tv Worldwide Exchange CNBC July 30, 2019 5:00am-6:00am EDT
it is 5:00 a.m. at cnbc. it is jay powell versus the busiest week of earnings season. apple, under armour, mastercard, merck and more on tap today as the fed prepares for what could be the first rate cut in more than a decade. ground up. beyond meat sinking after its second quarter public report -- yeah, they reported earnings people didn't like them. the stock is down. we'll find out why what's in your wallet. how about a massive data beach this is one of the country's biggest credit card providers.
u.s./china trade talking taking center stage today. billions of dollars in new tariffs hang in the balance. we'll take you live to washington. and the stage is set the second round of democratic presidential debates kicking off tonight. we are live in detroit with a rundown and why trillions may be talked about it is tuesday, july 30th as "worldwide exchange" begins right now. ♪ >> that song coming out today in 1966 good morning, good afternoon, good evening and welcome from wherever in the world you may be watching i'm brian sullivan we have a major developing story overnight. one that might have impacted you. capital one disclosing a massive data breach that could impact more than 100 million people across north america thousands of bank accounts compromised. there is one hacker in custody
we'll get much more on this story and whether you might be impacted coming up as we await the fed decision tomorrow at 2:00 p.m. eastern time, here's how things are setting up futures are down to maybe a little changed we've seen a sell here in the last 20 minneapolis. dow futures off 55 points. it's been a slow grind higher. the average return on an s&p 500 stock this year is now over 20%. 30 stocks in the s&p 500 are now up more than 50% in 2019 it's been quite a year for equities we'll see if the fed can keep that going in the bond market we're seeing more of what we've been seeing, not a big move the ten-year yield sitting still, 2.05% around the world, let's check starting with the asian markets. now japan, they downgraded their full-year economic forecast again to growth of 0.9%. they were hoping for 1.3%.
the nikkei not reacting. i guess they're getting annoyed to seeing slower than expected economic growth there. the nikkei up 0.4% hang seng and shanghai are higher in the early trade in europe, equity market there's are mixed. the ftse is flat we're seeing the dax down about 1% also need to focus on the british pound. we don't talk a lot about currencies it may be a good time to visit london the pound now at a two-year low against the u.s. dollar. we're at 1.21, down about 0.4% it's been just an absolute slow burn here for the british pound as the currency weakens and weakens against the u.s. dollar. down about 0.7% so far this year real concern there about a so-called hard brexit or a no-deal brexit you pick the term. there's the market reaction. there's your macro setup clearly the number one thing on investor minds today and tomorrow is the fed.
federal reserve chairman jay powell kicking off the two-day policy meeting today when they make the rate call and the subsequent forecast it could be a massive market moving event. it could also be the first rate cut in more than a decade. wow. it's not all about the fed you also have corporate earnings from some of the world's biggest names all out this week. apple, procter & gamble, mastercard and many more how do we wrap it up joining it's is a man who can do that, larry mcdonald, editor of the bear traps report. i'm not a currency guy i don't talk a lot about currency when you see the pound hitting a two-year low, when you see the kind of moves that we are beginning to see in the currency market, that's got to wake you up it does impact corporate earnings it impacts the costs of good imported, and the costs of goods exported how big of a dieeal are these
haven't currency moves >> it's a colossal deal, a spread between the dollar and other developed world currencies is one of the largest in my career it's setting up a powerful dynamic. if the fed is not dovish enough, you're talking about the u.s. treasury having to intervene to stop the dollar. the dollar is a global wrecking ball we saw this in 2016 when the dollar soars, it will crush s&p 500 earnings, most of which are outside the united states exposed globally and at the end of the day, if they don't stop the dollar, you will see the treasury and the white house step in here in the next month >> and do what how do they stop the dollar's gain >> well, there's a number of ways they can buy international assets overseas. they can talk the dollar down. the fed can -- if the fed -- as we saw in december, if the fed is not dovish enough, they can turn tail and then in the fed speak in the following weeks they can reverse course and
provide further dovish guidance. net-net, the beast in the market is going to break the fed and treasury over its knee the dollar strength will force great reaction out of washington >> while we're talking about a rate cut, and we'll probably get the rate cut and a dovish view, if the dollar keeps going higher, will that mitigate any positive impact from lower interest rates >> yeah. it's very destructive. you have to remember there's 62 trillion of gdp outside the united states. 18 trillion in when the dollar soars -- don't forget, there's like 17 trillion of dollar denominated debt thanks to the fed globally now the last ten years, every country on earth has been showing debt and dollars that dollar soars, it's damaging donald trump has a point you know, he makes a lot of noise on twitter he has some very valid points.
