tv Squawk on the Street CNBC October 8, 2018 9:00am-11:00am EDT
you think so >> why do you say that >> marshal blackburn is pro-life and she's a lot of things that millennials are not >> thank you so much for joining us today that does it for us today. it is time for "squawk on the street." ♪ good morning everyone. welcome to "squawk on the street," i am wilfred frost with jim cramer live from the new york stock exchange. david is off today taking a look at the futures you can see a little bit low and
not too significant around the rest of the world. last week we did see the dow up 0.5% s&p. 86 points at the dow at this stage. we need to look at the market at the rest of world. we'll discuss that as italian yield spikes above 6% on the 10-yr. china was closed all of last week today is down over to 3% this morning. a catch up is supposed an out right decline. wti crude is down 1%, having gained 1.5% last week. road map, interest rate risk plus, ge share is jumping after
an upgrade the bank is saying the ceo will have a turn around apple pushes back. the tech giant found no signs of a hacking attack an upgrade on that stock from citi that we'll dive into. a sell-off in chinese stock. china central bank free about $125 billion in an effort to boost lending, beijing is looking to boost china in wake of a trade war with the u.s. cutting reserve ratio. clearly big decline in chinese stocks as i mentioned, it was close last week. >> yes, you and i have been talking behind the scenes of issues involving china and china with this boost, may not be able
to do enough we got our gdp going up and theirs going down. where all the goods going to go if they don't come to us >> another current growth, right? >> i think the point to make as well os thn this, the reserve level's falling. it is not the end of the world for them yet at this stage of development, they should be doing the opposite the current should be rising now that the second biggest economy in the world they should be boosting consumption and having to reverse all after that a lot of questions of how weak is this economy. they have to do things they would not want to be doing >> several years ago, we were coming in and the chinese market were down, we would trade down the chinese market peaked similar to the nasdaq. it bottoms at 27 why did it bottom there? the chinese government decides it is got going to go down
anymore. they're trying to prompt up its mark i want to know how big do you think the stock market markitset the importance of china? >> it is certainly important the other point, not the shanghai mark,et shen zen is down 25% >> the local and the russell i got to tell you something, will we meaning the mainstream media and the intelligence that this market is weak or the russell is weak i think the they themselves do not regard it that way a lot of the wealthier people in china bought a lot of stocks and bought all margins and i don't think the government is as steady as the mainstream media thinks it is the government is trying to figure out how to get out of this by maybe in some sort of mexican chinese solutions.
there are other issues we know having more to do with intellectual party and regarding plain theft. against that, there was an article in "the new york times" about the idea that they'll stop many deals and mergers that they have the ability to do so. that's a punitive way that does not address our incident >> i think they're trying to fight back on all sorts of levels at this moment. you are hearing it is weaker he has been traveling around china recently and pointed to that the stock market has different types of owners. the mood of the downside i is -- the currency, if we can bring up the sixth-month chart that we got. it is down something like 17%. that's the shanghai comp it is down about 10% of the last
six months this is the two biggest economy in the world on top of that, oh look, china is weakening that currency no, they're not. they're propping it up >> thank you >> i think they're very concerned. i think there is a lot of people who literally, they're going to do anything they can to make them be able to sell things. no they're worried about their strength of their nation i don't want to over ak accentuate the role of china here you and i were discussing italian neil italy is a very strange country in terms of doing business strange country in terms of their budget the third market bond of the world. >> what's interesting of what's going on in italy, i don't think we are talking about crucial things than a couple of years
ago. one, we are not talking about a country that wants to leadthe single currency, that's not on the horizon. we are not looking at big c contagent. the spread over german is not 3% we are not seeing contagent across europe. can they raise rates like most people think we are not talking about doom's day scenario all that said, this is played out better than they could have hoped. what they have got from the european commissioner from the weekend is a firm rebutte for doing something that did not involve breaking the rules they announced their budget is 2% they got this repute from the commission and it plays in their hands to talk up the popular
issues more and hurts that brussels rhetoric not just euro italy but across europe. >> i don't want to accentuate the role of europe or china this morning. we have a close bond market. >> right >> i tend to look at international more importantly today. when we look at the employment number on friday, there are many of people who read it entirely strong they did not break down the unit it was private i think people are faring the fed. a lot of the sell-off had to do with jerome powell we are dropping. what we are going for, here is your road map. we can over shoot. now, let's put it all together europe is clearly slower i know there were some good news out of germany and so it comes back to me
>> it recently slipped a little bit. are we under estimating brexit in this country? >> there is so many moving parts. in the short term we are more likely to have a no deal today than six months ago. i think the deal is likely outcome. just that you expect the side coming together. that's uncertain the question is does that really hurt the u.s. and to finish the point. >> you can't clearly you have tremendous background in europe. i am playing to my advantage i lack the knowledge that you have i like to be able to put the context to why our market is down >> it is down because of europe and china today. china's playing catch up just on the point of contagent of italy, the exposure of the u.s. banks to italy's debt
they're not ground breaking numbers. >> no. citi is the one of the biggest exposure and goldman sachs is quite high and this is year end 2017 again, days we see the u.s. banks selling off. you can look at that and say okay, that's a little over done. >> i would jp morgan talking about good long growth citi, toi citi, i want to hear what they say about trade. part of the new nafta agreement is a snew consolidation. that's friday's business that's what's critical we don't have any big earnings until friday those are gigantic and the bank stocks are flirting with highs they're at the cousp that we
don't know >> but, the rates were soaring so they could have performed better and they have been low. we'll see the banks. >> let's see if there is anything american you are looking at >> yes, you have been asking the questions, jim we'll talk americans now facebook julia got the details. >> well, facebook announcing two voice control video calling devices to compete with smart home devices of google and amazon this is video calling with a smart camera follows you as you move around the room tapping into the 400 million people who use facebook messenger, voice and video chat every month now the portal has a screen that'll cost $200. the portal plus has a bigger screen and priced at $350.
you can order it now and it will ship early next month. videos from facebook watch, they are not partnered with the likes of youtube and netflix or at least not at launch. the device are equipped with alexa software amazon will be faced with biggest competitor amazon has the largest share of the smart speaker market over the third of sales google with 22% market share now facebook moves into this crowded smart home device spacecoms over scrutiny of its privacy practices. the cover for the camera lens and turning the microphones on and off. facebook does not listen to you or keep the content of your
calls. remember when echo recorded your information and sent it to a random contact, the issue of privacy is something people are paying attention to. >> julia boorstin for us in l.a. >> julia kiwhat i am concern abs the city they' at 8:22. that's a lower rate at at down year everyone and even if these the stock will go lower. >> it flips 3% last week it is not pricing in at that level of earnings. >> there are three companies that i am looking at here. one is ford, two is gm and three is facebook.
