Transcripts For CNBC Worldwide Exchange 20161115 : compareme

Im wilfred frost alongside seema moody. Yesterday we did see a decent futures board this time yesterday and decent open but we lost impetus during the course of the day essentially you can call it a bit of a step back pausing for breath from this posttrump election rally and today were seeing a little bit of positivity but muted given the gains we saw last week, the dow higher by 32 points, s p by five and nasdaq by 11 points. Not huge gains yesterday we saw continuation of some of the sector performance, financials once again the best performer theyve had their sixth positive session in a row. Can that continue again today . Tech suffering significantly, down over 2 . Worst sector yesterday. Big names like apple and amazon have been suffering since trumps election victory. Take a look at european stocks. They did finish well off their lows yesterday. Here in europe. As we can say u. S. Treasuries now in focus with the ten year still above 2. 1 . In europe mixed session right now with France Holding on to a grain of. 3 of 1 . Eurozone gdp plus 0. 3 plus 1. 6 yearonyear. Thats online. Germany coming in softer. Italy stronger. Overall no big misses or hits but the german one getting attention. The uk is out performing today in a relative sense. That comes in light of a softer pound. The pound down about 0. 8 . Allowing the ftse 100 to rally. Lets take a look at asia to see how markets are responding to the data we got out across the eurozone. The trump rally wearing off a bit, the japanese nikkei now at 17,668. Basically hanging on to the flat line whereas in hong kong gains there of around half of a percent. China down fractionally on the day. Stocks and bonds suffered about a 2. 5 billion in outflows due to trump as policies. Lets look at broad maerkts. Oil prices are rallying. Yesterday broadly ended the day flat. Today up 2. 5 . Opec will deliver its production cut. Of course thats one of the big events were looking at towards the end of the month. 44. 4 wti. Dollar prices lets have a look. We did see the dollar rally again yesterday. Not quite as strong. You got the dollar a little bit softer today against the euro, some gdp data helping the euro stronger, pause and reason for a correction given the recent run the dollar has had. Dollar higher significantly so. U. S. Dollar versus yen is broadly flat given a very strong run the yen, the dollar has had against the yen since the election result. Gold prices very quickly for you yesterday fell. 2 of 1 . Today similar size. The outsize reaction markets generated a discussion as to whether this, these levels are justified given that at this point we had big picture ideas from the president elect donald trump, a lack of detail. Can markets move just on the prospect of fiscal spending and lower taxes. Yesterday we did slightly pause for brit. We were broadly flat. Interesting to see Pharrell Williams put financials but strong. We did see the short end play catch up. Lagged previously. We saw more of a steepening. Shorter end of the curve caught up with the rise in yield we seen in the longer end. At the moment you can see around 2. 2 on the ten year. A bit higher. Two year note has caught up and at highs across the curve now from decemberjanuary which shows the space of the move. I appreciate the live charts youre using. Just in case. More for myself. More to keep myself. Todays top corporate stories, Warren Buffett Berkshire Hathaway disclosing new investments in four big airlines. Sec filings shows buffetts firm took stakes in united airlines, delta and continental. Becky quick reports that berkshire has taken a stake in southwest airlines. The move is a shock reversal for buffett who has shunned the Airline Industry for decades following a volatile investment he made in u. S. Airway back in 1989. Its interesting. As you said, massive reversal. Everyone is trying to work out what his reasoning behind it. Its hard to take a step in the domestic u. S. Airlines unless you have a bearish view on oil prices. Now there might be other minor factors around it. Theres a macro link factors. He must be saying this is a vote confidence for the u. S. Economy and a vote of bearishness towards oil prices otherwise hard to take those positions across the board. We have those reasons. Timing so interesting. Two weeks away from that november 30th opec summit where oil prices could move and change as you point out. One of the exalternatival factors. Reynolds america looking for a higher price from British American tobacco. Projected 47 billion take over offer. Saying the price was too low. British american already owns 42 of reynolds. The company is said to be open to improving its initial offer. Grocery Shopping Center Owner Regency Centers is buying equity one for about 4. 6 billion. The tie up will let regency add areas like los angeles and new york to its portfolio. Aig agreeing to sell its japan Life Insurance business. Terms were not disclosed. Fwd group is the arm. A busy one on the data front at 8 30 eastern well get retail sales, import prices, Empire State Manufacturing survey and at 10 00 business vince, two important speeches today at 8 00 eastern, boston fed president will give remarks and then answer questions at an event in portland, maine. At 1 30 eastern well hear from stanley fischer. Few earnings reports to watch. Home depot posting Quarterly Results. Watch for Dicks Sporting Goods and tjx the parent of tj maxx. The street is looking for home depotato post earnings on revenue of 23 billion. Beyond those numbers here are the three things to watch. First big ticket item data from the association of Home Appliance manufacturers suggest appliance sales softened in the quarter, second weather, higher temperatures throughout the quarter stifled Home Improvement projects especially in august. However prep regulates for Hurricane Matthew as well as poststorm recovery helped same store sales. And listen for managements projection on outlook. They expect a stronger finish to the quarter but mixed macro signals and uncertain consumer following the president ial election could lead to Slower Growth ahead. Shares from home depot are down 6 in the past three months. Back to you. Still to come, the dow on a six day winning streak. Insight and analysis from our chief market strategist. That comes next. Dont go anywhere. Youre watching Worldwide Exchange on cnbc. Welcome back to Worldwide Exchange. Yesterday marked the deadline for big Money Managers to reveal their holdings in 13 f filings with the sec. Soros one management dissolved its shares in the Worlds Largest gold funds. The move was ahead of the president ial election. John paulsons firm held a stake in the Spider Gold Trust exchange. Paulson has been long known as a gold bull. By the end of the Third Quarter the value of the firms position fell by nearly 4 million. David einhorn