tv Worldwide Exchange CNBC April 6, 2018 5:00am-6:00am EDT
it's 5:00 a.m. on wall street, 5:00 p.m. in beijing here are the top five things you need to know president trump doubles down on a trade war with china proposing an additional 100 billion in tariffs. two, the global markets are reacting in a big way to the news dow falling right now 200 points three, china firing back we're headed live to beijing for their reaction and what they may do in retaliation. number four, a big warning for your money that has nothing to do with trade. why scott minert says stocks
could fall 40% you heard that right his comments ahead and you're just hours away from the big march jobs report pour some coffee, speed up the treadmill. it's friday, april 6th, "worldwide exchange" begins now. welcome from wherever in the world you may be watching. i'm brian sullivan it looks like another wild day for your money on this friday. the dow jones pointing to a drop of more than 200 points at the open the implied open down 213. the nasdaq and s&p 500 also indicating a drop at the open. this as president trump turning up the heat on china he is now proposing an additional 100 billion in tariffs on chinese goods that news broke late last night. immediately the markets reacted. the futures reacted around the
world. as only we can do on "worldwide exchange," we have full global coverage for you on this breaking news and your money eunice yoon is in beijing. nancy hungerford in singapore, joumanna bercetche in london let's start closer to home where the news is being made, that's washington is nbc's tracie potts with more. >> reporter: good morning. a reaction from the united states, the national retail federation says the president is playing a dangerous game of chicken here manufacturers and politicians representing agricultural states are also concerned interestingly the president says he is doing this to protect american interests and to protect farmers. but some of those representing those states are not sure. the question is will americans end up paying more for furniture, clothes, shoes, things that often come from china. this is a response to china's 0 $50 billion in tariffs on soybeans and other u.s. goods,
which is a response to u.s. tariffs on steel and aluminum and another 50 billion this trade news may be becoming a trade war. that has a lot of people concerned. you talked about the markets it took the new economic adviser, larry kudlow, to try to calm things down we'll see what happens when the markets open this morning. the president saying he's considering more tariffs, that certainly seems to be making those markets rocky overnight and into this morning. brian? >> i know the news came out late last night, given your schedule, i don't know if you sleep at all. this is something that took a lot of people by surprise. >> it did. the president had already announced tariffs against china. there had already been backlash about whether or not this was sparking a trade war a lot of people here in washington want the president to back off a bit and go easier as opposed to taking on china the china commerce ministry
saying this morning they don't want a war, but they're ready to fight one if necessary >> tracie potts, thank you >> we are getting political reaction and fallout from trump's comments let's get to eunice yoon in beijing live with more >> thank you very much, brian. the chinese have said they're waiting and they're watching, and they're ready to fight it to the bitter end this is what the commerce ministry said earlier today. >> translator: china will fight back to the end at all costs china will fight firmly against it with new comprehensive action >> so how would they fight we have some hints in the chinese state media today. the chinese global times, which is a communist party paper said
how will china react any global voice and most chinese would agree that china will take action with equal force and scale to fight back. so based on what china did last time by slapping a package of tariffs of 50 billion to match the u.s.'s 50 billion, a lot of people here say we could see china putting on an additional 100 billion. the problem for the chinese and the u.s. is that china only import 1$154 billion worth of american goods that means that everything that's being imported from the united states would potentially see a tariff some analysts say this expanded tariff list could be an option and that the chinese could curtail services exports to the united states, increase regulations on american companies in china the capital economics folks
believe if this actually continues, it could mean that china would see a half percentage point knocked off of its gdp. china says it is in it for the long haul. we saw this as a top trending topic. public opinion is in favor of the government >> eunice yoon, thank you. let's get continued global market reaction to the escalating trade tensions. nancy hungerford is live in our singapore newsroom >> brian, i can tell you these main markets here did lose some momentum after those comments coming from the chinese commerce ministry that wrun neunice ran through. the nikkei 225 finishing lower by almost 4% this despite the yen retreating against the greenback. the investors in wait and see mode before the big jobs numbers stateside. look at the brikt spg bright spt
