Transcripts For CNBC Worldwide Exchange 20160524

And im wilfred frost. Very good morning from me as well lets bring you up to speed on Market Action. It was basically flat today. Not too much happening in terms of fundamental data either. Markets really just looking at what the fed expectations are. At the moment, were called slightly higher today. The dow by 35 points in the premarket. S p by 4, nasdaq by 7. 75. Not just flat yesterday and broadly flat yesterday. Mike santoli making the point that weve been in about a 4 raise in two months now. All of that volatility fluctuations that were fearing hasnt really been seen. Basically been flat for the last couple of months. Lets look at the tenyear note. More movement in the bond and fed dollar. 1. 835 . We saw what happened in asia, we saw almost a 1 decline on the stock market. The nikkei. On the back of a stronger yen. And word from g7 officials over the weekend that japan is not on board if it has to with the yen spooking. Gaves in hong kong barely. Declines in shanghai. Commodities weak overnight. The dollar was stronger. That played into the trade. Chinese stock playing down 0. 75 . And we saw better gdp number. Final read out of germany, faster on investment growth. Germ german dak is up 0. 5 . An perhaps lending support to u. S. Futures in early action. Waiting on german gew sentiment for government business due out any minute. Exactly. Well bring you that when we debt it. Oil prices still pretty resilient. Up near 50. But they are moving just south a little bit by 0. 5 . 47. 8. The dollar, of course, continues to be in focus. A little bit of divergence as to what its doing, agency you cs. It was weaker against the yen earlier in trade. But thats flipped around in the last couple hours or so. 0. 3 move higher. The pound showed strength again. 1. 4540 at the moment. Gold prices, less bring that up as well. Currently down, 0. 6 lower. Fed speak, once again holding the markets attention. It was philadelphia Patrick Harker who joined the chorus. He argues that a june Interest Rate hike is appropriate until it starts to weaken. Parker is not a voting member, but his comments could echo what weve seen from recent other fed president s. April home sales are due automatic 10 00 a. M. Eastern time. Those are expected to have risen about 2 . That follows a decline in march. Auto zone and best buy reporting before the opening bell. After the close, well here from hp, enterprise and intuitt. Do we think its going to be another one. Mr. Harker saying it was possible in june . We think that theyre preparing the markets. And they want to set expectation that the data has improved. Theyre meeting their mandate. And they do they hike in the summer dont be shocked. A lot of people on wall street anecdotally are talking more than july than june. And that adds an air of uncertainty to the Union Meeting because they havent telegraphed exactly in the language that theyre ready to hike in june. As they prepare the markets july looks increasingly plausible. Thats what you see in the fed fund bond market where they price in these things, july. Even though july, we dont have a News Conference at that meeting. Perhaps, shell call a special News Conference. And i wonder as well, if the romaine camp continues on the brexit polls whether that puts june slightly more on the table. We will be speaking to one of the leading pollsters in the uk shortly about the latest polls what we need to know and what is pointing to that brexit. The key is janet yellen on friday. Shes going to be speaking at harvard. We have not heard from here. Theyre preparing the markets. Saying theyre getting closer. We need to hear from the core, the fed chairman herself to see if he wants to telegraph the policy. At the closing bell, saying maybe the minutes made a. Take and maybe they didnt mean to set policy in tellers of reverse expectations for a hike. Well see if janet yellen clears that up on friday. Were getting results from toll brothers, expected revenues of 1 billion. That comes in line with the forecast. And well keep an eye on that. And we have the german confidence data that were waiting for coming at 6. 4, versus 11. 2 in the previous month. Thats an Economic Sentiment gauge. Following the Current Conditions 53. 1 versus 47. 7. The latest market moves, we were looking at european indices higher. Economic risks includes possible brexit do not allow investor to have an optimistic outlook. Lets move on. Facebook making some changes in chance to allegations by political bias. The social network will revamp its trendinging topics to minimize the effects of influence. In a probe they did not find evidence of that. This coming after the ceo met last week. In other big tech news, snapchat reportedly valued at more than 22 billion. Techcrunch says the company is looking to raise about 200 million. The last fundraising round you may remember in march valued snapchat at 16 billion. So thats a big jump ahead in the valuation. Find us on snapchat, were there behind the scenes, especially wilfred. I did as well. Im being told. Im criticized that its too periodic. It goes through a 24hour blitz and loads of posts. Its hard to do it constantly. I dont think people want to watch it constantly. Bottom line, snapchat is hot right now. You see that in the valuation. 