Green Light Capital cut its position in the Biggest Holdings during the quarter. This included apple and general motors. Einhorns firm disclosing a stake in u. S. Steel. The position was worth around 58 million. Lets get back to the broader markets. Joining us is our strategist, art hogan. Thanks for joining us. We hit all time highs on the dow yesterday but the move was smaller than weve seen in recent days. It is right we pause for brett for these new highs. Its been a resounding rally. Its a rally thats been characterized by a couple of things not the least of which is repositions. You have a lot of people, portfolios positioned for a Hillary Clinton candidacy and i think that set people up in a position where they needed to exit some trades that were popular. Short financials, short health care stocks, defensive plays. Thats happening at break neck speed. Its natural for us to take a pause. Last weeks volumes were up 25 week over week. A lot of positioning has happened. Now step back and say what does this mean. How much Economic Growth will we get out of a new administration and some of the policies. Is that why financials are the best performer . Yeah. Both of those things in concert when you think about that and thats a group that hadnt recaptured its 2007 highs. When you look at the s p 500 and the ten Industry Sectors only one that hadnt gotten back to 2007 was financials. When we think about brave new world for financials both things happening for the same time in a group thats not moved enough will be explosive. Does it make sense for investors to reallocate money into different sectors based on the prospect of trump policies which we dont know what they are and lack of detail . I can tell you this. Thats a great question. At the very least you want to get out of those things you were assuming were going to continue to be negatively impacted. If you think that biotech will have an overhang because of reimbursement or financials will see more not less regulation you might want to unload that trade. Doesnt mean you have to plow into industrials or into materials but weve seen a lot of that repositioning happening pretty quickly. To your point at some point in time we do need to sit back and say how much how far said and how much you can do in terms ever changes and we wont know that for quite a bit. Does the dollar keep rallying. On the face of it, increasing the National Debt through a fiscal stimulus should be softening. Yields have gone up and makes it attractive. Will it flip . Will we see dollar weakness . For sure. Weve never seen currency moves that weve seen. The pendulum has swung too far in the short run for the dollar and probably, you know, has gotten to a point where its more stretched. My guess is that backs up before anything else does. The selloff in emerging markets is that justified or do you think at this point its overdone. Rising rates. Commodities coming down. Very dependent on selling u. S. Stronger dollar. Doesnt set up a very good menu for emerging markets. Again that trade probably has more legs to it. As usual, think about that, over the next 12 to 18 months, would that continue to be a negative . Yes. Its a very simple short emerging markets. We spoke about the repositioning going on including financials have been the biggest beneficiary. Any other sectors havent repositioned sufficiently enough for a trump presidency. Financials obviously the first and foremost and health care. I think when we look at the industrials weve only started at the large cap. The Industrial Complex throughout the midcycle Industrial Companies will benefit and again this is a group that hasnt been on fire. So some things i get more concerned about on the negative swhied you lo side, thats gotten ahead. To the extent were talking about some massive infrastructure spend over the course of the next two years, i think that we need to differentiate who actually gets that money. Thats where youll see most of the bargains and stocks that havent lifted. Outside of the reacshow in the technology space, amend market cap lost 35 billion since the election outcome. Is that move overdone or do you think its no secret that is i lie cone valley does not get along as well with a president elect donald trump and his policies on trade and immigration. This as you were pointing out this is one part of the market where were seeing earnings growth. Its amazing that trade has picked up. Its a difficult narrative to spell out. You laid that out nicely but what does that mean . Do you think well get immigration policy that will negatively impact they companies and get trade policy that will negatively impact all of us . If thats the case its not Just Technology companies it will be bad necessarily for the entire economy. Were seeing it first in some of the bank stocks. But what weve got through the first what weve been four, five days into this president elect cycle. We focused on the positives except for those four or five stocks in technology. We havent really considered how trade policy, immigration policy can negative impact. Thats the scary part. Weve seen the good trump. We havent seen the bad trump yet. Thank you for joining us. Pleasure to see you. Nasdaq announcing its long time ceo will retire at the end of the year. Current coo will take over the top job. Green pld will become chairman of nasdaqs board. They both will join squawk box this morning live 7 30. Still to come the trump transition. The latest on the president elects white house plans. But first as we head to break heres todays National Forecast from Weather Channel kelly cass. Good morning. We are tracking some rain across the northeast moving into the drought stricken areas of the new england area too so thats a good thing. We need the rain in boston, much of massachusetts, still dealing with severe to extreme drought. Few rain drops may cause delays at new york airports. Otherwise good travel conditions across the south. Albeit we need the rain in the southern appalachians where wildfires continue to be a big story. The smoke has been aufrl reducing air quality in so many areas from asheville, North Carolina even down atlanta where weve been smelling smoke for days. Few showers in miami. Temperatures in the mid70s. Big system coming in to the west. You may hear thunder in seattle and portland with snow coming to the higher elevations. Thats a look at your National Forecast. Well be right back. Opportunities arent always obvious. Sometimes they just drop in. