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tv   Worldwide Exchange  CNBC  April 13, 2017 5:00am-6:01am EDT

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good morning. a call on currencies. president trump says the dollar is getting too strong. the global reaction which is severe straight ahead. new this morning, china posted a better than expected trade deficit on export strength. meantime president trump changes his mind saying he won't label the country a currency manipulator. earnings central. financials in focus today as we prepare to hear from jpmorgan, wells fargo and citigroup. it's thursday, april 13, 2017, "worldwide exchange" begins right now. ♪
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good morning. welcome to "worldwide exchange" on cnbc. i'm sara eisen. >> i'm wilfred frost. a very good morning to you from me as well. welcome back. >> thank you. good to be back. >> i was about to say it's friday the 13th. >> it is a friday. a holiday shortened trading week. happy passover, happy easter. it is the end of the week. you want to come tomorrow and do the show? >> no i'll be somewhere else for sure. it's not strictly a friday. it's not just a thursday, it's a throwback thursday. we're throwing it back to party themes. this is pink, right? >> yes. it's impressive that you knew something younger than elton judge. market futures at this hour. the nasdaq closing down a half percent. the s&p and dow were down a third of a percent. the reflections, the moves for the week are pretty watch yesterday's moves were.
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we came into wednesday's trade flat. the nasdaq the laggard for the week is down 0. 7%. the futures lower. the top story, president trump's currency comments in an interview with the "wall street journal." he said "i think our dollar is getting too strong. that's partially my fault because people have confidence in me. but that's hurting. that will hurt ultimately. t look, there's some very good things about a strong dollar. but usually speaking the best thing about it is it sounds good. he says it's very, very hard to compete when you have a strong dollar and other countries are devaluing their currency. he got what he wanted overnight and yesterday, immediate reaction. dollar index falling. it's down by a half percent. it dropped below 100 at one point. flying back from cincinnati yesterday afternoon, i thought thank god, i couldn't get back fast enough to talk about this. we will talk about it in a moment. the only thing i will say for
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now -- >> that's totally true. >> it's totally true. i think it's a reflection that he's listening to the ceos to come to him on these councils and advisory roles. >> just to sum it up, the dollar index year-to-date is down 2%. that's not all he said. in other news, president trump says his administration won't label china a currency manipulator in a report due this week. this is a major shift from his position on the campaign trail last year. trump telling the wj wng th"wal journal" that the reason he changed his mind is because china has not manipulated its currency for months, and that slapping that label on them could complicate matters dealing with north korea. he has showily come around to the realization that trying to get china to free float its currency would be a bad thing and see the yuan fall as opposed to rise. >> for a lot of investors and global leaders watching this,
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watching the heated campaign rhetoric, yes, it's a reversal from what he promised but a constructive and positive one. we wouldn't know how china would react. it's already -- >> and a practical one for everyone. it wouldn't really have made a difference to the u.s. either way. so it's just a clash for no real necessary reason. >> president trump also speaking out about the fed saying he's leaving open the possibility of renominating janet yellen as chair. her tenure runs out next year. on the campaign trail trump said he would most likely not appoint her to another term. he criticized her for keeping interest rates low. when asked about janet yellen during that "wall street journal" interview, he said i do like a low interest rate policy. i must be honest with you. he's getting low interest rates as a result. the ten-year treasury note yield back to the lowest several since november. 2.23. we're also at the highest level since november for gold prices. this idea, i think, that
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investors and people were chattering about trump filling these open vacancies on the federal reserve with hawks does not look right. he wants a weaker dollar, backing janet yellen, all of that is not hawkish policy. the question is will he go after janet yellen as she continues to raise interest rates. will he start tweet being that. now we know where he stands on the issue. 2.23% on the ten-year. yields coming down. all of this coming yesterday and over the course of the last month to see that trump reflation trade ease and step backwards what a great day to be hearing from the big bank ceos. we'll have earnings calls with them. this is bad for them. probably more than any other sector. they had run up the most and benefit from those higher yields. overall, on the market pullback, i would say two points. yes, we saw markets pull back sharply yesterday. yes, the vix picked up. hitting its highest level since november. volatility picked up. that said, the returns for the u.s. markets as return, not
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negative at all. down about a half percent for the s&p, the dow and nasdaq down a bit more. on top of that, volumes have been lower. it's a holiday-shortened week. broader markets, a look at oil prices. they've been relevant over the last week or so. oil up 1.5% for the week as a whole. soft yesterday and soft today. $53. gold prices, which were up again today and up yesterday, taking up the gains for the week, about 2%. and we are the fifth week in a row for gains at 1,288 for you. china's exports rose 16.4% topping estimates. but markets in general pretty soft around the world. in light of those selloffs on wall street yesterday.
