Transcripts For CNBC Worldwide Exchange 20170616

Happy friday welcome to Worldwide Exchange on cnbc. Im sara eisen im mike santoli in for wilfred frost. Before we get to the markets, breaking news to tell you about. The Russian Military says it may have killed the leader of isis in an air strike in syria. The Russian Defense minister says he may have been killed in an air strike late last month just outside of raqqah the u. S. Is not confirming these reports. Well continue to follow developments on this breaking story. Now we can check on the Global Markets. After another selloff on wall street, tech stocks moved lower yesterday as has been the case, down about a half percent. The overall market was down less than that. Things are looking up this morning in the futures market. Dow futures up 40 points s p up 5 nasdaq up six. Lets show you the tech stocks in the premarket thats been such a driver of the action lately with the nas dak starting to underperform it looks like theyre firmer as for the tenyear treasury note yield, slightly higher yields on what was considered a hawkish Federal Reserve. 217 is the yield its not like we broke out of any range. We just didnt go back down further. Exactly that was on the view that the Federal Reserve raised Interest Rates the third time since december kept up its tone that it will continue to raise rates. Start to taper down the Balance Sheet or shrink the Balance Sheet and saw evidence that inflation is picking up. Not sure if the bond market or the rest of the market sees that tried to write off some of the shortterm inflation turning to asia bank of japan standing pat at its latest Monetary Policy meeting. The central bank leaving rates unchanged there, while offering a positive view of the economy the markets there. The nikkei up about a half percent on that news hang seng slightly firmer. Shanghai is down about a third of a percent the nikkei there, 19, 943. In europe, the imf agreeing to another greek bailout worth 8. 5 billion euros. Grea greeces stock index hitting the highest numbers in two years on the news europe mostly to the upside. German dax up about 0. 4 ftse 100 was weaker earlier, now up 0. 25 across the board a firmer opening in europe. The weakness in commodities has been a big story lets show you the Broader Market picture it looks firmer now this morning. Wti crude is up more than half a percent. Still below 45 a barrel 44. 74. Strength in brent as well up a percent, 47. 36 nat gas higher by a half percent. As for the u. S. Dollar, firmed up this week on the back of the hawkish fed. Lets show you the action there. Its a bit weaker against the euro it is stronger against the yen that Interest Rate differential came into sharp focus when the fed maintained its hawkish stance and the bank of japan kept the rates unchanged and said it is not in a rush to exit from the extraordinary monetary stimulus as for gold prices they have been crushed lately on the back of the commodities slide things are starting to reverse this morning lets discuss the market moves joining us on the cnbc news line, contributor, founder of the gartman letter, dennis gartman. Is this normal volatility after a strong run up in stocks or are you reading into the commodity weakness as something more serious . Clearly theres a continued deflationary trend going on in the Commodity Markets that one cannot help but overlook if you look at the broad market indices, the commodity market is down almost 10 for the year to date predominantly that can be attributed to the weakness in the crude oil market which may well continue. Nat gas continues to be Weak Energy Prices on balance, throw coal on top of that, you have a problem there. At least the grains have stopped going down you talked about the fact that gold suffered its worst day thus far this year. It may have in the last 24 hours. If you look at where gold has been over the course of the last six, seven, eight months, its quietly moving higher. We are up for the year in dollar terms, up for the year in yen denominated terms, and up for the year in euro denominated terms. Though the Commodity Markets have been deflationary, gold has been quietly, slowly, difficultly higher how does the fed stance fit into all these moves here . You did see the dollar firming up after the meeting are we to take the fed now at its word that it is resolute about trying to get on with things in tightening mode . I think you have to if you dont, you have to believe the fed is lying one cant do that. I think on balance we have to say the fed has told us they are going to err on the side of quietly tighter monetary policies maybe not as aggressively tighter as some wish to see, but on balance it will be another 25, 50 basis points higher before the year end. Compare that to what the bank of japan decided to do overnight, which they decided to do nothing. Continue their experiment with quaubt quantityti quauntitative easing well be running off our assets while the federal bank is increasing the purchase of djbs. Dennis gartman, thank you. President trump is headed to miami today where he is expected to roll out a new policy towards cuba the president will likely reinstate travel restrictions to the island nation cl a Senior Administration official says the policy change aims to steer money away from the cuban government and towards the cuban people President Trump has been critical of warming u. S. cuba relations. On the campaign trail he said obamas lifting of restrictions