tweet
game a people to a dog wearing pants, cecile the lion. he will hold him to his word, i guess. >> kudos to mr. sanders there. there will be so many tweets that trump has released over the last couple of years that don't quite hold true. he will call him out on it. >> it's a new way to demonstrate quotes on the floor. >> next story, mariah carey's botched new year's eve performance, the san antonio spurs mascot parodying her performance while surrounded by dancers. he lip-syncs to "emotions" while wearing a leotard and stomping off the court after technical
difficulties. ♪ ♪ >> i love that. >> she was not happy. that was a good representation. 212 kilogram or almost 500-pound blue fin tuna selling for $637,000 in the new year's auction at tokyo's fish market. while bidding on the first tuna is an annual ritual, this selling price is the highest level since 1999. the king of tuna won the auction for the sixth year in a row. some say this is the barometer that things are looking up in the japanese economy. >> $600,000 worth of tuna. >> it happens all the time there. does it? that much? >> people pay such a premium. >> the king of tuna certainly
does. >> if you haven't been to the fish market, it's a blast. you have to go very early in the morning. >> how much did you spend on sushi? >> you can just have normal meals. >> hundreds of thousands of dollars? >> no, it's very affordable for the people who are not the king of tune fla. >> tuna. coming up, today's must-read stories. first as we head to break, a look at trading picture in europe. it's sort of a mixed one. strength in spain and italy, but a bit of weakness for germany, the uk, and france. germany down a quarter percentage point. stay tuned, you're watching "worldwide exchange."
good morning. welcome back to "worldwide exchange." let's check in on the market action. we're pretty much flat. just below that. as you can see, yesterday was similar to the first trading of the day of the year where the nasdaq led the pack up about 0.9%. the dow up 0.3%. a rotation of the post-election strength. these three called just lower this morning. let's check in on the dollar. dollar strength has been reversed this morning. it was all sparked by chinese yuan against the dollar. big move in that, 0.7% which is huge for a pegged currency. weakness in the dollar against the yuan spread into other
currencies and manifested as a weak dollar as a whole. the euro has lost its ground it was up 0.7% earlier in trading. it's now flat. that's reversed significantly. the dollar still weak against the yen to the tune of a half percent. the pound is down. so, in fact, that dollar weakness we had in quite a pronounced fashion two, three hours ago still there, but much less so. >> it is time for must reads. the stories there the papers catching our attention. my pick in the "washington post" titled "the american auto industry does not need trump to stage-manage it." the columnist is writing in preference to the recent moves from ford to expand jobs here in the u.s. that trump in a tweet went after general motors for manufacturing parts of its cruz in mexico. what a role reversal for the two parties. during the bailout when the obama treasury department owned the automakers, these democratic
officials kept out of the company's business decisions, less they be politicize d. it does scramble the free market having trump ordering companies to bring jobs back and grow workers. this was his campaign promise. perhaps the companies have their eye on the ball, which is lower tax rates, deregulation of the sector overall, which would help the businesses more. >> my pick is on a similar topic today in the financial times titled the protectionist trade fallacies of america first. "if he persists with this kind
of intervention, mr. trump will not help to boost employment in america. instead he will instill a fear of political meddling among business leaders, disrupt sufficient international supply chains and risk stoking a protectionist and populist backlash among america's trading partners." it does highlight some of the job gains that have been made by some of these specific twitter attacks and deals are quite small in the grand scheme of things. the question is making headlines, using this as propaganda in the short-term, will that damage things six months, a year into his first term if you just see people not moving here for bigger investment projects which might be foreign companies deciding to do that, or new plant builds here, or do they delay it. >> the administration's response will be we'll be pro-business, business friendly environment, look how many ceos they appointed to cabinet and other
important positions. they want to make america desirable for business. i think that's the negotiating tactic they would argue. >> negative view on some of those policies in the ft today. >> the team is getting ready for "squawk box." michelle caruso-cabrera joining us from the new set of the nasdaq. >> it's my first time on this set. >> it's pretty. >> it's lovely here at times square. coming up, we have anne winblad, a pioneer in private equity. she comes on historically to make recommendations for stocks in the software sector, that's the area she knows very well. last year she said buy microsoft, that was a good idea. turned out to be a good investment. we'll see what she says about where to invest this year. so much to talk about when it comes to silicon valley. rising interest rates, will that drive people away there that area? we'll talk about the situation
with russia and trump with a number of guests, and talking about what is going on with the markets here. i will not say you know what. >> i stopped. >> because a watched pot never boils. >> i stopped a week ago. i thought i was jinxing it. >> i don't know what either of you are talking about. >> a big round number hanging about. >> not mcbeth. >> but the ftse 100 has hit three record closes in a row. i know i'm talking about uk again, but -- >> in the wake of brexit, i find that interesting. >> exactly. michelle, look forward to "squawk box." still to come, jack caffrey from jpmorgan private bank, we'll get his take on jobs, the consumer -- >> and the dow's march to that mysterious boiling point.
