tv Worldwide Exchange CNBC December 17, 2019 5:00am-6:00am EST
room to run. our special series continues with a closer look at one sector up more than 300% decade to date plus how the chicken wars are shapg up reaching new heights all of that as "worldwide exchange" begins right now >> tuesday september 17, 2019. congratulations first off to the new orleans saints and their quarterback. he became the nfl's all-time touch down kingwith 540 touch down passes. he threw four of them last night. more on that coming up first off, wall street tried to extend a win of its own
stock futures pointing to major and minor losses the dow down by 13 points, nasdaq down about 11 looking at the bond market a slight tick lower. yielding 1.861%. two-year 1.631%. that's how the treasury shape is moving right now let us go worldwide. in asia, we did see a positivity trade there. in hong kong, up over 1% you can see there now in europe. that trade giving a little bit of it back remember, a huge move for many of the major forces out there. the german dax off and the ftse 100 about flat after big moves
from that brexit vote last week. let's look at some of the top stories with rahel starting with boeing they are suspending production of the 737 max in january. the biggest is assembly halt in more than 20 years they say they will not layoff any employees in seattle during the production freeze at least for now. looking at boeing shares, they are edging lower this morning. also down more than 13% since the grounding of the max back in march. this morning, the european suppliers that are feeling the burn the board ati fiat are discussig the $50 billion plan merger. they are looking to seal the deal by year's end putting
brands like fiat, jeep, dodge, ram and others under one roof. the british pound with losses this morning after reports that boris johnson will push through a revised brexit bill that will guarantee the country will fully exit the eu by the end of 2020 with or without a uk deal giving the uk about 11 months to broker a deal with brussels. >> do you remember for a few months, every day, we were getting brexit headlines >> it is still happening >> not nearly with the frequency of that period that looks like it is coming back >> the whole idea that you could have a massive auto deal coming together one of the biggest hurdles there was the french government. now they are saying this is a go ahead for these guys
the pound is interesting here. a move lower is no small feet but there was a huge run up. the idea here is that there would have been an idea for a softer brexit, perhaps a negotiat negotiated brexit. thank you for those. back home, u.s. stocks looking to extend their record run despite uncertainty about trade and brexit joining me now, president at patomac wed patomac wealth advisors. brexit, mergers. there are many cross currents. yet, the euro stoxx 600 hit a record high. is this a situation where nothing can take down the markets? >> i think a lot of the worry from those factors never
materialized the pro brexit party passed and won the election the london market responded favorably. if anything, the weaker pound will continue to boost that economy. a lot of the worries there appear to be for naught for now. the trade war turned out to be a double winner for usmca. at least a verb al agreement for phase one. the worries in the market don't materialize. meanwhile, the u.s. economy and strength continues to be strong. that is the real story that's what won out. the strong u.s. economy and consumer looking to 2020 upward earnings and gdp perhaps on the rise as well >> stocks do not go up in a straight line. not to say 2019 has been a straight line. after a really rough 2018 fourth quarter.
you can see why the markets would recover the way they did we are reaching levels where valuations are a concern, are they not >> absolutely the case we've talked about valuations that matter. wall street is not a one-way street investors are a little getting ahead of themselves for valuations over that point typically, the next few years aren't as ripe as they occurred. the story of the underlying economics are too strong they need to be selective. the enter pri points could matter here. but, yes, i think investors need to temper their enthusiasm at these levels >> what are you selecting and what are you staying away from >> what we are looking at is
what wasn't run up look in the small cap space, especially small cap value you'll see market multiples below historical averages. you can see some opportunity in the small cap space. banks dominate they've pulled back because of this flat yield curve and intense pressure, which is really positive pressure from internet banks you can see an m&a rally that can drive that sector. you saw it in the larger cap sector with suntrust can you see it more in the space as well. there is a fierce competition. the best way for banks to deal with that is improving technology, gaining scale and forces to reboost their margins which have come under heavy pressure in this flat yield environment. >> thank you for those thoughts.
when we come back on the show, flushing out the phase one trade deal we are live in beijing and changes at the top for one major streaming player that has that stock lower. later on, from impeachment to the budget investors getting ared fready f busy week. a busy hour ilstl ahead when "worldwide exchange" returns after this no matter what i wore, i worried someone might see my bladder leak underwear. so, i switched. to always discreet boutique. its shape-hugging threads smooth out the back. so it fits better than depend. and no one notices. always discreet.