on cuba is a bad deal. Cruise lines and Hotel Operators were banking on this warming of relations to open up a new market its not clear beyond some political constituencies who this move is serving and what exactly how big of a move it will be in other washington news, Vice President mike pence hired an outside lawyer to represent him into alleged ties betwe s b the russians and the Trump Campaign we are following a developing story on congressman steve scalise. He remains in Critical Condition after being shot on wednesday. Though he has improved scalise, the House Majority whip underwent a second surgery yesterday related to his internal injuries and a broken leg. His doctor says he will require additional operations and will be in the hospital for some time last night scalises republican and democratic colleagues did play their annual congressional baseball game. Players on both teams wore lsu hats in honor of scalise President Trump recorded a video message that played before the game there was a lot of bipartisanship in that game. Pelosi and ryan did a joint interview on cnn a lot of good photoopes the Democratic Team won but gave the trophy to the republicans. A nice gesture. The question is does that translate into the halls of capitol hill wide open question weve seen temporary thaws before yeah. Turning to todays agendage pair of economic reports may Housing Starts out at 8 30 a. M. Eastern theyre forecast to rise more than 3 after falling in april Building Permits expected to remain largely unchanged at 10 00 a. M. , the first report on june Consumer Sentiment also today well hear from dallas fed president rob kaplan when he speaks later this afternoon. To some Corporate News and a big stock mover today. Shares of Booz Allen Hamilton plunging la shares of Booz Allen Hamilton down sharply after the Government Services firm announced it is under criminal and civil investigation for Cost Accounting and charging practices. 90 of booz allens ref knvenue comes from the u. S. Government, the pentagon and the irs booz allens contractors sometimes have access to highly sensitive intelligence information and classified documents. The companys former contractor is edward snowden, who has been accused of stealing classified information from the National Security agency. The company defending itself yesterday saying to date our internal and external audit processes have not identified any significant deficiencies or material weaknesses or identified any significant erroneous cost charging. Booz allen added it is cooperating with the government and expects to bring them to an appropriate solution look at the stock. Shares of booz allen down about 10 this morning in early trading. Back over to you thanks. Theres been a lotof headline risks. After the snowden breach there was another one in 2016 with the nsa. The leaks so, kind of pointing out how intertwined things are with the government keep an eye on shares of snap the stock sinking to its ipo price of 17 a share the drop highlighting i investor fears over the company as competition from facebook heats up also expected to have the lockup expiration, more shareson the market this summer dupont and dow chemicals merger winning u. S. Anti trust approval finally, but that approval is under the condition that the company sell certain Crop Protection products and other assets Johnson Johnson completing its acquisition of actelion. The total price was 30 billion in cash or 280 a share a quiet 30 billion merger absolutely. Its true. Shares of finisar are trading higher despite the company reporting disappointing Quarterly Earnings revenues missed forecasts and issued a perceived weaker guidance. Bhp appointing Ken Mackenzie as the new chairman. Mackenzie will take up his post in september at a time when the miner is being challenged by investors to revamp its structure and improve returns. Elliott management says it supports the move. Takata is preparing to file for bankruptcy the japanese air bag manufacturer is working towards a deal for financial backing from u. S. Auto partsmaker key Safety Systems keeping our eye on shares of nike after 3 slide yesterday. Stock taking a hit further on a downgrade from jpmorgan. This comes after the sneaker maker announced changes yesterday saying it will cut 1400 jobs, 2 of the work force, focusing on a few key styles and key markets. Think it was a reminder for investors that growth is slowing down earnings are set for two weeks people were looking forward to earnings as an inflection point. Saw this release as a sign they have more work to do this downgrade, i think wall street is cool to the stock even after the decline. At some point maybe sentiment gets negative. Still to come, a big fine that could be coming to google details coming up. And its new music friday. Were listening to Calvin Harriss new song featuring pharrell, ka pry atyernd big sean stay tuned, youre watching Worldwide Exchange on cnbc i have access to the oil markets and gold markets. Okay. Im plugged into equities trade confirmed and i have Global Access 24 7. Meaning i can do what i need to do, then i can focus on what i want to do. Visit learnfuturestoday. Com to see what adding futures can do for you. But weve got the get tdigital tools to help. Now with xfinitys my account, you can figure things out easily, so you wont even have to call us. Change your wifi password to something you can actually remember, instantly. Add that premium channel, and watch the show everyones talking about, tonight. And the bill you need to pay . Do it in seconds. Because we should fit into your life, not the other way around. Go to xfinity. Com myaccount welcome back lets get you up to speed on the market action. Equity futures in the u. S. Looking to recover some of yesterdays modest losses. Pretty much about 0. 