>> how big of a dircfference is down number in earnings verses down users like snap recently. >> well, yes, most growth investors are going to be the value stock. most growth investors -- if you look at digital square, numbers are flirting downside last year and it is cut in half. this stock is trading far lowe than any consumer story. they can have cameras and do what you want with what they need is monetize other streams of revenue if they don't, you are locating a stock that's trying very hard to stay at the level >> instagram tv. >> i like earnings >> facebook is down a little bit in the premarket when we return, ge gets a boost from wall street and an upgrade, we'll dive into that note and taking another look at the
welcome back to "squawk on the street," general e lek lects rising in the market barclays says a blue sky scenario plays upside to more than $20 in his note julia mitchell says we think the upside potential in the shares is considerable now that an outside ceo has been put in place, which substantially increases the range of possibilities that could be pursued at ge. a number of points to make of this, no change in the base case price target the stock is up 9% last week so it is not a million miles from the price starting already
this is a strong rethink from the barclays >> this is an important report and you have to go to page four to be able to find it. >> does the 2018 plan still hold now there has been this rhetoric around culp that he's going to put through what flannery put through. >> he embraces that. he wants to change it. >> what he's saying now according to this report, now the outsider chairman ceo, the need for compromise which fla e flannery were trying to do is out. culp is trying to expand healthcare may not be so quick to turn that over and get that away also, there is an element to this that's under lining which
is financials of the way ge is going to report. i am i am saying they were certainly not in keeping with any other industrial in america. you get their earnings the way they should look and the huge cut dividend and you will be able to raise capital. the great thing about this barclays report is don't wed yourself to flannery's plan. i think mr. flannery got shortchange here he can do whatever the heck he wants and that's why the stocks are been going up. >> you mentioned the reporting and the note talks about that and the dividend says 75%. >> i think it will be full >> a little downside risk if they cut it in full. that's his number one piece of advice which it is going to allow him
to increase the price tarpgget. >> we are spinners i don't have any problems with the spinners of the philadelphia base this is not about spinning what this is really about will is to say we are not going to throw good money after bad which was unfortunately flannery's plan he's making his move and his move is to put good money in good investment and not good money towards bad. so i think people have to start waking up to the fact that spin zone, remember the spin zone >> he has done online shows now. >> good luck to him. never watched it in terms of culp, already the stock is up 10% also in the last week >> i know.
>> it is going to be paid out already. >> well, you know what -- will, one of the things that if fed ought to be worried about is the disparaging between the ceos and the 70% per year that the person is able to make. hopes for global warming >> ge price target from barclays is $16 trading this morning and 13 enchanin change. up next is cramer's mad dash as we head down to the open futures at 122 on the dow. "squawk on the street" from the new york stock exchange back in a coup omitelef nus. i think that she's a very nice girl...
all working together for you. can i borrow the car when it's back? get ready, because we're helping leading companies lead with digital. we distributeus, i'm the owner environmentally-friendly get ready, because we're helping leading companies packaging for restaurants. and we've grown substantially. so i switched to the spark cash card from capital one. i earn unlimited 2% cash back on everything i buy. and last year, i earned $36,000 in cash back. that's right, $36,000. which i used to offer health insurance to my employees. my unlimited 2% cash back is more than just a perk, it's our healthcare. can i say it? what's in your wallet?
pg&e prunes and removes over a million trees every year to ensure that hazardous trees can't impact power lines. and since the onset of the drought we've doubled our efforts. i grew up in the forests out in this area and honestly it's heartbreaking to see all these trees dying. what guides me is ensuring that the public is going to be safer and that these forests can be sustained and enjoyed by the community in the future. hi, kids! i'm carl and i'm a broker. do you offer $4.95 online equity trades?
great question. see, for a full service brokerage like ours, that's tough to do. schwab does it. next question. do you offer a satisfaction guarantee? a what now? a satisfaction guarantee. like schwab does. man: (scoffing) what are you teaching these kids? ask your broker if they offer award-winning full service and low costs, backed by a satisfaction guarantee. if you don't like their answer, ask again at schwab. if you don't like their answer, ♪ (whistles) ♪ come on. come on, squirt. (dog barking) whatever your financial goals are, a u.s. bank wealth management advisor can help make them a reality. talk to one today. u.s. bank - the power of possible.
welcome back, we are just a few minutes until the opening bell it is full-titime for cramer's dash what he's saying, he has a buy but boy, i would not want to buy if this is a buyer i don't know what a seller he's talking about how profitability in 2010. with so much higher for ford than it is now 16% lower in 2019 verses 2010. they're closer going up in a great deal they did some furlough s on the ford transit ford is expensive today on the
four-year forecast than 2010 will, ford is a disaster they're going to -- now, they're trying very hard and people are worried of the dividend. the company assures me that dividend is okay the industry of this country is a shamble. >> it has been down 27% here >> it is not priced in because once you start going free fall between here, you start getting victims of the selling i do not see ford turning around any time soon. >> what's the catalyst of turn around tra trade easing or it needs more fundamentals >> it needs to cut out all the losing cars. that's something that the ford family has not wanted. they have to get out of every market that's not doing well >> if you want a better valuation, maybe go by elon
musk >> that'll involve a lot of hazardous tweets o no one everyone thought about it do you tweet when you drive? >> well, maybe you can do that once we have autonomous vehicles >> there goes the bell, we are opened for trade at the new york stock exchange the dow about half a percent here at the big board, the bells rang by international flavors and fragrances the nasdaq is glad to celebrate 2018 spirit day and lgbtq. >> he ended up pricing a big deal in the 120s. he has been a man of his word. flavors and fragrances are
non-economic he has done a remarkable job why is he so under the radar he chooses to be so. by the way, they were the people who invented the fragrance for diamond which is the greatest perfu perfume. >> the fragrant for diamond. >> elizabeth hurley. >> that's not your mistake, only five people know it. >> the s&p is down 4%. less than the half of the percent that was expected. just triple digit. >> we can't be happy with the way the nasdaq is shaping up a lot of what's happening is multiple depression for fang, fang stocks and a lot of that is the amazon pricing increase for workers. very poorly receivered, almost s
if amazon is a national minimum wage i think it is going to be a bad look the minimum wage depends on the consequences of full employment where ever there are few workers. the employment rate is driving the price up in the southeast, plenty of workers and no real sign that there is problems getting people the housing companies, housing are going to be laying off people they're not building as many homes. why are people not talking about this everyone is caught up on how booming our economy is >> the way to express is that it will come quickly and across multiple sector or the likes of amazon >> i think it is over done i don't see any of the other retailer following they're the ones going head to head in more places with amazon than many other companies. >> the nasdaq is down. it was down 2% where the dow is