22 billion. Well continue to follow the redstone drama and viacom, the New York Post may be targeting. Theyll find out if the board was led after the ceo dumar. Comments yesterday on the saga. I think it puts the control of this company very much in a question mark situation. And i think for viacom, a stock that trades at 7 rate p. E. , 50 below the peers as a valued focused investor, you have to think is there some potential, certainly in our control, that could potentially end up unlocking the real asset value here. Which i think is meaningful and not very much recognized by the market. Heres a look at shares of viacom. Some other stocks to watch, Video Conference maker polycom it would be better than the current buyer from canadas mattel. The companys forecasts coming in short of investments shortly because they had to halt introduction of image sensors because of earthquake damage. Those sensors are used in apple ioffense and a large part of sony business down. And wall street journal reporting a fight tour chicos. Moodys downgrades the Deutsche Bank agency. With spice flavors and seasoning business for 340 million. That move, part of firms efforts to become leaner and focus on more profitable businesses in a challenging environment for food companies. Warren Buffetts Berkshire buys 64 million of phillips 66. Hes been loading occupy on that energy company. And corporate news, best buy reports First Quarter results before the opening bell. Landen dowdy joins us with three things to watch. The street is look you for shares of 18 billion. Beyond the numbers here are three things to watch. First, expect weakness on tablet and softer consumer spending. A key issue of whether sales of Consumer Electronics will begin to stabilize. Second, guidance. Watch to see if the retailer lowers for your guidance but it may not be enough to drive a rebound. Weve seen profits in macys and jcpenney. Best buy has weathered the retail storm and shows more than 4 over the past three months. Third thing is july. Best buy is solid. Thanks to reasonable attractive valuation. And in march announced the first repurchase Program Since 2012. Back to you. Landon, when it it comes to best buy, there are hints from the horizon. Youve got launch of the iphone 7 coming out later this year. Jim cramer noting recently if investors want to play apple, best buy might be the best play for that. Landon, thank you very much for that. I have to say, theyve got good salespeople in best buy. Ive got massively upsold. Bigger tv. Better speakers. Of course, not necessary. But theyre good at their job. Still to come will the uk stay or will it go . The definitive british pollster joining us with his take. Peter cal, this date in history. The first Eurovision Song Contest was held. Are you wear aware of that . Sort of. It was out recently. Is it like American Idol . No, weve got pop idol. No. Its got an audience of 600 Million People worldwide. Its quite unique. The songs arent really that good. And dont do that well apart from one night of the year. There we go the 50th anniversary. Were back in a couple minutes. Most important part of that is peoples holiday. Thats how people relate. I try to get them interested all the time. Right, lets talk more about this, joining from us london, peter calmet, hes the former president and leading expert. Good morning. Peter. Good morning. Lets dive into polls and what we expect to happen in this vote. Theres been quite a bit of difference with the results of online polls which suggest that exit tending to be doing versus telephone polls which remain is more. I personally think telephone polls are more accurate. On this occasion, ill tell you why, because online polls have panels, people who choose to join us. Those panels. And they spend to be politically well more interested than a person who never join a panel. The and the people least interested in politics are the people more likely in the ends to vote for safety against risk. And in the case of the current reference on the european union, the safe option is to carry on with what we have now, which is membership. And not to take the risk of departure. As we say, we talk about the risks of this economy, to inflation, to mortgage rights, to Vacation Costs and brexit. I think telephone polls are picking up those people more than online polls. Theyre looking at the latest polls. And im sure that the uk will vote to stay in the eu. And i think theyll win by sufficiently big margin for it to count as a clear clear victory for the Prime Minister. I think were heading to a fairly decisive victory more the remaining camp. In the united states, we look at the polls with a grain of salt because a lot depends on the turnout, which is so hard to measure. How much of a factor is that for you, peter . Turnout to be a factor. There are signs the people who want to leave