the ecb and the european central bank has done the differential in easing. it's about $3 trillion more easing than the fed has done same thing with the bank of england. the central banks around the world are easing much more aggressively than ours their currencies are imploding therefore their cars and their products are cheaper over here and it's hurting the u.s. economies and the white house is going to do something about it >> what can they do? >> michigan, wisconsin and pennsylvania -- >> i hate this probably the only three states that matter to the election. you named them >> absolutely. the election didn't turn until 2:45 a.m. on election night in 2016 when pennsylvania went trump's way. these are major manufacturing states there's a number of tricks, if you look back over the last 40, 50 years, the treasury intervened before. they can team up with other international central banks
globally they can do a lot of things with the amount of dollars held globally there's a lot of tricks up their sleeves, they'll pull every one of them out in the next two, three months to contain this beast inside the dollar. >> the strengthening strengthening dollar king dollar as larry kudlow likes to call it we like you, larry thanks for coming on >> okay. also happening today, u.s./china trade talks beginning in shanghai. this is the first new round since that trump/xi face-to-face late last month at the g20 eamon javers joining us from washington, d.c. on what or what not to expect. >> this is the 12th round of talks between the two sides. the first since the talks broke down in may. the south china post is calling preparations on the ground in shanghai low key they say the chinese government
is keeping a tight lid on media coverage in china of anything going on related to the talks to keep expectations low. that matches what we're hearing from the white house mnuchin and lighthizer are in shanghai this week the white house views it as a success just to have the talks take place that's why the expectations for deal making this week are relatively low the president has suggested he thinks the chi knnese want to stallen untstal until after the election the president says a democrat will be an easier negotiator than he is we'll see if that's the case as the talks get under way today and tomorrow whether we get any local media coverage on any of this will be fascinating to watch >> what more will we learn this week, if anything? >> the first question is, you know, do the chinese really want to stall i think you might get some
indication of that during the course of the week based on their negotiating posture, whether they agree to a number of things early on or whether you start having debates over the shape of the table the other thing that we might get an indication of here is whether or not president trump actually wants to move forward there's some thinkers who argue that what trump really wants is to keep the tariffs in place he wants to overall reshape the trade relationship between the united states and china. that's not a multi-month thing that's a multi-year thing. and he really wants to do that and views this protectionist agenda as something that's working, he might want to keep the tariffs in place long-term >> eamon javers, thank you very much. >> you're rewelcome. hackers answers the question of what's in your wallet maybe what's in their wallet is a better question. more than 100 million people affected in a massive hack attack. and then overcooked?
