Transcripts For CNBC Worldwide Exchange 20170123

World Wide Exchange on cnbc. And in today. Happy monday morning everybody. Lets check in on the Global Markets. Seeing a sell off in world equities future following a sell off in the dollar. Taking a pause. Wait and see what trump will do. Dow futures are down 21 points. Nasdaq futures are down 13. This after a volatile day on friday where stocks sold off as President Trump was speaking and the dow finishing higher by 100 points. Ibm as well contributing on friday overall. You can see right there, sarah, on the board is futures market that perhaps is taking a pause after a nine point rally in the dow. Theres some buying of treshries. And nothing extreme but a little bit of a risk all mode this morning. The busiest week so far. 100 Companies Reporting the s p 500 and the busiest day thursday. I want to say 39 Companies May be reporting thursday. Check out whats happening with european equities because were seeing weakness across the board in the major markets. The dax down half a percent. The cac in france off by about the same percentage. And the ftse 100 off and the ftsemib off. As for asia overnight, sell off in japan after the yen strengthened. Down 1. 3 . China closed higher by about 4 10th of a percent and hong kong finished just about flat. Copper higher on the session. And they gathered in vienna over the weekend and say opec and nonopec are off to a great start. They are Lower Oil Prices right now. Wti crude off and the last trade there. Ice brent crude, those futures off by about 25 cents. Off by half a percent as well. I mention the dollar. It is declining against some of the major currencies like the euro. 107. 28 and weaker against the yen, 113. 58. Interesting move on the yen. The dollar just sinking. I guess the trump comments during the inauguration, perhaps the speculations about trade wise. It has been a strong rally for stocks, up for the s p and the question now is we need see some specifics, policy behind the actual action. A lot of money has move under to stocks and theres a lot of optimism. We heard from policy makers on the economic front. Now we need to figure out how its all going to work. Quickly, lets show you gold because it has been on a stronger run. It has boosted gold for four weeks in a row. President trumps first 100 days in office kicking off. He will have talks soon with leaders of canada and mexico and begin renegotiating the nafta trade pact. That was a central promise of President Trumps campaign and hes scheduled to meet with teresa may this friday and disdecusa potential trade pact. 4 30 p. M. Eastern time the Senate Foreign relations will send a vote on President Trumps pick to lead the state department. Rex tillerson to the senate flor. John mccain and Lindsey Graham will be voting for the former exxon ceo. And the senate expected to vote on cia director nominee mike pompeo. That was delayed after senator ron widen, a member of the Intelligence Committee formally objected siting concerns about his positions on surveillance and other issues. Ethics lawyers plan to sue trump today over his business interests. It says hes in violation of the constitution because his businesses accept payment frumz Foreign Governments and he has not divested his interest in the trump organization. The nonprofit citizens for responsibility and ethics is behind the suit. And trump tower in new york and payments from Foreign Government owned broadcasters related to his show the apprentice. Apparently President Trump has no intention of releasing his tax returns according to Kellyanne Conway. Trump said he would make his tax returns public once the audit was completed. Conways comments came in response to a petition on the white house website which called for the president to release his return. This is likely to be met with skepticism after he made the promise he would do so and after continued conflict questions arising with business, relations with russia, you name it. And Kellyanne Conway saying they didnt care about his returns, they care about their own. I guarantee you anyone wondering about those conflicts are going to keep pressing the issue. Speaking of Kellyanne Conway, shes shedding light on the health care system. She says the Trump Administration may no longer enforce the individual mandate rule that forces americans to Carry Health Insurance or a penalty and reiterated a promise that no one would lose their coverage while a replacement is being. And after domestic flights were grounded for more than two hours last night because of a computer outage. United saying the issue was caused by technology that sends Text Messages to poilots in the cockpit. They were able to resolve the issue around 9 00 p. M. Eastern. More than ten customers may still experience delays. And yeah hew ahoo reportedl an sec probe into its two massive hacks on whether they should have reported it sooner. It will likely focuses on the 2014 data breach of more than half a million users. It has yet to explain why it waited so long to disclose the breach. Samsung says faulty batteries from two suppliers are to blame for the galaxy note fires. This after its monthlong investigation as to why the devices kept exploding. It wiped 5. 