the eu will turn out in slightly bigger numbers than those who want to remain. Theres a very good piece in the New York Times about your own online versus telephone polls. And what they argued the online polls are overstating Donald Trumps support. Where the telephone polls on average got the support about right. It seems to be the same sort of thing. The online panels are slightly more enthusiastic. Slightly up for insurgency. Slightly up more change. Youll have the same phenomenon in britain as youll have in the primary season in the united states. Peter, all the lessons to take from the Scottish Referendum a few years ago, even though the polls predominantly suggests that scotland would not vote to leave. We did see a little uncertainty in the week of the vote and the pound sell off the market. Do you think some of this could happen, even in the polls remain, as you say they are pointing quite clearly to a remain vote . Well, what happened in scotland is that the polls narrowed about two weeks before the referendum. And in the fine ten days, again, the late deciders played safe. They said, lets stick with the united kingdom. Lets not go for dependence. You ended up 50 , a fortnight before the referendum. To stay if the uk. And referendums around the world, you tends to get to a move to the status quo in the last one, two or three weeks. If remain is ahead right now six or ten points i would normally expect that to widen in four weeks time. Peter, thank you for joining us. The former president. And that brings you to the facebook and twitter question of the day, will the brexit vote on june 23rd impact the feds Interest Rate decision the week before . Theyve got a key meeting june 14th and 15th. We got three choices here. A little nuance. Yes, it will impact them and theyll wait and see, no, it will not impact them and theyll go ahead and hike. Or, yes, it will impact them and theyll go ahead and hike way. Its a nuance question but its clearly playing into the debate because all of the regional president s are talking about it. Most of them are saying, yes, it will impact them. I like that you snuck in a third nuance option there. The question is do they move or not . Its twopart. I like that. Thank you. Coming up, the tsa replacing the head of security, this is a big deal as lines at airports get longer ahead of the summer rush. Stay tuned a political story ahead. Youre watching cnbc, first in business worldwide. Ding, flies, meow febreze air effects heavy duty has up to. Two times the odoreliminating power to. Remove odors youve done noseblind to [inhales] mmm. Use febreze air effects, till its fresh and try febreze small spaces. To continuously eliminate up to two times the odors. For 30 days febreze small spaces and air effects, two more ways. [inhale exhale mnemonic] to breathe happy. Plumping surface cells for a dramatic transformation without the need for fillers. Your concert tee might show your age. Your skin never will. Olay regenerist, olay. Ageless. And try the microsculpting cream you love now with lightweight spf 30. Welcome back to Worldwide Exchange. The tsa replacing its head of security, nbcs tracie potts joins us from washington with that story which is increasingly becoming a big deal for politicians on capitol hill, tracie. Especially because the tsa is under fire of late, these long lines that weve seen at major airports. And now the House Oversight committee here is reporting that the head of security for the tsa has been removed. Apparently, reassigned. Reassigned to what, we dont know. But according to a memo from the tsa administrator who is now an acting replacement, someone who has a lot of experience at a couple of big airports, jfk, l. A. X. , also new leadership at ohare where we repeatedly saw the long lines and the incident command center. But back to kelly hogan for the moment, the security chief who has been replaced, hogan drew 90,000 in bonuses while the tsa was under fire for mismanagement for missing things like explosives and fire arms going through tests in the Security Check points. Now, it looks like theyre looking for someone knew to head up security for the agency thats supposed to keep us all safe as we get on the airplanes. What can you tell us about governor mcauliffe and his connection with the clintons. How serious is this . Yes, this is interesting. Virginias governor is under investigation by the fbi according to sources confirming to nbc, theyre looking into possible, possible, Illegal Campaign contributionings to the governors 2013 campaign. His service said they have been been contacted by this. Theyre saying by any contributions there was nothing illegal done. If contacted the governor will cooperate. The crux of this seems to be a Chinese Business that contributed. And the law prevents foreigners from contributing to u. S. Campaigns. But this persons Spokesman Says hes also a u. S. Resident which would allow that, but thats the crux of the investigation. But the key here when it comes to politics, mcauliffe is a very close ally of Hillary Clinton. Was on the board of the