Picture. Comes off a day of record closes once again the gains were relatively slight they did come off the highs during the course of the feenl few ho final few hours of the session the Telecom Sector was the worst. Healthcare was the best. The nasdaq was the laggard of the three. Oil hitting a threeyear high thanks to ongoing production cuts led by opec gained about 2 yesterday. Up another 0. 7 . 63. 4, so a great start to the year for oil prices. That continued not just a strong year but a strong q4 in particular tenyear treasury note for you yields did move higher yesterday. For once its been the longer end of the curve that moved higher, faster than the shorter end. 2. 546. This time yesterday flirting with the 2. 5 level, yesterday it picked up steam. The 30year moved noticeably higher people talking about the fact that this is a surprise underlying tapering from the japanese thats driving global bond Prices Higher that shows the way that the u. S. Has been anchored by the International Picture over the course of the last couple of years lets look at markets around the rest of the world. Asia is down today its been a very strong start to the year its mixed as opposed to down. Japan down, hong kong and shanghai slightly higher germany is down 0. 4 slight gains for most of the other markets. Looking at currencies, the dollar moved higher yesterday but only slightly. The move in yields was higher than the move in the dollar. Today were seeing dollar weakness against the yen quite noticeable again that talk, more talk of whether or not the japanese are starting to taper the bond buying purchase, a slight move of tightening has made it a decent move for the yen the move in the dollar against the euro and the pound less pronounced lets drill down on oils big move higher. Joining me is Richard Madison from energy aspects. Good morning to you. Thank you very much for joining me clearly a decent move higher for oil at the start of the year including yesterday what was the reason for yesterdays 2 jump i think this is becoming a technical rally. Theres some fundamental support from the cold weather at the start of the year, from a couple of supply issues, and we dont have the overhang we had a couple years ago thats putting a much more constructive position on it. The pace of the rally over the last few days has maybe been a bit overdone what about the cold weather, is that a factor . Absolutely. I think that in the u. S. And parts of asia that helps in the winter because it pulls down fuel for heating, but as we look to the next few week theres are forecasts of much milder weather. So we might see some of that support for refining margins from fuel oil, from diesel weakening just in the shortterm will u. S. Supply and rising production here stateside be something that could pull prices back in some point in 2018 if so, when . I think this is a big factor that everybody in the market is watching we saw some strong growth outperform as we go into 2018 we expect a strong year for u. S. Production growth but we also think globally the market will need that additional production and the main thing will be to watch how much can the International Market absorb u. S. Crude exports. A big shift from previous years where the u. S. Was the big emportee importer its still importing but also exporting more with Global Demand growth strong, it can absorb that as we look at prices and where they are now, theres likely to be a seasonal pullback in pricing later this quarter it will be linked most likely to refineries going into maintenance so a softening in crude demand and u. S. Production growth will be a factor in that. But it will be temporary and then well get back on a constructive course for prices in the latter part of q2 and into the second half of the year richard, thank you very much for joining us lets turn back to currencies dollar board for you again decent move in the yen today, up 0. 8 thats where we will start in terms of discussions david bloom joins me, global head of hsbc long time no see yeah. Yeah happy new year to you and your viewers. And to you. Lets talk about that yen move a lot of talk about the quiet tapering that they may have begun. Is that the reason for the yen move how significant is it . I think you hit the nail on the head when you said quiet when the fed did it, it was with thunder and lightning. When the ecb announced it, it was already happening. The japanese have been buying less and less and less and its becoming very apparent to the market that they might be an exiteer as we call them, and that could cause a stronger yen. Yes, we believe in a stronger yen at hsbc, we want to buy anyone exiting from ultra loose Monetary Policy. Does that include the euro then . No. I think the euro is done the ecb announced an exit program last year. The euro went from 1. 05 to 1. 20. It was super bullish we dont get everything right, we got that right, but now were flat on the euro its more like norway, sweden, maybe japan, they are all exiteers we saw something pronounced today in sweden. We did, from the rix bank the aussie dollar are not exiting ultra loose policy, are they never got super loose there. Well, the point is when they do a turnaround, compared to other economies, no. But their economy has been doing quite well but its the turnaround from loose policy you know, australia is saying, no, were not going to hike. Were not going to hike. One day you wake up and they say, well hike, like canada last year and you get a 10 depreciation in currency thats why we like that. Those Central Banks will turn the corner, when they do, those currencies will rock whats your view on sterling . You were one of the names that expected it to fall significantly last year. Which it did the opposite of where do you stand now thanks for reminding viewers of one of my failures. Thats very kind of you. Appreciate coming on the show. I had to tell viewers