the hang seng had a positive finish, higher by 1.11%. to give you an illustration how much the comments from the commerce ministry impacted trade the hang seng was trading higher throughout the session, then we got the comments from the commerce ministry about them willing to do anything it takes to fight the tit-for-tat with trade and the united states, after the lunch break we got the dip in the hang seng it did recover, but no doubt about it, the latest comments and the threat from the united states and the reaction from the chinese commerce ministry weighing on sentiment here going into the weekend >> thank you very much now to get reaction in europe, joumanna bercetche has how the european markets are reacting to the news >> good morning to you it's a sea of red behind me as far as the european bourses are concerned. ftse 100 down a quarter of a percentage point the xetra dax, the german index
export heavy, export oriented, very much at the whim of global trade, down 0.7% in today's trading. very briefly i want to draw your attention to ftse mib, which seems to be outperforming its counterparts, down only 0.2%, this after consul tatations to r a government did not succeed i want to draw your attention as well to some sector moves. this is quite interesting. as you can see, autos are leading the decline today, down 1.65%. you would think that with all of the tariff discussions going on, what is it about german automakers are getting impacted by this? analysts have estimated that the tariffs that the chinese have imposed on u.s. automakers will hit mercedes and bmw the most because they make their cars in the u.s. and they export from there. clearly we're seeing impact on the auto sector in europe on the
back of further talks when it comes to tariffs being applied back to you. >> let's bring in peter boockvar you ever get into a fight as a kid? you're on the playground, you have words someone pushes you push harder. you either eventually have to take a swing or walk away. that seems to be where we are in this trade situation this is the third sort of move, period, if you will how does this end >> up until last night i was hopeful this back and forth, which i'm not a fan of the tactics, but maybe that we would get an agreement on intellectual property, but seeing the news last night it confused me more of what the real intention is here what do you think the intention is do you think this is just a big negotiating tactic or maybe that this will end in tariffs being implemented? >> if the focus is to deal with intellectual property, i can say maybe we'll get to an agreement.
but this obsession with the trade deficit, if that's the goal, it's hugely misguided. >> so for the equity markets, you wouldn't know it, but the dow is actually up 1.5% this week after today we may not be, but we're holding up fairly well do you believe the equity markets think this is, as chris kruger wrote last night, more foam than beer >> up until last night, yes. i thought they believed, okay, this will not come to fruition there's a long runway of potential negotiation before any of this gets implemented when you see the news last night that he keeps upping the ante here, i just think markets will lose patience with this. >> we have in about 3 1/2 hours the monthly payroll number normally that's a top story. the big monthly jobs number. does this trade stuff sort of cloud the jobs number? i'm not saying render it unimportant, but does it reduce
the importance >> it does for two reasons everybody knows the labor market is as tight as a drum. in the "wall street journal," the article about the town in ohio that can't find workers, that's prevalent throughout the u.s. another strong jobs report would confirm that wage numbers will be hugely important. the other thing is jobs data is lagging. if all this tariffs stuff leads to a slowdown in growth. who cares about growth today -- >> that's the battle that's why the trade stuff matters on a different level than the headline. let's say the jobs number comes in hot, as they say. that might put the fed more into play do they raise rates two or three more times this year but if the trade stuff heats up and starts to cloud worries in the economy, wouldn't that reduce the hawkishness of the federal reserve, no matter how the economic data comes in >> couit could potentially, buth
