tv Worldwide Exchange CNBC May 2, 2017 5:00am-6:01am EDT
good morning. earnings central. bp beats the street on higher oil prices and the being name to watch next -- apple. we'll get you geared up for results. financial shock. president trump says he is considering breaking up the big banks. the volatile trading reaction coming up. and the rise of the wo bot. credit suisse makes a push to replace the man for the machine. that story coming up. it's tuesday, may 2, 2017. "worldwide exchange" begins right now. ♪ >> good morning. warm welcome to "worldwide exchange" on cnbc.
i'm wilfred frost. >> i'm seema mody in for sara eisen. always good to be by your side. lovrnlgts l >> lovely to have you here. >> yesterday the dow losing 22 points but the nasdaq hitting another record high, a divergence between the major indices. looking at the futures where they're trading on tuesday morning, if you're just waking up with us. here we go. s&p 500 calling for a higher open by one point. dow jones higher by 13 points. bp earnings, results is something investors are digesting. nasdaq higher by 8. we will keep a close eye on the nasdaq throughout the day. apple hitting a record high now up 25% this year ahead of its highly an tess pated earnings report, which is die this afternoon. ju the nasdaq composite, a big mover of the overall index. quick note on treasuries, looking at where the bond market
is trading now. when headlines began to cross about the 4.3% reading in the gdp model forecast we saw a sharp drop in treasuries and gold. ten-year note yielding 2.33%. >> yesterday, as you said, a tech-driven day. the dow was positive most of the day. just slipped into negative territory by the end of the day. banks also outperformed. it was the boring sectors, utilities, telecoms that underperformed that meant the dow and s&p were behind the tech heavy nasdaq. in europe, most of asia was closed yesterday because of the may bank holiday. open again today. australia's central bank leaving rates unchanged. so the aussie dollar not really moving. in china, the cak s kshgcac sur to the weakest pace in seven
months. also it showed manufacturing pmi soft yesterday. we have not seen much reaction. shanghai down 0.3%. nikkei up 0.7%. a bit of yen weakness over the last day or two. that's one of the reasons japan is higher. european trade is closed yesterday. it's higher today. we have got about a quarter percent in france. a bit more for the ftse 100. the ftse 100 legged up a bit after we had uk manufacturing pmi in april. a big beat. expected to be 54.2. so that coming in higher than expected. the final readings of the rest of european pmis on the continent strong as expected. just the second reading as opposed to a new number. but continues to show european manufacturing and pmi is better than expected. the uk beat today was a surprise. the continental european beat was to be expected. >> notable improvement in pmi as
we track the progress of the uk economy post brexit. a down day for commodities. yesterday crude lost 1%. similar in ice brent crude. today we're higher. wti at $49.05. can't get above that 50. ice brent crude at $51.86. looking at the broader commodities and how they're trading on this tuesday morning, one of the reasons that we saw movement in the commodity market yesterday was because of stronger green back. the euro now at 1.09 against the dollar. gold quickly, we did see a bit of selling yesterday. how is it doing today? here we go. $1,255, up 0.1%. >> the interesting thing to pause on on the oil price, on friday we got a bit of reprieve. it was a bad month for oil, bad week for oil. on friday, chevron exxon numbers
surprised to the upside but started this week negative territory. the oil sector underperforming. interesting to see bp outperform today. the question is whether these types of earnings can support the energy sector for more than one day, which was the case last week. oil prices up a bit today, but certainly one of the risk factors to keep an eye on in the face of otherwise positive earnings coming through. the other point from yesterday is that volatility was low. volumes -- >> ten-year low for the vix. >> volatility surprisingly low. volumes were low because of european and asian markets were closed. it is an amazing low in terms of volatility. big news out of hollywood. the writers guild of america striking a last-minute deal with the alliance of motion picture and television producers. hollywood writers were threatening to walk off the job starting today if a deal was not reached. the statement confirming they reached a tentative agreement on the terms of a new three-year collective bargaining deal.