there it is, a shoft windy city it is cold over there. we hope the folks there are getting the weather out now. the phase one trade deal with china. top economic advisor saying the deal has been, quote, absolutely completed. despite limited details and that it will not be signed until the new year getting to beijing for the latest developments there. good morning or good evening to you. >> reporter: new reports have emerged that look like china is making it easier for more companies here to buy american products and have beijing look good on its end of the bargain
reportedly looking to grant more waivers right after the phase one trade agreement is implemented. up until now, waivers have been granted to supplement strained supplies for example, u.s. chicken is taxed 35%. the trump administration says china could potentially and is supposed to buy as much as 40, maybe $50 billion of agricultural products every year this move is seen as a way to make it easier for beijing to reach that goal. >> is this a scenario where these could be foundational to what is happening with the phase two trade deal >> i mention only because there
has been talk now about what is happening with phase two does this mean with all of these pieces, that next round of talks could continue and what could they possibly entail >> i think it is still very unclear. at this point, we don't know whether or not the phase one is going to be signed from what robert lighthizer has said he thinks this phase one deal should be signed by early january. at the end of the day, it would make it easier for china anyway to be able to reach some goals when it comes to agriculture ral purchases if it does allow for these. >> a lot left to be determined eunice yoon on trade shares of unilever sinking largely this morning why it is christmas coming early for mariah carey that is trending and coming up
shares of roku are lower after they announce chief financial officer is stepping down he joined in 2015, he plans to help hire his replacement and assist with the transition the stock is up 300% but down 3% this morning unilever is cutting the sales growth for 2020. the consumer products giant reporting a slow down in south asia and weakness in north america. the growth has been a drag for several quarters where consumers are opting for fresher foods, specialty brands they make everything from dove soap to ben & jerry's ice cream. ending with pfizer, the fda approves the drug in the expanded use of hormone
treatment. reducing cancer deaths by more than 60% in men. straight ahead on the show, bad blood between fedex and amazon putting investors on edge and on notice and new scrutiny for purdue pharma over transfers from the business to the sackler family those details when "worldwide exchange" returns after this we keep companies ready for what's next. (man) we weave security into their business. (second man) virtualize their operations. (woman) and build ai customer experiences. (second woman) we also keep them ready for the next big opportunity. like 5g. almost all of the fortune 500 partner with us. (woman) when it comes to digital transformation... verizon keeps business ready.
that's a live shot of new york city right now. 5: 5:21 am eastern time you can see the shot there of the ice rink we'll head right out to 30 rock to frances rivera with the latest >> it is a mess out there. multiple tornadoes ripping across the deep south. they've been blamed for three deaths in louisiana and alabama. fortunately, all of the students in this school were evacuated. the storm ripped down lines and trees. winter blasts of snow and ice are making roads treacherous in louisiana a mother and son were killed when they are car spun into the path of a truck. >> the campaign manager for donald trump is due in court
today. rick gates pled guilty to cooperating with robert mueller in the russia probe. he was close to paul manafort who is serving seven and a half year sentence. they are not opposed to probation as opposed to jail time a group of friends dining in a ihop left their server a generous tip she thought it was a mistake and tried to give the money back but it is hers to keep everybody pitched in $100 bucks. >> i love these stories. thank you for bitening up part of our day here. thank you. how bowings first assembly line freeze could send ripple effects across the entire u.s. economy. former ceo director set on what
and room to run continues. looking at the tech sector's decade of dominance and whether anything can slow it down. all of this as "worldwide exchange" rolls on ♪ welcome back to the show, welcome back to cnbc i'm dominic chu in for brian sullivan we are half way through the 5:00 eastern hour futures are looking at modest losses if these moves hold to the opening bell, the dow would open down by about 14 points, the s&p would rise about two points and the nasdaq up about 10 points. the 10-year benchmark currently
1.866% the two-year benchmark treasury note yield 1.63% in asia, we are seeing green across the screen. up over 1% looking at what is happening with early trade in europe we are seeing a bit of a pull back there right now, the dax off by 1.5% the cac in france off by about a third and off about a ten in the decline. let's look at some other top stories we are following a federal judge in california has handed uber a legal victory refusing to force the company to classify drivers in that state as employees but the judge refused to throw out the case entirely potentially allowing