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. This is my retirement. Retiring retired tires. And i never get tired of it. Are you entirely prepared to retire . Plan your never tiring retiring retired tires retirement with e trade. Im in vests and as a vested investor in vests i invest with e trade, where investors can investigate and invest in vests. Or not in vests. Sign up at etrade. Com and get up to six hundred dollars. Welcome back to Worldwide Exchange. Lets get you up to speed on market action. Politics still playing a big role in driving market action. The dow hitting an all time high yesterday, traders attributing that once again to trumps presidency and the prospect of fiscal spending and cutback in taxes and that ultimately being able to boost Economic Growth. Again dow calling for a higher open of 30 points, nasdaq up 12 which ended lower because of the selloff weve been seeing, extended selloff in the tech sector with those big tech names like apple and s p higher. Lets take a look at currencies. Its been the appreciation in the u. S. Dollar that has been hurting the emerging markets and currencies of those countries but today were seeing a bit of a breea breather. U. S. Dollar is down against the yen and euro. Deutsche bank is now calling for a parity between euro, the euro and u. S. Dollar trade. Thats something to keep an eye on. If we switch focus 0 commodities a big move in gold and iron ore. Oil yesterday it was trading lower. Today a bit of a rebound here, perhaps hat has to do with the move in the currency market. The u. S. Dollar, wti crude at 44. 44. Ice brent up nearly 2 at 45. 38. Wolf, back to you. President obama arriving in greece earlier this morning. This is his last president ial trip abroad. Hell visit greece as well as germany in a bid to reassure his european allies the u. S. Will maintain its kmint to nato. In washington president elect trump is working on his transition. Tracie potts joins us with the latest. Reporter the latest is that hes appointed someone as chief strategist who is a lightning rod for controversy during the campaign and will now have the you president s ear. Criticism is pouring in on president elect Donald Trumps choice of steve bannon as chief strategist. The fact that republicans have been silenced on bannons appointment is a disturbing sign. Reporter his Breitbart News is a favorite of white supremacists. I look forward to having a discussion with whoever they appoints. Reporter president obama declined to weigh in on bannon but giving the president elect some advice on how to heal a divided nation. How he signals his interest in their issues or concerns, i think those are the kinds of things that consider tone. Reporter including reports that mr. Trumps Campaign Finance chair success considered as treasury secretary. A lot of hard work. Reporter conservative radio host Laura Ingraham as press secretary and gull and former u. N. Ambassador john bolton as secretary of state. I wont be attorney general. Up wont be. I wont have to decide that one. If i can escape. Reporter insiders say the trump transition is ahead of schedule. And the nbc is now learning the transition is asking whether the three oldest trump children who are very close advisors to their father might be able to get security clearance before the inauguration. After the inauguration trump can grant clearance to anyone he wants. Before the new ration they have to get the okay. Thats unusual. Lets go back to the appointments yesterday that garnered so much attention over the last 48 hours or so. Clearly those two, chief of staff and chief of strategist didnt require any senate approval. Might we see retaliation from the senate with those appointments in the cabinet that do require senate approval. They will try to block those . Reporter we havent seen that level of backlash yet from the France Holding<\/a> on to a grain of. 3 of 1 . Eurozone gdp plus 0. 3 plus 1. 6 yearonyear. Thats online. Germany coming in softer. Italy stronger. Overall no big misses or hits but the german one getting attention. The uk is out performing today in a relative sense. That comes in light of a softer pound. The pound down about 0. 8 . Allowing the ftse 100 to rally. Lets take a look at asia to see how markets are responding to the data we got out across the eurozone. The trump rally wearing off a bit, the japanese nikkei now at 17,668. Basically hanging on to the flat line whereas in hong kong gains there of around half of a percent. China down fractionally on the day. Stocks and bonds suffered about a 2. 5 billion in outflows due to trump as policies. Lets look at broad maerkts. Oil prices are rallying. Yesterday broadly ended the day flat. Today up 2. 5 . Opec will deliver its production cut. Of course thats one of the big events were looking at towards the end of the month. 44. 4 wti. Dollar prices lets have a look. We did see the dollar rally again yesterday. Not quite as strong. You got the dollar a little bit softer today against the euro, some gdp data helping the euro stronger, pause and reason for a correction given the recent run the dollar has had. Dollar higher significantly so. U. S. Dollar versus yen is broadly flat given a very strong run the yen, the dollar has had against the yen since the election result. Gold prices very quickly for you yesterday fell. 2 of 1 . Today similar size. The outsize reaction markets generated a discussion as to whether this, these levels are justified given that at this point we had big picture ideas from the president elect donald trump, a lack of detail. Can markets move just on the prospect of fiscal spending and lower taxes. Yesterday we did slightly pause for brit. We were broadly flat. Interesting to see Pharrell Williams<\/a> put financials but strong. We did see the short end play catch up. Lagged previously. We saw more of a steepening. Shorter end of the curve caught up with the rise in yield we seen in the longer end. At the moment you can see around 2. 2 on the ten year. A bit higher. Two year note has caught up and at highs across the curve now from decemberjanuary which shows the space of the move. I appreciate the live charts youre using. Just in case. More for myself. More to keep myself. Todays top corporate stories, Warren Buffett<\/a> Berkshire Hathaway<\/a> disclosing new investments in four big airlines. Sec filings shows buffetts firm took stakes in united airlines, delta and continental. Becky quick reports that berkshire has taken a stake in southwest airlines. The move is a shock reversal for buffett who has shunned the Airline Industry<\/a> for decades following a volatile investment he made in u. S. Airway back in 1989. Its interesting. As you said, massive reversal. Everyone is trying to work out what his reasoning behind it. Its hard to take a step in the domestic u. S. Airlines unless you have a bearish view on oil prices. Now there might be other minor factors around it. Theres a macro link factors. He must be saying this is a vote confidence for the u. S. Economy and a vote of bearishness towards oil prices otherwise hard to take those positions across the board. We have those reasons. Timing so interesting. Two weeks away from that november 30th opec summit where oil prices could move and change as you point out. One of the exalternatival factors. Reynolds america looking for a higher price from British American<\/a> tobacco. Projected 47 billion take over offer. Saying the price was too low. British american already owns 42 of reynolds. The company is said to be open to improving its initial offer. Grocery Shopping Center<\/a> Owner Regency Centers<\/a> is buying equity one for about 4. 