in earnings news, bp topping estimate base penny. the oil giant reporting earnings of 7 cents a share. earnings up 1.6%. at big round of names reports before the bell, including conoco phillips, mastercard, merck and pfizer. after the bell the mother of all earnings reports, apple. on the economic front. the fed kicks off its two-day policy meeting. the big automakers will release april auto sales. indian outsourcing firm infosys is making a big bet on america. the company announcing it will create 10,000 jobs here in the united states of the next two years. those jobs will focus on the cloud, artificial intelligence and big data. four new facility also open as well. with the next one by summer,
august of 2017. i'll speak with the indiana governor and the infosys ceo today at 8:00 a.m. eastern on a cnbc exclusive. it will be interesting to see this broader trend, international companies feeling the pressure from president trump and showing they are willing to invest in america's job story. stocks to watch today, barry dillers will buy angie's list and create a publicly traded company called angie home services. up 41%. advanced micro devices matching estimates in the latest quarter but shares dropping on disappointing gross margin forecasts. shares of luminex up.
chegg shares getting a bump following the earnings beat. the textbook company earnings revenue above expectation and rising full-year guidance. and tenet healthcare posting a smaller than adjusted loss. the company announcing a deal to sell its acute care hospital and related facilities in houston to hca holdings. and tenet says all its hospital centers and physicians will be phased back to humana's network starting next month. texas road house quarterly results topping estimates. the company seeing sales jump more than expected. shares of texas road house up 9%. a couple more stocks to watch. china's ten cent holdings announcing it will open an ai research facility in seattle to be led by yu dong. he will run the new lab and spearheading research in speech recognition and natural ralangue
understanding. monsanto terminating an agreement to sell its precision planting to deere. the doj filed a lawsuit last year blocking the deal. the sale was originally announced back in 2015. to washington news, president trump says he is considering breaking up the nation's biggest banks. it's a promise he first made on the campaign trail but then seemed to put on the back burner. major averages slipped and rebounded on the news while government bonds hit the highs of the day. bank stocks dipped and rallied with investors taking a win-win view that breaking up the banks would open up business opportunities for bigger firms. i think people just didn't really feel this was likely to happen. because we did see a lot of big
banks outperform yesterday. it wasn't just the smaller regionals. bank of america up over 1%. my take on this, if we look back at what the ceos of the big banks were saying on the earnings call, even if you were to see some form of ring feng g i fencing law come in, people don't expect it to be glass-steagall. in london, the fca brought in ring fencing. barclays is going through that. the view is, "a," they think this is unlikely despite him saying it. but "b" f it does come in, it won't be as bad as a pure and simple return of glass-steagall. the rally towards the end of the day was based on the eblgs pexpn that this won't come. for the big banks it would be a bad thing for share prices. >> the trump administration reportedly plans to replace the chief overseer of federally chartered banks. the white house is preparing to
replace comptroller of the currency, thomas curry as soon as this week. he was appointed by president obama for a five-year term which expired in april. the comptroller oversees hundreds of bank supervisors stationed inside large financial firms. this is interesting. one of the areas where people have been disappointed in the first 100 days is the lack of new appointments to area like most crucially the fed vice chair of supervision which we still haven't got. an added aspect that was confusing investors is thomas curry's term, he's seen as a heavy regulator as opposed to someone of the new mindset of deregulation had not been replaced, even though his five-year perm had eterm had en. people were wondering maybe donald trump is not committed to deregulation. if confirmed he is leaving, that's something that will be encouraging for the banks, particularly if it was paired soon after with a new appointment to the fed vice chair of supervision it would
have a re-ignition of belief that this is a deregulatory administration as opposed to take its time. >> a lot to do, such little time. also looking for more appointments at the state department. president trump's nominee to lead the s.e.c. is one step closer. the final vote will take place tomorrow on the nomination of jay clayton. in other banking news, credit suisse deployed 20 robots within the bank. the goal is to reduce the number of calls coming into the compliance center. though the technology allowed credit suisse to cut back on middle office staff, headcount remained flat because the bank hired a large number of programmers. all right. coming up on the show, france back in the spotlight. we're just days away from the final round of the presidential election in the yureurozone.
we'll discuss market immplicat n implications with peter spiegel. we, the entertainment-loving people, want all our rooms to be tv rooms. because those are the best rooms. because they have tvs in them. and, when we're not in those rooms, we want our shows to go with us. anywhere? you got that right, kid show thing. get a directv all-included package for 4 rooms. only $25 a month, price guaranteed for 2 years.
