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tv   Worldwide Exchange  CNBC  April 1, 2013 5:00am-6:00am EDT

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i like to say there's always a bull market somewhere and i promise to try to find it just for you right here on "mad money." i'm jim cramer and i will see you next time. welcome to a spesh edition of "worldwide exchange." ross and kelly are off today as europe celebrates easter holiday. i am brian shactman. >> and i'm kate kelly. futures right now are looking -- >> a little on the on negative side. >> yeah. >> on this easter monday, all the major european markets, the ftse in london, the cac in france and ibex are closed, right, brian sfp. >> that's right. there are a few asian markets
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that were up and running today. li sixuan is covering it all for us from singapore. sixuan. >> thank you, brian. first, let's get a look at china's factory activity. new data shows manufacturing is extend expanding, but at a slow pace. official pmi wish monitors mostly large state-owned firms at 50.9, missing market expectations. meantime, the hsbc readings which mainly tracks smaller companies readings came in at 51.6, roughly in line with the flash reading. take a look at the market reaction today. shanghai composite eased a modest 0.1% thus a year-to-date low. but the property counter was the outto date performer. in gentleman panch, the boj tankan survey showed improvement among manufacturers.
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there are big expectations at the easing this week and investors are weary of being letdown. the nikkei tumbled over 2% today on profit taking. in south korea, we got relatively muted reaction to north korea's latest war threats, the kospi a slight retreat had more to do with that chinese pmi data. the builders cap losses. india's sensex still in action, now trading higher by a modest 0.2%. as you just mentioned with the aussie, hong kong and new zealand markets closed for the easter holiday. they'll be back online tomorrow. back to you, brian. >> as mentioned, rising tensions of north and south korea, the major concerns in asia. south korea vowing to strike back quickly pt north wages any threats to its territory.
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>> it's probably more -- it feels close to war at times. north korea's missile res combat ready and pointing at south korean and u.s. targets now. both sides, north and south, say that they'll strike americanslessly at the other side if there's the slightest provocation. and there's that state of war that is declared by north korea on saturday and that still remains in effect as well as the threat of even preemptive nuclear strikes on south korean and u.s. targets. so most experts will tell you that kim jong unsimply doesn't have that capability. despite all that, life seems to be going on pretty much as normal here in seoul. you about we're told that masks and anxiety shared by many south koreans that in such a tense atmosphere, even a minor incident could trigger a conflict. that does seem to be the main overriding fear right now, that a miscalculation could lead to
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war. but many south koreans do seem to see kim jong unas the, quote, boy who cried wolf. they have lived through these ba ledge rant threats and rhetoric many times before usually during joint u.s. south korean military maneuvers which are going on currently. only to see all of that dialed back, but, of course, there's always a chance that this time could be different. back to you. the first quarter ended friday on a high note with the s&p up a full 10% on strong volume. some successful ios came to market including the debut of pinnacle foods on friday. credit markets are thriving, issuance of leverage loaned, collateralized debt and loans at highs. even ongoing fiscal struggles in europe haven't tamped down the price there. we'll get a sense of how professional investors did with
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hedge funds through march likely to trickle out and some body language on bank earnings coming up. markets say it was a solid quarter, so those that weren't in equities in january when the big move happened may now be regretting it. i should say, by the way, that some investors think it's too pricely to get involved with bonds right thou. obviously, the price shows you there's interesting. >> let's bring in dan cummings to talk about that. we'll get to the bond market. i think we should get to the broader equity market because everyone is so focused on how well we did. the way they've talked about it, we've never had an 8% gain in that first quarter and never finished positive for the year. can we increase on what we've already done or are we done for the year? >> brian, we're off to a good start. we've had a habit of doing that the last four years. i think importantly, though, investors have come back in in a reasonable predictable tagz. it took us 17 months to lose 50%, 57% in the market and it took us four years to regain it.