clinton global initiative. Theyre looking at crossover in the campaign contributions. Tracie, one other political source to focus on, donald trudtrump has picked up another big supporter, woody johnson. Johnson has raised money for john mccain, mitt romney and george w. Bush. Trump and johnson had a contentious relationship. In january, trump mocked the team and on twitter he said if the finance chairman would have been with him he would have been some the playoffs at least. I think ill be supporting the jets. The jets . Ill decide. The top three stories plus the three leading executives in europe, what theyre saying about brexit. Its more than a network and the cloud. Its reliable uptime. And multilayered security. Its how you stay connected to each other and to your customers. With centurylink you get advanced technology solutions, including an industry leading broadband network, and cloud and hosting services all with dedicated, responsive support. With centurylink as your trusted technology partner, youre free to focus on growing your business. Centurylink. Your link to whats next. Shoshow me more like this. E. Show me previously watched. Whats recommended for me. X1 makes it easy to find what you love. Call or go online and switch to x1. Only with xfinity. Good morning. Odds of a brexit. Do Financial Firms think the uk will stay or go . And trying to make sense of a june rate hike speculation. And amazon drops all all of its price matching. Well tell you why. Its tuesday, may 24th, 2016. Youre watching Worldwide Exchange on cnbc. Good morning. Welcome back to Worldwide Exchange. On cnbc im sara eisen. Im wilfred frost. Good morning to you. Lets bring you up to speed on the markets. Wall street is set up looking similar to yesterday, in terms of modest gain for u. S. Equity. Dow futures up. Nasdaq up 13. And the possibly new fed hike in july. New home sales. And note yield 180 level. 184 pretty much flat. Keep an eye on that. With the data, if its better, could be a signal for the fed. Lets have a look at the market. Asia seeing a stronger earlier in trade. The nikkei is now down. The nikkei closed down by 1 . Hong kong eking out a slight gain. If we look at european trade. The banks, Insurance Companies have led sectors higher. Thats extended gains over the last hour or so. France at 1. 4 . Germany up 0. 9 . Announced in a survey, we saw Current Conditions increasing but expectations sliding. So a mixed bag of results there. And brexit was cited as one of the reasons why confidence is not as high as it might be. As for the Broader Market picture, the stronger dollar is really starting to show itself and become a key theme after four weeks of gains for the u. S. Dollar strengthening again this morning. That the put something pressure on commodities. Wfi crude off fractionally, down 3, it . And brent the National Mark sitting at 48 a barrel. Its down 0. 5 . And nat gas is gaining. Stronger Japanese Dollar against the yen and the euro, the euro has been weakening a bit. The dollar has been strengthening. And that has spooked investors in stockings and in commodities lately. Well see if those gains continue. And the magnitude of the gains which really seems to be a theme as well. Usually, gold goes on the flip side of the u. S. Dollar. Its been understand pressure lately as the fed bets ramp up for the summer. It continues to sell off this morning. Down 8. 60. Fed speak once again holding the markets attention. Latest, philadelphias fed president Patrick Harker joins that june hike is appropriate until data weakens. Harker is not a voting fmoc member this year. The focus will be on comments coming from janet yellen on friday. Yes, at harvard. Big banking conference underway. Financial meeting in madrid. The Brexit Debate is certainly front and center. Our jeff cutmore joins us live from the gathering. Good morning, geoff. Good morning to you. Low European Growth and a fear of summer rate hike from the fed are not far away from every conversation taking place here. It is front and center, that near term risk of brexit that is focusing minds here at the financial forum. Lets take a look at comments here. Im going to start with the chairman of zurich insurance. This is what he had to say about the risks they are facing. Its very difficult to predict whats going to happen next year. The political and financial uncertainties at this point in time, especially the first three or four months of this year were indeed exceptionally high. Reporter well, ing has had a tough start to their year. This is one bank. A dutch bank, that had a very difficult financial crisis. And theyve trumped through that and they are starting to show good growth. But the challenge near term, of course, is the brexit story. I just want to play you a little bite here from ralph cammers, he is the ceo of the business. So, what we are seeing in the First Quarter, certainly, because of all of the uncertainties, that clients were a little cautious as to whether to go out and do their business. And hatch their business. Although we have seen some of them coming back in march