yield curve flattening may cause the fed to continue to raise rates. they're at 1.625 they need to refill that gun there's still big inflation pressures building in the economy, particularly on the wage side. the fed wants to normalize, but at the same time the ten-year yield being below 2.80, that's telling you that the fed will raise, the markets worry about the economic implications on that and with respect to trade >> it's early in the morning on a friday, viewers are thinking i have a strong economy, that's good strong back drop for earnings. but i have a couple rate hikes probably on the ray from tway fd and now this trade talk. what should be the focus for them >> hiking of interest rates, shrinking balance sheet, to me
monetary tightening is the most important story. it makes the market more vulnerable to stories like tariffs, facebook privacy issues to me focus on the monetary and interest rate landscape. >> peter boockvar, pleasure. have a great weekend thank you. much more on this later in the day. at 1:00 eastern time, treasury secretary steve mnuchin will join cnbc and "power lunch" to talk taxes, trade and the overall economy. on deck, it's not all bad news on this friday. we'll head to hong kong with how all this trade talk could present you with a once in a lifetime investment opportunity in asia. and if you're worried about the fed, listen up scott minert is out with a big warning for you and your money he thinks stocks could fall 40%, 4-0, you heard it right. his commts cenoming up a lot more to do "worldwide exchange" rolls on
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darkest just before dawn, that's why we're asking do all the scary headlines and the growing threat of a trade war present you with a big opportunity in asia joining us now from hong kong is the vice chair of asia pacific from jpmorgan chase. there's a lot going on your markets are actually closed today, but why do you believe there could be grand opportunity that coming out of this back and forth? >> well, you know, so far we have not started the trade war, but we're on the brink of a trade war. we think actually that the baseline scenario is that the two sides will come to the negotiation table and we think the trade war could be averted there's a lot of market volatility global markets are reacting to escalating trade tension if you look underneath, both in the u.s. and the chinese
markets, corporate earnings growth is quite strong so therefore as the volatility subsides in the coming several months, the two sides can reach some sort of conclusion to avert a trade war, there could be some good investment opportunities. >> it's kind of incredible with the headlines of the past year, you wouldn't realize that the hang seng in hong kong was up 22% over 12 months. why do you think stocks have held up as well as they have >> you know, the chinese market did very well in 2017. into the new year actually because global investors are keen to get increasing exposure to china because of middle class consumption, because of the rise in china's stature overseas in terms of technology, in terms of economic growth. however the recent escalation in
trade really has thrown some uncertainty into the markets i think it's important to recognize that a trade war would be a lose-lose proposition for both the u.s. and china. if you think about the most recent announcements from mr. trump, 100 billion u.s. dollars of additional chinese exports would be targeted. that would basically cover the entire chinese exports to america. last week was 50 billion plus 100 billion. china is an important trading nation many of the goods china exports to the u.s. would be very difficult to be replaced by other partners on the chinese side, many american companies -- >> we all remain optimistic, but what if the worst case scenario does happen. we believe this is a negotiation. what if it's not what if we cannot come to a deal
and tariffs are implemented. how would that change your investment thesis? would that completely reverse your optimism? >> well, it would be -- right now we're cautious i don't think one should be extremely optimistic in the current situation because i think volatility is increasing things could get worse before they get better. if a trade war could not be avoided we could see a downside risk in markets, it could also bring about a global recession if a global trade war broke out. however this is not our baseline scenario our base case is a trade war can be avoided and cooler heads would prevail. in the coming several months, especially during the 60-day cooling off period, i think
there will be markets reacting to daily news. obviously in the current scenario people may be taking a risk-off stance on equities especially >> i know equity investors hoping this is all just talk thank you. have a great weekend coming up on "worldwide exchange" on a very busy friday, sheryl sandberg speaking out and you may not believe what she said about the only way facebook would stop sharing your personal data her comments ahead. and the eagle has landed but in the wrong place the wild video from the sports world involving a giant bird and a baseball player that you have to see to believe.