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the nikkei down 0.7%. european trade for you as well, soft today and for the course of the week, we have germany and france in negative territory. the ftse was flat coming into today. but it's down half a percent. red across the screens in europe. >> the nikkei at a four-month low. in other news, president trump is openly expressing support for the u.s. export/import bank. trump telling the "wall street journal" he plans to fill two vacancies on the bank's board. the agency helps u.s. companies do business overseas, guaranteeing loans for international clients. many conservatives criticized the bank calling it corporate welfare or crony capitalism. on the campaign trail he called the agency unnecessary, but in the interview with the "journal" he said it turns out that first of all a lot of small companies are helped, the vendor companies but also more importantly other countries give assistance. when other countries give it, we
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lose business. another sign, i think, he's listening to the ceos, ceos like jeff immelt who always talks about the need for this to put the u.s. on a more competitive playing field. on today's agenda on wall street. look for reports on weekly jobless claims producer prices and consumer sentiment. markets are closed tomorrow for good friday. but it's not a federal holiday. so the government will release data on retail sales, consumer prices and business inventories. the banks will officially kick off earnings season this morning with results from jpmorgan, citi group, wells fargo, and pnc financial. busy morning for you. >> previewed this heavily yesterday. i think loan growth has been soft the last couple of months. people want to know why that is. is it a fundamental structural reason? in terms of investment banking, trading should be okay, so should debt issuance. m&a should be soft. all comes down to the earnings
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calls and comments on the yield curve. >> i saw some chatter about auto loans. do we expect to see anything as delinquencies pile up? people have been warning about this. >> two areas to watch. corporate real estate loans, where there's been signs of weakness, and autos, where there's been signs of overheating. comments on that will be focused on. want to focus on banks. focused on this in the early morning chat. the euro/dollar moves have not been that pronounced this week. the euro has not sold off much. we've seen dollar weakness on the other side. if we talk about the impact of the french election rising, it has shown clearly, if we see it against euro yen, 5% for the euro against the yen over the course of the last three weeks. look at these two french banks. bnp paribas is down 6% over the last two weeks. socgen down about 8% over the last two weeks. and just wanted to highlight those. it shows that rising fear around
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the french election. volatility in euro/dollar that picked up. even though the euro/dollar move itself has not been that big. the election is a week on sunday. two big factors lifted that volatility and that weakness, getting closer is the date but also the rise of the far-left candidate, mr. melenchon, and the fact there are four horses in this race, very, very close and the markets are getting jittery. >> underperformance of the french cac this week. now, sticking with financials but back state side, berkshire hathaway is selling 9 million shares from its stake in wells fargo. berkshire says the sale is not tied to the bank's sales scandal. it is selling the shares to keep its stake at 10% to avoid additional oversight by the fed. after talking to fed officials, berkshire said it decided maintaining the high stake would restrict its ability to do business. before the sale, berkshire owned
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more than 500 million shares of wells fargo. buffett personally owns another 2 million. the sale of 9 highlighting a small sale relative to the stake. berkshire is also likely to vote in support of the wells fargo annual meeting later this month, that's on the 24th or 25th of april coming up. all 15 board members are up for re-election. institutional shareholder services maintain their advice to shareholders to vote against 12 of those -- >> including the director, who you spoke to. >> the chairman, steve sanger. interesting that perspective that they maintain that thought. when we come back, stocks to watch. first, as we head to break, check out the dollar. it is the mover over the last 24 hours. president trump says getting too strong shand that hurts. well, the dollar is back on the rise against the you'euro this morning and the yen. just flipping. he got a mini selloff.