high the nasdaq is at 0.5% this morning. in terms of valuations, apple, we got an upgrade this morning falling valuation? >> if anyone sells out i don't want to denigrate anyone >> but the performance have not been great >> you the seller are not significance and i like tim very much, my thinking of the investment analyst community is because the stock did not go up on the strong recommendation, the bear will come out tomorrow and cut the price target of apple and saying something negative and worry about the news feature and set up apps under the new form they'll come up with something
the analysts who bull stocks and they don't have any impact will be surrendered to the negative and they'll have impact going for them i want to watch kimberley clark, hated by goldman and suddenly loved by it. they're now saying they don't like it. that stock is not down it is early during the day people are beginning to price in and maybe we should be focusing on the stocks that do well in recession. >> does jerome powell follow the stocks >> i don't know. should he be following what's working? i know things are better in the country, he'll drive the stock market to lower levels regardless of what the president says and does not say. does he now focus on fashion of china? >> either way. it is fair to say the current fed chair focuses on capital market >> i happen to like mr. powell
very much but i like the market going higher >> we are in good shape and we got a good level of rates. we are continuing his dodge term >> now, he's been one of the four most champion of higher rates back in 2015 when-i it is ill fa ill-fated. >> i salute him, he looked at the data and changed his mind. how great is that? >> we had the peak when we open up tomorrow, there is no bond trading >> we tend not to look at funds. there are some big holders of bonds who are dumping them i don't thinks the entirely related to the hot labor market because if you break down the labor market, it is not as hot as you think it is related to the idea that chinese are selling bonds and order to be able to finance the
new boost in cap >> it hit a 14-month low >> what does it tell you >> people frame it the wrong way. they're having to do it so they can buy their own currency >> get it baa k uckup thank you for understanding the way the world works. >> if they want to prop up the currency, it is free fall, it is a question of how they're managing it for. >> the fact that you know that narrative and i know that narrative, that does not share by mainstream media and finance shows you it is a mistake and how it is going to be. not until everyone note it >> they still have a lot of foreign countries over $3 billion >> yes it was significantly low it is now closer to about 25% of
gdp. still way ahead of what asian economies had in the '90s but it is something to keep note on that >> cannot prop it up forever >> should we be concerned of chinese banks or deutsche bank >> the chinese economy is the biggest concern. >> you are missing the narrative of what i regard of the sbel intense. don -- intelligence don't you know they got a 30-year plan what's with you? you stick with the facts i find the facts are annoying in the face of the narrative. my father ended up working for the chinese later in his life. he was the only one american that did that, god bless him >> it is harder to get real facts from china >> we do have a narrative that says in the end, we come to the chinese and i am tired of it
given the way their finances working out. >> yeah, they're having to go back to the old tactics. >> let's come back to the great picture here in terms of where you think it is heading. financial is suffering again today. >> if you see the cu, i have been buying cd -- how much can the bank be making i used to see raising prime. >> we are in the middle of a race now >> you are exact i righly right now, what is interesting, i am watching goldman sachs going down what is interesting is they are scaling back on markets. credit worries, that was one of mr. chavez's cfo i felt it was old fated.
the work at goldman sachs told me that any customers less than $10 billion is not worth my time >> whether consumers they are doing more lending and people talk about they're look for an mma. do you think it is a solid move? >> i think it is a nice thing for people to do that people felt the banks are under pressure from washington if they are concerned of small business credit, square should be concerned what people don't understand and i happen to be -- they have a clear look of what you are getting in sara friar, the unbelievable good cfo will tell you their exposure and worth -- it is important to keep in mind, there is a slow down >> jamie dimon talked about it with his interview with you. >> right >> that's where the growth has been some of that because it is too
expensive to hire new workers. that's an issue, one for j. powell i will give him that you slow down this economy, you get all the workers you want we have an immigration issue we are not letting immigrants in that are taking these jobs of major cities across america. it is something that you do not want to expand if you are in the restaurant business. >> amazon's price increase here. they did it in two places, the u.k. and the u.s here it is over 100% higher which highlights the point in terms of the gap and having to pay off workers. >> if you go to powell, a lot of different retailers. you should become a price setter for retail what do you do if you are jc penney jc penney is only a dollar a stock but it employs a lot of
people we come in with our cell phone and we don't need checkers and there are 3 million people with checkers >> what about the manhatt manhattan - its got employees and it is a normal store it is slightly odd >> it is slightly disappointing. target is holding up incredibly well here. i think brian kornell is making some original moves. watch pepsico. david faber asked me what's the key of this market, pepsico is going up and they are been free fall since they reported 3.5% yield, if you believer rates are peaking, you would want to buy pepsico. that's incredibly important. >> don't know them do miss the former ceo >> lovely cuffed links you are wearing today. >> thank you indeed. >> this show is not about friends or money
once you retired, there is a change in status >> pepsi over coke >> coca-cola is making some moves that are not talked about. i think quincy is doing a lot of special things and the yield 3.3. he's trying to build up other carbonated beverages pepsico did put a lot of money behind this market quarter that's going to come coca-cola may be a shared donor this quarter >> let's have an update of what the markets have done. bob pisani is on the floor >> happy monday. 2-1 declining to advancing stocks china is down 3% they have been closed for r a week take a look at the sector that decidedly dense sifense sifr utility did fairly well last week some say that's a sign that people don't think rates will be going up that much
healthcare, they're the ones that's leading on the upside energy is down today we went from 73 to 77 on oil and now we are back down to 73 no surprise, a little bit of profit taking in energy. rates are the big issues and home builders are down again we emphasize this all last week. rate sensitive sector like emerging markets and building stock is at a two weeks lows autos are hovering around 52-week lows etf associated with the new lows, those are heavy leverage groups here at casinos and affected by rising interest rates overall. we are looking at a macro backdrop that's extraordinary that's why a lot of people feel
we can withstand rising rates and not moving down on the stock market we have record earnings of 20% more growth in earnings three months in a row and 3% gdp growth a low probability of recession those are not ordinary the economy is getting better. these are rather extraordinary it is a wonder when you see these kinds of environment rates don't kill the stock market we study earlier in the year with kensho looking at the five periods when we see big moves up of the 10-yr yield the period does very well. five of the six times we are up during rising rates. these are not necessarily associated with declining economies. what sectors are up? it is not surprising, technology
and growth sector tend to do better and consumer discretionary are not surprising financials when you get steepening yield curve it also does not mean things are bad. we have been lucky here and that we have had a tremendous amount of rotation this year. financials have not done that greatly, we benefited from other sectors. healthca healthcare is a monster this year, we are moving 12% or 14% of healthcare. we see energy, a break out in energy going into the high 70s which have done nothing for most of the year. that has helped a little bit as well and industrial as we have gotten less concerned of china trade and tariff trade ruining international industrial stocks.