6 billion. The tie up will let regency add areas like los angeles and new york to its portfolio. Aig agreeing to sell its japan Life Insurance<\/a> business. Terms were not disclosed. Fwd group is the arm. A busy one on the data front at 8 30 eastern well get retail sales, import prices, Empire State Manufacturing<\/a> survey and at 10 00 business vince, two important speeches today at 8 00 eastern, boston fed president will give remarks and then answer questions at an event in portland, maine. At 1 30 eastern well hear from stanley fischer. Few earnings reports to watch. Home depot posting Quarterly Results<\/a>. Watch for Dicks Sporting Goods<\/a> and tjx the parent of tj maxx. The street is looking for home depotato post earnings on revenue of 23 billion. Beyond those numbers here are the three things to watch. First big ticket item data from the association of Home Appliance<\/a> manufacturers suggest appliance sales softened in the quarter, second weather, higher temperatures throughout the quarter stifled Home Improvement<\/a> projects especially in august. However prep regulates for Hurricane Matthew<\/a> as well as poststorm recovery helped same store sales. And listen for managements projection on outlook. They expect a stronger finish to the quarter but mixed macro signals and uncertain consumer following the president ial election could lead to Slower Growth<\/a> ahead. Shares from home depot are down 6 in the past three months. Back to you. Still to come, the dow on a six day winning streak. Insight and analysis from our chief market strategist. That comes next. Dont go anywhere. Youre watching Worldwide Exchange<\/a> on cnbc. Welcome back to Worldwide Exchange<\/a>. Yesterday marked the deadline for big Money Managers<\/a> to reveal their holdings in 13 f filings with the sec. Soros one management dissolved its shares in the Worlds Largest<\/a> gold funds. The move was ahead of the president ial election. John paulsons firm held a stake in the Spider Gold Trust<\/a> exchange. Paulson has been long known as a gold bull. By the end of the Third Quarter<\/a> the value of the firms position fell by nearly 4 million. David einhorn Green Light Capital<\/a> cut its position in the Biggest Holdings<\/a> during the quarter. This included apple and general motors. Einhorns firm disclosing a stake in u. S. Steel. The position was worth around 58 million. Lets get back to the broader markets. Joining us is our strategist, art hogan. Thanks for joining us. We hit all time highs on the dow yesterday but the move was smaller than weve seen in recent days. It is right we pause for brett for these new highs. Its been a resounding rally. Its a rally thats been characterized by a couple of things not the least of which is repositions. You have a lot of people, portfolios positioned for a Hillary Clinton<\/a> candidacy and i think that set people up in a position where they needed to exit some trades that were popular. Short financials, short health care stocks, defensive plays. Thats happening at break neck speed. Its natural for us to take a pause. Last weeks volumes were up 25 week over week. A lot of positioning has happened. Now step back and say what does this mean. How much Economic Growth<\/a> will we get out of a new administration and some of the policies. Is that why financials are the best performer . Yeah. Both of those things in concert when you think about that and thats a group that hadnt recaptured its 2007 highs. When you look at the s p 500 and the ten Industry Sectors<\/a> only one that hadnt gotten back to 2007 was financials. When we think about brave new world for financials both things happening for the same time in a group thats not moved enough will be explosive. Does it make sense for investors to reallocate money into different sectors based on the prospect of trump policies which we dont know what they are and lack of detail . I can tell you this. Thats a great question. At the very least you want to get out of those things you were assuming were going to continue to be negatively impacted. If you think that biotech will have an overhang because of reimbursement or financials will see more not less regulation you might want to unload that trade. Doesnt mean you have to plow into industrials or into materials but weve seen a lot of that repositioning happening pretty quickly. To your point at some point in time we do need to sit back and say how much how far said and how much you can do in terms ever changes and we wont know that for quite a bit. Does the dollar keep rallying. On the face of it, increasing the National Debt<\/a> through a fiscal stimulus should be softening. Yields have gone up and makes it attractive. Will it flip . Will we see dollar weakness . For sure. Weve never seen currency moves that weve seen. The pendulum has swung too far in the short run for the dollar and probably, you know, has gotten to a point where its more stretched. My guess is that backs up before anything else does. The selloff in emerging markets is that justified or do you think at this point its overdone. Rising rates. Commodities coming down. Very dependent on selling u. S. Stronger dollar. Doesnt set up a very good menu for emerging markets. Again that trade probably has more legs to it. As usual, think about that, over the next 12 to 18 months, would that continue to be a negative . Yes. Its a very simple short emerging markets. We spoke about the repositioning going on including financials have been the biggest beneficiary. Any other sectors havent repositioned sufficiently enough for a trump presidency. Financials obviously the first and foremost and health care. I think when we look at the industrials weve only started at the large cap. The Industrial Complex<\/a> throughout the midcycle Industrial Companies<\/a> will benefit and again this is a group that hasnt been on fire. So some things i get more concerned about on the negative swhied you lo side, thats gotten ahead. To the extent were talking about some massive infrastructure spend over the course of the next two years, i think that we need to differentiate who actually gets that money. Thats where youll see most of the bargains and stocks that havent lifted. Outside of the reacshow in the technology space, amend market cap lost 35 billion since the election outcome. Is that move overdone or do you think its no secret that is i lie cone valley does not get along as well with a president elect donald trump and his policies on trade and immigration. This as you were pointing out this is one part of the market where