14 or 0. 15 of gains looking to maybe close the gap the s p 500 the alltime high, just about 10 points away. It couldnt take much to get up there. Well see if we get some summer friday trading as well lets get you set up for the trading day ahead. Joining us is jurien timmer. I look at big moves this week, and the s p 500 is up 0. 03 . I think the nasdaq is down a little bit maybe 0. 6 or so so clearly tech is underperforming. What kind of damage have we seen internally in this market this week during the selloffs in tech very good morning to you. I dont think of it as damage. I think of it as a good thing that a bit of air has been let out of the f. A. N. G. Balloon if you will we saw something similar a year ago with the bond proxy trade, stocksing ac inacts like bonds,a getting parabolic, last summer the air started to rise, and you dont want the moves to get out of hand. In tech and the f. A. N. G. Trade that has not happened yet if you look at the fundamentals, the pe on the tech sector is 19 today versus 70 back in 2000 i think this is all part of the normal rotation. There are three big groups, one is value cyclicals which moved after the elections. There is these bond proxies that act like bonds there is tech and biotech. Investors have been betting against growth and going into this space so i think now were seeing a bit of a rotation back into financials a bit, back into the bond proxies its a healthy part of the market as you indicated, markets are still fractionally higher. You dont see it at the top level of the markets so much as underneath the surface if we see one of these rotations, you mention were not necessarily going back into the cyclical parts of the market that would imply the Market Positioning for an acceleration into Global Growth do you think we need to see those economics, surprise indexes, thing like that start to click higher again in order to sustain this market as a whole to a higher level . Not against the market as a whole. I think the economics surprises have been romming over as you mentioned, but overall the economy seems to be okay its underneath the surface, for stance the ratio of small caps to large caps. Thats sensitive to those indicators s but overall the market is following earnings, which in q1 rose at 14 . Q2 are on track to grow at about 7 , 8 so the fundamental story is pretty good. But i think investors are reacting to the tenyear yield having dipped down to 211 a few days ago that brings the bond proxies back in. As the f. A. N. G. Trade starts to come down, you know, utilities, reits, consumer staples, telecoms start to come back up again. Its all rotation within the same market. And the market at the broader level is continuing to do reasonably well. It is near alltime highs. What is the takeaway from a week where the Federal Reserve does raise Interest Rates and signals it wants to continue to do so along with shrink the Balance Sheet and have a pretty optimistic view of the economy and the tenyear is stuck below 2. 20 what does that mean Going Forward . Its a bit of an odd jux to juxtaposition. If you look at the dots for 2017, the fed funds forward curve is running through the middle of that dot plot. 018 thi in 2018 it will be all over the place. The dots are all over the place, we dont even know who will be running the fed. We are setting up maybe not this year but next year for a little bit of a disconnect, where the fed needs to lower its dots or the forward curve needs to price in more rate hikes right now its pricing in one or two hikes over the next two years, which is quite different from what the fed is saying. If the fed is right and it is going to raise rates another six times, eight times over the next two years, the market has to basically reprice itself, which means that rates should be going higher, not lower. The bond market is betting on the fed lowering its dots as it has done a lot over the last couple of years. Thats a big 2018 story. Art cashin says he always sides with the bond market jurrien timmer, thank you. Futures pointing higher. Still to come, big changes could be coming to the american cuban policy. And a look at the mystery chart. This stock is a big underperformer this week down 20 the answer to what that stock is coming up. And as we head to the break, here is the National Weather forecast from bill karins. Good friday morning to you. Across the country the heat wave will be enveloping areas from the steep south to the southwest. Well watch severe thunderstorms over the next couple of days the biggest threat is 9 Million People at risk from lincoln to omaha and des moines kansas city and st. Louis could see a strong storm or two. Into saturday the heat builds into the middle of the country well see the extreme heat in areas of california and the des zertd southwest. 