them to fight this into the new year fedex is out with earnings after the closing bell today the numbers come after amazon revealed it is blocking third party sellers on the platform from using fed ex-as ground delivery service up in the pre-market trade new documents reveal the owners of purdue pharmaceuticals began taking more money out of the company as scrutiny in its roll in the opioid crisis grew. and making $11 billion in payments between 2008 and 2017 benefitting members of the sackler family raising questions about how much the family should pay itself to resolve lawsuits in the opioid crisis lawmakers in the house are
preparing for an historic vote joining us now from washington, can we layout what the next few days will look like on capitol hill >> the process of voting will begin today with the house rules committee meeting at 11:00 a.m we do expect to hear from the committee nadler and adam schiff during that meeting. he'll also have to answer questions from the members expect that debate to go on for many hours with he know the outcome is basically all but certain. president trump will likely be it impeached. schumer is demanding to hear from witnesses including hearing from white house acting chief of staff mick mulvaney and former national security advisor john
bolton >> in the coming weeks, senators, particularly republican senators, will have a choice do they want a fair honest trial or a trial that doesn't let the facts come out trials have witnesses. that's what trials are all about. >> the schumer and majority leader mcconnell are to meet today to look over what that trial will look like the only real clue so far is that it will start in january around the college football bowl games. maybe you can read more into that >> your new orleans saints did a bang up job. sticking to business one second. impeachment is one of the major themes in washington we have a budget battle. a vote on usmca also
how does that calendar play out this week? >> there are really a bunch of important votes happening this week the impeachment vote is book ended by two highly bipartisan votes on capitol hill. we'll see lawmakers voting on two bills that would fund the government for the rest of the fiscal year. there is $49 billion in more spending set to be on deck for this fiscal year that is something that is really important. lawmakers are able to come together and really do the basics of governing. no more stop gap measures or threat of show down. once these bills pass, they'll be able to bill the government at the end of the week, we are expecting a vote on the usmca. one of the victories, really both parties want to be able to go home over the holiday recess
and show that they can still get things done in washington, even among this partisan political divide >> thank you for all of those updates and what is happening. for what is set to be a high stakes week in washington, i'm joined by president and former cb director under george w. bush, george, thank you for being with us this morning you heard the report this is a big week take us through what the ramifications are given the idea that there are funding issues up for debate can we count on that to keep everything going >> i think she laid out the time line pretty clearly. it begins today with a vote in the house on these two spending bills. i spent yesterday waiting for it to fall apart. we have seen this moving many times. you don't really have a deal until you have a bill to vote
on they did that late last night. it has all sorts of things in it you have the spending, yes seven years of authorization terrorism risk insurance repeal of every tax in the sca, cadillac tax, medical device tax. the list goes on the good news scenario is, they take care of business, fund the government, gets to the senate, gets done on thursday probably and we don't see a shut down or any tremors that go through the market from things going on in washington the bad news is, people finally get a chance to read it. something is in there you don't like and we see the push back. we've seen those before. i'm still watching this pretty carefully. >> let's talk about usmca. we have details around it. we are in the red zone for this particular move here
is this going to be something all of the members of this free-trade agreement fact can get behind will this be a boom if we can get nafta 2.0 passed >> this looks like the phase deal with china which is addition with subtraction. somehow the north america agreement gets divided you get usmca in place it has some sectors where they have clear benefits. digital trade are quite strong other places people are quite happy. that is the nature of big deals. the issue with mexico is on the ininspecti inspection of labor commissions. whether done by altering usmca or a side agreement, i don't
know that is manageable it should go to the senate in early january. >> maybe not as much to do with trade specifically but you've been following the developments with boeing and the 737 max jet. we are hearing some estimates floating around the street that the suspension of production of the 737 max jet will actually have a market effect on u.s. growth gdp could take a hit take us through what that means and how that bares out for the fiscal situation in this country. >> certainly, it has already had an impact on gdp growth. we've seen the potential cut in growth you'll see that in the first
quarter data it feeds to the pace of income growth and the household sector which has been the strength of the economy. watching closely to see that feedback certainly, everybody needs to understand this impact and that it comes from a relative anomolous source it has a lot more to do will making regulators happy about approving the max. that will be a big problem for the company. >> given everything you've talked about right now, can you give us the grade you would give the u.s. fiscal situation right now given everything we know about boeing, the economy, markets and trade? >> i think, if you want to grade the economy, it gets a good solid b, maybe a b plus. it has hung in there well.