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that seems to be reversing. you're watching "worldwide exchange" on cnbc. so you're having a party?
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how nice. i'll be right there. and the butchery begins. what am i gonna wear? this party is super fancy. let's go. i'm ready. are you my uber? [ horn honks ] hold on. don't wait for watchathon week to return. [ doorbell rings ] who's that? show me netflix. sign up for netflix on x1 today and keep watching all year long. welcome back to "worldwide exchange." let's give you a market update. this comes after we had an intraday selloff yesterday. the vix hit its highest level since november. but let's put those declines into perspective. the moves themselves were not huge. we saw the dow and the s&p down about a third of a percent. the nasdaq down a little bit more, 0.5%.
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the moves for the week as a whole not much more pronounced than that. the nasdaq coming into today, down 0.7% for the week. we should also point out in this holiday-shortened week that volumes have been a bit lower. therefore perhaps just exaggerating the size of these moves. futures market this morning is soft. down about 0.2%. comes off weakness in asia and europe. let's look at the yield curve.c president, in terms of the dollar, he wants it weak and interest rates which he wants to see low. yields have moved down across the board as well as dollar weakness. the ten-year treasury note down to 2.23%. so well below that all-important 2.3% resistance level. we'll have to see if that continues throughout the day. sara? >> some individual stocks to watch today. shares of hanes brands popping on better than expected q1 earnings. its cfo is also stepping down at
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the end of the year. pier 1 warning of a bigger than forecast q1 loss. shares falling on that news. aerie pharmaceutical reporting positive results for a drug to treat glaucoma and eye diseases. >> preorder fors >> preorder for for samsung's galaxy s8 smartphone could set a sales record for samsung, this despite the controversy following the galaxy note fires. samsung up 1.2% this morning. up 13% over the last three months. taiwan semiconductor posting weaker than expected earnings in revenues. shares of the chipmaker and major apple supplier falling off the back of the news. it's up still over the last three months. infosys earnings falling a bit short in the latest quarter and its full-year revenue outlook comes up light, this as the
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exporter added more clients in its 1$100 million plus category. down 4% today. coming up, secretary of state, rex tillerson telling vladimir putin u.s./russia relations are at a low point. a live report from washington is next. first, as we go to break, here's today's national forecast from nbc's bonnie schneider. good morning. incredibly warm still across the country with some exceptions. little cooler in new england and parts of the northwest where highs will be in the 50s. rain working its way through milwaukee this morning. that's a travel trouble spot as well as across parts of west texas, looking at strong storms that may develop throughout the afternoon. tomorrow's forecast calls for that big ridge of high pressure to push to the east. we'll see warm conditions in the southeast. watch out for some rain as we go through chicago into st. louis. temperatures cooler as a result. but that warm air is working its way to the northeast. we will experience that on easter sunday. that's your business travelers
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forecast. more "worldwide exchange" when we come back. this is the new new york. we are building new airports all across the state. new roads and bridges. new mass transit. new business friendly environment. new lower taxes. and new university partnerships to grow the businesses of tomorrow today. learn more at
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♪ what we do every night is like something out of a strange dream. except that the next morning it all makes sense. to power global e-commerce fedex networks are massive, far-reaching and, yes... a little magical. slash dream what powers the digital world? communication. like centurylink's broadband network that gives 35,000 fans a cutting edge game experience. or the network that keeps a leading hotel chain's guests connected at work, and at play.