you can see since july again that's when it gotten better industrial stocks have moved to the upside here. that's why the s&p has held up so much, that's why we are only down 1% this month it was only a few weeks ago, we had all these concerns of rate hikes and a little bit of a shock last week because of the pace moved up. keep your eyes focus on the macro environment and i think you will find there are a lot of reasons to be optimistic about whether or not we'll move up and higher towards the end of the year >> bob, thank you so much. >> tech is falling again after a rough week let's go to bertha coombs >> hey, will the fang names are lower chips are the performer at this hour. it is not just the big u.s. tech names, despite the liquidity
move by the chinese central bank, we have chinese stock fals falling again today all hitting new lows here at the opening and they're among the biggest decliner small cap, their relative out performers but they lagged all year and over the last few weeks over three straight weeks. jp morgan says they are a bit more sickcyclical, they have a d time passing on and absorbing of the high cost of this rising rates of environment take a look at what we have seen with the russell 2000 here when it hits the 200 day moving moving day average and trade below there, it is bull issue. they rallied 8% in february and april they rallied 17% we are close to that level now not quite yet but that's something to watch will >> thank you very much for that.
let's have a deeper look on energy prices with jackie deangelis. >> good morning. there is plenty of support still left in this trade the rising rate environment. that's what happens when demand concerns arise still, there are enough fuel on the supply side to keep it at $18 a barrel there are more concerns about brent at this point. there has not been any clarity of what is going to happen with iran's supply. there is reports of saudis are coming together. they don't want to look like they're pandering to the president ahead of midterms. the current average price for a gallon of gasoline is $2.91.
that's 41 cents higher than this time last year this definitely has an impact. >> jackie, thank you very much for that now as we head to break. let's look at the stocks on the 500. >> oh, private equity, we should have gotten that small company now. >> ventas is up a couple of percent. we'll be back here on "squawk on the street" in a couple of minutes. every call is different, so the only thing that we can do to make sure that we get there safely, and that we leave that scene safely and go home at night, is train. and we train all the time in the fire service. no matter how much we train, the last thing you want in a disaster is to lose communications. without communications, we have nothing-- people get hurt. when disaster strikes, that is when your communication service
can really become your lifeline. ♪ (nicki palmer) we are constantly innovating. from a dedicated lane on our network just for first responders to cell towers on wheels. we can even fly cells in drones so communications stay up. in times of crisis, their calls go through, and they can get their job done. we know what we're getting into when we sign on, to take care of people and make sure everyone comes home safe. that's what my number one goal is.
air velocity is reading at fifteen fpm. why would you need to learn every detail about a company? firmness... nine. it's how ibm services helps retailers around the world drive growth and save millions. he's very into this. yeah. is that the standard amount? yes. feels good. when your partners are obsessed with business and technology, you can put smart to work.
there is apple stock down about half a percent this morning. it slipped last week a new upgrade is out. >> that's got to work. if that doesn't work, you know what's going to come downgrades. >> we will see, we will discuss ept. in the cramer ror what's it called stop trading, my bad jim coming up next yeah, that too. i don't want any trade minimums. yeah, i totally agree, they don't have any of those. i want to know what i'm paying upfront. yes, absolutely. do you just say yes to everything? hm. well i say no to kale. mm. yeah, they say if you blanch it it's better, but that seems like a lot of work.
time for stop trading. >> we want to see apple go positive you mentioned ventas being the third best now ventas is a primarily nursing home company that business has picked up because there's no longer overcapacity this is also a read. you know what this says to me, we have to talk rates. and wouldn't it be something if
we've seen the high for year in rates? >> it would. if you look around the world i'm not sure you'd agree with that but maybe in the u.s. >> or you could argue this is what our market looks like when our bond market is closed but i will tell you a lot of soft goods companies that do quite well when you think we're in recession, here they go and i think people should be careful if they here in the fed. jerome powell seems to think he can forecast out to the end of 2019 i know jay and i love jay and i think jay is going to get off that gate. >> ventas up a couple cents today. what's on "mad"? >> tonight we're unveiling power rankings, if we were including arsenal in power rankings i think they would jump to the fore. >> nine wins in a row. >> but in our country we have a lot of stocks that are doing well that i think are pretenders a lot of 5-0 clubs that aren't as good as some of the two and three clubs. we will be unveiling who's really doing well and who's not. watch facebook because we know
♪ welcome to new york, welcome to new york ♪ good morning and welcome back to "squawk on the street. i'm sara eisen with wilfred frost and mike santoli at the new york stock exchange. carl and david have the morning off. look at where we stands in the markets. a global selloff pressuring u.s. stocks at the open the dow down 14 points remember, we're coming off of a tough week 1% down for the s&p 500. worst week for the nasdaq since march. it's declining about a tenth of a percent this morning our road map begins with rising rates. bond markets closed due to the holiday but investors are spooked by recent action we'll look at what rising rates means for investors. consumers, your money, straight ahead. plus, shares of ge jumping after an upgrade at barclay's.