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introducing scotts turf builder triple action. it kills weeds, prevents crabgrass and feeds so grass can thrive, guaranteed. our backyard is back. this is a scotts yard. welcome back it's shaping up to be another volatile day on wall street. stock futures are down they've come off a bit from their lows we're indicated down about 200 points with all the trade talk and the president's threats of another 1$100 billion on threats. facebook shares are lower this morning after that massive data scandal coo sheryl sandberg going on the defensive today. here's what she told savannah guthrie. what is the reason it took so long you could have done all of this
2 1/2 years ago. >> you are right >> so why didn't you >> because as i explained, we thought the data will been deleted. we should have checked they gave us assurances. it wasn't until other people told us that it wasn't true -- >> why go to somebody who has already violated you in spirit if not to the letter why trust that they'll delete it >> we didn't trust we had legal assurances from them that they deleted what we didn't do was the next step, an audit we're trying to do that now. >> sandberg was also asked if facebook users could op out of target based advertising, she said a function like that would have to be a made product. why not, folks let's check on what's happening outside the world of business phillip mena has more from new york disgraced former south
korean president park has been sentenced to 24 years to prison for abuse of power, bribery and leaking state secrets. park was removed from office last year. new details in the battle between president trump and porn star stormy daniels, with the commander in chief addressing the scandal for the first time telling reporters on board air force one that he had no prior knowledge of the payment his lawyer, michael cohn, made to the adult film actress just weeks before the 2016 election mr. trump and the white house denied any affair took place. and space tourism may be closer than you think. richard branson's virgin galactic announced the completion of its first supersonic rocket powered flight it's the world's first commercial space line and a ride on it will cost you $250,000
that will get you 62 miles above earth, and hopefully a window seat >> would it matter it's dark. >> right that's a good point. >> also dark right now thank you very much. have a good weekend. >> you, too. still ahead, is the jobs market so good it may be bad for you and your money it could just be we'll explain why. forget trade wars, what scott minert says could cause stocks to fall 40% that interview coming up in a few minutes.
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stocks likely to open much lower. the president doubling down on trade war talk with china. scott minert says a 40% drop could be in the cards. his comments ahead. and what would you do if a giant bird with razor sharp claws and a thirst for blood landed on your head? it happened to a baseball player the must-see video ahead as we spread our wings on this friday, april 6th. the second half of "wex" takes off now. happy friday thanks for being with us that video is interesting. it's coming up in a bit. we have to start with the markets. futures indicating perhaps a big
drop on this jobs friday the dow pointing to an open about 190 points to the down side, this as the president turns up the heat on a trade war with china and in three hours you get the march ta roll numbpayroll numbe. this number important, but today more so because of rate hikes and the fed coming into play if the number is better than ex pe expe expected, that could put the fed more in play the bond not moving a whole lot. the bond market, ten-year, 2.82%. but that jobs number has the power to change a lot of stuff as this comes out during "squawk box. the oil market, brent and wti downcents. market moving data at 8:30 euro/dollar at 1.2243. let's get back to your top story
out of d.c president trump proposing an additional 1$100 billion in tariffs against china. eamon javers joins us from washington with the latest on what would be considered the third salvo in this trade talk war. >> that's right. we're going back and forth, back and forth. the latest announcement came just before 7:00 p.m. last night when the white house released a statement from the president the president frustrated with the chinese response to his earlier round of proposed tariffs saying in light of china's unfair retaliation, i have instructed the u.s. trade representative to consider whether 1$100 billion of additional tariffs could be appropriate under section 301 of the trade act and if so to identify the products upon which to impose such tariffs we saw an immediate move in overnight trading last night when the statement came out. i asked a white house official for an explanation of what the president's thinking is here the official said that the president is simply sending a