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or the it platform that powers millions of ecards every day for one of the largest greeting card companies. businesses count on communication, and communication counts on centurylink. welcome back. let's get up to speed on the market action. we are headed for another down day on wall street. dow futures are down 38. we'll get initial jobless claims, and march ppi wholesale inflation numbers this morning. nasdaq futures down 10.5. s&p is down about 4. as for currency, that's where the action has been, especially
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last night where president trump talked about wanting a weaker dollar getting a weaker dollar, that's reversing course a bit this morning. with the euro now weaker at 106.44. the dollar unchanged against the yen. we did see yen strength overnight. and that sent the nikkei to a four-month low. the pound is firmer at 125.51. oil prices backing off yesterday after that inventory report in the u.s. early in the morning. wti crude sits flat at 53.11. brent, a bit higher, just fractionally, just below $56 a barrel. nat gas continues to get hammered, down almost a full percent. in washington news, following foreign affairs. secretary of state rex tillerson heads from russia back to the united states with apparently little luck warming up the frosty u.s./russian relationship. tracie potts joins us live from capitol hill this morning. >> good morning. we are watching that frosty relationship not really thawing
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at all between the world's two largest superpowers and all of this as the world tries to figure out what syria and north korea might do next. president trump heads to florida on easter break today with this assessment of world affairs. >> right now it's nasty. >> reporter: admitting problems dealing with russia. >> there is a low level of trust between our two countries. >> reporter: secretary of state rex tillerson returns to the u.s. from moscow today empty handed after chilly meetings with president vladimir putin and russia's foreign minister. >> i will be frank that we had a lot of questions. >> reporter: questions about election interference which russia denies and about president trump launching air strikes after syria's chemical attack. >> translator: so far we have not seen any facts. >> reporter: the president is doing an about-face on two key issues. nato -- >> i said it was obsolete. it's no longer obsolete. >> reporter: and china as a
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currency manipulator. now telling the "wall street journal" they're not. saying this in an unexpected phone call with china's president. >> i said the way you will make a good trade deal is help us with north korea. otherwise we'll go it alone. >> reporter: with two of the world's major superpowers for now at arm's length. the president now widening that gap with russia, suggesting that russian soldiers who were in syria may have known about this chemical attack before it happened and did nothing to stop it. >> thank you very much for that. tracie potts in washington. turning to sports business news. remember reebok? >> i do. >> it's been a while since rebook was cool. >> i actually have a couple pairment. >> you may wanted to bring them back. parent company isadidas has enjoyed growth. the question is can rebook grow
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again. rebook has been in decline since adidas first ponied up to buy rebook. at that time reboebok had 12% shares. the new ceo is focused on turning around reebok internally and how is he doing it? he's going retro. relaunching classics from the '80s and '90s. workout, club c, those are the models you may remember. taking back old school logos and styles. as part of that effort it's partnering with artists for humanity a boston-based non-profit which offers aprenstiaprens t aprensties apprenticeships for
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teens. three new models were unveiled in nyc's times square. rebo reebok hopes to appeal to the social socially -- >> the size within adidas is what? >> less than 10%. the big bet in 2005 was that buy buying reebok, adidas would take on nike, and it's gone the other way. reebok is focused on fitness, cross fit. >> adidas has taken on nike some what with its own brand. >> yeah. exactly. especially in the u.s. market in the last year. that was the big story. adidas grew market share and nike shrunk market share. still nike has about 50% of the
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market. >> the big ambassador for reebok across the uk, you know who that is? >> no. >> ryan giggs. >> is it a coolendorser? >> yeah. certainly in the '90s. ryan giggiggs, a welsh left win. turning to a big interview today with new england patriots head coach, bill belichick. sitting down with suzie welch talking everything from football to finance. >> you've been called the chief economist of football. you were the person who saw the financial value of undervalued players. it's considered one of your great skills. you always had incredibly financial discipline as a coach. >> right, but none of us got into football to be a professional football, none of us got into football to be a professional coach, to manage a cap or a team.
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all of us that got into football got into football because we love to go to practice, we loved to play the game when we were, 9, 10 years old. >> you can catch more of that interview today at 1:00 p.m. eastern time on "power lunch." still ahead what apple is quietly doing that could be a game changer for millions dealing with diabetes. and a whopper of a story involving burger king and google home. this morning's top trending stories are coming your way when "worldwide exchange" returns. hey.
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pass please. i'm here to fix the elevator. nothing's wrong with the elevator. right. but you want to fix it. right. so who sent you? new guy. what new guy? watson. my analysis of sensor and maintenance data indicates elevator 3 will malfunction in 2 days. there you go. you still need a pass.