an intensifying protest movement entered its second month. to europe the second round of the french election is fast approaching. tomorrow is the final debate of the candidates, marine le pen and emanuel macron. friday is the final day of campaigning. and sunday the french people head to the polls to elect the next president. the result will come out mid afternoon eastern time sunday. joining us from london is peter spiegel. there's great confidence that this pairing of le pen versus macron points to the market-friendly outcome of emanuel macronle pen? is there any rceason to doubt that outcome? >> macron has had a weak first week. the big question is turnout. we've seen the french pollsters do well. they did predict the first round
accurately. the polls still show macron significantly ahead of le pen in the second round on sunday. the problem is we've seen time and time again the front national and le pen supporters are motivated, they show up. the question is whether macron supporters are that motivated. it is the urban elites that support him. he's expecting to win over the supporters of most of the other mainstream candidates from the left and right. but the question is how motivated are they? will they turn out? will they turn out enough numbers to offset the front national supporters for le pen. but thus far we've seen nothing change the narrative that macron will win and the euro maintained its highs from after the aftermath of the election. right now the markets and pollsters are betting an easy macron win. >> we knows there a mindset in france of anything but le pen. anything but the national front. in part that is in relation to
her father and the national front back in the '70s, ' 80st and '90s. is le pen shaking off that view of her, or is she still significantly labeled in the same way that her father was? >> it's where your base is coming from. the fact of the matter is even if the polls are correct, she'll get 40% of the vote. that's significantly better than her father did about 20, 25 year years ago. 40% of france voting for an overtly anti-euro candidate is remarkable. she made that accomplishment. we can't take that away from her. the problem now is she has to talk to two audiences to get anywhere above 40. she has to win over the fillon voters who are catholic, conservative. at the same time she has to win
over the hard left melenchon supporters who backed him. ant anti-eu. she had been struggling to win over conservative central france and hard front urban left. 40% of the vote, for a major presidential candidate coming from the front national, that's a significant victory for her. >> how important is this french tv debate for le pen? is this her last chance to catapult her base? >> i think it's more important for macron. macron's support is wide but thin. if he faulters here at all, which we saw in the first few days of his second round campaigning, it is his to lose right now. he has to turn out his base. i don't think we'll see le pen win much more votes than she has, but macron can lose his base. much more at stake tonight for macron than le pen. >> quick question on italy. the euro has rallied off the
back of this result. are people too quick to extrapolate that this means the eurozone's problems are over and an election to come in the next 12 months in italy as well. >> election to come. we've seen the populist party there, the five star movement doing well. they're neck and neck with the democratic party. another party that is populist, anti-eu and we still have the problem of the italian banks. if we see italy falter, that's what people are more nervous about than france. that will not only have political instability but also financial instability. we have economic growth in the eurozone for the first time since the crisis. a lot of banks are cleaning out their books and results in the first quarter of 2017. things are markedly better. the macro situation is getting better. italy is an outlyer, it does bear watching. >> peter, great to see you as always. still ahead, grilled on the hill. airline executives make their way to washington for a hearing
outperform the other two again. we're essentially flat this morning. apple was a big performer yesterday. they report earnings after the bell. >> to washington, the house panel will hold a hearing today to examine consumer airline issues. this comes in the wake of the viral video showing that united airline's passenger being dragged off the flight. oscar munoz will be in the hot seat along with other airline executives this will surely be colorful, if you -- to say the least. >> tray tables up shg, buckle y seat belts. president trump and russian president vladimir putin are expected to speak by phone today. tracie potts joins us with all the details. good morning. >> reporter: good morning. the other big thing in washington, health care, republicans pushing to try to get a vote done this week. they've only got a couple days
left. we've been counting who is for it and against it. 20 republicans against it. about a dozen undecided which means republican leaders here can only afford to lose two more. >> are we going to vote this week? >> stay tuned. >> reporter: today republicans are counting votes on health care. >> all signs are positive that they do have the votes. >> reporter: they got two more days to convince nearly a dozen lawmakers to vote yes on a plan that trump insists will cover pre-existing conditions. >> i mandated it. i said it has to be. we want to protect people with pre-existing conditions. >> reporter: but what's on the table now could allow some sick patients in some states to be charged more. >> extremely high rates, three, four, five types the normal rate. >> if done wrong could cause damage to millions. >> reporter: a vote could happen before congress takes a break thursday. the white house is optimistic. >> confident in the direction,
in this is going. >> reporter: the white house explaining why the president said he would be willing to meet with north korea's leader. mr. trump told bloomberg if it would be appropriate for me to meet with him, i would. absolutely. i would be honored to do it. it's something no sitting u.s. president has ever done. but the white house says the timing just is not right for that type of meeting between kim jong-un and president trump given the tensions now over north korea and the fact they're still doing these provocative tests. >> also waiting for the news of the philippines president roberto duterte and that call with president trump. thank you very much. coming up on the show, the top stories. a round up of global markets. apple earnings. we are joined by ben nis gadenn and later, richard clarida. you're watching "worldwide exchange." i love you, couch.