3 billion off of its profit. And the galaxy sweig8 will be delayed. And foxconn may be teaming up with apple in the u. S. The facility could cost about 7 billion and create between 30,000 to 50,000 new jobs. Turning to whats on the agenda. We mentioned its chalk full of economic and earnings report. Mario draghi will be speaking in italy and look for existing home sales and thursday, jobless claims and new home sales, friday durable goods and Consumer Sentiment and Fourth Quarter gdp. Nearly a fifth of the s p 500 will be reporting this week. Mcdonalds out before the opening bell, du pont, verizon, intel, microsoft and starbucks. What are you going to be looking for . Because so far a lot of the companies that have started to trickle out, a lot of them are mentioning Trump Administration uncertainties but also potential positives. Its the elgeephant in the rm and about the idea we talked about dollar weakness today but there has been a prevailing theme of Dollar Strength and companies always end up mentioning what happens with the dollar. Tle does cut into the sales. Landon dowdy here with what to expect when mcdonalds announces earnings and three different sizes of big macks but what else are you watch sng. Thats a big one. Looking for mcdonalds to report on revenue of 6 billion. The golden arches hasnt launched any blockbuster menu items in a while. Smaller and larger versions of the big mack but they still face a burger quality problem. So you want to listen to whether they plan to switch to fresh beef patties and french fries and labor. Mcdonalds faces a tight labor market and this could force franchisees to turn up prices. And the franchising goal. They recently announced a deal to sell 80 of its operations in china and seeking a bid for its stake in japan. Theyll want updates of those plans as they close in on becoming a 95 owned company. Franchiseowned. And that has perked up since the election. Stocks to watch today. Phillips lighting is promising to increase margins and sales this year. It is flopped in european trade. Kate spayed reportedly atracking interest coach and michael kors. Blo bloomberg says both coach and michael coors is speaking about the bid. Herballife condukted its own independent review and cooperating with the had secs investigation. Continued speculation. And actelion has been doing a phase three trial for patients suffering from different forms of a heart and lung ailment. Hugo barra leaving the High Tech Firm next month. He was poached from google and says hes head hadding back ing sillicon valley. Apple alleges qualcomm refuses to pay in rebaits after they were accused of an effort to maintain monopoly control over semiconductors. The first 100 days in office. Chief political analyst tell us some of the risk in the new administration. Stay tuned. World wide. Welcome back to world Wide Exchange. Lets get you up to speed on the market action. You can see red across the board but not as bad as it was a few moments ago. Equity futures down but not by much. The s p off by three or four points. And nasdaq down as well. Marginal losses on the heel oz of the gains we saw. And check out oil. Were seeing weakness in the two major mench mabench marks for o. Off by over 1 right now. 54. 95. Well call it a about a percent there as well. Venezuelas president naming a new Central Bank Head as the country tries to dig out from its economic crisis. A longtime law maker in the Ruling Socialist Party replacing nelson who ran the bank since 2009. A period marked by a frenzy of money printing which has led to a free fall in the currency. Estimated to have fallen 28 since the president took office in 2013. Big issue for a lot of the Consumer Companies that have seen their sales get cut by that currency slide. We mentioned the dollar is weakening pretty sharply as they await more policy clarification from president donald trump. Joining tuse gauge whats next is chief political analyst at citi in london. Good morning. Thanks. What are you hearing after this massive rally that weve had had for stocks post election thats basically been marching in place over it last few weeks . Whats next . I think that markets, as they often do, have got way ahead of the political process. Some of that trump good news is already priced in seems to have dawned on investors. And i mean, the reality is with any new administration, it takes months to fill appointments and there is always a period of real transition. I think it will be a while before we get much clarity. One of the big things were watching as well is whether or not there are dislocations in the market happening because of some of this get ahead of the political scene you just spoke of. Where do you see some of the relative opportunities happening . In the u. S. Or abroad in asia . Thats difficult for me to comment on in terms of specific sectors or industries but i think most of the optimism is felt in the u. S. I talked to Global Investors and europe is particularly concerned about the Foreign Policy and Security Policy implications and that coming on top of brexit uncertainty. It really weighs on the minds of Global Investors and sentiment. Tina, president elect well, actually then during campaign promised on his