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good morning. jpmorgan, wells fargo and citi out with earnings in a few hours from now. the dollar slammed. what president trump said that sent a shockwave through the global currency market. and a whopper of a story. why google shut down this burger king ad. it's thursday, april 13, 2017. you're watching "worldwide exchange" on cnbc. ♪ good morning. welcome back to "worldwide exchange." i'm sara eisen. >> i'm wilfred frost. good morning to you from me as well. it feels like a friday, but it's not. it's throwback thursday. this week we're throwing it back with a party theme. >> we're celebrating the four-day trading week. >> as always the producers on point. i don't know the name, but i like it. >> we get it.
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>> let's check in on what the global markets are doing. futures coming off a day of declines. big intraday selloff. saw the vix pick up to the highest level since november. the declines in absolute size were not too big. about a half percent for the nasdaq. the s&p and dow are down about a third of a percent. for the week as a whole, around about half percent of declines coming into today's trade. the dow down 50 points in the premarket. softness around the rest of the world. asian trade for the most part was lower. the nikkei down 0.7%. the yen has been strengthening this week. that's played a part. south korea up some 0.9%. samsung's up today on the pre-release of its presales of its next phone which were good. it will be delivered next week. european trade has been soft coming into today. the ftse 100 is flat.
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germany and dak downx adding to losses. over a half percent for the most part. a lot of overseas action being driven by comments that president trump made about the u.s. dollar. very unusual for a president to be commenting on the value of the dollar, president trump told the "wall street journal," i think our dollar is getting too strong. that's partially my fault because people have confidence in me. but that's hurting. that will hurt ultimately. look, there's some very good things about a strong dollar. but usually speaking the best thing about it is it sounds good. i completely agree with him. he says it's very, very hard to compete when you have a strong dollar and other countries are devaluing their currency. in a big reversal from a campaign promise, president trump said he would not single out china as a currency ma n manipulato manipulator. an initial dip of dollar index below 200 index.
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but it is climbing back from when the initial comments were . i think it points out that he, president trump, is licensing to some of the ceos he's been parading through the white house. he had the latest meeting on tuesday with big multinational companies that have complained and seen the strong dollar whack earnings and sales overseas, and are also saying china is not manipulating the currency. if anything, it is manipulating it -- as we heard from larry fink last week from blackrock, to keep it from getting too weak. >> the question is how much do we read into this for how long the market moves can be. traditionally when he has done the tweet about the strength of the dollar, you stepped away and thought maybe that can influence a single day's moves, but so many other things at play move the currency. the interesting thing about yesterday, he talked so widely about other areas, fed, janet yellen, interest rates, clearly all of those things considered,
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if he can influence them towards a weaker dollar. >> we know he has a fawew appointments on the fed to make. >> just talking doesn't have a lasting impact. the question is does he make dovish appointments. >> we don't know that. >> does he leave the border adjustment tax off the table? those things are the key to see if yesterday's moves are extendednouncepronounced. >> agreed. the top thing will be monetary policy. that moves currency exchange rates. but this jawboning by a president is something a bit new. he can take measures, he can negotiating, and renegotiating trade agreements and is focusing on currencies. the question is will he get backlash from other world leaders. he has criticized so many about unfair trade practices. i don't know if you want to call jawboning manipulating a currency. there could be a bigger action like intervention in the
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markets, which you see in some eamericans m emerging markets. the fact he's speak out about it is something. >> speaking out about it -- >> it's a badge of honor. >> some economists say it's positive for u.s. assets. >> the flip side works as well. i've been hurting because of the weakness of the great british pound. it does hurt. your pride. >> hurts the pride a bit. >> even though all i want do is go over there and go shopping. it's great for the economy. >> helps the economy, but when you give me jabs in the ribs, it does hurt. i wonder how the queen feels about it. it's her face on every note. it's weaker. it's softer. her majesty, stay strong. >> i don't know if she's as emotional about it as you. >> i hope she is. we have to move on. lots of other market news, particularly coming from president trump's interview with the wall street journal yesterday. in that same interview mr. trump
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said he would not rule out appointing janet yellen to a new four-year term saying she's not toast. went on to say he likes the fed's low interest policies. as for the broader market picture. let's show you how all of this is moving markets. oil prices are flat. wti at 53.11. brent firmer at 55.90. nat gas down more than a full percent. the iea saying the oil market is close to reaching balance. this comes after that build in inventories yesterday which sent oil prices lower. ten-year treasury note yield, we're seeing five-month lows. there's been buying of treasuries, buying of gold back to november highs. the u.s. dollar, we mentioned on the trump comments, settling down after initial weakness when president trump complained about the strength of the dollar. dollar/yen now is unchanged, 108.98. the overnight action has been dominated bay weaker dollar and stronger yen. the euro is flat.