35 Million People are at risk of severe storms. Detroit, chicago, kansas city, st. Louis once again for fathers day we will see a warmth up the midatlantic with an afternoon storm possible. The real heat in south texas and all the way through the sedert southwest. Phoenix could be at 114. More Worldwide Exchange when we come back whos the new guy . They call him the whisperer. The whisperer . Why do they call him the whisperer . He talks to planes. He talks to planes. Watch this. Hey watson, whats avionics telling you . Maintenance records and performance data suggest replacing capacitor c4. Not bad. Whats with the coffee maker . Sorry. We are not on speaking terms. Welcome back to Worldwide Exchange. Im sara eisen google is bracing for a possible fine of more than 1 billion euros from eu regulators the Financial Times reportsing that brussels is getting ready to announce the first of its three big antitrug decisitrust against the search giant the fine could reportedly top 1 1. 5 billion its summer, that means attendance at concerts and ballparks is red hot getting tickets can be a pain. One company hoping to fix that program. Julia boorstin has more. Reporter a number of Tech Companies are trying to make ticketing less frustrating and more fair. Songkick partners with arrestedists to sell tickets to more than 10,000 events annually it is used by more than 15 million fans a month songkick boasts it prevented more than 100,000 tickets from entering the secondary market via scalpers and bots last year. Also tackling inflated prices, citizen ticket launched bit ticket which uses blotching technology to prevent fraud. And if you dont like your seat when you get there, pogo seat allows you to search for other seats. And stub hub is experimenting with Virtual Reality when selling tickets. So you can put on one of these headsets and check out your view from your seat ahead of time you can find out more right now on cnbc. Com. Coming up, the top stories and a round up of the Global Markets including that bank of japan decision overnight and jay z makes history. Well tell you what the rapper did when we return stay tedun Worldwide Exchange will be right back [vo] when it comes to investing, looking from a fresh perspective can make all the difference. It can provide what we call an unlock a realization that often reveals a better path forward. At wells fargo, its our expertise in finding this kind of insight that has lead us to become one of the largest investment and Wealth Management firms in the country. Discover how we can help find your unlock. Good morning another tech turnaround . F. A. N. G. Stocks trying to rebound today after yesterdays big slide. Breaking news on disney. Bob iger speaking to cnbc moments ago from china well bring you his comments and can you name this weeks mystery chart. A stock thats down 20 this week alone the answer is coming up. Its friday june 16, 2017. Youre watching Worldwide Exchange on cnbc. Good morning welcome back to Worldwide Exchange on cnbc. Im sara eisen im mike santoli in for wilfred frost. Wilfred gets a long weekend before we get to the markets, breaking news to tell you about. The Russian Military claims it may have killed the leader of isis in an air strike in syria the Russian Defense minister says he may have been killed i an air strike late last month just outside of raqqah the u. S. Is not confirming these reports. Well continue to follow developments on this breaking story. Now we can check on the Global Markets. A better tone to overall markets. Equity futures after another fractional selloff yesterday the s p tech sector down half a percent yesterday. We are seeing strength come back to the markets this morning. Dow futures up 44. Nasdaq futures up 11 s p futures are up about 6 points overall for the week heading into a friday, the s p is absolutely flat. The nasdaq is down about 0. 7 . Lets show you the tech stocks in the premarket since theyve been a big driver of the overall market and nasdaq apple looking to rebound just a bit here 0. 3 it has been a drag on the dow and the nasdaq theres the rest of the group, unchanged, but an improvement from yesterday as for the overnight action in asia very strong in japan seeing off that weaker japanese yen. Japan staying pat at the Monetary Policy meeting. The central bank there, the boj leaving Interest Rates unchanged, pledging to keep asset purchases around the current target of 80 trillion yen. Not talking about an exit any time soon, unlike the fed which is why youve seen in the last 24 hours a strong dollar and a weak japanese yen. The exporters in japan loving that we saw a half percent move higher hong kong up about a quarter of a percent. Shanghai up 0. 3 eurozone finance ministers agreeing to another greek bailout. The greek index hitting the highest level in two years on that news. As for the Broader Market action, msi world index had a tough day yesterday, but things are coming back. In the uk up about 0. 75 thats a bright spot looking at the Broader Markets, oil remains very much on the defensive, trying to hold near the bottom end of whats been arranged in the mid 40s to the mid 50s. Still looks like it will bounce today. About 0. 2 gain. Not quite to 45 a lot of talk about supply and how the north american lower may be under water so far hanging in there. Looking at the tenyear note, a similar story in terms of the yield. Holding near the bottom end of the recent range and lifting above it, 2. 17 . A lot of focus on the yield curve. The difference between the twoyear yield and the tenyear is around 0. 8 its narrower, not critically narrow, but getting focus when it comes to the bank stocks. Looking at the u. S. Dollar, once again, actually u. S. Dollar index, above its lows, but not too much and there you see modest moves so far sara mentionedthe yen weaker against the dollar, that seems to be perhaps helping risk sentiment there. Euro just under 1. 