message to china about consequences so the question here is whether or not these tariffs will ever go into effect the president is saying he's asking the u.s. trade representative to consider 100 billion in additional tariffs, and if so which products to put those on larry kudlow was out earlier this week reminding reporters that the proposal tariffs from earlier in the week were simply proposed tariffs and suggesting they may never go into effect ultimately, and putting all of this in the context of a negotiation with the chinese the chinese responded to that. now the president's responding to the chinese will these ever go into effect we don't know. we'll wait and see what the white house has to say about all of this. but it's jobs friday, so a lot of economic news today >> thank you very much a can't-miss interview on "power lunch" later on today
the treasury secretary, steven mnuchin, will join the "power lunch" team to talk taxes, tariffs, trade and the economy that's at 1:00 eastern time. "power lunch" is a pretty good program. check it out moving from trade to tees. let's bring in eric chaieric ch will start not with golf but a guy throwing trash cans. >> he's a small guy, 155 >> all muscle. >> conor mcgregor is in some hot water today. he turned himself in to police last night following an incident at the barclay center in brooklyn he showed up at a ufc media event that he was not invited to he was caught by tmz throwing a cart into a bus of fighters,
fighters that were supposed to fight this weekend two fighters on the card for this weekend's pay-per-view event in weekend have been pulled because of the injuries they suffered in the incident, which suggests this was not a promo stunt, this was an actual thing they did not expect him to do >> he was not involved in the fight at all he was literally a spectator heckling the other fighters. >> his title got stripped this week >> he was just mad >> he is rich -- >> rich and mad. >> that's a bad combination. round two of the masters begins in a few hours jordan spieth is the leader at 5 under par. i thought it was 6 >> it's 6. >> check this out. defending champion, sergio garcia, he made history on the 15th hole. he knocked his second shot on to the green, that rolled into water, then it was like a scene out of "tin cup. he hit four straight shots that
rolled off the green into the water. he took a 13 on the hole that's the highest score ever on any hole at the masters. >> a couple things here. we've all been there joe kernen, avid golfer. he could have beaten garcia on this hole. we all feel it's good to see one of the best golfers in the world act like a regular person. this is what i would have done >> but he didn't drop them directly into the water. the video shows, it hit the green, it just rolled into the water. >> what shows his ability, he pretty much hit almost all five shots in the exact same spot >> pretty close. >> pretty close to the same spot just the wrong spot. >> with the spin at first when i read the headline, i thought they just went into the water. then it's like i don't know what else he's supposed to do >> i would have shot a 9, kernen
a 10 techs wed the minnesota twins had their home opener against the mariners, but there was a small mishap a bald eagle was released during the national anthem. he was supposed to fly to another trainer on the field but it got lost. the eagle headed for the outfield and decided to land on seattle pitcher james paxton both paxton and the bird are okay after the bird paxton said i'm not going to run, i'm not going to outrun an eagle, so we'll see what happens >> first off, do eagles run? are eagles quick are they swift >> 3/4ed like a chicken. >> i don't see eagles running quickly. i see them flying. i have to say for mr. paxton, he was strong i would have cried like a baby >> i would have started running. >> i would have been on the
ground eagles are big their claws are sharp. they're scary. >> combine conor mcgregor and an eagle, see what happens. >> the american bird should have been a turkey, not an eagle. eagles are too scary still ahead on "worldwide exchange," back to business. the eagle has landed we're counting you down to the jobs numbers that's a big number. could affect the fed and the key numbers you need to watch coming up first a warning for your money why scott minert says the market could fall 40%, and that trade may have nothi tdoith itngo w his comments coming up when "worldwide exchange" returnsen n and improves memory. - dad's got all the answers. - anncr: prevagen is now the number-one-selling brain health supplement in drug stores nationwide. - she outsmarts me every single time.