first day of office hes going to name china currency manipulate. I think today is his first day in office. He unsaid that. Did he . Clearly that u. S. China relationship has to be at the top of global worries. It certainly is. And the fact tat the u. S. china relationship has been although a frenemies relationship, pretty solid has arguably done a lot to defuse otherwise high levels of Political Risks. But he has road back from china as a currency manipulator and i was reminded with president obamas chief Economic Advisor that the last several u. S. President s have promised to name china a currency manipulator and not done so. I guess we can expect him to take some kind of action on china, just not that one. To me the headlines are coming out of europe. Le pens talking about how the brexit votes signaling her movement could have more. And i think it could. Especially if we continue to see as we saw a couple of weeks ago marie le pens in trump tower which gave European Commission officials and some National Leaders the sense that donald trump was actively seeking to undermine European Cohesion and encourage other pro referendum movements. Hes said breksxit is a great thing. But its extraordinary that we have a sense of an american president actively looking to undermine the European Union through encouraging other antiestablishment movements. Is he right . Is there a fear its going to work . Well, theres certainly a fear. For european investors, French Election had s are front and ce. We have germany as well. Trumps comments that the European Union was essentially a vehicle for germany did not go down very well. As i say the one european leader that seems to be seeing a political opportunity is teresa may whos very pleased to be the first foreign Leader Meeting with trump in the hopes of securing a bilateral u. S. u. K. Deal. Still to come, super bowl 51 all sorted out. Don was up all night watching. I was. And heres todays National Weather forecast. From the weather channel. Sgl good monday morning. Thunderstorms are finally moveing all the way south of florida. Well be wrapping up with a lot of gusty winds across the southeast and a potential noreasterer bringing pretty strong north easterly winds. In the west, the rain, the big rain continues to today. Got one more day of showers and potential thunderstorms on the west coast, including l. A. Where we had a tough weekend with flooding rain. And temperaturewise, overall, very mild across the country. Above average in places like chicago, new york and atlanta. In the 70s in south floridflori. Thats your coast to coast. ir f tut matt ir f ak ins, y par firth goventsand une 50d, celernso rer p ururntgs welcome back to world Wide Exchange. M. Night shyamalan with the movie split doubling forecasts. The psychological thriller which stars james mack voy as a man with multiple personalities was made with less than 10 million. Owned by nbc universal. In second place, the vin diesel action sequel xxx on an 85 million budget. To sports and the nfl playoffs. We now know which teams will be playing in super bowl 51 in houston in two weeks. The patriots and the falcons. 3617, brady threw three touchdown passes in the victory and the patriots will be playing the super bowl for the ninth time. The most for any team in nfl history. They have won four times. How about atlanta . This is going to be the first. So matt ryan was the only quarterback that had not won a super bowl and now hes going to be playing in that big game. Anyway, the patriots will face off against atlanta who made it to their second super bowl in team history. They beat Aaron Rodgers and green bay. He threw for nearly 400 yards and four touchdowns. It was the final game that georgia dome. They will move into a new 1 1. 5 billion new stadium next year. And the patriots are favorites. A round up of Global Markets, plus well head to vienna where Oil Ministers are talking about production, moving the markets. Stay tuned. Good morning. The first 100 days. Global markets want to know what President Trump will be delivering. Early trade straight ahead. Oil shock. Oil ministers meet in vienna. Thats coming up. And why twrit twitter ceo is apologizing for accidently making people follow the potus account. Lets start living dangerously good morning and welcome back to world Wide Exchange. Great to be here, sarah. Good morning. Lets check on the Global Markets because we see at least right across the board for it u. S. Markets. We are off by maybe four points on the s p 500. The dow opened lower by about 26 points and the nasdaq off by about 11. The biggest percentage loser among the three big. And different story in europe because the losses are bigger than in the United States. If you look at the german dax, same percentage loss for the cac in france. And inftse 100 off by about 1 10 of a percent as well. And in asia, the big story here, sarah and we talk about this last half hour is the nikkei in japan off by over a percent. Stronger yen, weaker u. S. Dollar. And the shanghai composite up. As for the Broader Market picture, some buying of treasuries as stocks sell off, pushing yields lower, 246 is your yield on your tenure. And your dollar is weaker not just against the yen but against the euro. Euro back above 107. 