12 gold is down about 3 in the last ten days. It made a run at 1300 an ounce. Has been backing off before the fed meeting. Now looking like its trying to hold above the 1,250 level that firmer dollar seems to be sending gold lower. Bob iger is in china today as the Company Celebrates the oneyear anniversary of shanghai disneyland eunice yoon just caught up with bob iger, she joins us with more good morning good morning, sara. As you said, this is the firstyear anniversary for shanghai disneyland. Disney is semcelebrating it in a big way. Bob iger is in town and i spoke to him about the visitor numbers. This is what he had to say im pleased to say, as we hit here on the oneyear anniversary, we exceeded 11 million in guests. We had mentioned 10 million by the 11th month we now exceeded 11 million we made no projections about whats ahead except to say that this is something thats been embraced by the people of china truly in that about 50 of those visiting are actually from outside the shanghai region. Thats a lot higher than we expected now, part of the point of this business was not only to bring more foot traffic to the theme park business but also to try to build disneys brand in china, for the entire company. The movies, also introducing new characters, merchandising. I asked bob iger about this as well he said that it is true that the brand has been risen in terms of its awareness but it has not yet translated into numbers. This is what he had to say clearly the Peoples Awareness of disney, respect and appreciation for disney, interest in things disney has risen appreciatably this year what that means to the bottom line, time will tell iger still does have a lot of confidence in the china market he said that hes already expanding this park. Theyll be adding toystory land which will be opening in 2018. He says shanghai has a lot of land and they plan to expand did you happen to ask him about his recent decision to step off of President Trumps ceo Advisory Council after President Trump pulled the u. S. Out of the Paris Climate Accord . Got a lot of attention here. Absolutely. Got a lot of attention i asked him about it he was very careful about what he had to say. He didnt want to sound too critical of President Trump or the white house. And i also was continuously asking him about some of the rumors about his own ambitions potentially to run for the u. S. President. Again he said that he was not going to say anything about it maybe a little early on that one. Eunice, thank you very much. We look forward to rolling out more there thfrom that intervie throughout the day sticking to politics, President Trump is headed to miami today where he is expected to roll out a new cuba policy. Eamon javers is live in washington with more on that good morning. A briefing last night from white house officials giving us the details of what the president is expected to announce later today. Hemiami this morning where he will roll back a lot of president obamas openness campaign towards cuba. This white house calling that policy appeasement they say theyll make significant changes including prohibiting financial transactions, including transactions incidental to travel with the Holding Company that is operated by the cuban military the goal here, they say, is to roll back the militarys control of the economy and get dollars into the hands of average cubans to that end theyll strengthen americas statutory ban on tourism to cuba, which has not gone away up the obama rules the individual people to people travel will be prohibited. Thats the travel where you can simply go on your own to cuba without an organized tour group that is licensed that will be ending. Theres no change now to the embassy status so that will be continued from the obama reforms. There will be a u. S. Embassy in cuba there are a couple of exceptions to this. I will put them up on the screen theyre carving out a lot of specific categories. Exceptions include exports of agricultural commodities, medicines and medical devices. Air and see opps that support travel, cargo and trade. And program to build democracy are exempted here. So a lot of carveouts for specific embassies across the board to continue doing operations so this will be billed as a rollback of the obama appeasement policy but its not a full rollback of the obama reforms. An official at white house told me yesterday that you just cant put the genie back in the bottle 100 the president doesnt like a bad deal with cuba its not that hes opposed to any deal with cuba also exempted, expansion of telecom and Internet Access for cuban people and sending processing or receiving remittances. So there will be ongoing business with cuba, but theyre trying to redirect those from the military services of the castro regime and get any mesh dollars flow nothing that country more broadly to the cuban people where does that leave the travel companies, the cruise ship companies, hotels, airlines who had been banking on the opening of this arket . Its a good question. It looks like they will be impacted none of this takes place immediately. He will announce changes today regulations have to be put in place by favarious Government Agencies that will take 90 days or longer cruise ships will still be allowed to go. You can still fly, but that individual people to people travel will be blocked so the cruise ships generally operate with these large