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i think people lose sight of the fact that there's a lot of cross-training here that are much improved over past peaks. valuation are lower. unemployment has still more room on the downside. consumer sentiment still has room to improve. so i think that there is still more good news to come. it's definitely a show-me market. and so the next few weeks with earnings are going to be a real challenge and you can't ignore that southern european map. it seems to have a daily dose of uncertainty that we have to cope with, but so far, investors have remained reasonably undeterred by it the. >> sam, i'm reading the "new york times" yesterday morning and almost choking on my coffee because david stockton is warning, right, that the tech stock boom, the housing boom and the period we're in now are bubbles that are likely to burst and billions of dollars of wealth will be erased for americans. what's your take on that? >> you know, as we hit new highs, i don't see a lot of people being sent mental about it. i don't think a lot of people
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will re-evaluate their investment strategy just because we hit new highs on the s&p and the dow. david is a wiseman. david is a -- a lot of history and i'm sure a lot of very good insight offer. i think that the economy remains very strong. the fed remains committed to supporting the economy. and from where we sit, i think still the best is yet to come for the balance of 2013. >> so we haven't seen this rotation out of bonds into equity. it's been money from the outside. can the economy stand on its own? if we do have the fed to get back there, are we actually growing in a real way and could we survive without the fed? >> brian, the question you're asking is the key one, which is when the fed decides to pullback, where do we find ourselves? >> i think importantly if we're stable from the standpoint of income statements, balance
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sheets, there's more political certainty. commodity price ves moderated. the political uncertainty in the world is moderated. i think we'll be in ach better position. but i think one of the most important things is if you listen to chairman bernanke's testimony, i think he intends to be very cautious. and while the exit may occur, it's not going to be abrupt and i think we'll see a nice bleed into the market. hopefully we can move into an unsustained, unsupported fed market. but i think that's going to take some time the. >> dan, just -- i know you guys haven't gotten to earnings yet. but what was the feel of things this past quarter at bofa? did sales and trading have a good feel to it? was the volume healthy? >> we started the year -- i think the market was a good proxy for how we felt. i think the dow was up 11% in the first quarter. that's the best start to the year in 15 years. across our markets, we saw our clients become more active. despite the difficult political back drop, we saw a lot of very
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positive things. funds are flowing back into equities. prior to the beginning of this year, we had 19 of 20 months where people yanked dollars out of equities. we're seeing the support. the supply and demand is there. i would say in general that we felt very good at volumes, we felt very good about activity. but we are justifiably concerned about the futures. >> very quickly, we talk too much maybe about the retail investor. but the person you deal with who has been in bonds and cash and are conservative and worried about jumping in at the top, how to you placate their fears and encourage them to trade in the equity markets? >> that's a very good question, brian. fist, the market lost half its value twice in the last two years. retail investors tend to remember that. but i think we're reaching the point where the meager yields and fixed income are really encouraging investors to take note and i think there are some
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genuine concerns about missing the rallies. >> you guys have been on top of this trend, as well. you've had great research coming out of bofa, favoring bonds really over the last decade and the question being money is coming in off the sideline into stocks. but when are we going to see outflows from bonds and into stock funds? and if it happens soon, will it be soon enough to capitalize on this rally? well, you know, kate, we've seen both. we've seen bond inflows, we've seen equity inflows. >> which is odd, right? >> it is absolutely odd. i think much of what is coming into the market is within cash and cash equivalent. i think coming back in, equities is a big step. it's unclear what can happen next to investment. there's a lot of money coming in. >> dan cummings, thanks for that. we're going to have more coming
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from you after the break. it's may be a small nation, but it's proving to have a big impact on europe and the rest of the world. and later from washington, law marks who like sweet crude. we're going sector by sector to get you prepared as we kick off the second quarter. only hertz gives you a carfirmation. hey, this is challenger. i'll be waiting for you in stall 5. it confirms your reservation and the location your car is in, the moment you land. it's just another way you'll be traveling at the speed of hertz.