the bank says the new ceo will lead a turnaround and the bad news is already priced in. and going, going, gone a painting sold at auction for $1.4 million shreds itself on the auction block. we have those details. let's get to stocks this morning. the recent rise in interest rates spooking investors bond markets are closed for the columbus day holiday but, mike, you've been looking at this for us, what it means for the bulls and the bears in the fourth quarter and whether we're at a tipping point for bond yields and the ripple effect on stocks. >> i don't know that we're at a level that acts as a tipping point but i think rising yields do represent a pressure point for stocks every time you've seen ten-year treasury yields advance to a next higher level this cycle you've had the markets stall out, stock bond valuation relationships, it's not the only thing that matters for stocks because bond yields have doubled off their lows and stocks have continued to go higher so it can work but i think at this level
when you have corporate bond yields following to multiyear highs as well it does create a head wind for corporate profits and margins going out ahead. fed speak has turned hawkish so we don't know if that's a phase where jerome powell and other folks at the fed have come out and tried to take the markets' expectations of 2019 rate hike path back to what the fed intends to do so that's been something i think the market has had to adjust to and then really i don't know that it's a problem longer term because it's happening for largely the good reasons, so to speak. >> better economy, lowest unemployment rate since 1969. >> exactly we have a tight economy. we have things working pretty we we well. >> and one other factor that anchored rates on the longer end in the last 12 to 18 months has been international yield nanss n
a day like today where you see the italian yield jump, that's something to watch but that hasn't led to the real anchor which is japan and germany moving so whilst that stays low it can kind of have the same effect. >> there is some talk lately that especially with the fed transmitting this idea that they're going to be more aggressive perhaps than the market expects next year, it's becoming expensive to hedge the currency if you're a global investors and buy treasuries and capture that yield spread so perhaps we won't have that spread tighten up much, maybe it widens out that's why there's an anchor of global yields but the chain might be longer. >> if you think this treasury selloff, rising bond yields is going to continue, we have we got a play book in the u.s. stock market about where you want to be there are winners here and utilities surged 2.5% last week, financials got a real bid. technology and consumer discretionary got the most hurt. >> utility move was confusing, though and that was coming off a low level. you don't get an interest rate driven week where utilities and
banks move in the same direction. >> people would look and say that's the stock market saying this rise in bond yields maybe is running its course for now or, for that matter -- >> or you want to be defensive. >> it's a defensive trade. exactly. now in terms of the banks and small caps got hurt, too, because largely they're exposed to credit costs so all this stuff filtering in why don't we get to more on this move in rates, what it -- how it matters for investors. let's bring in a couple market guests we have samir samana, global equity and technical strategist and jill kerry hall, bank of america's senior u.s. equity strategist good to see both of you. jill, you've heard us kick this around how does the rate story, the yield pressure play into your expectations for what stocks can do here? >> i think it's a great question a lot of investors have been concerned about the recent move in rates but we found that when we did -- looked back and did some analysis, a lot of the big
moves in interest rates we've seen going back over the last 50-plus years have coincided with positive equity market returns and if rates are rising for a good reason. we have strong corporate earnings, we think this is less of a reason to be concerned if rates were rising for bad reasons, if there's a credit shock. but it makes sense to pick your spots within the equity markets and it makes stones avoid bond proxies like utilities you were mentioning and as well as the stocks that are the high growth no yield stocks whose valuations can be hurt by rising rates so we like the middle of the spectru spectrum. >> samir, all this year we've had stupendous earnings growth up 20% at this point
the rest of it is more organic and yet the market has been stingy in pricing that in. obviously the market is up about 8% year to date. is that motionly about what's happening on the yield side to cap out valuations or is something else happening >> i think a lot of it was borrowed last year this year has been more muted. i think that's probably one of the biggest take aways from interest rates is that people need to manage gains going forwar forward. >> i think trade tensions are a concern and broadly we've seen an environment where u.s. has
been outperforming the rest of the world. that spread has continued to widen. i think that while valuations for the u.s. versus the rest of the world are reaching spreads that we haven't seen since since 2009 when you look at price-to-earnings ratios, what we're looking at is for other reasons you're still seeing analysts take earnings expectations down. so earnings haven't bottomed in the rest of the world so even if you stress this performance spread in our view the u.s. could continue to do well until we see those fundamental trends start to pick up >> samir, do you expect to see a move in u.s. bond market yields when they open up to respect to what's happening in italy. >> you're not seeing much of a response yields are up a tick in the u.s. so, again, the markets looking at italy but at the same time they're going -- they will resolve this situation it's mostly political posturing.
>> joe, you are mentioning that the earnings picture obviously continues to come through pretty well there seems to be a heightened sensitivity to what companies are going to be saying going out another quarter or two we now have the first quarter consensus for s&p earnings is supposed to be up 7% so obviously a deceleration so what specifically are you looking for sector wise in terms of profits >> we're expecting overall our earnings growth should decelerate slightly but remain very strong this quarter so we're looking for 23% year over year even though profits growth is decelerating, we found that's not a reason to be concerned about equities and guidance as you mentioned is going to be very important commentary. i think this quarter will start to get a sense now that we've seen more tariffs come into
place. and i think if we do start to see corporate outlooks deteriorate, that could be a risk to the cap x recovery where cap x growth has been very strong and corporates are guiding up there so far so good. but from a sector basis from our quantitative work ahead of earnings season the sectors that have screened best ahead of this earnings seasons are industrials, health care, tech, those are the air is i can't say that have seen stronger vision trends, strong guidance, good results last quarter versus consumer staples and financials have ranked weakest. >> within a week we'll be in the thick of it. jill, sameer, appreciate your time this morning. >> when we come back, wall street is abuzz over the surge in treasury yields we'll look at how rising interest rates could impact your portfolio straight ahead plus former federal reserve vice chairman alan blinder will be here to weigh in and look at the top performing
stocks on the s&p 500. you have notable winners, arconic, conagra and newell brands "squawk on the street" will be right back think your large cap equity fund has exposure to energy infrastructure mlps? think again. it's time to shake up your lineup. the alerian mlp etf can diversify your equity portfolio and add potential income. bring amlp into the game. before investing, consider the fund's investment objectives, risks, charges, and expenses. read the prospectus carefully at alpsfunds.com/amlp
stocks have been down 20% since the saga began in early august we're joined by s.e.c. enforcement attorney alma agnotti and betsy atkins good morning to you both this whole development has been criticizing the s.e.c. >> the board of tesla is the catch-22 the if they remove elon musk, the stock goes down 30%. if they leave him in he continues to violate the s.e.c. agreement so they have a tough decision and i think that likely iconic tech companies go through leadership transitions apple has, microsoft has and they're through their innovation cycle. now it's about operationalizing. >> former s.e.c. enforcement attorney like yourself, what's the reaction when you saw the tweets from elon musk so clearly
targeted to the s.e.c. itself. >>the issue -- they won't take that personally but the issue is, is the judge going to approve this settlement because they are concerned tesla won't be able to do anything about his tweets and social media is difficult to pre-clear or approve in advance unless he's willing to cooperate and this is kind of a signal that he may not be willing to cooperate. >> that may mean the deal that tesla and musk made with the s.e.c. goes away they're back to square one >> it could. i doubt that will happen but the judge will have to take that into account before she approves it. >> betsy, you frame this as a dilemma for the board about whether to remove him or not why can't they just remove him from twitter don't they have the power to do that, at least >> they don't. it's not the role of the board to review the tweets the board should put a
mechanism, an oversight compliance mechanism, but that would be implement bed by the general counsel who probably won't succeed. he says he's naughty by nature and he's unrepenitent and gleeful. >> so what would you do if you were on the tesla board. >> oh, my gosh i would try to get a strong manufacturing successful chairman like alan malaly who led ford i would try to get intervention coaches to try to contain the damage but ultimately it will be hard to control him. >> you said the s.e.c. folks won't take this personally the way musk has tweeted at them assuming this thing is in violation of the spirit of the
settlement is it something that misleads investors where would you place that line? >> it has to be something that misleads investors. >> it's a neither admit nor deny sentiment. he wanted to say i was just getting rid of it, i didn't do anything wrong lots of defendants wants to do that and that violates the settlement. >> in terms of where we head to here, betsy, what's your take as to how likely the board takes the actions. it feels like they've been slow to react over the last six to 12 months will they kick into action now, do you think >> it's interesting. one of the big catalyst which is i would worry about as a public company director at tesla is as you continuously oversee a company where the ceo is breaking the law and at certain point your insurance carrier who
provides the director and officer insurance they're going to cancel that policy and you're personally going to be liable for those class action suits so that's one catalyst that would move them. by and large, they're friends of mr. musk so you're going to have to change the board room dynamic. the two new directors plus the chairman may help that >> did the s.e.c. give him too sweet of a deal, alma? >> the s.e.c. was trying to balance additional harm to investors from removing him with trying to manage him i don't think they gave him too sweet of a deal at the time but if this keeps up the deal may get more difficult. >> as we talk about the judge approving or not this settlement, each party has to make the case this settlement is proper at this point, is that how it works. >> that's right. the judge wants a joint letter so they have to agree.