organized tour programs. They might be still in a pretty good position. The hotels might be in a different spot some of the hotel chains have done deals with the cuban military to operate or license facilities in cuba they might have to renegotiate or untangle themselveses fr s fm that well see if any of those get grandfathered in here. One big beneficiary is airbnb. They told me they want to redirect things towards Services Like airbnb which they think benefits the average cuban people and not the cuban military this is the president checking off a campaign promise. Is there a formal process in terms of how the administration will approach trying to perhaps reopen or make progress on thee fronts outside of these exemptions they say what theyll do is lay out today a series of boxes that the cuban government can check in terms of releasing prisoners, open democratic elections, other things. They say if the cuban government checks those boxes, makes those reforms, they would be willing to reconsider all of these restrictions, have more openness with cuba. They think theyre on a new generation of cuban leadership raul castro and a lot of top officials in castro are in their 80s at there point they think at some point change is coming in cuba, so they want to be able to have the stick and the carrot here in terms of negotiating with the new cuban government saying if you open up, were will be to work with you, but you have to hit these metrics that were putting out there. Eamon, thank you very much. You bet for all the preparation on that r that announcement. Top trending stories a viral video alert. Miley sirius and jimmy fallon teaming up for an incognito performance in new york. The pair taking to the subway station below Rockefeller Center to perform in wigs and hats, but computers caught on. Taking videos and singing along. The singer quickly removed her wig and sunglasses, treating the crowd to one of her hit songs. [ cheers ] this is miley cyrus on a plane to l. A. X. Welcome to the land of fame excess am i going to fit in i jumped in the cab here i am for the first time to my right i see the Hollywood Sign thats a fun surprise if youre just commuting. Maybe it was the camera crew who gave it away times square station. Rock center. That makes more sense. Former president barack obama inducting jaycee in z int song songwriters hall of fame. And lets face it, we both have wives who are significantly more popular than we are also a subway story, by the way. Jay z named after subway lines good, making the link there owe also talked about how they were both protective over their daughters. He said that jay z will have one up on him with the kids. Twins coming this week this month. I dont think the president will try to catch up on that one. Coming up, food fight. Whole foods ceo on the counter attack against activist investor jana partners. Wait until you hear what he called them. And its new music friday, we have the latest from macklemore with skylar gray. Exchange. Im sara eisen here with mike santoli. Time for some mustread tostori. My pick, time is running out for nafta. Despite all the risks which he lays out quickly ratifying an amended agreement could provide a positive outcome for all three countries. The current Mexican Administration has little to lose from a good deal that mitigates economic risk. Canada has everything to gain. For the u. S. , an interim outcome eliminates uncertainty about a future mexican negotiating counterpart. Talking about the rise in populism over there. Y secu yes, security may be the main issue in mexico but there will be a lot of posturing in mexic if there is not an interim deal before then, you may not get as good a deal after correct he says you only have a certain window since the clock is ticking since wilbur ross, the commerce secretary, notified congress of his intent to renegotiate. But what looks likely at this point is an extension into 2018. Thats the worry here he says, because you may not get as cooperative of a partner or as good of a deal was so much momentum in that direction a few months ago my pick is whole foods john mackie attacks greedy bastard investor jana. Jana is an investor in whole fo foods. They have been critical of mackie theyre greedy bastards and putting propaganda out there trying to destroy my reputation and the reputation of wholefoods because its in their best interest to do so. Difference of world views of john mackey. One criticism is that hes too occupied with his book, he even said they had the nerve to go after wholefoods when i was on my book tour it shows a mismatch between Cultural Values the founder from 12 years ago. Its interesting that he is fighting back. He got rid of a cfo, chairman, but he stayed. He will dig in any sense where this activist battle will end . Theyre making some buybacks. They want to put it for sale. Potentially a sale out there, which remains a possibility. Speaking of the grocery business, here is todays mystery chart. The stock is down 20 this week alone. You can tweet us your guesses. I gave you a clue. Well have the answer coming up. And as we head out, another check on the futures looking like well be green towards the open, though very, very modest moves. Yesterdays selloff was kind of minimized in the afternoon we do have options and futures expirations today. Wlddexcng wl orwi ehaeilbe right back welcome back to Worldwide Exchange. Im sara eisen here with mike mike checking on the futures board, things are looking