were seeing earnings growth. Its amazing that trade has picked up. Its a difficult narrative to spell out. You laid that out nicely but what does that mean . Do you think well get immigration policy that will negatively impact they companies and get trade policy that will negatively impact all of us . If thats the case its not Just Technology<\/a> companies it will be bad necessarily for the entire economy. Were seeing it first in some of the bank stocks. But what weve got through the first what weve been four, five days into this president elect cycle. We focused on the positives except for those four or five stocks in technology. We havent really considered how trade policy, immigration policy can negative impact. Thats the scary part. Weve seen the good trump. We havent seen the bad trump yet. Thank you for joining us. Pleasure to see you. Nasdaq announcing its long time ceo will retire at the end of the year. Current coo will take over the top job. Green pld will become chairman of nasdaqs board. They both will join squawk box this morning live 7 30. Still to come the trump transition. The latest on the president elects white house plans. But first as we head to break heres todays National Forecast<\/a> from Weather Channel<\/a> kelly cass. Good morning. We are tracking some rain across the northeast moving into the drought stricken areas of the new england area too so thats a good thing. We need the rain in boston, much of massachusetts, still dealing with severe to extreme drought. Few rain drops may cause delays at new york airports. Otherwise good travel conditions across the south. Albeit we need the rain in the southern appalachians where wildfires continue to be a big story. The smoke has been aufrl reducing air quality in so many areas from asheville, North Carolina<\/a> even down atlanta where weve been smelling smoke for days. Few showers in miami. Temperatures in the mid70s. Big system coming in to the west. You may hear thunder in seattle and portland with snow coming to the higher elevations. Thats a look at your National Forecast<\/a>. Well be right back. Opportunities arent always obvious. Sometimes they just drop in. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets<\/a> and drive forward with broader possibilities. Cme group how the world advances. This is my retirement. Retiring retired tires. And i never get tired of it. Are you entirely prepared to retire . Plan your never tiring retiring retired tires retirement with e trade. Im in vests and as a vested investor in vests i invest with e trade, where investors can investigate and invest in vests. Or not in vests. Sign up at etrade. Com and get up to six hundred dollars. Welcome back to Worldwide Exchange<\/a>. Lets get you up to speed on market action. Politics still playing a big role in driving market action. The dow hitting an all time high yesterday, traders attributing that once again to trumps presidency and the prospect of fiscal spending and cutback in taxes and that ultimately being able to boost Economic Growth<\/a>. Again dow calling for a higher open of 30 points, nasdaq up 12 which ended lower because of the selloff weve been seeing, extended selloff in the tech sector with those big tech names like apple and s p higher. Lets take a look at currencies. Its been the appreciation in the u. S. Dollar that has been hurting the emerging markets and currencies of those countries but today were seeing a bit of a breea breather. U. S. Dollar is down against the yen and euro. Deutsche bank is now calling for a parity between euro, the euro and u. S. Dollar trade. Thats something to keep an eye on. If we switch focus 0 commodities a big move in gold and iron ore. Oil yesterday it was trading lower. Today a bit of a rebound here, perhaps hat has to do with the move in the currency market. The u. S. Dollar, wti crude at 44. 44. Ice brent up nearly 2 at 45. 38. Wolf, back to you. President obama arriving in greece earlier this morning. This is his last president ial trip abroad. Hell visit greece as well as germany in a bid to reassure his european allies the u. S. Will maintain its kmint to nato. In washington president elect trump is working on his transition. Tracie potts joins us with the latest. Reporter the latest is that hes appointed someone as chief strategist who is a lightning rod for controversy during the campaign and will now have the you president s ear. Criticism is pouring in on president elect Donald Trumps<\/a> choice of steve bannon as chief strategist. The fact that republicans have been silenced on bannons appointment is a disturbing sign. Reporter his Breitbart News<\/a> is a favorite of white supremacists. I look forward to having a discussion with whoever they appoints. Reporter president obama declined to weigh in on bannon but giving the president elect some advice on how to heal a divided nation. How he signals his interest in their issues or concerns, i think those are the kinds of things that consider tone. Reporter including reports that mr. Trumps Campaign Finance<\/a> chair success considered as treasury secretary. A lot of hard work. Reporter conservative radio host Laura Ingraham<\/a> as press secretary and gull and former u. N. Ambassador john bolton as secretary of state. I wont be attorney general. Up wont be. I wont have to decide that one. If i can escape. Reporter insiders say the trump transition is ahead of schedule. And the nbc is now learning the transition is asking whether the three oldest trump children who are very close advisors to their father might be able to get security clearance before the inauguration. After the inauguration trump can grant clearance to anyone he wants. Before the new ration they have to get the okay. Thats unusual. Lets go back to the appointments yesterday that garnered so much attention over the last 48 hours or so. Clearly those two, chief of staff and chief of strategist didnt require any senate approval. Might we see retaliation from the senate with those appointments in the cabinet that do require senate approval. They will try to block those . Reporter we havent seen that level of backlash yet from the Republican Party<\/a> and thats what you just heard from the democrat and rp saying were not hearing republicans who are in charge of the senate speak out. Certainly you may hear that from democrats in the senate but from the Republican Party<\/a> not a lot of push back on this. At least not yet. Timeline for the big appointments. When do we expect them . Reporter secretary of state is one we mentioned. We could see that possibly by the end of the week. Thank you very much. On a programming note dont miss an exclusive interview with john boehner at 12 30 p. M. Eastern on halftime report. Absolutely. Coming up on Worldwide Exchange<\/a> this mornings top stories including another Early Morning<\/a> rally in stocks. Plus well talk politic, the fed and economy with michael