and april already. Having said that, we have a brexit discussion coming up. And the relevant of europe as well. Depending on where brexit is going actually the discussions around and the elections in some of the other countries as well. If brexit does not happen, the deal that the british have with the eu may actually set a precedent for all of to us start negotiating. So its here to stay for quite a while. Also for the second quarter, i do expect uncertainty to continue. And part of the reason why there are very real challenges for many of these banks is that they have large operations based in london. And theyve got to work out what to do with those operations in the event the uk votes to leave the eu. Ubs has over 5,500 employees. When i spoke to the chairman of the board, that was one of my questions do they have a plan in place, come june 24th, if the uk decides to leave the eu. This is what he had to say. The real important thing for decisions in finance about how our presence in london will be is all about how will the negotiations, if this were to happen, what is going to be the traction that the uk government is going to have with its European Partners in largely preserving the status quo in Market Action and all of these things. Reporter this is already a sector in europe that is struggling. And without stronger growth camps in europe its hard to see very much upside in the second half of the year for these businesses, particularly, as they feel that many clientses have put their Investment Decisions this year, at least in the first half of the year, on hold. As they wait to see how this brexit story shapes up. Back to you, guys. Geoff, thank you very much. Ever great to see you. We asked on facebook and twitter will the brexit vote on june 23rd affect the rate hike decision. So far, the majority saying yes, it will impact and well wait and see. But we did add other options like no, it wont impact and the fed goes. Its confusing. Its not confusing. People are into it. Its nuanced and its accurate. I challenge you to a twitter question tomorrow. Im going fourpart. Do continue to get involved on our twitter question. I apologize if its a little confusing for everyone this morning. Right. Moving on, authorities in singapore are calling it the worst case of gross misconduct theyve ever seen in the financial sector. Theyve ordered bsi, a Swiss Private Bank to shut down operations for breaching money laund laundrying operations. The fund has been at the center of Corruption Scandal with charges that the Prime Minister personally gained from. Murky transactions. Several countries including the u. U. S. Are also investigating the matter. This is a big story another relations. In other related banking news, swift is trying to uninfluenciunplug gaps in its security. It will unveil new measures at a conference in brussels. Those measures are expected to combrub. Adele may have scored one of the Biggest Record deals ever. The singer reportedly signed 130 million deal with sony music giving them the rights to release her future album. The deal was apparently struck before christmas and theyve kept it it quiet until now. And before that she was with an independent uk label for the past few albums. The previous womens record for an album, whitney houston, 100 million bucks, adele just beat it. Do you think shell stick with labeling albums . Probably. How many years do we have to wait for the next one is the next one. Im sure sony will be pushing her to get one out. Amazon is quietly changing its policy earlier this month. Amazon aloud customers to request a refund if the price of a purchased item dropped within seven days dropped within seven days. But under the new policy, amazon will issue a refund if it lowers the price of a tv within 30 days of a purchase. Theyre also matching prices of select competitors. The streaming wars continue. Starting in september, netflix will be the exclusive u. S. Paid tv home for all disney movies. This includes titles from marvel, pixar and lucas films. Netflix blocks amazon and prime and hulu from disney hits. I think its pretty big. Its not original like house of cards that is the only place you can get them exclusive. Thats a big coupe for netflix. Absolutely. This gives viewers of netflix an early shot. Xmen character investigation taken over snapchat. The site teamed up. With 20th century fox for the First Complete takeover of up snapchat lenses to promote the studios latest film Xmen Apocalypse which opens on friday. The puppy and the flower lenses will be gone, and theyll be replaced. The xmen buyup comes at no small cost for 20th century fox. Sponsoring a lens can cost anywhere from 450 million. To 750 million. Are you into xmen . Yeah. Im not. But i will use the lens. A little bit of wilfreding. A previously halloween costume. Yes. Were wishing happy birthday to patti labelle. She sold hits like lady marmalade. Well be back if two minutes. Fallujah argonne khe sanh midway dak to normandy medina ridge the chosin reservoir these are places history will never forget but more important are the