that letter will probably be more difficult for the lawyers and the s.e.c. to agree on the langua language. >> malaly is on the board of google just to talk about the broader board, do they have to own up and take responsibility for the troubles of late regardless of what they do going forward are they to blame as much as elon musk for the last six months of happenings at the company? >> they're going to have to answer for it. there will be class action lawsuits and then aimed at them specifically derivative lawsuits that i currently have insurance but they are culpable. they're there and owe a duty of loyalty to the shareholders. to look long-term at the best outcomes for the enterprise and at a certain point he's hurting the enterprise and they're not able to control him. >> but phil has pointed out many times that this would be a tough ask both getting one as a number two, a c.o.o. under
musk or even as a chairman over elon musk because he is such a strong force and personality and part of this company would you accept a board position at this company >> i'd be afraid i couldn't be effective and i think it's a tough ask. anyone who has a strong track record doesn't want to have their whole career put in durability to control an exuberant founder who is not willing to respond to the rules. >> we'll leave it there. betsy, alma, thank you for joining. >> the dow and the nasdaq have gone positive. u.s. stocks strong rest of the world weak here it it is in action. when we come back, the great rate debate. fed speak, turning more hawkish as interest rates surge. former federal reserve vice chairman alec linder will be here on what rising rates mean
♪ i'm a rebel just for kicks now ♪ breaking news out of washington, d.c. a senior treasury official just holding a call with reporters ahead of treasury secretary steve mnuchin's trip to bali, indonesia. which is the upcoming imf world bank meetings. as far as what secretary mnuchin will be focused on, he'll be meeting with his fellow treasury officials and central bankers. the priority is on global growth not trade. that's the headline out of this call worth noting the chinese vice premier lu, who is secretary mnuchin's counterpart in china won't be there at these meetings
in bali. if there are other meetings, we're told with other chinese officials, trade won't be a focus. it jibes with the administration's approach that we don't do this on a multilateral stage, we do this bilaterally. that's why the treasury is saying don't read into these meetings, we're not solely focused on trade we are willing to talk with china on trade as soon as they are ready to have meaningful discussions on the trade imbalance. this is nothing new. we've had this stance, according to the treasury, for quite a while and remains to be the case also guys, just wanted to point out a headline on the chinese currency manipulation question treasury officials say we'll continue to closely monitor the developments we remain concerned about recent depreciations and we're broadly concerned about china's turn away from market-oriented policies and continued reliance on non-market policies that impact the macro environment the treasury official says more details on that in the treasury's foreign exchange report which will come out next week i pointed that out because the
chinese currency does continue to weaken but many read into it as not china doing that for a trade advantage but trying to keep it from weakening too much where it would really cause capital outflows and more of a deterioration in their own economy. so that's going to be politically sticky if the u.s. starts to call out china in a more meaningful way on that front. but bottom line, there are significant trade issues and they won't be discussed at a forum like g20 or imf world bank meeting. that's not the way the administration does business. >> and i think the right point on the currency which is there's a question of how much they let it depreciate as opposed to actively forcing it down it will be falling further if they weren't still propping it up but i guess the other point is broadly the data whether you're looking at reserves, the currency, the stock market declines or the latest pmis, it's softening in china and i guess we always say any reading with a pinch of salt from china and if they're worsening it's clear the trade is -- trade war is impacting the
economy. >> and i think that's what the chief market concern is that things get disorderly and there's a harder landing in china and they can't hold it together with these stimulus efforts. that's why i think the market is responding. >> that's what the administration is banking on but you hear two narratives with china. you hear their stock market is collapsing, their currency is collapsing, they have to come to the table to make a deal the skeptical take is china has a much longer term view. politically, economically, fire power to prop up its economy and i think the jury is still out as to who has the leverage on this economy. if you look at the stock markets it's the u.s. but there are deeper questions around that. >> if you look at the currency as well which is down nearly 10% in six months, again, it suggests -- >> that's a big slide. >> exactly it suggests the u.s. has the power. but as you've suggested, the currency reserves 14 month low but still over $3 trillion still about 27% of gdp they've got a war chest. let's switch to oil.
oil prices dropping slightly this morning but the surge over the past two weeks from wti and brent is threatening to hurt airlines phil lebeau joins us with that story. look at airline stocks over the last couple weeks. it's been rough. if you look at the airline index since september 21, it's down just under 7%. this comes at a time when we see stocks moving higher the fourth quarter tends to be good for airline stocks. look on average what the returns have been since 2015 not bad. and people were thinking this year we might see the same thing. and then, well, oil and jet fuel raised its ugly head and it's raising higher in terms of costs and that's what's keeping the airline stocks under pressure. look at jet fuel prices. really since may we've seen a dramatic increase and while it's pulling back a bit today the trend isn't good delta reports earnings later this week so we'll have a chance to talk to ed bastion when we're
in atlanta about what the company is expecting for the fourth quarter and how much of a drag these oil prices are not only on delta but the airline industry as a whole. remember, they just put through these ancillary fee increases for baggage fees, this will help a bit but when you're looking at oil up close to $100 a barrel and you extrapolate for jet fuel, not good for airline stocks or those investors who were in those stocks. >> phil, we get the first earnings coming out from stocks as well. remind us, it's thursday >> thursday with delta then united then american, southwest is in there and alaska what's interesting, guys, is what they think they see for the fourth quarter clearly demand is strong, the economy is strong, they're doing better in terms of business fares and able to bring in more
revenue in that regard but on the cost side, that will be the big drag. >> phil, great stuff phil lebeau in chicago. when we come back, the great rate debate. former fed reserve vice chair blinder will be with us. so no matter what you trade, or where you trade, you'll only pay $4.95. fidelity. open an account today. ♪ ♪ move to the enterprise-grade cloud that's built to handle all your apps. ♪ ♪ the ibm cloud. the cloud for smarter business. on the new sleep number 360 smart bed. it senses your movement and automatically adjusts to keep you both comfortable. and now, during our fall sale weekend special, the queen sleep number 360 c2 smart bed is only $899. plus, free home delivery.