gapen. Stay tuned youre watching Worldwide Exchange<\/a> on cnbc. Breitbar good morning. Global market rally, the dow on a six day winning streak closing at record highs an futures point to more green arrows ahead today. Taking flight. Warren buffett makes a big bet on u. S. Airlines. Plus only in vegas, taco bell making a unique debut on the strip. Its tuesday, november 15th, 2016. Youre watching Worldwide Exchange<\/a> on cnbc. Very good morning to Worldwide Exchange<\/a> on cnbc. Im wilfred frost alongside seema moody. Good morning. Great to have you with us. Lets check in on Global Market<\/a> action. Were pointing higher but not too much. About 30 points for the dow, s p by five points, the nasdaq by 11. We continued higher yesterday. The dow hitting another all time high albeit the gains were smaller in size than weve seen last week with some of the posttrump davis ralys rally. Financials thread way. Sixth positive session in a row and tech continued to suffer. That was the weaker sector down over 2 . Lets have a look at european trade. It was slightly higher yesterday. Mixed today. We have had european gdp numbers out. Germany itself was a little disappointing. Why its up only ten basis points. The survey showed some signs of positive sentiment with the forward looking gauge as opposed to the backward looking one. Overall european gdp at 0. 3 quarter on quarter was in line with expectations. Ftse 100 up almost 1 . Uk inflation softer at 0. 9 . It had hit 1 last month. The pound has suffered today a little bit and thats why the ftse 100 is higher. Were looking at asian trade being a bit more muted particularly the nikkei which has been particularly strong following that trump induced yen weakness. The yen today is just pausing for breath and the nikkei as well. Lets look at broader markets because theres an interesting move in the commodities space if we take a look at oil. Some disappointing u. S. Shale production figures sending oil prices higher. This coming ahead of that opec meeting on november 30th. Renewed talk of a cutback in production. Wti crude up 2. 7 at 44. 49. If we take a look at treasuries that has been where the action has been, this reallocation out of bonds in to equities. U. S. Ten year treasury yield which over the past week has jumped more than 40 basis points to a ten month high retreating a bit here. Still holding on to 2. 21 thats the yield on the ten year treasury. The u. S. Dollar the appreciation weve seen over the past couple of days on the prospect of trumps potential policies that hell put forth when he becomes president in january, retreating a bit. The u. S. Dollar weaker against the japanese yen and euro Still Holding<\/a> on to 107. Stronger against the uk pound. As for gold thats been an interesting trade as well. It was down last week, but one today,s trade were seeing gold slightly higher perhaps having to do with a weakness in the dollar. Be interesting to see if equities can continue to hold on the their own gains. We saw bonds pause for dret, 2. 3 was the high we saw in the ten year. So not a big reversal but if we dont dont see those yields soar will it hurt equities performance, less money coming out of one asset class. A lot fof cuss will be on the fed speakers today. First Economic Data<\/a> well be getting after the election. How investors retook that. As you point out move in yields is interesting. Quite of few speakers yesterday. If we do see a looser fiscal policy it includes the environment with more ease to tighten Monetary Policy<\/a> because one offsets the other. That helps get the expectation of a hike up to 90 . Were pricing that in. Were getting ready. Shorter end of the curve. Pick up yesterday to offset some of the pull back weve seen. Lets get to todays agenda on wall street. Busy one. 8 30 a. M. Eastern time retail sales, import prices and export. At 10 00 business vince. Two important speeches 8 00 a. M. This morning we get boston fed president Eric Rosengren<\/a> and at 1 30 well hear from stanley fischer. A few earnings to watch. Home depot post Quarterly Results<\/a> before top. Watch for results from Dicks Sporting Goods<\/a> and tjx, parent of tj maxx. Late yesterday we heard from richmond fed president who said a possible fiscal stimulus could cause the fed to hike Interest Rates<\/a> faster. San francisco fed president John Williams<\/a> said he was hopeful the u. S. Government would continue on its currents course of open and free trade given the years of subpar u. S. Growth. Todays top Corporate News<\/a> Warren Buffett<\/a>, Berkshire Hathaway<\/a> disclosing new investments in four big airlines. Sec filings shows buffetts firm has taken stakes in american airlines. United airlines Continental Holdings<\/a> and delta airlines. Becky quick reports exclusively that berkshire has taken a stake in southwest airlines. The move is a shocking reversal for buffett who has shunned the Airline Industry<\/a> for decades following a volatile investment he made in u. S. Airways back in 1989. Cigarette maker reynolds is looking for higher price from British American<\/a> tobacco after reynolds rejected a 47 billion take over offer saying the price was too low. British american owns 42 of reynolds american. Back to the broader markets and the economy joining us now michael gappin chief u. S. Economist at barclays. Very good morning to you. Thank you for joining us. Lets talk about the market rally. 2. 3 was the high we hit on the ten year note yesterday. Back to 2. 2 . Is that a reversal of the trends weve seen since trumps election victory and what does that suggest to you about u. S. Equities . It does suggest we finished the initial move. Taking ten year treasuries back to where we were around the Fourth Quarter<\/a> of last year. Weve been at these yield levels before as you mentioned in the lead. Up about 40, 45 basis points or so in the last week. I would say the initial move is probably there. The data now has to start to come in and we need a little bit more clarity on what the actual policies will be from a Trump Administration<\/a>. So this is consistent with the expectation youll get a lot much fiscal policy, some improvement in short term growth and probably a little bit more inflation down the line. Markets are reor yerntsing themselves to that outcome. You say we now need to see the data first and clearer policy second. Do you put this rally more down data based expectations than trump policy expectations . I dont think at this point. Obviously i think the expectation that policy will change dramatically. Were weighing how much of that is antitrade and contractionary and tax cuts and spending. Thats what markets are reacting on. In terms of the data, the data is obviously more about a rate hike in december, Financial Market<\/a> volatility in the near term. Were not getting a lot of that, a hike in december looks very likely. Market responds much more about whats anticipated policy stance which should come in perhaps early 17 if not the second half of 17. Seems like investors picking and choosing what they want to hear from the president elect forks cuss on fiscal spending and lower faxes, but overlooking the protectionist trade policies that donald trump could potentially bring to washington and also that 45 tariff on chinese goods. Theres research that shows that could lead to a 4. 