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1 1.0640. down about a quarter of a percent. >> the question with the euro, if we didn't have a week of dollar softness, would it have moved against the yen? the euro is down about 5%. >> gold prices have been on the rise. they a strong week. strongest since november. trading just below $1300 an ounce. today's agenda. there's plenty of economic data ahead of the long holiday weekend. look for reports on weekly jobless claims producer prices and consumer sentiment. markets are closed tomorrow for good friday. but it's not a federal holiday. so the government will release data on retail sales, consumer prices and business inventories. i know where i'll go to get that information, that's your twitter feed, i'm sure you will be on it. >> wake me up early for economic data. sure. i'll do that. the banks, very quickly.
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that's the story of the day. you're covering it. that's the trump trade unwind. >> and look for the earnings calls. in terms of the numbers, they hit at 6:45 a.m., jpmorgan the first one as always, then wells fargo and citi group. >> i would point to the russell 2000, since we are looking at charts since the election and the trump trade. this is based on the idea that tax reform would be good for splauler companies. it al smaller companies. it has also sold off. put that in there with the big three especially on the sensitivity out of washington. in corporate news, the drama continues for united airlines. the passenger dragged off a plane over the weekend hiring lawyers. two more police officers placed on administrative leave. now even president trump has weighed in. landon dowdy joins us with the details. for the first time since this video surfaced, showing a man bloodied and dragged off a united flight, we're expecting
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to hear from that passenger. the doctor at the center of this now viral video will be holding a news conference later today. this comes after he filed court papers late yesterday demanding that united preserve all evidence relating to sunday night's incident. united trying to head off a mounting pr crisis saying it will give a full refund to the 70 passengers on board the flight. and now president trump calling it terrible. he also called for airlines to drop the cap on the amount of money they can give a passenger for being bumped. as for united stocks, shares somewhat resilient. trading slightly higher in early trading. >> thank you very much for that. it does rumble on. almost at end of the week, happened on sunday. still aftfecting them. not many pr fallouts last that long. >> i know it recovered, but the stock price yesterday.
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>> on to the top trending stories. love this one. >> i know you do. >> jude law is set to play one of the most iconic characters in the wizarding world of harry potter. law will play a young dumbledore. he with be dumbledore mrprior t meeting harry potter. >> he was my favorite character. i love jude law as a british actor. and a young dumbledore at the young 20s, 30s age, no level to this story that i don't love. >> do you like it because of jude law of harry potter? >> all of it. jude law is great as well. underestimated actor. i think he's outstanding. >> he has some personal problems. >> i think he was also unfortunate because he was so exposed by the phone hacking scandal. clearly he was still doing those things. we might not have known about them. i think he's an outstanding
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actor. never made it in a massive lead role. i'm not sure. i think he's a great actor. talented mr. ripley. did you see that one? >> good. >> outstanding, i thought. >> wilfred frost covering the banks and jude law. >> and now dumbledore. >> google is not a fan of burger ki king's latest commercial. the fast food chain unleashing an ad that was meant to unleash google devices. the ad goes google, what is in in the whopper burger? it would then go on to read the google explanation. this will keep going on with alexa, and everyone going after these devices. everyone went into the wikipedia
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entry and edited the ingredients. now apple is quietly making a big bet on helping millions of people with diabetes. sources telling cnbc the company has hired a small team of biomedical engineers to work as part of a secret initiative to create sensors to monitor blood levels to better treat diabetes. this was initially envisioned by apple co-founder steve jobs. another exciting area. >> apple so secretive, that was a great scoop by our reporter out west. as we head to break, a look at where european stocks are trading at this hour. all the major averages in europe are in the red for the week. for the day as well. some of those losses accelerating in places like france. wilfred highlighting the bank as the french election nears. you're watching cnbc.