here shares of beyond meat sinking. and from snowmobiles to atvs, we'll have more on the trade war and the state of the american economy how is the consumer doing? you'll find out only if you stick around that's what happens in golf nothiand in life.ily. i'm very fortunate i can lean on people, and that for me is what teamwork is all about. you can't do everything yourself. you need someone to guide you and help you make those tough decisions, that's morgan stanley. they're industry leaders, but the most important thing is they want to do it the right way. i'm really excited to be part of the morgan stanley team. i'm justin rose. we are morgan stanley. your but as you get older,hing. it naturally begins to change, causing a lack of sharpness, or even trouble with recall. thankfully, the breakthrough in prevagen helps your brain
welcome back it's 5:13 on a tuesday morning we have a major developing story that could impact you. capital one disclosing a massive data breach. kate rogers has more on that >> that's right. look at these numbers. capital one said it suffered a breach affecting 100 million u.s. customers, 6 million in canada the company says 140,000 social numbers and 80,000 bank accounts and 1 million canadian social insurance numbers were compromised. it says the largest category of data that was exposed was from credit card applications including names, addresses, dates of birth and self reported income payment history, credit scores and credit limits were also accessed the breach occurred in late march. the hacker accessed information through a vulnerability of the servers in an unnamed cloud company that hosts the bank's data the fbi arrested a suspect,
paige thompson she's a former engineer at amazon web services. thompson posted some information on a private chat page capital one says the breach will cost it up to 1$150 million thi year back over to you >> the company was unnamed yet the guy was a former employee of amazon web services, but we're not putting two and two together right now >> that's right. this clearly seems like it's still under investigation. that's according to the "wall street journal" and their reporting. we'll have to see how this unfolds. on deck, is the sizzle finally coming off of red hot beyond meat? shares losing more than 10% right now. we'll tell you why next. these folks don't have time to go to the post office
get a 4-week trial plus postage and a digital scale i had a few good tricks to help hide my bladder leak pad. like the old "tunic tug". but always discreet is less bulky. and it really protects. 'cause it turns liquid to gel. so i have nothing to hide. always discreet. bp shares are higher after second quarter earnings beat forecast production is up 4%. profit coming in at 2$2.8 billion. 3$300 million more than expecte. you better get bayer investors some aspirin second quarter profit falling sharply and the company says earnings targets for the year will be more difficult to reach. bayer down 2%. beyond meat reported that sales nearly quadrupled in the
second quarter however the stock is down 12.5% because they announced plans to sell 3.5 million more shares in a secondary offering they were criticized forever having so few shares sold to the public that stock is up 700% sense their ipo back in may. nobody was expecting that follow-up offering a special "worldwide exchange" bonus, if someone wants to ask you what is the best performing stock in the s&p 500 this year? it's also in the food space. chipotle, 3% gain yesterday means that chipotle is now up 87% so far in 2019 chipotle you're on top as the best stock in the s&p 500 this year still to come, atvs, snowmobiles and more, how the king of consumer discretionary is taking on the trade war and
winning. and ladies and gentlemener on a major college financial aid loophole is exposed. if you thought the athlete scandal is big, wait until you hear what some families are doing, giving up control of their children to get financial aid. it's a real story, it's a big one, you'll want to hear it. ♪ more, more, more ♪ how do you like it, ♪ how do you like it ♪ ♪ more, more, more ♪ how do you like it, how do you like it ♪ all you can eat is back.
in america more consumer related than polaris, they make things you don't need but you want like atvs, boats, snowmobiles how is the company dealing with higher costs and a consumer economy that more are getting nervous about? we spoke with the ceo and i asked him if he sees a recession on the horizon >> we spend a lot of time looking at what's going on with the economic cycle as a u.s. bank board member i see a lot of data on where things are the economy is very strong right now. consumer sentiment at 98.4, up a little bit in the last month consumer is in great shape we're seeing our loan values, everything is good with our consumers, the dealer traffic is good with the launch of new products we expect a good second half
i think 2020 could be a problem with the election year and some stuff, but right now we feel good about where the u.s. economy is >> you're there at dealer day. i appreciate you having cnbc there. the dealers will buy for next year, are they not they'll take their orders no for what they plan to sell in the months and quarters ahead. what's the dealer's general mood >> let me change that a little bit. that's how we used to do business, long order cycles. we implemented retail flow management where we deliver to our dealers what they sell they have a profile, we restock it we keep dealer inventory in track with what's happening with retail trends to make sure when the inevitable recession does happen, we're ready for it and we can help dealers through it it's one competitive advantage we dealers appreciate it. their excitement around new product launches was incredibly
strong >> it's good they don't have to take that huge inventory costs and risks like in the past when we look at the inventories, i've been to some of your dealers, the big razors, the utvs, the side by sides, those are hurting everywhere, is that hurting your atv side of the business those numbers seemed soft last quarter. >> our atv market has been down for almost a decade aside by sides have continued to grow as we talked about earlier on the cnbc segment, the price increases that we pushed through, they had more impact on our lower priced atvs. that's where we had the biggest market share issues during the quarter. the price increases hurt that lower price. the lower margin product also. our films were in good shape, but the value products, especially the atvs are hurt more by the higher prices
related to tariffs >> we have a federal reserve meeting on wednesday we are supposed to get a rate cut. how important are interest rates to your business and your customers? a $20,000 side by side is generally not going to be a cash purchase >> you know, more than 60% of our customers finance. the interest rates are important. it's that monthly payment for some of the customers that really is most important so interest rates matter we help to mitigate some costs for consumers with promotions, but interest rates matter it looks to be a 25 point cut, that will be good for consumers >> you're entering the first full year where you have the biggest deal you made, 8$800 million deal to get into the boating market, bennington boats and other types of pontoons. i know personally going to a lake in wisconsin in the summer, i see a lot to of new boats out there. >> we felt fortunate to be able
to bring the bennington brand into our portfolio the premium pontoon boat in the industry and our partnerships we have with great engine manufacturers to really bring great technology i wish we could have gotten out on the lake saturday it's the fact we have great brands in the portfolio. and we're bringing new i no investigati innovation and technology to that, and we feel good where we're positioned to take that business to $1 billion >> scott wine, ceo of polaris. there's more to that interview you can see it by going to cnbc.com when we come back, forget the trade war or brexit. the one thing that your next guest says could be the biggest trouble spot in the world that almost nobody is talking about and will the trade war slam apple or can the company innovate its way back into the hearts of investors?