8 million decline in american jobs. Right. So the way to look theres an antitrade component to his policy plans. This is about sizing the two. The underlying theme is to reorient the economy away from trade towards more Domestic Production<\/a> and activity. That type of reallocation is typically messy. Its about the relative size of these. We assume you get some antitrade policies. Weve done that through form of higher tariffs on mexico and china goods not to the 45 as you mentioned. But chinas exports to the United States<\/a> go generally right into the consumption basket. Its like a tax on the consumer, higher tariffs are a tax also on business. You need offset that somewhere else to keep growth elevated. You do that through a large personal and Corporate Tax<\/a> cut. Its about sizing and timing those two components. Obviously theres a lot of uncertainty around that and i think markets are making the assumption that the fiscal package will dominate any antitrade policies that come out. The market now resigned to the fact that any fiscal package will see the National Debt<\/a> and the deficit rise again or are people expecting that this is going to be efficiently delivered and balanced by the Trump Administration<\/a> . I ask because im looking for where the market can see some surprises as we get into early next year and see some disappointments . Our assumption is the deficit will go wider and borrowing will increase. Where that ends up in terms of debt to gdp ratio will be dependent on where nominal gdp growth goes. But our assumption is that it cant really be offset in terms of being deficit neutral so we would expect the deficit to go from its current 3 of gdp towards 5 , the size of the revenue package we are assuming is about 2 of gdp in terms of revenues at the federal level for comparison purposes the bush tax cuts would be 1. 5 . 2 would still be far less than independent estimates of the trump plan which would put it at 4 to 5 . We think thats a bridge too far but 2 to gdp would be a quite Large Program<\/a> and i dont see how you make that deficit neutral. Michael thanks very much for joining us this morning. On to top trending stories today theres a new taco bell on the vegas strip and not your typical drive through. The 24 hour restaurant has a dj, a vip lounge and customizable freeze wall with drinks on top. I like the sound of that. That sounds like a good set up. Im not sure i would go to vegas and taco bell is my first choice. When you first turn 21 you dont have a lot of money. If on your Facebook Timeline<\/a> was flooded with pictures of the moon yesterday dont be alarmed. Social media erupted with stunning photos of the emergence of the supermoon the largest and brightest moon. The moon wont come this close to the earth again until 2034. I caught it just before i fell asleep last night. It was beautiful. Really astounding, to be honest. Never seen the moon this close to earth. It felt fake. You say that for it to be zbhoen it gets dark earlier these days. Im in bed at 4 00 p. M. So i missed it. Amazon is ditching its blue and gold wrapping paper. They will be shipping millions of gifts in velvet gift bags. It comes in five sizes and three colors. Prices range from 3. 99 and 5. 99. Why the change . Amazon director of worldwide sustainability says the e commerce giants wants to minimize packaging suggesting wrapping paper has no value. There we go. Something to think about. Hate wrapping. Coming up on the show our must reads plus a programming note. Dont miss cnbcs exclusive interview with Jeffrey Immelt<\/a> at 11 00 a. M. Eastern. Well be right back. Guests connected at work, and at play. Or the it platform that powers millions of ecards every day for one of the largest greeting card companies. Businesses count on communication, and communication counts on centurylink. Now to todays must read stories. Lets start with wall street journals Editorial Board<\/a> writing a piece titled europes trump panic. On sentence says please folks get a grip. The conclusion is europeans like to lecture americans about their Political Choice<\/a> and even as americans always seem to be coming to europes rescue before panicking about mr. Trump perhaps europes leaders should meet him and i do agree with the general theme in this particularly its echoing sentiment from the foreign secretary of the uk over the weekend where he said to eu leaders we must stop this. I agree with that main point. But in terms of questioning what the result was itself. In terms of the policy implications there are reasons for certain countries to be concerned in terms of his position clearly towards backing up eu integration and that headline about some comments about nato worries the baltic states. Overall analysis of this article is right on. But there are finer points ever policy which are worrying a lot of leaders. Im encouraged how u. S. European relations are impacted by a trump presidency. Those foreign minister meetings is something we watch very closely. Financial times, i picked an article there. A piece titled donald trump, Vladimir Putin<\/a> and the art of a deal with rush. He writes, a rival school of thought argues what mr. Putin wants above all is respect and this school believes if washington treats russia as an equal and makes it clear america has no intention of encouraging russias liberal opposition than new deal with russia is possible. I just thought this was interesting, a fresh view. So far reaction has been so negative to the prospect of stronger relations with russia. Having russia restored relations would potentially be good. A unified approach in the middle east and in syria. Also seen this rise of strong men across the world from i would say from modi to putin, trump in some ways as well. Maybe this is someone we want on our side as opposed to opposition. Potentially. There were no answers from the Obama Administration<\/a> in terms of how to deal with it in any other way. Theres a lot of, again, a lot of concern about what the consequence would be. Geopolitical tensions. Start to allow amnnexation o eastern ukraine. Tough one to manage. Not a successful answer in the past administration. Approaching the top of the hour. Steve is getting ready for box. Joe kernen is full of ideas and tell us what is coming up. We had nigel on yesterday. I know. I dont know for sure whether he could he be a cabinet member here . I was talking actually to Michelle Carusocabrera<\/a> about that. I would like