i got euro right, i suppose i was too bearish on sterling last year. The bank of england raised rates. I havent given up, im afraid to say im beaten but not completely giving it up im worried cyclically, one of the worst performing economies in the g10, politically we have all these worries, structurally, big account deficit and fiscal currencies its one of the currencies i dont like this year in terms of the dollar, youre more optimistic on the dollar what about against other currencies, would you be buying the dollar here or selling it . Our view on the dollar is benign thats great news for emerging markets. Some of these yields are delicious. When you go to indonesia, india, those countries, if the dollar is a drifting dollar, its not a bull market or bear market it goes up and down. If you collect 4 , 5 , 6 , 7 yields, theyre irresistible im already dribbling out the side of my mouth when i think about it. What word do you use for germanys. 4 in contrast disgusting i dont want to buy the euro against the dollar, when you think of the two currencies, i cant differentiate the two at the moment i have no big view on euro dollar. That might sound like a currency were interested in, how boring is that but its exciting. You dont want, you know, big moves in the dollar. I dont think theres a big trend in the dollar either up or down i think its like you do in equities, a stock pickers environment. In currencies, if you choose wisely, theres lots to be made. David, as ever, thank you very much. Good to see you. David bloom of hsbc. If youre yield hungry theres delicious and irresistible yields in emerging markets. Bill miller making a bold call on the markets. Leslie picker has the details. The markets have been on a tear for some time that is prompting fears that were at a top but bill miller says fear not. Hes looking at one key metric that could signal were headed higher i think thats still to come, if well get it. It will be driven by you mentioned earlier about the tenyear yields. Those tenyear yields go through 2. 60 and head towards 3. 0, we could have the melt up we had in 2013 when the market was up 30 . The tenyear treasury yield hit the highest level yesterday at 2. 55 but miller believes the stock market could get another boost from lower Corporate Tax rates you can see the market wants to go up weve got the tax cut bill, i think that was great from a corporate standpoint and most of the rest of it was political Christmas Tree ornament doings but i think that the economy looks great. Usually even if we get the economy accelerating, i think that inflation is probably a year or so away from becoming anybodys concern. I do think the curve is probably going to continue to shift up. Er is considered one of the best investors ever after beating the market for 15 straight years when he worked for legg mason he said he likes Airline Stocks and the banks. Heres what he said about financials we can see the banks getting a return in the high teens, theyre not there yet. That would with the fed raising rates, that helps them theyre all super liquid the roll back in regulations helps them all the things people are pointing to are good for banks if they were reflected in valuations, we wouldnt be so keen on it, but they dont you can find more on bill millers latest market calls on cnbc. Com financials becoming increasingly attractive if yields do rise i think its fascinating debate in terms of rising yields and what that means for equities more broadly as the yields are rising, money is coming out of bonds, probably going into equities. Once we get to the peak of yields, thats a different question clearly yields are more attractive relative to where they are now exactly the topic that always comes up with hedge managers is inflation and what that means for various markets theyre invested in. Especially talking to hedge funds in fixed income and equities and have more of a risk neutral portfolio. They look at this, they look at whats been going on with qe and when the market does turn what does that mean for a basket of different Asset Classes or their portfolio . Its something that a lot of Hedge Fund Managers are grappling with, being able to protect against the down side because were in such unprecedented territory here leslie picker there, thank you very much. Well worth going to cnbc. Com for the full interview with bill miller sources tell cnbc toyota and mazda plan to build a 1 1. 6 billion Assembly Plant in huntsville, alabama. The announcement is expected this afternoon the plant will employ about 4,000 workers and build about 300,000 vehicles per year. Toyota up 2 in japanese trade nordstrom says samestore sales rose 1. 2 during the holidays the retailer was boosted by strong sales at the rack stores. Nordstrom is adjusting the fullyear earnings outlook slightly higher. Its down 1. 1 . Dominos pizza says the ceo Patrick Doyle will step down in june doyle has been ceo since 2010 and oversaw dominos turnaround including the move into online ordering and promotions. Thats a pizza chain whose name i can say with great ease. Theres a pair of economic reports on the wall street agenda december import prices are out at 8 30 a. M. Eastern followed by november wholesale numbers at 10. Charles evans and rob kaplan are speaking today lennar and kb home report results before the open. Still ahead, a big brexit warning. Why the eu is putting some Big Companies on notice. And crisis in california as a powerful storm triggers massive mud slides were live on the scene with the latest on that stick around its not theirs. Its mine. Mine. Mine. Mine. The new lexus rx 350l with three rows for seven passengers. Are you excited about your baby sister coming . Experience space for the unexpected with the rx l, part of the rx family. Experience amazing at your lexus dealer. Can this much love be cleaned by a little bit of dawn ultra . Oh yeah one bottle has the