faces we will always remember. Cathys gotten used to thee sme. In her kitchen rbage. R. Yup, shes gone noseblind. She thinks it smells fine, but her guests smell this. Ding, flies, meow febreze air effects heavy duty has up to. Two times the odoreliminating power to. Remove odors youve done noseblind to [inhales] mmm. Use febreze air effects, till its fresh and try febreze small spaces. To continuously eliminate up to two times the odors. For 30 days febreze small spaces and air effects, two more ways. [inhale exhale mnemonic] to breathe happy. Welcome back to Worldwide Exchange. To todays must reads. The stories catching our attention. The New York Times an interesting take on john kerry, john mccain and bob cane. Were talking about the secretary of state, and john mccain, and bob kerrey, looking back on vietnam. Heres say quote for you a few lessons from the vietnam war. A fourth and final lesson of the vietnam conflict is playing out before our eyes that with sufficient effort and will seemingly unbridgeable differences can be reconciled. The fact that mr. Obama is the third consecutive american president to visit vietnam is proof that old enemies can become new partners. Just an historic look on the progress weve made as the president continues the trip with the arms embargo and various gestures. Perhaps the greatest example will be partners. I thought you said about going to vietnam on my honeymoon next week. That, too. On the note of europe, my must read is in the telegraph. Former british secretary William Hague writing in relation to in part the upcoming brexit. But on a topic thats very relevant here in the u. S. He says trade deals are the worlds best hope of avoiding the new recession. He said when americans, british, germans start opposing it, free trade is in real trouble. Trade is becoming the scapegoat for all businesses, economies, blamed for poor business practices. He mentions ttp. And highlights the original arguments for free trade in a very clear way. And i sometimes pause to think when we look at the election here its not highlighted more often. An amazing amount of traction. That sanders and trump get in terms of attacking trade. You never see a clear argument from the benefits of it. Its sort of strange that president obama is in asia promoting ttp, Transpacific Partnership when none of the president ial candidates including Hillary Clinton are backing it. And members of his own party, democrats have come out against it. Manufacturing has hit particularly hard in this country. Were approaching the top of the hour. That means the team is getting ready for squawk box. Joe kernin joins us. Good morning. Kudos to sara, you mentioned trump and sanders not being for free trade. And Hillary Clinton is against ttp now. Yeah. She used to be for it. And that is the poor president is almost alone. He doesnt have if theres any chance for ttp, its not coming from his party. Might be abe to corral enough support on the republican side of things to do it. Its certainly not coming from his party from either sanders or Hillary Clinton. But its become just a populist issue. Yes. I hear afraid of trump, hes against free trade. Its hello you know, the other you dont have a candidate. You dont have a free trade candidate. Im not afraid of anybody, joe. Im afraid of everything. I do believe in the arguments that adam smith makes in the wealth of nations and free trade is definitely a good thing. It is, near term, theres dislocation, but its easy to say its going to be, you know, to people that are displaced and lose their jobs, its like, you know, take one for the gipper, sooner or later its going to be good for everyone else. Just suck it up. That starts to ring hallow, pal. You can understand the sentiment. But when labor costs 2 an hour in some places and it cost what is its going to cost in this country now, its just hard. And maybe there are better negotiating tactics to use. No, i agree. Listen, i think longterm arguments are clear. I can see the sentiment. Whats upsetting where because it becomes a populist issue, politicians change their tune for the rhetoric because its simply something they wouldnt vote on. Geez. Just watching a lot of things in politics, as were finding out now, its something to behold. Its definitely something to behold. We have sam zell on again. The bulls again had trouble maintaining that market, four or five weeks of negative activity. I think well wait forever. Everybody is worried about a quarter point increase. Sam zell will be here today. Hes not a person that thinks the that the stock market is cheap by any stretch. Payoff, hes been great at selling. Usually real cars. I can remember putting my clients in investments when i was a stock broker in 1984 when he was big in itel railcars. Well have him for two hours to talk about all kinds of different assets. But the stock market is not one of his favorites right now. Joe great stuff. We look forward to that, squawk box in ten minutes. When we come back here, the fed agens joe just mentioned. Whats likely to drive the trade today . Well talk to