today, forget the dollar, forget the gold, it's bitcoin. it's at 1,001 dollars. it's at a place nobody thought it could get back to. a record high. it was past 1,000 a few years ago. it tanked and cratered. this is the currency alternative online only, anonymous currency. it is being driven higher by demand in china and india where there's some concerns, race for cash, liquidity concerns, concerns about currencies, protecti protectionism. for all these reasons, bitcoin is a place people are hiding out and buying. >> very similar price per dollar now as gold. >> how about that. the new safe haven? >> we should do a gold bitcoin exchange rate. >> we should. there are some dangers with investing. it's a much smaller market. all sorts of warning signs.
new technology. unclear whether it has staying power. >> regulation can change things in the way no other currency like gold or the yen could see that. it's something that you could get rules brought in that could derail the rise in the price. as for stocks, we are called lower by 24 points on the dow. we gained 0.9% on the nasdaq yesterday. 0.3% for the dow. let's discuss whether the positive start to the year can continue. jack caffrey joins us. happy new year. >> good morning. happy new year. >> we started off the year in positive fashion. it did accompany with a strong move in the dollar. the move in the dollar has turned around today. is does that spell the fact that the stocks might move around as well? >> we have earnings season starting next week, some people were sitting on their hands later in december and may be
willing to take a few gains off of that strong rally we had in the fourth quarter. don't lose sight of longer trends. earnings turning higher. continuing to move positively. people will watch and try to understand what actually some policies that come out of the new administration might mean to how business friendly they can make things. >> along those lines, is the trump trade getting crowded? >> certainly i think you look at the sectors that were expecting to have some big changes, you look at the financials. not necessarily crowded but embedded some aggressive changes in expectations. you look to the finals, people are seemingly looking for unique combination of much faster loan growth and lower costs. that can be challenging to implement in the shorter term. i do think we'll have hair poai pockets over the course of the year. policy changes take a long time to work through, implement and
legislate. that will give us chances to give us some risk in the portfolio. >> given the stock underperformance of the autos in 2016, and the strong numbers yesterday, is 2017 a good year for auto stocks? >> it's not one where we get to a massive number but how do you put a valuation on a group of companies that might have a sustained plateau? that's not something that the auto industry has had to experience in the past. it has been very much a cyclical business. then trying to understand how do we change the technology under which our autos are built around as we think more about regulatory changes, efficiencies, fuel, and even fuel costs. which ones are driving the profits of the auto sector between small cars, suvs and pickups. >> sounds like you're not going there. >> i'm not now. >> what about retail in the department stores after warnings like we got last night, 2
docto percent declines in same-store sales for kohl's and macy's after a weak holiday per. how do you look at them? >> you look at the retailers in general, you have to ask is it an online formula, store-based format, and there are very different success stories across those different companies. consumer behavior has changed. initially you went to the jenlt store in town, then to a catalog retailer, then a discount retailer, now we go to an online retailer. transition change. that's the defining characteristic of the retail industry. >> jack, great stuff. thanks for joining us. jack caffrey of jpmorgan private bank. yesterday fed minutes, today jobs numbers. >> a lot of data today starting with adp, initial jobless claims, the services number for the u.s., jobs tomorrow.
good morning. the march to dow 20,000. good progress yesterday, futuring pulling back this morning. early jobs data could turn things around. retail stocks plunged. the soft holiday sales number for from macy's sent shares of the department store sliding. plus a billionaire boom in washington. trump's cabinet ushering a wave of wealth into the nation's capital. robert frank tells us what it means for real estate prices. it's thursday january 5, 2017,
"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. we are live from the nasdaq particular k market site in times square. i we want to congratulate andrew and his wife pilar on the birth of sydney. 7 pounds, 9 ounces. andrew says he will be back with us soon. spend some time with the baby. look how cute. >> coming back tomorrow, i think. theoretically. >> what? >> huh? don't you think? >> isn't there paternity leave here? >> i -- you know, i -- >> don't