grease cleaning power of three bottles of this other liquid. A drop of dawn and grease is gone. We know life can be hectic. Thats why, at xfinity, weve been working hard to simplify your experiences with us. Now, with instant text and email updates, youll always be up to date. You can easily add premium channels, so you dont miss your favorite show. And with just a single word, find all the answers youre looking for because getting what you need should be simple, fast, and easy. Download the xfinity my account app or go online today. Welcome back the European Union issuing warnings to the uks Biggest Companies over a brexit no deal scenario joining me now is Peter Spiegel news editor from the financial times. Good morning to you. This sort of breaking news that you have had has developed over the last couple of days, and its that the eu is threatening uk companies and warning them how bad a no deal would be if thats the eventuality is that right . Thats it lets remember where we were just before the christmas break. Theresa may finally at long last reached a divorce deal with brussels, it seemed like financially there was peace and love breaking out between london and brussels what weve seen since then is the European Commission has been quietly sending Legal Notices to every major uk industry saying you guys get ready because this will be a disaster there is no brexit deal between the eu and britain on what the trading relationship is after brexit you guys will be cut out for the entire European Market you have to set up subsidiaries in europe. Thats been going on david davis found out about it from industry, hes angry about it this whole peace of love going into christmas, the war has broken out again how bad how antagonistic a move is this from the eu and Michel Barnier clearly both sides should all both sides and all companies should be preparing for every eventuali eventuality, shouldnt they . Thats the argument youve heard from brussels yesterday when they were forced to make a comment. They said, look, you have the uk preparing for a nodeal scenario, pe pthey put aside 3 billion pounds to finance studies, why shouldnt we be warning British Companies they also face ramifications in europe if this happens yes, thats true, but its a bit of strong arming tactics by brussels theyre very good at this in terms of negotiations. So it is trying to sort of get british industry to put pressure on the British Government to be more accommodating in the negotiations so, yes, it is indeed exactly what i would expect the commission to be doing, but its hardball tactics. In terms of the strength of the government right now in the uk, clearly theresa may ended on a high note, some of the positive developments in getting the eu negotiations taken a step forward. She executed a reshuffle over the last couple of days, many framing this now showing how weak she is as opposed to the fact her power had hopefully risen again. Yeah. Again coming back in the new year, she wanted to show she was in control, she was going to sack some ministers, bring others n in, but two or three others said they didnt want to be sacked, others said they would stay the question with all this stuff is how much practical implication will this have on her able ility to execute brexi and her agenda weve seen an incredibly weak Prime Minister still able to haltingly, no doubt, but move brexit forward relatively well. She got her deal she needed in december the problem everyone is worried about now is securing a trade deal, securing a transition period by next march thats much harder than securing the divorce deal can a horribly weakened Prime Minister who cant control her own government bring everyone together to a much more divisive discussion about the future deal with the eu. Thats the question facing britain now. Thats why weve seen volatility in the markets, both in the 4fox and the gilt markets it has spurred nervousness here. Peter, great stuff. Up next on Worldwide Exchange, crisis in california as a powerful storm triggers massive mud slides were live with the latest when we come back james r. And associates. Anna. [phone ringing] baker architects. This is anna baker. This is what our version of Financial Planning looks like. Tomorrow is important, but youre ready to bet on yourself today. Spend your life living. Find an advisor at northwesternmutual. Com. Welcome back to Worldwide Exchange. Were keeping an eye on a developing story out of the caribbean. A strong 7. 6 earthquake struck in the Caribbean Sea last night between the coast of honduras and the Cayman Islands puerto rico and the Virgin Islands were under a tsunami advisory but thats been removed. Officials say there were no early reports of damage on land. Another developing story this morning, a powerful rain storm in Southern California triggering deadly mud slides kirk hawkins is live in montecito, california with the latest reporter good morning to you. Right now were live in the middle of the 101 freeway, a 30mile stretch of this highway is shut down a scramble is underway for survivors and access is a big concern at this hour for First Responders as we look at this video, just its devastating just what has gone on here it was an allout scramble for First Responders as soon as this mudslide began keep in mind this all happened just after 3 45 early in the morning in the middle of the night for many of these residents here a lot of this came as a surprise some residents talked about a wall of mud rushing through their homes. As search and rescue crews worked their way through some of these neighborhoods, in one case they found a young 14yearold girl and the video of that rescue is just incredible. In another case, there were neighbors that found a small baby and that the baby was rescued and that is the kind of thing that these rescuers are dealing with right now the death toll could go up in the overnight hours