Boris Schlossberg next. Welcome back to Worldwide Exchange. Joining us to talk about the wall street setup, Boris Schlossberg managing director and cnbc contributor. Boris, glad to have you. The dollar is the story for stocks, bonds, commodity its, is that right right, is the dollar leading the charge right now . Dollar is leading the charge. If mc sentiment communicated very hard that the fed wants to move in june. All of that has been corroborated not just by the minutes bus that they want to move towards normalization in june. The shift in the dollar has been pretty significant. Its going to have fallout effects in my opinion. Boris, why hasnt been more fallout effect information europe . Or is it responding to data . You know, its interesting, the euro has gotten weaker in the currency Market Division but theres a response the euro below 112 as we speak. So there has been an impact there. As far as equities theyre celebrating because going to make them more competitive because the reevaluation of the dollar is going to make the european stocks more valuable. To me, it doesnt seem that stocks can make up their mind do they want a strong dollar because it means the u. S. Economy is recovering and things are better and the fed is hiking rest rates as they should in a recovery . Or is it bad because profits are slashed . Yeah, lets get this straight. The u. S. Economy is not better. The fed is hiking rates because they need to save face. They have pretty much lost as much credibility as possible. They need to move now ahead of the general election cycle as you guys were talking about earlier. They dont want to move at labor day which is the kickoff for the general election. If theyre going to move it anymore this year, its june or july. But the rate is decelerating. Theres a tremendous amount of accelerating growth in the u. S. Economy. I think all of these factors, yes, are going to create a bump in the road for equities. I think equities are very vulnerable to a selloff in the summertime. I do think every rally is pretty much an opportunity to get short rather than buy the momentum. Boris do you pay the defensive sectors like utilities which have done well. And on the face of it should do badly if rates are going up. If youve got a negative year in the Company Economy that have you should be . I actually thing probably the better trades right now would be simply going to cash. Youre not assuming any risk in the equity market. I do think were overstretched very high in valuations. Profits are hit peak profit about a year ago. And higher rates are going to make it a little more difficult. All of these factors are aligning against equities at this point and i think the sale is the right trade. Another central bank that findings itself in a difficult position is the bank of japan. The bank of japan is the prime example why the fed is eager to move rates up. The bank of japan has sort of lost all credibility. They wept to negative ratings and they got the opposite impact. It tends to be in a complete morass, i think the yen has weakened. Weve seen the end of the yen strength. Weve got to leave there, boris. For some opinions on central bank. Thats it for Worldwide Exchange. Squawk box is next. By dentis, with a round brush head. Go pro with oralb. Oralbs rounded brush head cups your teeth to break up plaque and rotates to sweep it away. And oralb delivers a clinically proven superior clean versus sonicare diamondclean. My mouth feels super clean oralb. Know youre getting a superior clean. Im never going back to a manual brush. No, youre not yogonna watch it tch it we cant let you download on the goooooo youll just have to miss it yeah, youll just have to miss it we cant let you download. Uh, no thanks. I have x1 from xfinity so. Dont fall for directv. Xfinity lets you download your shows from anywhere. I used to like that song. Good morning. Markets gaining ground today, again, did that yesterday. But one of these disappointing selloffs into the close. Almost closing basically. And this morning, u. S. Trading higher. Crude coming awe the lows of the session. Well talk strategy straight ahead. New this morning, snapchat is raising more money. Values the company at more than 22 billion. And the zika threat is rising as mosquito season approaches. Well tell you which insect repellents are top rated for deeping away that virus. And spreading those pests all around. Its tuesday, may 24th, 2016, and squawk box begins right now. Hot town summer if the city back of knew neck getting dirt and gritty doesnt seem to be a shadow in the city announcer live from new york where business never sleeps this is squawk box. Good morning, welcome to squawk box here on cnbc. Im becky quick along with joe kernin and andrew ross sorkin. We did see a selloff and things ended relatively flat. This is slight declines for averages. The futures are indicated higher with dow futures up by 58 points. S p up by 7, nasdaq up by 14. Overnight in asia, youll see that the nikkei was down by almost 1 . That was a decline of 155 points. Hang seng was slightly positive. Theng