38. Really moving against it yen. 1 move lower. Thats accelerated over the last half hour. Even the pound is stronger against the dollar today. 124. 59. And on the flip side, its been a ben fishiary up about 3 4s of 1 this morning. The weaker dollar really setting the tone. The trade has been strong dollar, strong stocks. Thats the trump rally and the trade. Thats reversed over the last few weeks. And a few down weeks for the u. S. Dollar as we ponder whats next. Bank of america mayoral lyneryl saying theres some concerns about trade wars, especially about the u. S. china relationship and what comes next. Trump did talk down the dollar. It was confusing. It was. And Energy Ministers gathered in vienna over this weekend. They say opec and nonopec countries are off to a strong start, lowering output and hadley gamble from vienna with more. I got to say the sense is these guys always end up cheating but there is a little solidarity in terms of the overall picture for oil production, right . Reporter oh, absolutely. And the vibes were all pretty positive. I had a chance to catch up with Russias Energy administer and hes surprised their aehead of schedule. They could reach as much as 1. 7 Million Barrels a day by the end of this month and i took the chance to ask him about the secretary of state nominee, Rex Tillerson. Translator Rex Tillerson a very Famous Energy specialist and im certain his actions will be positive as a whole for the industry. Reporter so essentially youre hearing Russias Energy minister weighing in and the Foreign Ministry expected to vote on that later today and we heard comments from sergey, that countrys foreign minister and essentially saying that putin agrees with most of President Trumps foreign policies so far. Howhere are the uncertaintie . Reporter well, its interesting you mention this because basically what we were told is in russias area of interest, theyre Going Forward with things he more quickly than they anticipated. But in terms of data, we didnt hear that much in terms of specifics. They say thats because they havent gathered all of that data as of yet themselves. I expect well hear more about that at the same time. Thank ryou so much with the latest on the oil picture globally. Lets get back to the Broader Markets and discuss how some of President Trumps policies could impact. And portfolio manager. You heard hadley. She spoke about the oil picture right now. Oil does seem to be a focus for some investors. It adds to the recipe of where Global Growth will be going or not going. We think Global Growth will be decelerating, hence in the short run were somewhat constructive on oil for the time being and in the intermediate to long term, were pretty much bearish on oil. We think theres going to be additional production in the u. S. Will come online and that will start the demand curve will moderate a bit and youll start to see lower lows. Ever since trump won, it has been decupeling from the price or where we were this time last year. Where are we in the trump trade . I do believe that to be the case. I believe youre going to have to see tax breaks come through from washington as well as Capital Improvement plan from washington d. C. We dont think thats going to happen until the later half of this year. But none tthelesnonetheless, va7 times with growth rates where they are on global basis, we would be much more balanced in the portfolio. Balance is one thing but theres always going to be relative out performers and underperformers. Are you seeing places that could be better in this count year or administration than others . So, on a sector basis in the United States, youve seen an underperformance from staples, as well as health care. We would start to actually allocate assets there, dollars there. When it comes to on the global scale, we will quite underweight the developed side of the market. We would actually increase our holdings there. Slightly. But nonetheless, again, Political Risk in 2017 is going to be quite substantial. Thats going to put a lid on valuations on multiple expansions in the United States and i believe across the globe. But it did the opposite last year. The breks squt Trump Victory were both buying opportunities. Well, i think the growth you really need to see growth start to kick in to confirm all of that valuation adjustment on the up side and we believe youre not going to get this type of surge with global trade or fiscal stimulus here in the United States as well as overseas. Hence had again that we would be a little more cautious. Youve ehad this huge move withn the market. I think the hope has run out of steam but i believe you have to see action, earnings lift higher. Xthe tax break to justify valuations. Were not overly bearish. We think our longterm forecasted return for the United States is roughly 6 overall over the next several years. There has been a lot of focus with the credit markets, treasury market. We keep mentioning the treasury yield bouncing up and down. Is there anything telling you something were not seeing right now in the overall picture . Would you be attracted to some parts of the debt market . We like high yield. We dont think the 10 year is going to