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nothing to do with sports but it's guaranteed to tick you off when you hear what wealthy families are doing to game the system it's tuesday, july 30th. you're watching "worldwide exchange" on cnbc. ♪ >> part of that golden rule is to give up ownership of your kids this is a story you have got to hear welcome back thanks for being with us on cnbc 5:31 in the morning. i'm brian sullivan here's how your money and investments look stock futures are down a bit off 66 points now. s&p and nasdaq futures are lower as well. markets have been in a slower grind higher all ahead of the federal reserve meeting that starts today the rate decision tomorrow at 2:00 p.m. eastern time the first rate cut in more than
a decade is widely expected. the bond market, it's been forecasting that for a while bonds moved a couple months ago. they've been sitting still since. the ten-year note at 2.05% it's the single busiest week of earnings just today you will get results from companies like apple, samsung, mastercard, nintendo and under armour what does this matter in the face of the fed? you are a stock guy. you like to dig into those numbers. you got the numbers. you also got the federal reserve. do the numbers for the quarter matter or is it really all about the fed right now? >> everybody expects the fed to lower rates. that's -- >> is it priced in >> we think a lot it it will give a positive bias in terms of the earnings season, it's coming in pretty good 75% of companies are beating
expectations, in line with the past few quarters. >> in the top or the bottom line >> on the bottom line. on the top line the beat is 55% to 60% the outlooks have been more cautious few if any companies are talking about interest rates being too high while the fed is lowering rates, that won't really help business. companies are warning about trade with china and that's slowing the global economy and causing them more pause. >> how much of that bottom line cut is because of massive buybacks companies keep buying back their own stocks, making earnings per share look better? >> a portion of it is financial engineering if a company can buy back stock at 12 to 14 times earnings, it's good for the value of the business. but companies are also running themselves well, operating, controlling costs and hitting earnings you're talking about an
environment with bonds at 2%, stocks are looking attractive. >> tell me about a stock you feel is attractive abbvie has had a tough year but a nice yield >> we are recommending stocks with good long-term outlooks but have done poorly this year abbvie is at the top of that list the yield is 6.5%. we think they have good long-term prospects. the average pharmaceutical is 15 times earnings, so you're getting this about a third off >> wells fargo, one of the biggest banks in the world scandal after scandal. trouble finding a pem napermane ceo, but that's not keeping away from the stock why not? >> it's one of the cheaper banks right now. the footprint is among the best in the group they have a great loan quality portfolio. very good capital ratios they're allowed to buy a lot of
stock back we think they're well on the way to fixing themselves and that's not in the stock price we like the financial group in aggregate. we think wells fargo is well positioned >> also in this space that i cover, oil and gas the energy stocks have been crushed. if you go down to the small and mid cap names, they're down 60%, 70% in 12 months a ceo we talked to many times of royal dutch shell, they continue to perform and you like that name >> the business has done well but the stocks have not. >> they can't get out of their own way. >> oil prices are up sharply the company's cash flows are better they will be returning more capital to shareholders, yet you're getting about a 6% yield. we think at some point oil company stocks catch up to the better oil prices. >> abbvie, wells fargo, royal dutch shell, quite the mix there. nothing in common except they've
been beaten up and they have a decent yield >> and good long-term prospects. >> thank you very much >> thanks. the one company possibly getting the most attention when it comes to earnings today, what else, apple. apple stock has done well. up about 30% this year a number of risks remain for cook and company, including possible regulation, the recent departure of their design executi executive. the stock has done well, sigh ri cyrus, that's fine, but what are the issues for you iphone sales china? what else maybe they have up their sleep? >> there's three numbers we need to watch for today the first is apple iphone sales. 18 months ago they were two-thirds of apple's revenues,