welcome back stock futures indicating a drop at the open of 195 points. the s&p and nasdaq are in the red as well. all of this on continued talk about trade wars and trump's additional 100 billion on chinese products those comments coming out in the evening last night we are getting new comments this morning from the european central bank to our growing threat of a trade war. steve sedgwick had the tough assignment of going to lake cuomo, italy, doing some high-level and important interviews good combination >> yeah. i've been working quite hard you have to look at this
i know i have to do some hard work in a second, but take a look at this >> it's the most beautiful place in the world i've been there. most beautiful place in the world. >> literally on the planet. my vp of international news told me i have do some tough assignments of this one. i have been working at a fast pace today, even if the conditions are nice. talking to former central bank governors, current governors of stall bran central banks. everyone wants to talk about trump and ramifications. i just finished speaking with benoit ceure, a member of the ecb supervisory board. one of the key lieutenants for mario draghi they're running the numbers on what a trump trade war can mean. he said we have to move beyond
the bellicose semantics and see what's happening here. this is said not to be a trade war, but the u.s. has concerns, and it's important that everybody recognizes that and we get real progress. back to ceure, they have been modeling at the ecb a lot of the effects, and already we are seeing tighter financial conditions there are concerns from looking at the financial flows around the world that there are liquidity issues that the stock markets are oscillating so aggressively on the back of every trump tweet. the ecb is doing its numbers on the back of this the central scenario is not that there is a grave fallout that we're affected terminally by what's going on. whether it's the u.s., whether it's europe, whether it's china or the rest of the world, we are seeing a steady but unspectacular growth story the central scenario is that a trade war will not happen, it
will not necessarily derail the global economy but they're all modeling for it and worried about the ramifications of interest rates. from the hard chips of lake cuomo, back to you >> our mutual friend patrick allen just e-mailed me and said the next assignment is brussels in november. thank you very much. >> i knew he would be saying that >> thank you one of the biggest power players on wall street is out with a warning for you an your morn guggenhe guggenheim's scott minert saying the economy could be on a collision course we asked why he thinks we are on a collision course here's what he said. >> the reality is monetary policy and fiscal policy are both heading in directions which are contradictory to each other. the expansion now is getting
into the late stages fiscal policy under the trump tax cuts is highly stimulative that's pushing the economy to grow and to expand at a faster pace, just at the same time as we're running out of workers, and wages and prices are starting to feel upward pressure that, on the other hand, leaves the federal reserve whose mandate is full employment and stable prices to say we really need to pick up the pace of monetary tightening, and in the process we will push interest rates higher, make credit more restricti restrictive. once the first stimulative boost from the tax cut dissipates around 2019, all of a sudden corporations will be facing higher interest costs. the increased growth in cash flow will subside because the tax cut deal, though it's permanent, the free cash flow is
a one-shot deal. with record levels of corporate debt they'll find it difficult to service this debt in a higher rate environment >> 2019 sounds far away, then you realize that's just next year can't corporations just refinance? >> they'll refinance at higher rates. even though this tax cut is freeing up a lot of cash, over 40% of corporations surveyed say their intention is to use this free cash flow to repurr class stock. another 40% are talking about using it for increased m&a activity 10% is being given back to the employees. 10% is basically going out the door in the form of dividends. there is not going to be a cash windfall that sits on the balance sheet of corporations,
they'll end up using it all. as interest rates keep ratcheting higher with record levels of corporate debt, it will be harder to service. at some point, as the economy starts to mature and cash flows stabilize and decline, it will be difficult for everybody to pay all this interest. >> are you suggesting a wave of defaults >> absolutely. with corporate debt at these levels, our internal research shows once you get short-term rates up around 3%, that we will be absorbing enough free cash flow that the free cash flow on corporate income statements will fall to a level which is consistent with levels that we've seen in prior recessions >> are you calling for a recession in 2019? >> either late 2019 or the first quarter of 2020. with all this debt on the balance sheets, you know, as we saw in the last crisis, the
household sector was overlevered. in this cycle, the corporate sector is over-levered the defaults will be in corporate america, where in the past downturn they were focused in the areas of consumer activity does that mean equities would also fall? can equities and corporate bones go in opposite directions? they don't normally, but could they >> i think for the next year, even with the current tariff tantrum, that equities will continue to go up as we have these stock buybacks and increased free cash flow when the chickens come home to roost and we have a recession we'll see a lot of pressure on equities, especially as defaults rise i think once we reach a peak, we'll see a 40% retracement in equities >> 40% retracement in equities that's just half of our exclusive interview with scott