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welcome back. time for some must-reads. in the op-ed, mine is in the "wall street journal" titled a warning in wichita. wichita, kansas saw a close call in a special house election that the journal says is an alarm for the gop. the danger is that the close call will cause more republicans in washington to be even more skittish about casting difficult reform votes, which is what democrats want. if gop voters see little to show
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for, the gop majority, they may not turn out. speaker nancy pelosi is not farfetched, which is the big warning shot, meant to scare all of the gop lawmakers. they're referring to this race, which was close. the republican did win, mr. estes will be the representative. >> it's a remainorment. >> it w reminder. >> a reminder they have the majority and better do something with it. >> my pick is in the "the financial times" titled why donald trump still needs steven bannon. like him or loathe him, mr. bannon's perspective is consistent, it also comes closest to mr. trump's. the bannon world view is clear. he goes on to say it's quite possible even probable that mr. trump's actions took place in a strategic vacuum. he saw the syrian carnage on television and reached for his
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remote control. those 59 tomahawks could have been the munitions equivalent of a tweet. mr. bannon he says is the one who kept donald trump on point, working towards the promises, making sure everything has fit together. as he has had his role lessened in recent weeks, it's become more volatile. people are questioning the rational behind some of the foreign policy actions mr. trump has made, which makes it hard to predict. >> hard to predict, but moderate republicans saying more constructive. this time last week, we were talking about whether there would be a shakeup involving steve bannon. approaching the top of the hour, the team is getting ready for "squawk box." today steve liesman has a look at what's coming up. >> oh, boy, are we getting ready. we'll be all over the comments by the president regarding fed chair janet yellen, regarding interest rates, regarding china. it strikes me that president
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trump on several key issues, china, russia and nato is reversing course here faster than a captain running from a squall line. >> wow. >> at the same time he's tacking back to the center on a lot of these issues. so on the one hand he's changing course, he's kind of confusing markets. you can see that in some of the movements of currencies. huge decline in bond yields, when it comes to the 2 and ten-year yield. at the same time coming back to the center. how worrisome is this really? >> steve, also, question for you. do you think janet yellen would want another term if it was offered to her? we already seen mr. turillo and others stepping down. >> i think there may be some fences to mend here. some xheps that the president made during the election, during
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the campaign. he said actions by the fed chair were shameful. not sure how much of a part -- it should be in general a decent relationship between the president and the fed chair. not 100% sure one can be forced. on the other hand, every fed chair likes to be reappointed. it feels like a mark of success to have that second term in there. i guess fed hachair janet yelle would worry about interference. we'll talk about whether it's right for a president to make these comments on currencies and interest rates. >> steve, thank you very much for that. steve liesman in new york. >> "squawk box" coming up in ten minutes time. still to come, global markets struggling today as president trump talks down the dollar. we'll get you set up for the final trading day of the week, this thursday, with jeff kleintop. he joins us next. . sometimes they just drop in.