last quarter they were about 53%. will they dip below 50%? if they dip below 50%, psychologically that's probably not good for apple second is services revenue services is the growth area, tv services, gaming services. will that rise above 20% if that happens, that's psychologically good for investors. if the growth rate is high, that could be the savior of apple and the third thing is china china sales comprise about 18% of apple's sales, but they've been heading down. we need to know if they'll continue to go down. china is the third biggest market after the u.s. and europe >> do you think they will continue to go down? >> i think they will certainly in the medium to long-term, as long as we have the trade wars going on, i think china sales will go out. i think chinese handset manufacturers like huawei will pick up the slack. >> your point on growth, can they make it up on the services
growth rate? or is there nothing that can replace the iphone for apple >> i think for me right now, you know, there's a risk that apple is going through an identity crisis it has not had a new product for 12 years >> they did have the ipad. >> yeah. the ipad is a large iphone, because it works on ios, the same operating system. i would classify that as really the same product just a larger version. they also had the apple watch a slightly different operating system, but still part of the ios system they have not really had a blockbuster product like autonomous driving car or a tv service. they got apple tv plus streaming service, which launches later this year. but, you know, they're launching a tv service just at the end of the internet tv era. a little bit like microsoft buying nokia in 2013 when
everybody has a mobile phone an internet tv, netflix is the market leader and amazon is number two the whole industry is changing. when content holders are putting their content in-house on their own streaming services, just at a time when apple is launching its streaming services i'm worried about services >> all right we'll watch those numbers tonight. cyrus, we appreciate your time thank you very much. coming up, the countdown is on the 2020 democratic field will take to the debate stage tonight and tomorrow we have full team coverage and what to expect after this. and later, how far would you go to get financial aid for your child's college education? would you basically disown your own kids some people are. kind of. it's the latest college admissions scandal, and you have to hear it to believe it coming
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welcome back 5:41, the sun is about to rise over the nation's capitol. two nights of debates start tonight. we have full team coverage kayla tausche is in detroit for the main event but let's begin. two nights of debate in the mot motor city >> for half of those 20 candidates this is the last time they will appear on a debate stage. look for them to capture those
moments and poll boosts that come with it tonight expect bernie sanders and elizabeth warren to break out and come under attack from amy klobuchar and pete buttigieg as what they see as a far-left agenda of the democratic party buttigieg and klobuchar just put out economic proposals tomorrow night candidates will chip away at the support of kamala harris and joe biden. the front-runners who have commanded the most wall street cash so far and who would go toe to toe on healthcare they just put out health care proposals in the last week biden doubled down on the affordable care act. he said he would expand the aca. harris says she would put forward medicare-like plans offered by private insurers, but that customers out of pock ket co pocket costs would be capped at $200 a year. who would pay for that
likely a tax raise on wealthy individuals and corporations that's something we expect to be debated tonight. healthcare is a top issue that voters want to hear about. 63% of likely democratic voters want to hear about the affordable care act. 55% want to hear about medicare for all. the very, very, very top issues are immigration and climate change that being said, this stage of the cycle is much more about performance than policy. but so many candidates in just the last week have been rolling out these policy proposals they want to change the conversation, even though to get those policies done they need a senate majority of democrats as well >> maybe the them will be called get joe biden. everybody is going after joe here's the other question that a lot of people have when will we whittle down from 20 candidates? >> it will be at some point in
the next six weeks normally this happens after the iowa state fair. you will see all of these candidates next week taking to the soapbox just outside of des moines to try to really refine that stump speech, try to reach the average voter in one of those early primary states most of the candidates if not all of them are already on the register to appear at the iowa state fair the next debate is in houston and that will be a much smaller field. corporate consolidation is becoming a bigger talking point with some democratic candidates. >> we have a serious problem in our country with corporate consolidation. >> we're supposed to break up big corporations when they're not serving our democracy. >> i want to return government to the people and that means calling out the names of the monopolists and saying i have the courage to go after them >> so leslie picker traveled to