minert you can check out the other half on our website we are counting you down to the jobs number today. there's a couple of numbers out there that are more important than others, not just the headline we'll tell you what those are as "worldwide exchange" will be back after this. my mom washes the dishes... ...before she puts them in the dishwasher. so what does the dishwasher do? new cascade platinum lets your dishwasher be the dish washer. three cleaning agents
waiting really is the hardest part you still have to wait for that jobs number. two hours and 38 minutes the magic number is 178,000. that's the consensus forecast. perhaps the headline is not the number to watch. let's bring in danielledy m ed danielle dimartino booth the wage, what is the most important number
wages, hourly earnings, the headline number. what are you most concerned about? >> the market is concerned
about what jay powell is concerned about. the market perceived that to be wage inflation if we see that 0.3% number, a big rebound from february, you could see jitters that show up in the stock market and the bond market all eyes will be focused on wages. there's clearly a lot of noise in the numbers will we get another 161,000 construction jobs in march probably not another 50,000 retail jobs created? absolutely not consensus should be where we come in. but the focus will be on wages >> do you agree with that, david? >> that's where the focus probably is going to be. the question i would ask is whether or not it makes sense. there's so much emphases on wages leading prices actually, when you do the analysis and look at past
periods of stagflation starting in the '60s, '70s, early '80s, prices led wages wage growth
is usually the last thing to start moving up in the inflationary process even with tep pedestrian wages, the rail city we've already seen inflation pressure build the focus is on wages and that's probably misplaced it will be difficult to replicated what we saw in february i think at least there will be some payback from that he would be below consensus on today's number unless we get a downward revision to the 300,000 number in february nobody is asking the question, we're here talking about the quantity of jobs nobody talks about the quality of jobs. i'm looking at the net export numbers, the consumer spending numbers. looking at the housing numbers even with the modal positive ton
spending, i can't get the gdp numbers 1% above the annual rate productivity may be going down so we could employ all the numbers in the world today's number could be 4 000,000 but we're scraping the bottom of the barrel if we're creating that many jobs for such little output growth what does this mean for productivity that's the root cause for what causes deterioration on returns on equity irrespective of everything happening on the trade front. >> i understand that as well, danielle i don't want to blow the jobs market story out of the water. it's an important number it's a big number. how much does this trade stuff -- i feel like the fed is the rain, but you have a tornado coming and you have to deal with that first does that trump the jobs number in the short-term? >> you had to use that number. when the news hit the wires last
night, futures were down over 400 points on the dow. it's unusual to go into a non-farm ro non-farm payroll number on friday with numbers down trade is taking its toll companies have to be preemptive. markets are forward looking mechanisms, so are corporate executives they have to plan as if it's not bluster andnegotiating tactics they have to plan as if the tariffs may happen and that's not good news for the corporate sector and that will take its toll on the equity markets >> david, how big would the toll big? not minimizing the story if the tariffs are implemented, right now just proposals, what do you see happening with the u.s. equity market we're actually higher this week. >> i think the equity market tens to rally when the situation
on the china front gets defused, and then when we get tweets or heightened tensions, the stock market sells off it makes sense to me the economic impact is very small. it's not about the economy the impacted on earnings could be quite a bit harder than the impact on gdp. the impacted on the equity market comes through the pe multiple, which is the tent for confidence in the system usually when things are stable, like they were last year an things are calm like last year, you get tremendous multiple expansion. half the rally last year was multiple expansion, half earnings this comes down more to how comfortable you are paying for the earnings in a period where there's rising risk. the markets operate on probabilities. there's a rising risk of trade tensions that's why the equity market probably remains under pressure.
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good morning well, is it? is the trade war escalating? president trump proposing an additional 1$100 billion in tariffs on chinese goods in response to china's retaliatory move earlier this week we'll bring you live reports from washington and beijing. dow futures plunged initially as much as 400 points after the announcement, but moderated those losses really not on a percentage basis, not down that much at this point and on top of all this, it's jobs friday. will we see another big number
most people are tempering their enthusiasm for this report just 2 1/2 hours away from that number predictions minutes away on this friday, april 6, 2018, "squawk box" begins now. good morning welcome to "squawk box" on cnbc. we're live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. as joe mentioned, the dow futures plunging overnight after president trump proposed an additional 1$100 billion in tariffs on chinese products. we'll get a report from washington in a employment first you can see the dow futures are down by almost 200