if you want to grade the government outlook, it gets a gentleman's d at best. >> thank you for sticking with us this morning on the whole development with the u.s. economy, trade and everything else sticking with that boeing story, phil la bow joins us now layout what this means the suspension and what it means moving forward >> probably several months of uncertainty. boeing knows with certainty what it is going to do to a certain extent let's say through march we don't know how long this will last it will stop in january. there will be no layoffs approximately 12,000 workers at
the plant in washington. some will shift over production. there will be work for some of those people more importantly for them, they will continue to be paid finally, the whole focus here is to clear up this the 737 maxes that have been built. they want to start clearing this out. they want to start clearing these and have them sitting there. don't be surprised that this production halt might last a little longer than that. they don't want to fire up this plant again. it will take a while to deliver those planes especially if the faa continue with ear worthiness certificates on each of those planes. you look at the monthly production it was at 42 per month they brought it down
they said they were going to build 57 per month in 2019 that is not going to happen. 57 per month not going to happen in 2020. may happen 2021 they have a long ways to go to catch up with the original plan. look at boeing shares going back to november 5. remember november 11 is when they put out the guidance that they were going to be having the certification in 2019. clearly, that is not going to happen we talked to the head of the faa who said that is not happening look at the shares now 321 a share. looking at spirit aero systems they haven't decided what they are going to do. for ge, they make the engines as part of a joint venture with
safron out of france that is less impacted. there are a lot of other businesses there you see the impact as well >> so phil, let's turn our eyes towards the other side of the atlantic you brought up safron and ge i think of aerobus have they benefitted we have heard some major u.s. airlines going with the airbus models you interviewed them and they said this is not good overall. >> right it is not a benefit in terms of somebody scheduled to get a 737 max who says, that's it. i don't want it. i'm getting an a 320 you can't do that. there is probably a seven or
eight-year wait. what you do see. take a look at the a 321 xlr that's the newest plane airbus introduced for longer routes maybe connecting parts of the u.s. with smaller designations or routes in europe united within the last two weeks said we want 50 of the a 321 xlrs there is nothing boeg has ing ho offer that is a direct competitor that's the benefit for airbus. >> a huge story. phil, thank you for the latest on boeing and those developments coming up, the chicken sandwich wars are back on as poppies makes its latest dis at
rival chick-fil-a. and tech faces a growing scrutiny or maybe has room to run. "worldwide exchange" is back after this police officer: excuse me, sir. sit tight. yep, sit real tight, speedy. cause you've got to call it in, police officer: radio to dispatch... type it up, hey, dispa... (feedback ringing) deal with that, dispatch. write it up, walk it back, police officer: slow down out there. and call hq-again. (sigh) (siren blaring) this isn't working. introducing samsung mobile first responder solutions. with the galaxy note10, you can get real-time data at the scene, all on one device. samsung business solutions.
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that will generate value for our investors. that's why i go beyond the numbers. all this week, we are looking at the market gains as part of our room to run series today, tech's dominance is in focus. pouring money into chip makers and social media giants. the tech composite is up over the last 10 years compared to 191% for the broader s&p 500 for more on what tech still has to do and whether is it has room to run in the new decade, i'm joined by the managing director at wedbush securities.
tech generally speaking, has been a driving force behind the u.s. economy does tech have room to run beyond 2020? >> yeah, look, in our opinion, it is a globen age for technology when you look at cloud computing, enterprise has only moved 30%. it is not just amazon and mo microsoft. it is a whole eco system in my opinion, we are only half way through this cycle i think a lot more room to run for tech which is why we are bullish going to 2020. we talked about amazon
retail but a tech focus. microsoft, facebook, alphabet. some of those are now communication services but can we expect those megacap names to keep doing what they are doing or can we expect new leadership in the market like fintech or other leadership elsewhere. >> in our opinion, such as faang, i think we are half way through the cycle. they interer act more with amazon, facebook and google than an average bank. i see them getting further into health care, banking, automotive i still think they are going to be leaders i think on semis and other areas, you'll start to see other leadership there you have square and financial
services ultimately, we don't see any reason why the faang will not continue to be the pilot on this going forward compared to everything we see with apple front and center >> always hurdle as long the way, tech is facing a lot of them especially big tech. if you look right now, if you are zuckerberg, others, they'll spend a lot of time in the 202 area code over the next year the anti-trust will spotlight that we do believe it is more fines but that is a broad ever headli headline risk for these companies. they need to continue to show that growth. look at netflix. now you are starting to see a glass half empty view because of valuation and spending on