st. louis, missouri where a number of large hometown companies that have been acquired i can think of a beermaker that rhymes with "ush." >> there was a beermaker we are in downtown st. louis which has seen a number of companies get acquired, monsanto, panera, and others more than 3.5 times more money was spent on outsiders acquiring st. louis based companies than st. louis based companies spent acquiring outside the metropolitan area. there's no information on showing what that has done for a local economy like this one, but it has not helped. population growth and per capita income growth are well below the national average
we sat down with ronnie chambers who handed out severance packages to anheuser-busch she said she laid off hundreds of people until she heard she was receiving a pink slip. >> i wasn't surprised. i was ready. i was emotionally exhausted, physically exhausted i was 54, it was time. i was happy. i thought i was ready, but in fact once i got on the other side of carrying my box out of the building i did my share of crying >> chambers is now a career transition coach helping other people who have been displaced from mergers in recent years she says it's not all bad for people who have been laid off recently some people have gone on to start their own craft breweries. there's a budding scene here for craft breweries. others are simply using the capital they got from their
stock once the acquisition was complete they've been able to take some time and enjoy life more as presidential candidates focus more and more on corporate consolidation, it's likely they do hone in on this city in particular, st. louis, a key swing state in missouri. >> the number of stocks available to trade cut in half in the last 20 years leslie, what is it about st. louis that makes consolidation so attractive? >> it's a good question. people we've spoken to on the ground here peg it to the idea that a lot of these companies were family owned. that's a characteristic of st. louis and its long storied history. so this latest generation of family members, for whatever reason, has decided that this is the right market to sell so they decided to sell in the recent merger boom that we've seen >> leslie picker in st. louis, fascinating story there. appreciate it. see you soon
thank you. on deck, an apple a day might keep the doctor away but only if you're eating it right a new study that will have you side-eyeing your fruit bowl. then the anniversary of one movie with a turn on investment that was anything but horrifying that cult film is your rbi, it's coming up. ♪ ♪ applebee's all you can eat is back. now that's eatin' good in the neighborhood.
all right. 5:51 on the east coast times square, let's find out what else we'll be talking about today. it's time for the top trending stories. kate rogers, what will we be talking about today? >> you have to check out a story in the "wall street journal. it says wealthy parents in illinois are going to great lengths to get financial aid for
their chirp. the education department is looking into a tactic where parents transfer the guardianship of their children to less wealthy friends or relatives. this allows the teens to access resources meant for middle and low income students. the scheme is technically legal but some universities in illinois say they're looking into the practice to ensure fairness in their aid policies another record broken by little nas x and old town road, the country rap song is the longest running billboard hits it's been at the top of the charts for 17 straight weeks and an apple a day may keep the doctor away but you're probably eating it wrong 90% of the nutrients and beneficial bacteria are in the core if you're not eating 100% of the apple, seeds and all, you're missing out. >> that's gross. >> i wouldn't eat the core,
would you? >> it's one of those things where you should eat dirt or something because it's good for you. this college admissions scandal. that is -- this is the kind of stuff that hard working families -- they wake out and find out wait you transferred guardianship of your child to a poor aunt or a business associate. >> yeah. >> to try to trick -- because the way it works is this i'm the father, i make x amount of dollars okay if i cut us off, you're my daughter i cuss us off, you have a summer job where you make $10,000 you report that as your income because we are severed but in reality you have daddy w warbucks over here who is potentially backing you while you're taking financial aid that is supposed to go to kids who don't have the wealthy parent who just used a lawyer to cut the guardianship >> unreal and technically legal. >> there's nothing illegal about it >> yeah. >> but if you're going to do
that to trick a college aid system, which might already be struggling to have enough money to fund everybody -- >> yeah. and people who actually need it. >> my parents lived in a three-bedroom one-bath rental home so they could pay $4,000 a year so i could go to a public college and not have any debt. you have people pulling this stuff? can you tell i'm worked up >> a little worked up. it's t >> it's the lion talking >> you're always worked up in a great way great energy in the morning. here's your executive recap. capital one says a data breach exposed personal information of their customers including 80,000 bank account numbers and 1 million canadian social insurance numbers. about 106 million impacted individuals. the fbi arrested a suspect who has been charged with computer fraud and abuse. beyond meat shares looking