up. Dow futures up 40 points s p futures up 5 nasdaq up 10 after another little selloff on wall street that was dominated by selling in technology with us now is john silvia from wells fargo security if you had to wrap up the week where you got a big fed decision and clues about future policy what do we need to know now Going Forward about the fed . We need to know to what extent the fed will finesse this combination of rising Interest Rates in their intended dot plot along with shrinking that Balance Sheet. I think its going to be a somewhat difficult process now youre raising Interest Rates at the short end because of the fraederal fwund funds rat also raising at the long end because of the shrinking Balance Sheet. John, the markets are typically fine with raising rates. They have done it three times before here, so long as it is perceived that the fed is responding to nearterm Economic Conditions and it is not off on its own agenda to get rates to a certain place no matter what the data. Were not necessarily in that point. Do you think theres a danger here if we dont see economic acceleration, people starting to worry about that kind of fed policy error youre right. This is something that weve talked about here with respect to continuing to raise Interest Rates according to their model of how the economy operates versus the reality of what were seeing with the Consumer Price index, not rising as quickly as people expected. The net result is that real Interest Rates start rising. The fed right now has room to raise the nominal Interest Rate, but over the next 6, 9 months, as sara was subjeggesting earli that squeeze on real Interest Rates will bite. What kind of Economic Data would you be looking for in the weeks ahead to see whether the fed is right or the bond market is right . They need some stronger Inflation Numbers. When you read the fomc minutes that came out earlier this week, the comment was that they were surprised at what happened with inflation over the last three to four months. Can we get that john with the slide in commodities that weve seen oil is up today but still below 45 a barrel thats their bet on the model, not for us. We dont see accelerating inflation that would justify the dot plot we see for 2018 janet yellen was willing to write off some of the nearterm Inflation Numbers saying you have these wireless plans that are giving you great deals, its kind of depressing the cpi now the flip side of that is that you still do have modest wage growth therefore real spending power for the u. S. Consumer is going up strongly. Yeah. Again, you look at used car prices being down, new car prices being down. I got the wireless story but thats a side light. Its so per savasive in terms of the weak Inflation Numbers, ill stick with the idea that inflation is not rising as fast as the mod tel projects, we will have difficulty if we face that model in terms of slow Inflation Numbers. We will look for a pick up in inflation if it comes. John, thanks for joining us. Time to reveal the mystery chart, actually related to the lack of inflation. This stock tumbling 20 since monday most of that damage was yesterday. So i picked it as todays chart of the week, its kroger the big grocery chain warning about the outlook for the remainder of the year. Food deflation is a tremendous overhang in the group. It has got an downgrade from ken goldman from jpmorgan. Ive been going back and forth with jim cramer about the story. He says even though theyre a good operator and has been one of the best in business, its a tough business right now you have this price competition coming from walmart, target, aldi and lidl, another german retailer that made its debut yesterday in the United States in the best of times, 1. 5 Profit Margins already razor thin. He said that in the Conference Call the management seemed to recognize this is a game of straight to the bottom in terms of prices. My chart of the week is nike which got beat up on announcements. Another stock that i follow not to the extent of kroger. Thanks for being here. Have a good weenekd, everybody that does it for Worldwide Exchange. Squawk box is up next. Nts eve. Ddos campaigns, ransomware, malware attacks. Actually, we just handled all the priority threats. You did that . We did that. Really. We analyzed millions of articles and reports. We can identify threats 50 faster. You can do that . We can do that. Then do that. Can we do that . We can do that. Tech under pressure. The selloff of names like facebook and amazon weighing on markets. Cuba crackdown President Trump is headed to miami today to roll out a new policy with cuba well tell you what is expected to change. And disneys c erngs o, bob iger speaking to cnbc moments ago from china well bring you his comments straight ahead its friday, june 16th hopefully we can cue the entourage music, because ari gold is here where is the entourage you have a hot mike, watch yourself good morning, welcome to squawk box on cnbc we are live, guys, from the Nasdaq Market sitd you have a microphone on good morning im becky quick along with joe kernen and andrew ross sorkin. Yesterday the markets closed lower. That was only the second time in the last seven trading days that we have seen the dow down. On a friday, dow futures indicated up by 38 points. S p indicated up by 5. The nasdaq indicated up by almost 10. Overnight in asia, the nikkei up by a half percentage point the shang lhai was down by 0. 3 green arrows in europe the ftse i