content. if you look at cloud and 5g, massive opportunities. you have winners but you have a lot of losers too. investors are trying to pick the spots. large company are some of those diamonds in the rough. >> thank you all week long, we'll look at whether the markets still have room to run here on "worldwide exchange." tomorrow, we look at consumers in the spotlight >> thank you for having me >> let's find out what you'll be talking about today with today's trending stories rahel is here with those tell us what is trending just when you thought the chicken wars are died down, popeyes takes a dig. the chain ran ads seeking applicants who had experience preparing chicken sandwiches and
that can also work on sundays. there in lies the dig. chick pl chick-fil-a is closed on sunday. something popeyes has made fun of >> legends of the hidden temple is making its way to digital the plot remains the say >> after 25 years, mariah carey's song tops the number one list her first in 1990 with "vision of love. and also extending her report for the most number ones if she can score another number
one, she will tie the beetles at 20 one of four artists to log number ones in the '90s and 2000's >> i was going to talk to you about the chicken sandwich but i know you too well. i will say i enjoy a chicken sandwich i haven't had the popeyes one but i have had the chick-fil-a and it is great. in sports, nfc south leading the saints taking on the colts last night stakes are high for the colts who are back in the playoff picture on the brink of elimination. saints quarterback drew brees throwing four touchdowns helping him to nab the record for all-time touchdown passes from
former colt payton manning they fall to the saints 34-7 brees set the single-game completion record. he threw 30 passes and made completions on 29 of them. 97% completion rate. congratulations. on deck, we tee it up for the moves you need to make netflix looking at how many subscribers it has around the world as "worldwide exchange" is back in a moment
details at the investment group. the memo said the group will be tasked with raising capital and crafting client strategies for alternative investments throughout the bank. offering details at the meeting later next month netflix has released new numbers overseas as it faces increasing competition in the united states. revealing subscriptions in europe, middle east and africa has more than doubled since 2017 former treasury secretary is endorsing joe biden in the 2020 race speaking on the closing bell yesterday, jack lew explained his decision >> joe biden has both the heart to care and the experience to lead he has demonstrated his deep concern for an economy that works and works for working
americans, for restoring american values and restore america's leadership as the global and economic leader that we need to be. he surrounds himself with people who really are the leaders with the next generation and has the ability to reach across party lines and across all parts of the democratic party he has the ability to make donald trump a one-term president. >> wall street is coming off the fourth straight day of gains with averages close at record highs. the phase one trade deal has lifted the cloud of uncertainty some what. >> joining me now, the founder of organization. are things more certain now? >> i think things are more certain now than back in the summer we've been talking a long time now since early october. u.s. small caps, midcaps are
right for a rally. they are up around 12% they'll continue to do well in this environment it will continue through january. non-u.s. small caps will do very well in the next month but through 2020 >> the view right now is that the u.s. has -- i wouldn't say run its course the latest stages for the rallies. is it fair to say the more attracted opportunities now reside abroad. >> u.s. small caps still have room to run. i think 2020 will be about non-u.s. small cap >> would you go to emerging markets on those or developing markets for those? >> seeing china as a result of the trade deal we are seeing in some cases,
many stocks are off of their highs. we see plenty of room to run for these for developed and nondeveloped markets >> we have been seeing data come out over the last few weeker or months about how invietors aeste putting up cash. does that concern you or make you feel like that is and indicator and gives us more room to run in 2020 >> more the latter than the former some people may be taken off gains from what they experience in 2019? we have seen stocks become appropriately priced as we are seeing non-u.s. small caps up. we see them get plenty of room to run that money will shift.
still with room to run here in the u.s. it will shift non-u.s. >> thank you always appreciate your mind and thoughts on this >> that does it forwomen we are marginal losses at the opening bell "squawk box" picks up now. good morning, boeing shares falling again after the company confirmed plans to suspend production of the 737 max. we'll tell you what it means for investors and the overall economy as well. stocks hitting new highs we'll show you how investors are preparing for different scenarios around the impeachment of donald trump. wall street, pay outs will be better than the jelly of the month club numbers are straight ahead tuesday, december 17, 2019 "squawk box" begins right now.
good morning welcome to squauch we are live from the nasdaq marketsite in time square. we'll start this morning with the markets. the dow closed 100 points higher logging the 16 record close of the year year to date, the down is up 21%. the s&p and the nasdaq are on track for the largest gains since 2013 but the s&p could post its best year from 1997 if it just gains two more percentage points by the end of december not a long way to go to see the best year since 1997 look at equity futures