raw right now. down about 12% numbers were okay for the quarter. the company surprised everybody with plans for another stock offering just three months after the ipo. they'll sell 3.52 million more shares. china's huawei says it's revenue grew more than 23% in the first half of the year that despite massive pressure from the united states including the trade ban starting in mid-may. huawei is not publicly traded. let's get back to the markets and your money stock futures are down just a bit. dow futures off about 50 points. we have the federal reserve, their two-day meeting today. the rate decision tomorrow our next guest says there's something happening out there, not brexit or the trade war, but it may be a big deal for your money down the road. patrick is chief strategist at silver crest asset management. he joins us now. patrick, why do you think the hong kong protests could be sort of a black swan event for
stocks >> remember, black swan means an unlikely but highly consequential development. in the case of hong kong, look, there's a -- people turn their tv on, don't fully appreciate, this is a regional financial center one of the top three or four in the world. it's mainly happening on the weekends, but there's a lot of people talking about taking their money out of hong kong if that suddenly happened you could have a source of financial instability in the world that people don't see coming. >> we've got the protests. it's not truly a black swan. we've seen the police firing rubber bullets into a crowd. they've been beating people with clubs. it's gotten violent but the markets have not yet reacted why not? >> i think because we see this sort of thing in bangkok, other places around the world and we
figure nothing will amount to anything this is a -- the issue is rule of law it's what makes hong kong distinct it is what makes people keep their money in hong kong when that comes into question, you're talking about a large pool of money that could leave you know, it could send some shockwaves >> what are the odds that this happens? >> well, it's black swan i don't want to make it out like i'm predicting that this will happen but it's something to keep an eye on given the fact that markets seem pretty happy now. they are sort of pricing in all good things will happen. >> has the fed rate cut that we are likely to get tomorrow, has the market already priced in a rate cut >> clearly the bond market
expects it to happen the issue for broader markets is there's a reason why the fed is likely to cut rates. it's because there are weaknesses in the economy. you know, we got 2.1% gdp growth last week. that was better than expected. but the things that drove that were consumption and government spending everything else was negative we had a sixth straight quarter of decline in residential investment we have the first quarter decline in business investment and trade was not impressive with exports declining and imports stagnant there were a lot of sources of weakness in the economy that we need to watch out for. >> what's the best part of the market now, patrick? >> well, the fact remains that what is penninexpensive in thist is risk-off assets
though i think there's a bumpy ride ahead for the stock market, that doesn't mean that people are better off going and hiding. they're better off riding that out. >> all right it was a pleasure to get your views. thank you very much. thank you for watching "worldwide exchange" this morning. we'll see you tomorrow "squawk box" begins right now. good morning hack attack. capital one disclosing a data breach that exposed personal information of more than 100 million customers. we'll tell you how it happened shares of beyond meat sinking but it wasn't quarterly results that prompted the drop we have the full details straight ahead. and it's a busy day for the markets as the fed kicks off a two-day policy meeting these happen a lot they do a lot of things. we'll get reports from merck, under armour, procter & gamble and eli lilly before the bell. we'll also get you ready for
apple after the close. it's tuesday, july 30, 2019. one more day in july, i think. "squawk box" begins now. ♪ live from new york where business never sleeps, this is "squawk box." good morning welcome to "squawk box" on cnbc. we're live at the nasdaq market site i'm andrew ross sorkin along with joe kernen and melissa lee. becky has the day off today. the dow looks like it would open off about 40 points. nasdaq down about 28 points. the s&p 500 also looking off, but we'll call it 6 1/2 points for now. let's show you what's happening overnight in asia. a board of green arrows across nge board.
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