good morning, everyone, i'm sue herera, here's your cnbc news update at this hour north korea releasing footage of kim jong-un meeting with secretary of state mike pompeo pompeo saying he and kim have made significant progress towards an agreement for the denuclearization of that korean peninsula. it was pompeo's fourth visit to north korea. two american researchers have
been awarded the nobel prize for economics for studying the interplay of climate change and technological innovation with economics. william nordhaus of yale and pall romer of new york university will share the prize. french officials are trying to contain an apparent oil spill after two merchant ships collided in the mediterranean sea north of corsica no one was injured in sunday's collision and the size of that spill remains unclear. and a tropical storm off mexico's yucatan peninsula has strengthened it could be a dangerous hurricane by the time it makes landfall in the panhandle midweek. tropical storm michael is expected to move into the gulf of mexico where warm water is expected to fuel its strength. we'll keep a close eye on that one for you. that's the news update i'll send it back downtown to you guys welcome back to "squawk on the street," i'm sara eisen with
wilfred frost and mike santoli at post 9 at the new york stock exchange about an hour into the trading session and things have turned positive the dow is up 11 points. s&p up two, nasdaq up as well after a week of declines for the nasdaq and s&p, nasdaq's worst week since march the focus continues to be on weak markets in italy, bonds there selling off hard, a very weak overnight session the bond market is closed for columbus day but that's been a big source of tension. recent rate rise still worries some t the treasury yield started at 2.4 and we've had a big jump let's bring in alan blinder, professor of economics and public affairs at princeton university i was thinking back to 1994, alan, last time we saw a scary
turbulent yield spike. you were either in the clinton administration or vice chair at the fed. which one? >> both. i was there in that transition the early grousing i was in the clinton administration then i joined the fed in time to hear the rest of the grousing from the bond market. >> so you were in a place of lead leadership what can you tell us ant then and now, similarities, differences, as we try to figure out where the bond selloff goes. >> there's a similarity that if you go back to '94, indeed, you can go back to '93, alan greenspan and the fed chairman started to drop subtle and not so subtle hints that interest rates were low and had to go up, short term interest rates which the fed controlled and the bond parent didn't listen and when they started to move up in february, '94 there was shock in the humphrey bogart claude
raines sense, like where did this come from today the fed has been raising interest rates gradually for some time and as you know and your viewers know the long end doesn't want to go up. the fed usually feels it raises the short end then the long end follows, maybe not very long after that but didn't happen this time. so that was a surprise to the fed. it's trying to put a little bit of a damper on the economy not too big, that's the trick of getting a soft land iing and th fact that the long rates until recently didn't want to move was acting against that. >> so what's the take away the great bond massacre of 1994, as it's called, what do you tell equity investors who might be worried about the spillover
effect of the economy and the markets? >> the first obvious point is that they're not wrong in thinking lower long rates, other things equal are bad for sweet prices that was true then, it's true n now. the key thing, however, to watch and market people i think understand this is will the fed succeed or maybe i should say how well will the fed succeed in achieving the elusive soft landing. the fed, unlike other times in history, is not trying to drive the economy into recession it's watching and waiting, proceeding cautiously. by the way, the current yield curve slope has steepened a lot lately it's historically normal something around the 100 base us points between fed funds and the ten year bond rate is very, very normal so if you're sitting at
the fed you're not viewing this as a steep yield curve, you're viewing the old one as a flat yield curve. >> alan, just to extend the '90s analogy, you've taken this through and compared it to right now where fed officials seem to by trying to get the market's attention but fed chairman jerome powell has also invoked alan greenspan's treatment in the later part of the '90s where he said there's a bruckive thety revolution going on, maybe we won't have inflation.productivi revolution going on, maybe we won't have inflation do you think there's relevance to that experience today >> i think there's tremendous relevance for that experience today. it was a period of time going back to the late '90s where the labor market tightened, the unemployment rate fell so low that by conventional thinking there should have been inflation
but there wasn't and alan greenspan had to persuade his colleagues just to hold steady, see if we get any inflation out of this and we didn't it's not like it was long delayed so go to today, off similar thing, although productivity -- it's not being driven by a productivity miracle which greenspan saw early on in the late '90s. productivity has been lagging, productivity growth, and yet there's no inflation or very little very little acceleration of inflation can be seen despite the unemployment rate. >> what do you make of the picture in europe? we see the yield 3% above the
same for germany do you think that will ator what the ecb can do moving forward? people expect the ecb to tighten and raise interest rates will this be a limiting factor or the factor that will make the fallout worse than they have been in the u.s. >> i'm not sure about the latter because the italian rates have gone up but, yes, i think this has to be a factor that will be a restraining influence on the ecb. go back to 2012 when mario draghi with words only annihilate it had yield spread between italian, spanish, et cetera, bonds and german bonds now you have a large spread. i don't know if he's planning another verbal attack on the spread but this looks to an outsider this looks more country
specific than eurozone wide. the eurozone as a whole doesn't look so -- doesn't look terri e terrible but to year question, sure that has to be something that the ecb takes into account as it plans its next few steps. >> finally alan, just on our top story which is this rise in bond yield yields from a perspective of higher mortgage rates, consumer loans, small business loans, is there a level or a speed and are we already at that point >> i don't think there's a magic number and i don't think we're quite at the point that it will come soon. there's probably a lag of quarter, two quarters, three quarters before the market bond
rates filter in -- fully filter in they start right away. for auto loans and businesses and bank loans it's a little bit ahead in the future but not so far very ahead. >> alan blinder, thanks for the perspective. out of princeton university today, former vice chairman of the fed. >> as we get to break, look at the major averages, s&p down 1%. we are holding steady right here very slight losses quk t see wa flat story so far, "sawonhetrt"ill be bright back. each day our planet awakens with signs of opportunity. but with opportunity comes risk. and to manage this risk, the world turns to cme group. we help farmers lock in future prices,
tradingnation.cnbc.com more "squawk on the street" coming up. [ phone rings ] hi, tom. hey, how's the college visit? you remembered. it's good. does it make the short list? you remembered that too. yeah, i'm afraid so. knowing what's important to you... it's okay. this is what we've been planning for. thanks, bye. that's what's important to us. it's why 7 million investors work with edward jones.
welcome back to "squawk on the street." bob pisani joins us with an etf spotligh spotlight. >> treasury etfs across the yield curve. you can buy that, 7 to 10 year you can buy that 10 to 20 year is particularly heavy volume also very heavy volume in the main investment grid corporate etf. these are all at 52-week lows meaning yields have been moving up quickly looking at stock etfs.
gaming stocks are often highly leveraged, they can be susceptible sudden moves in rates. look carefully here and you'll see that the strong economy is helping over sectors that might get hit by higher rates and traditionally have to reits, real estate investment trusts, they're down not even close to new lows. that's because the economy is so strong and sectors that real estate services like the health care industry, storage industry, apartment business, the hotel business, they're all still doing very well. also note that the high yield etfs like hyg, for example, they're down, they're selling off, it's more like a knee-jerk reaction they're not at new lows, they're tied to the credit cycle than the interest rate cycle and with the economy so strong, the risk will be fairly low you can argue these are a bit on the oversold side as well.