to draft him to come over here and help with running. Probably not. They still need his assistance as you said over in the uk. Hes not going get it. The uk government came out again to make it clear hes not we may have something for him over here because hes sewing right minded about so many things. Let me ask you, i know youre embracing culture. Have you seen meet the millers or were the millers the Jennifer Aniston<\/a> movie. No. Youre locked on to masterpiece theater. Dont go to theater much either. Jennifer aniston and funny. Today we have bill miller the legendary investor and his son bill miller iv and it will be interesting especially given the cross currents that were seeing in all these different markets that have reverseed a little bit today. One thing that hasnt reversed is the positive sentiment towards at least the broader averages. I dont know whats happening with the nasdaq. Kind of interesting. Well talk currencies, well talk back up in bond yields and three or four consecutive records weve had in the dow. Bill miller over the years, had one of the best records of anyone on wall street. And were going to give this new guy a little bit of a Job Interview<\/a> see if hes up to the task for taking over for a legend. I mean he has good genes obviously. Ive seen you in jeans, you look pretty good in those jeans. Different spelling. Whats your inseam like 40 . Not 40. That would be extreme. That would be put me about 8 foot. Im 65. Is it 38 . What is it. I want to know. Im 36, i think. I cant believe were talking about it. Joe well leave it there. Squawk box starts in ten minutes time. Coming up on Worldwide Exchange<\/a>, richard clarida. Youre watching Worldwide Exchange<\/a> on cnbc. Were drowning in information. Where, in all of this, is the stuff that matters . The stakes are so high, your finances, your future. How do you solve this . You dont. You partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. Morgan stanley. About tempurpedic mattresses. Is that they contour to your body. It keeps us comfortable and asleep at night. Shop our biggest event of the year, including all tempurpedic mattresses. Save up to 600, now thru november 29th. Get your tempurpedic. The most highly recommended bed in america. Welcome back to Worldwide Exchange<\/a>. Joining us now is rich clarida, local strategic adviser at pimco. Lets get into some of the minutia of the bond moves weve seen. Short end of the curve, stloer react to this trump victory. Why is that and now that were seeing expectations around 90 for a rate hike in december of all the bond moves happened already . Im not sure about that but its a good point. We had big selloff in treasuries. Yields are back to where they were a year ago. Really the 2016 yields that were abnormally low. Also true that most of the selloff has been what we think of as a term premium. The fed repricing has been pretty modest. We expect the fed to go in december, perhaps two more hikes next year. Most of this move is restoring a premium in the market and not pricing an aggressive fed. Youre sounding like this move is totally justified. Its been i would say a very sharp correction. You think this is a justified move. The fact that it occurred in a week was obviously very noteworthy and if we get a lot of weeks like this it would be of concern. Treasury investors have not been compensated for the past several years for taking on Interest Rate<\/a> risk. Also the markets have been too relaxed we think about inflation over the next couple of years and right now the repricing indicates markets are expecting about a 2 inflation rate and that also makes sense. The outcome of this election, rich has brought a discussion about Monetary Policy<\/a> and geopolitical risk. Are they overlooking the potential geopolitical risk that trump brings. Geopolitical risk is with us and a very complex time. Youre correct seeing markets the pendulum tends to swing both ways over geopolitical risk. Thats a factor. Another factor is that well be getting a fed chairman by early 2018. Now were focused on the transition of fiscal policy but next year focus on who the next fed chairman will be. Is that a simple transition to perhaps a slightly more hawkish fed chair and thats it, very simple change or is this a more meaningful change, well see more political interference, someone that donald trump can speak to daytoday and really start to lose the independence of the fed . Well, i think that is not a major risk. I think transitions between fed chairmen always generate market volatility and likely that whoever President Trump<\/a> appoints will have a somewhat more hawkish approach to multiple than weve seen out of the yellen fed. I think the yellen fed on balance has made the right call but the folks that a President Trump<\/a> might appoint would have a different view about the pace of liftoff. Thats the most relevant factor. When do you expect the first rate rise here in the u. S. The fed meets next, in the second week of december. And the markets are pricing in at 90 . That looks about right. I think well get a fed hike at the december meeting. Rich, great stuff. Thank you very much for joining us this morning. Pleasure as always. Rich clarida with pimco. We leave you this morning with futures pointing higher. Mexican peso rallying higher. Dollar pausing for breath. Thats it for Worldwide Exchange<\/a>. This morning squawk box is next. Monopolies make money, right, andrew . When Warren Buffett<\/a> does it youre vindicated. New read on housing, the economy and American Consumer<\/a> home depot set to report. Well bring you numbers and reaction from wall street and rumors swirling about potential cabinet positions in the Trump Administration<\/a>. Well talk to a billionaire who reportedly is on the short list to head the defendant treasury. Its tuesday, november 15th, 2016. Squawk box begins right now. A. Announcer live from new york where business never sleeps this is squawk box. Good morning welcome to squawk box right here on cnbc this morning. Im sore with joe kernen and melissa lee. Take a look at u. S. Equity futures this morning. Keeps going up, up, up. Dow looks like it will open up 22 points higher. Nasdaq up seven points and s p 500 look to open up four points higher. Overnight in asia, a bit of a mixed picture. Hang seng did go hire. Nikkei down. Finally lets take a quick look at european equities. Youre looking again, all sort of marginal mixed picture and then finally","publisher":{"@type":"Organization","name":"archive.org","logo":{"@type":"ImageObject","width":"800","height":"600","url":"\/\/ia600505.us.archive.org\/6\/items\/CNBC_20161115_100000_Worldwide_Exchange\/CNBC_20161115_100000_Worldwide_Exchange.thumbs\/CNBC_20161115_100000_Worldwide_Exchange_000001.jpg"}},"autauthor":{"@type":"Organization"},"author":{"sameAs":"archive.org","name":"archive.org"}}],"coverageEndTime":"20240626T12:35:10+00:00"}