run away from us. We like Investment Grade bonds. We believe in 2017 the fed will raise about two to three times over the next 12 to 18 months and we dont think youre going to get the credit dislocation. What do you do with the banks . Theyve led the past few weeks but led the rally post election. If youre expecting more fed rate hikes r you over buying . We over weighed financials in 2016. We now went back to a neutral in the financial center. We believe over the long run, because of deregulation and that means net interest margins will improve; that you will get a longer term earning streak so we wouldnt be bearish on the financials. Perhaps in the short term take somebody at the table. Over at Washington Crossing advisors. Time for top trending stories. The womens march dominating stories after hundreds of thousands ral edaround the world. Drawing celebrities and politicians, ashley jud, america fer era with their speeches. But it was the number of people and the crowds that really stole the spotlight. Some interesting pictures just in new york city with the marches and what not. So certainly a big focus. Also twitter ceo apologizing for accidently making users follow the potus account. They were somehow automatically following trump even when they had had unfollowed it. And on saturday, one of the tweets reading we believe this affected about 560,000 people. This was a mistake. It wasnt right and we own it and we apologize. No excuses. Interesting that the preferred platform for our president now, not president elect, is twitter and this is happening. This is New Territory for twitter. They have to figure out how to switch it. The new England Patriots head to super bowl 51 after beating the steelers. But everyone is talking about tom bradys coat. It was a cool 40 degrees so he was tieing to keep warm on the sidelines. He dawned a coat that would have possibly fit the michelin man. Inspiring a few jokes about the deflategate scandal. These have been around, maybe not recently. But in the 60s and 70s, they were wearing jackets like that. I thought they were tough. They are but it has to fit over their pads. One says hes so scarred from deflategate that hes even inflating his jacket. Especially for a guy whos headed to his ninth super bowl snp. Nine rings, he gets this one. Coming up, the must reads ahead and as we head to break, look at the European Equity picture at this hour. Youre watching cnbc first in Business World wide. Rsobobicultc welcome back to world Wide Exchange. Time for must read stories. My pick in the Washington Post titled whats next after the womens march . Hundreds of thousands of womenen and men in new york city all across it country. And big cities especially. Columnist writing the tea partys protest after president obamas inauguration birthed the National Movement that swept both candidates the to the 2010 midterm elections. Many credit to the antiestablishment sentiment for setting the stage for trump. His term starts off facing a much larger opposition and as many signs read, opposition is fruitful. Saying the best hope really from this can be Something Like the tea party, which did start as an opposition march and turned into a real political movement. It remains to be seen whether well see this. It wasnt a unified message. But as this oped columnist wrote and resistance is fruitful. There you go. Anyway, my pick is also politically related in the u. S. A. Today titled dont panic about the alternative facts. Now that President Trump has taken the oath of office, the impact of fake news and alternative outlets will be revealed as vastly over blown. Traditional media will still control the National Conversation and policy makers will have to build around what Mainstream Media reports. It will dominate the headlines as they did just before the inauguration. Those of fake news sites will not and we should say this. We are in the Mainstream Media world. Its important to know that in the news world, facts do matter sometimes. Always. Always matter. So alternative facts or not. At least in some ways so alternative facts is a reference to Kellyanne Conways conversation talking about sean spicers first press conference. The crowds. He presented alternative facts and that of course is a meme. On twitterer. The preferred platform for the president. Were approaching the top of the hour which means the team is getting ready for squawkbox. Not as pretty as davos, becky. Its good to be back in the warm. Im happy to be back and warm again. In the heat of new york city. Enjoying the glow right now. Were going to look at whats going on with wall streets reaction to the donald Trump Administration. We have our first guest is bob doll. Hes going to be joining us to talk about how wall street what wall street is hoping to see, what they expect to see and how to game it all. And from 7 00 to 9 00, our guest is the former cea chairman, the former counsel of Economic Advisors chairman talking to us about what we could expect to see, what he hopes to see when it comes to tax policy and trade. And we have a very special guest from 8 00 to 8 30 and that is richard rebrapratt. He has been tapped to be in charge of the infrastructure committee. Possibly a trillion dollars