i don't know if this is a bottom -- concern about the rate's short term but the market is acting that way. >> the other thing we mentioned earlier, that slightly odd dichotomy given rates are such a big factor last week that both utilities and financials did well. >> so you had people arguing -- i got notes saying hey, bob, see this utilities are telling us the interest rate cycle spike is a little bit past its prime now and that's what utilities are telling us that's a very hard read. you can make that argument, i think. it's such a small sector, i would just look at the broader picture right now. wherever you get a sudden spike up like that the stock market traditionally has a hiccup but look at the macros, at the fundamentals, and we are in an extraordinary economy right now. we have seen this before usually you can handle higher rates. i think blinder had it right how well is the fed going to succeed in a soft landing? that's the critical question
right now. >> financials sort of flat this morning regardless of what rates do this week likely to be flat until they get through earnings. >> they came up last week, we saw almost ten basis point increase in the yield between the -- the spread between the two and the ten-year and those stocks responded but it's true they've gone nowhere. >> what about technology worst-performing group today, one of the worst last week, i wonder if this is going to be the big loser as it's been the big winner of the bull market. >> all we know is all of a sudden rates go up unexpectedly, the stock market has a hiccup historically so you go after your biggest performers you've got stuff that is up 30% on the year, when you have apple up 30% on the year, it's no surprise you'll see those stocks come down. let's give this a few days if this thing just stops all of a sudden and we're sitting again at 3.2% and the yield curve is not jumping up dramatically, spreading -- let's see what it's like at the end of the week. i'll bet you these stocks will
stabilize very quickly. >> great stuff thanks very much let's head over to a look at what's coming up on "squawk alley." >> two big tech companies, two very different strategic moves facebook's portal smart speaker, an answer to amazon's echo, google's home makes its debut with reviewers we'll check into that. microsoft's linkedin unit buying an hr startup. its second-biggest acquisition ever that's linkedin's second biggest. that's coming up on "squawk alley. hi, i'm joan lunden with a place for mom,
the nation's largest senior-living referral service. for the past five years, i've spoken with hundreds of families and visited senior-care communities around the country. and i've got to tell you, today's senior-living communities are better than ever. these days, there are amazing amenities, like movie theaters, exercise rooms and swimming pools, public cafes, bars, and bistros, even pet-care services. and nobody understands your options like the advisers at a place for mom. these are local, expert advisers that will partner with you to find the perfect place and determine the right level of care, whether that's just a helping hand or full-time memory care. best of all, it's a free service. there is never any cost to you. senior living has never been better, and there's never been an easier way to get great advice. call today. a place for mom -- you know your family, we know senior living.
welcome back to "squawk on the street." stocks are trying to stage a bit of a turnaround in early trading, slightly lower as interest rates push to seven year highs amid those fears, consumer rate stocks, some of the top performers today up by almost a percent. among the names leading, walgreen and costco, tyson and campbell's soup. and conagra up 3% after an
upgrade, citing concerns over a possible sales slow down are a bit overblown. watch those shares now back downtown to you >> thanks very much for that, dom chu at hq. may be banksy's greatest prank. we have the full details >> greatest piece of performance art in auction history, art money and technology came together friday night, sold a painting girl with balloon by the street artist banksy after the final bid of 860,000 pounds, the canvas slid through the frame and shreds appears we got banksy. then he posted a photo of people watching itself destruct, raising speculation that the artist whose identity is unknown
may have been at the auction and triggered it with a remote he posted a video showing how he built that shredder into the frame in case it was sold at auction. he painted it in 2006. sotheby's has no knowledge of the plan or shredder in discussions with the buyer over next steps the buyer won't want to return it may be worth twice as much since it is one of the most talked about moments in recent art history. back to you. >> sotheby's really didn't know about this >> i don't know. the point is the frame was technically part of the picture, part of the artist work, they couldn't touch it or remove it they wouldn't have inspected it, and therefore many people say this might have gone unnoticed, even though it might have been heavier and bigger than a normal frame. >> are we ever going to find out
his identity maybe you have to go to 79th and broadway >> it is across from my apartment building it is a banksy i hope he hasn't rigged the building in case anyone tries to sell that spray painted work >> there's a photo of the man at the auction who may have been banksy and matches a photo of a man daily mail years ago identified as banksy, so the plot thickens. it appears there's at least one person that the press identified as banksy and appears to have been at the auction. we can't say for sure. >> quickly, the person that supposedly bought this before it was shredded, what happens, do they get money back? what happened? >> that was the speculation friday because you have a work that had been destroyed. sotheby's was in talks with the person now it is clear the work is
probably worth perhaps twice as much that buyer may be the luckiest person of all, probably won't want a refund, won't have to do a deal with sotheby's, will probably sell it for even more that's how the art market works. >> weird story robert frank, thank you very much. some tape in, president trump taking questions >> we're going to be talking we'll be talking on the plane. i actually have a good relationship other than there's been no collusion, folks, no collusion. but i have a very good relationship, we'll see. i didn't hear you. no, i don't. i thought the way they behaved
was absolutely atrocious i have never seen anything like it from the leaks of important documents to the statements they made to watching blumenthal who was a fraudster in vietnam, i thought the way they conducted themselves, dealt with a high level brilliant, going to be a great justice of the supreme court, the way they really tortured him and his family, i thought it was a disgrace. i thought it was one of the most disgraceful performances i've ever seen. so i have been hearing they're thinking about impeaching a brilliant jurist, a man caught
up in a hoax set up by the democrats, using the democrats' lawyers, now they want to impeach him. i heard it from many people. it is an insult to the american public i think you're going to see a lot of things happen november 6th that would not have happened before the american public has seen this charade, this dishonesty by the democrats, and when you mention impeach, a justice of the united states supreme court, who is a top scholar, top student, top intellect and who did nothing wrong, and there was no corroboration of any kind, and went through seven fbi investigations, had nothing to do with any of this. take a look at the last one. the things they said about him, i don't think he heard of the word it was all made up it was fabricated, and it is a
disgrace and i think it is going to really show you something come november 6 i think a lot of democrats are going to vote republican i have many friends that are democrats. the main base of the democrats have shifted so far left that we'll end up being venezuela this country will end up being venezuela. a lot of democrats will be voting republican november 6th very well documented well documented. it has been documented many years. very well, all public documents.
[ inaudible >> i don't understand a word not at all look, i'm traveling with rod i didn't know rod before but i've gotten to know him and i get along very well with him >> president trump stopping to speak with some reporters, he is on his way to orlando, he will be participating in a police chief's meeting this afternoon mostly taking some political shots at democrats, though feeling good after getting a second supreme court justice confirmed over the weekend eamon javers is with us. you were trying to ask a question about the president's finances. >> you heard the president toward the end, he came around to the side where i was standing a few moments ago. i asked him in light of the "new york times" investigation, remember the president said over the years he got a one million