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good morning. warm welcome to "worldwide exchange" on cnbc. i'm wilfred frost. >> i'm seema mody in for sara eisen today. good morning. let's get straight to the global market action. yesterday the dow lost about 27 points. s&p 500 was flat. tech continues to be in the spotlight. the nasdaq hitting another record high here looking at futures. we're higher across the board. the dow jones up 19 points in premarket trade. nasdaq up nine. s&p 500 up by 2. all of this ahead of key earnings today. apple is the big one to watch, which typically hits the tape around afternoon. spring is the time that apple typically reports earnings. a dividend typically announced. shares of the big tech heavyweight up 25% already this year, playing a big part of the nasdaq's outperformance. in asia overnight, australia's central bank leaving rates unchanged. in china, a private survey
showing growth in the factory sector slowing to the weakest pace in seven months. shanghai composite off by 11 points on the day. >> looking at europe, stocks in europe faring mostly well. we're higher by 0.3% in france. ahead of the second round of the presidential election. ftse 100 gaining ground after uk april manufacturing pmi. italy and spain also in the green. the pound at 1.28 against the u.s. dollar. >> big news out of hollywood. the writers guild of america striking a last-minute deal with the alliance of motion picture and television producers. hollywood writers were threatening to walk off the job starting today if the deal had not been reached. the guild saying they reached a tentative agreement on the ters of a terms
of the three-year deal. at big round of names reports before the bell, including conoco phillips, mastercard, merck and pfizer. after the bell the mother of all earnings reports, apple. on the economic front. the fed kicks off its two-day policy meeting. the big automakers will release april auto sales. now to indian outsourcing firm infosys making a big bet on america. the company announcing it will create 10,000 jobs here in the united states of the next two years. those jobs will focus on the cloud, artificial intelligence and big data. infosys plans to open four new facilities, tech hubs in the u.s. with the first to open in indiana sometime this summer. i'll speak with the indiana governor and the infosys ceo today at 8:00 a.m. eastern on a cnbc exclusive. some stocks to watch today. shares of ocado are a big mover
on reports that the company is considering teaming up with marks & spencer. shares up 7% in the uk. shares of angie's list skyrocketing in the premarket on deal news. iac buying the company for $8.50 a share. 44% premium to the closing price yesterd yesterday. iac plans cobin ambine angie's with its company. china's ten cent holdings announcing it will open an ai research facility in seattle to be led by yu dong. the market cap $300 billion. up 2% today. bp topping estimate base penny as higher oil prices boost the company's bottom line.