into inf infrastructu infrastructure. What theyll expect to see and what kind of projects we can expect to see put into action. Sounds good. I know thats something investors are watching closely. And i cant say it enough, its so good to have you back. Sdwrirts e its so good to be back and i love the star trek. Resistance is few tile, fru tile. Every other f word. And the Global Markets in wait and see mode. Were going to see how investors need to think about the first 100 days. He clofeela clouthrirl ee. U fiream sines t. Thte ee. U welcome back to world Wide Exchange. U. S. Equity futures are lower but theyve really improved over the last half hour. S p futures down four. Nasdaq down 11. This after two weeks of decline for the dow and s p. Even though we had a rally to finish the day friday. Here brad mcmillen. Chief Investment Officer at brad mcmillen. With one eye on washington and the other on earnings this week what will you be looking for in terms of catalyst to take this market higher or signal a correction is come sng. I think its all about earnings at this point. Here at common wealth, were very aware of the political situation. What didnt happen was a sell off at inauguration. We need to focus on the fundamentals because the politics is not news anymore to some extent. Brad, a quick follow up there. If politics isnt the news, do you expect a lot of these ceo, and what nots to be making comments about the current political environment because theyve already weighed in a lot going into the inauguration. I think at this point most ceos are going to try to keep their heads down. President trump has demonstrated an ability and willingness to call out companies. Right now i think they want to focus on the fundamentals. The ekaconomy is improving. And i think companies are going to want to focus on what it means for their business rather than getting into the political sphere . What sort of themes and points will you be looking for tomorrow in full . A are the financials going to continue to do well . In fact, thus far and its early days yet, weve seen more beating by earnings. We could see Earnings Growth double what was expected. So is that actually going to happen . One of the big themes from last year that lost steam was that theyre looking for divdnd paying stocks, the more defensive ones in nature. As you look across your broker networks, what do investors want to see . Are they still asking questions about whether they should invest in dividend stock snz. I think the change has been from safety to growth. Theres still a lot of fear out there. Theyre more and more saying why arent i Getting Better returns . You can see this at a macro level. When you see Consumer Confidence rise as it it has done significantly, you see valuation multiples expand and thats one of the key things for the Market Performance this year. What are you expecting from technology in particular . Were going to get a lot of earnings like alibaba and netflix. This is a group that has had had mixed portions past the election. I think youre absolutely right. But i think the split is not technology per se but hardware verses soft ware. A lot of the Hardware Companies are very exposed in thar Manufacturing Base and supply chain. Netflix, for example are going to be less exposed to that. Its going to be a trade story as much as a Technology Story with companies exposed significantly suffering relatively speaking. Domestic u. S. Against the rest of the world. Should investors be looking outside our borders, perhaps in other emerging type markets . Over the next year i think the u. S. Will probably continue to out perform but over the next four or five i think you have to be in europe because right now its relatively cheap and starting to grow faster. Emerging markets same story. I think the u. S. Is going to continue to do well in the short term. Thank you for joining us this morning. Chief Investment Officer at commonwealth financial network. I want to see whats going to happen with the sales picture slowing perhaps maybe. Mcdonalds. And im watching the dollar. Its weakening sharply. That sets the tone to follow the dollar. Well wait for comments from mcdonalds and others out of the dollar. Squawkbox co squawkbox coming next from new york city. Good morning. Politics and your money. The Global Markets prepare for lots of action in President Trumps first week. United Airlines Operations back to normal after domestic flights were grounded for more than two hours. Plus super bowl ready had. The falcons and the patriots and both look like they deserve to be there. Its monday, january 23rd, 2017, and squawkbox begins right now. Live from new york where business never sleeps, this is squawk box. Good morning everybody. Welcome to squawk box live from the Nasdaq Market size. And our guest host for the hour is bob doll. Hes chief equity strategist and good to see you. Were going to talk a lot about whats been happening with the markets and what to expect this week. Look at the u. S. Equity futures for the hour. Dow futures down by 27 points and closed up by 95 points on friday, breaking a fiveday losing streak. You can see the s p 500 is down by about 4 a1 2 points. And in japan at least, the nikkei was down