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it's a big deal. and it's how edward jones makes sense of investing. iit's where we end up.t, expedia. everything in one place, so you can travel the world better. welcome back to "worldwide exchange." futures setting up for another
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down day on wall street. futures are down 43 points. s&p down 5. nasdaq down 11. looking at a negative week by a half percent for the s&p. little more for the nasdaq. joining us is jeff kleintop, chief global i venvestment strategist at charles schwab. we were talking about the china currency manipulator, the foreign policy issues, the fed, and president trump open to renominating janet yellen. how do investors take all of these market moving events that are reversals to the center? >> we've lost jeff's sound there. we'll pick it up in a moment. >> we got you, jeff. >> sorry. i was going to say, markets didn't price in the opposite. they weren't pricing in a trade war. they weren't pricing in a soaring dollar or any dramatic changes around the outlook at the fed. i don't think there's a whole lot of them to back out or reverse course on. politics or policy prescriptions have not moved the markets for
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more than a day or two this year much it's been about earnings in asia and the u.s. moving in lock step with earnings expectations. so the real rally lies with earnings season. >> what level of earnings growth do we need to see to justify where markets are. >> double digit on a year over year basis. markets have gotten optimistic around the pace of growth. rev few growth should be strong. global economic activity is accelerating. but so are costs. the ppi in europe, for example, is the highest it's been in five years. producers costs are going up. helping to squeeze profit margins. while the top line looks good, incrementally it's harder to eke out gains. >> how do you read the sharper weakness in the russell 2000, the index of small capped domestic based companies in is that an earnings story or a trump optimism fade story?
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>> there may be a bit of trump optimism fading in the small caps. evaluations rose. we shifted to an underweight in small cap earlier this year. as a result of that outlook, there may be too much momentum on the front of tax cuts, which would definitely benefit them. anything on trade would have benefited them, being more domestically oriented. the fact that optimism on earnings got too high. that's now cooled off just a bit here. i don't know if there's more to go on small cap underperforming versus large. we remain cautious there. >> in terms of the banks earnings coming out today, do you think the pull back in bank stocks during march and over the last week or two, does that give them room to beat and to rise today off the back of earnings? >> maybe. i think it's all about the yield curve. if longer term rates don't rebound again, it will be hard for financials to move up. if the u.s., loan demand has been weak. it's been slowing. in europe it's picking up. but in the u.s. it's been falling. so those margins reflected in the yield curve very important
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to financials. >> let's talk about what that yield curve does, what yields do specifically. as we look at ten-year yield at a low. the president likes low yields and also thrill ondollatrillions worth of pro growth. >> the market is pricing in probably not a lot of overwhelming outcomes from the trump administration. maybe we get some action on tax reform, maybe there's something next year in infrastructure, but it's a slow progress towards getting those things done. and probably not as big as maybe what was hoped a few months ago. that is reflected in the lower yields on the treasuries. expect them to move back up again. better growth is here. we are likely to see progress on the pro growth reforms. so yields probably moving up between here and the end of year. >> jeff, thank you for checking in on thursday. jeff kleintop of charles schwab.
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a few things to highlight we're watching today. has to be banks for you. >> banks, 6:45, jpmorgan, 8:00 wells fargo and citi. obviously the commentary coming out of those guys afterwards on the calls. very much clearly are they going to deliver? easy comps for them to beat year over year, q1 last year was terrible. tougher comps month on month. share price up sharply since the election. i'll be watching the dollar as always, but really to see how much of a trump impact it can have. he said the stronger dollar hurts, got a selloff. it's already starting to fade this morning. to your point earlier, will policies be backed up to support the president's view that the dollar is too strong? so far a lot of the policies including border adjustment that are floating out there could make the dollar stronger. >> whatthat's it for "worldwide exchange." have a great extended weekend. "squawk box" is next.
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good morning. happy thursday. a call on currencies. president trump says the dollar is getting too strong. we'll show you how the market is reacting. and siri, check my blood sugar. sources telling cnbc that apple is working on a way to improve the treatment of diabetes. and we'll hear from three giants of the banking world today, beginning with jpmorgan, results and market reaction are all ahead. it's thursday, april 13, 2017. "squawk box" begins right now. live from new york where business never sleeps, this is
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"squawk box." >> good morning. welcome to "squawk box" on cnbc. we're live from the nasdaq market site in times square. i'm michelle caruso-cabrera, along withandrew and steve liesman. u.s. put chorfutures show a low. overnight in asia. the whole world reacting to the donald trump interview that we heard, and his comments about the dollar that andrew referenced. the nikkei lower by 0.2%. hang seng lower by a quarter percent. and south korea higher. european markets lower across the board. not by much. let's get to the big story for the morning. treasury yields dropping at five-month lows. the ten-year at 2.2.


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