they had revenues of 55$55.8 billion. shares are higher by 1.5% now. checking in on oil this morning. crude moving higher in early trade following back-to-back losses. wti below the $50 a barrel mark. it's at $49 this morning. joining us is cnbc contributor, founder of the gartman letter, dennis gartman. in terms of the bullish factors the last couple of days, it's all been on tech. what's your view on that? >> first, the big number today is obviously the apple earnings coming out after the close. what i find fascinating, if you look at what apple is earning and where earnings are coming from, services three, four years ago were one-third of what they earned in ipads. now services from music primarily are above that of the ipad and above that of the mac. it's astonishing to see what's
going on. apple is not any longer a high-tech company. it's now a services company. i think people are missing that fact. we are pricing that stock as if it were a true high-tech firm, and it's become a bank of sorts and a services company. >> what about other bullish signals. we mentioned oil prices, which are fairly bearish in terms of the last week or two. but are there icommodities that offset that bearish signal? >> let's talk about the oil prices. i find it amusing that people find a rise in oil prices is bullish of stock prices. falling oil prices are bullish of stock prices. there's an abundance of supply. there's a dearth of demand as far as crude oil is concerned. that will continue to put downward pressure on crude oil. i'm not bearish at the moment,
but i'm clearly not going to be bullish of crude in any rally that one gets i think you have to sell into. as far as other commodities are concerned, pay attention to what's going on in the grain markets. instead of an abundance of grain, and a great corn troop, a great soybean crop and a small wheat crop, that has changed over the past 54 hours as the weather turned very ugly in the midwest and sent a goodly portion of the wheat crop into the ground, putting it down and for all intents and purposes probably destroying 20% of that crop. that's amazing. nobody is paying attention to that fact. >> i want your thoughts on how politics could impact oil prices. we have an upcoming election in iran. a presidential election where a hard line islamic clerkic is running against rouhani.
how could that impact the u.s. relationship and the price of oil. >> first of all, rouhani is far from a moderate. the cleric is an old guard, old line khomeini supporter. if he wins the election, that could only diminish u.s. iran n iranian, audsaudi iranian relations. it's an election few are paying attention to and more should. >> i agree. >> let's talk about the vix volatility incredibly low over the last couple of days. what's your view on that? >> it's astonishingly low and reflective of the fact that so many markets are quiet. we are quietly going higher. slowly going higher. laboriously going higher,
plottingly going higher. as long as that continues, vix could get down to 9. would i be a seller? no. would i be a buyer? not really. if you push me, i guess i would have to be a buyer because eventually volatility will have to obtain. but you will only get out of volatility if markets decline. it's still a bull market. >> dennis, thank you for joining us. time for our top trending stories. netflix unveiling the first trailer for the fifth season of "house of cards." the trailer showing the main character on the campaign trail trying to retain his presidency. the next season of "house of cards" on may 30th. as soon as i heard this was released, the first thing i did in my car on the way here was watch it. >> it looks creepy. a dark, underlying tone, which i guess what house of cards is all about. >> i think the tone has gotten increasingly dark over the last couple of seasons.
it's awesome stuff. can't wait. >> something a bit less creepy, kylie jenner breaking the met gala social media ban to share a sle cele celeb-filled selfie. she shared a snap from inside the gala bathroom featuring kim, kendall, paris jackson, p. diddy and more. an active bathroom. >> they must have mixed gender restrooms, this particular gala. looks like a fun event. one year maybe you and i will go. >> >> one day. >> the question is what to wear. >> fashion is a big part. samsung's self-driving cars hitting the streets after the ministry of land, infrastructure and transport allowed samsung to test its vehicles on roads. they are hyundais equipped with
camera equipment from samsung. another competitor in that space. images of microsoft's new surface laptop have surfaced. using walking cat, the new device has been dubbed the surface laptop. the leak coming just ahead of microsoft's big press event in new york city today. >> we don't have the images. >> we don't. hey, you have some neat colors to work with. >> shame not to see them. still to come, talking big banks and cold hard economic lessons from scandinavia. the must reads are coming up. >> definitely yours not mine. >> it is. european markets are also higher this morning. we're back in a couple minutes. researchs ofhnologies you thatne day, you will.
welcome become to "worldwide exchange." most of asia and all of europe were closed yesterday for the may bank holiday. positive across most markets as they opened up again. japan open yesterday. up 0.7%. a little bit of yen weakness to talk of. that's helping the nikkei. shanghai down 0.3%. we should point out the second private reading of manufacturing pmi was disappointing coming after the initial numbers yesterday. just something to keep an eye on the fact that gdp the first quarter outperformed expectations. broadly positive for european
trade. closed yesterday on a strong week after that first round election result last week. the ftse 1 0 00 is leading the charge. bp, strong numbers from the oil giant this morning. oil prices were soft yesterday, they are higher today. about $49 on wti this morning. this comes on the back of the day where we were led higher by the nasdaq. another record high. apple up over 2%. they report after the bell today. facebook reports later in the week. tech leading the charge in the futures market, albeit pretty much flat. the dow slightly low every, the nasdaq slightly lower. >> it is time for our must-reads. my pick is in the "washington post." it's titled this law could prevent the next financial crisis. lawmakers want it gone it reads
pressure is building on congress to repeal significant portions of president obama's dig sure dodd-frank act. critics are targeting a provision in the law known as orderly liquidation authority which gives the government the power to step in and avoid a system-wise collapse during financial emergencies. the s&p sector up 18% since president trump was elected. some of these rules were put in there for a reason. similar to tax reform, if you change it, there are risks. >> i'm not sure the liquidity provision they say must be kept are top of the list to be removed. >> the idea that it would prevent a future leemen brothhms is happening. >> i'm not sure that particular rule is on the chopping block. certainly a bigger question here
in terms of not deregulating too far and missing the point. my pick is titled lessons from the anti-globalist. the lesson of all of this coming off the back of various elections in the past couple of years and the one on the docket at the moment in france, saying the lesson of all of this is something that scandinavian companies learned long ago. the region's small companies understood openness was the key to economic growth and prosperity, but if they were to remain open and democratic citizens had to be convinced that significant citizens would not be left behind. the welfare state thus became integral to the success of the scandinavian countries. they understood that the only sustainable prosperity is shared prosperity. so simply the first round of the
presidential election means for europe, the populist and anti-globalist sentiment has passed. there are other steps that need to be taken to make sure that's the case. we have not gotten confirmation of that. his argument is there needs to be a more left leaning welfare state implemented. lots of people would disagree with that. he's saying we're not over it yet. >> the lessons from scandinavia. >> we're approaching the top of the hour. the team is getting ready for "squawk box." becky quick joins us. >> good to see you. woel talk abou we'll talk about a lot of thifr different things. it is earnings season and we'll watch for two dow components, both pfizer and merck, you have apple coming after the bell. we'll get you set up for all of those things. plus we'll take some cues from washington once again. comments out of washington having a big impact on stocks and business. yesterday the comments from president trump about breaking up the big banks, being
something that his administration is considering. it was a big shock at first. people stepped back and analyzed the comments more deeply. maybe not as big of a deal as people had been anticipated. but we have barney frank on to talk with us today, co-author of the dodd-frank regulation. we'll talk to him about this deregulation and what he expects to see what happen. we'll talk with linda mcmahon, the small business administration head about her thoughts on what the administration can and is trying to do to help small businesses, maybe clearing out the red tape. talk to her about her plans for that arena. and we'll talk with dann dimicco, the nucorp ceo. all of this talk with wilbur ross about all the issues that the commerce department is facing when it comes to trade issues, trying to get fair deals for the united states. we'll get dan's comments on what he sees happening in the administration what else he
would like to see. it's all coming up in a few minutes on "squawk box." >> great stuff. look forward to it "squawk box" coming up in 12 minutes. the fed kicking off a two-day policy meeting in a few short hours. joining us is richard clarida. you're watching "worldwide exchange." ♪ 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. fedex.com slash dream ♪ i love you, basement guest bathroom. your privacy makes you my number 1 place... ...to go number 2. i love you, but sometimes you stink.
. welcome back to "worldwide exchange." futures pointing to a slightly higher open, but nothing too significant. the dow up by 20 points. the nasdaq by 9. the s&p by 2. it's been the tech heavy nasdaq leading the charge of recent days. the fed getting ready to kick off a two-day meeting. joining us now is rich clarida from pimco. good morning to you. from the fed, this two-day meeting, we're not expecting anything, are we? >> we're really not. we had a rate hike at the march meeting. the fed minutes made some news.
we'll have an important june meeting, but this may meeting will not be eventful. >> as for the bond market, we saw a tick up in yields yesterday. are we range-bound in and around the 2.3% level on the ten-year? >> we have been range bound. a lot of folks coming into the year we thought we could see a lot of upper pressure on rates. we have not seen this for two reasons. one,i anxiety about the frenk c elections. markets are scaling back. we are pushing back the timing into 2018 as well. those two factors are important. >> what are you opening will be achieved in the next 100 days under president trump? >> my goodness. it's like the markets and i would like to see some clarity about basic parameters about what the tax and fiscal package will look like. that's first and foremost quite important. the budget situation, that can has been kicked down the road
into september it seems like a lot of the things most folks thought would be resolved were pushed into the second half of the year. >> when it pertains to tax reform, reduction in the corporate tax rate is good for big companies. what about main street and the retail investor, do you think this reduction in the individual tax rate will be good for main street? >> it's a good point. here with tax reform the details will matter. we have a tax code that encourages companies to locate abroad if we get a real corporate tax reform like 30 years ago that could be positive for workers. capital comes into the u.s. investments. i think the details will be important. >> there's a big debate on cnbc yesterday about whether 3% growth is achievement. what is your take? >> growth is the sum of labor force growth and productivity. labor force growth is slow because of the aging population. so you would need a big pick up
in productivity. the good news is that we've gone through a soft pack in productivity, and there's some sense to think we could get some increase in the future. but 3% will require a big increase in productivity that so far we have not seen. >> you are encouraged by the international growth picture? and what it means for the united states? >> that's a great point. probably the biggest change in the global economy in the last 12 months has been outside the u.s., we've gone through a soft patch in '14, '15, '16. and now europe is surprising on the upside, brazil and russia are surprising. the global economy is not going bang busters but is operating at a better pace than a couple years ago. >> asian markets trading at a 22 month high. back to the u.s. economy. stocks in general. one notable characteristic has been the outperformance of growth over value. the technology sector up 13%
already this year. apple at an all-time high. does that continue to the end of the year? >> my crystal ball is not perfect, but earnings is key to any equity valuation. the earnings momentum is strong. obviously they're the best of the u.s. they're cutting edge companies, innovative. i think that's a positive story for sure. >> rich, meantime dment fcommene u.s. dollar. unwound its post election gains. from here, what's your view? >> there's upward pressure on the dollar. the fed will be hiking. i expect some pick up in u.s. growth, probably a big pick up in the second quarter compared to the first. i think it's supportive of the dollar. but we had a big move in the dollar the last couple of years. the euro moved by 20%, 30%. the yen, em currencies. it's more of a grind higher than a big pop in the near-term on the dollar. >> just fijl lfinally in terms
deregulation view, we had talk about that yesterday from president trump, possibly on the re-regulation front. what are you expecting? is it a big swing factor for markets? the banks stock prices shrugged it off by the end of the day. >> that's a great point. the president talked about thinking about bringing back the glass-steagall that would require legislation. i don't expect that will be happening soon. i think they have other priorities. in terms of deregulation, we will see more of that push, especially as it impacts smaller banks in the u.s. >> rich, thank you very much for joining us. >> you got it. >> rich clarida of pimco. >> only about a minute left. we want to highlighted a few things to watch. this afternoon, apple reports, and earnings will be out. >> all of the tech sector continues to outperform the nasdaq leading the charge once again yesterday. so all eyes on the nasdaq again,
but also whether the others can catch up today. that's it for "worldwide exchange." thanks for watching. "squawk box" comes up next. thanks for loading, sweetie. ...oh, burnt-on gravy? ...gotta rinse that. nope. no way. nada. really? dish issues? throw it all in. new cascade platinum powers through... even burnt-on gravy. nice. cascade.
. markets now, futures trading higher ahead of a flood of earnings reports. and wall street's fear gauge hitting a ten-year low. we'll talk about a full market rundown. and wall street shake up. president trump says he is considering breaking up the nation's biggest banks. and also breaking overnight, negotiators reaching a dast-minute deal to avoid a writer's strike in hollywood. it's tuesday, may 2, 2017. "squawk box" begins right now. ♪ live from new york where
business never sleeps, this is "squawk box." good morning, everybody. welcome back to "squawk box," we are here at the nasdaq market site in times square. i'm becky quick along with andrew ross sorkin and melissa lee. i heard that song, i wasn't sure if they said the show could go on or the joe could go on. yesterday was a mixed day for the markets. not too far directionally moves, but the nasdaq had another new high yesterday. he are looking at green arrows with the dow futures indicated up 25 points. s&p futures indicated to open up higher by three. and the nasdaq also projected to open up high. wall street's fear gauge hitting a ten-year low of 9.9 yesterday. the lowest level since february of