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welcome back to "worldwide exchange." jack lew will head to berlin for talks with german finance minister and francis pierre moskovichi. cyprus will be high on the agenda for lew and his counterpart. cyprus's central bank some some depositors could face hefty losses and this is unbelievable. as part of the nation's bailout, accounts with more than 1100,000 euros which are uninsured will lose 37.5% of their value after they convert it into classic bank shares. banks of cyprus will freeze an additional 22.5% until the bailout terms are met. that pone will be placed in a fund that will not earn any interest. the latest bank bailout
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controversy in cyprus has sparked fierce of contagion. while the cyprus story has weighed heavily on some investors' minds, it hasn't been enough to stop investing. dap, one thing that struck me last week was this back .forth over the sa maptices of what the dutch minister said. was this a template where the depositors are being taxed, effectively, or was it not? regardless of what he said, i think it's being taken as such. >> right. listen, cyprus is more important than the relative size of its economy. okay? that's the first point. i think the second point you have to think about is what you just said. this could be the model for resolution in other parts of southern europe. so we have to be mindful of what's done. depositors not getting their money back is a very challenging conversation. 30%, 40%, whatever. this is virtually unheard of in
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a world where deposits are thought of as being sacrosanct. on wall street, we get paid to worry and we do worry about this. thus far, it hasn't been enough to unnerve the market so far, but we do worry that it's going to weigh on investors' psychology. >> they say depositors under 100,000, so the pristineness of the insurance made it through. but then, you know, there's so many high network people that we're using that avenue. forget about a run on the banks because i think we're past that conversation. will we see a lot of money go to more secure nations like the u.s. which have hired specials for insurance or do they just go to another tax-haven-type country? >> i think you have to look at the insurance models. the u.s. model is paid in by multiple different entities. the insurance model in cyprus is a government model. i think the flows, if they can, brian, will flow out. but at this point, you can check in but it's unclear if you can
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ever leave. >> i think the cultural and socioeconomic impact has been huge certainly on this small island. i was listening to npr over the weekend or pnc and they had a woman talking about how she literally wants to live off the land growing vegetables and how she wants to make due without commerce and imports. it's become too painful. putting those issues aside, though, when do you get to the point that a eurozone departure is a possibility and the great inflation that could come with that? cyprus is sort of an isolated case, but if people starting to get truly disaffected, it could be a negative har binger for the eurozone, couldn't it? >> i don't think it's quite as dramatic as we're going to see the larger countries in europe need to go take action. i think it leads to the overall unease people have the about the settlement of the southern debt crisis. and three weeks ago, i'm not sure many of us were speaking
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about cyprus with any regularity. it's all we've talked about for the last -- >> well, it's such a tiny economy in the scheme of things. >> and their banking system was so much bigger than them. but i get the question all the time and i'll ask it of you. as an american, if there is no real systemic risk to us, why should we care? why is it important to us? >> i think the reason we should care, brian, is the global kind of activity today, even if you make the statement that it doesn't have any direct impact, i would challenge that, first of all. second of all, i think it ultimately is where someone sneezes, everyone else gets a cold. so i think there's some contagion here that spreads outside the eurozone. >> you know what i think is interesting, dan? and is we were discussing this a few minutes ago. the market globally does seem to have taken on an air of resilience in some ways. in the u.s., we see that despite the big concerns, sequestration has more or less shrugged off.
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it hasn't thrown the equities off its game. in europe, i was speaking to professionals last week who were telling me last summer, they thought there were good opportunities in europe. now they thought they were extensive. if there was real contagion in europe, wouldn't you see bond prices start to fall a little bit? >> i think so. let's go back and look at equities as a proxy for these different markets. the u.s. had a good first quarter. japan had a good first quarter. >> yeah. people ripped it in japan. anybody along the nikkei or these major japanese blue chips did phenomenally well. >> but look at china, look at the select economies in europe. they're lagging. there's still more room to grow. and i think there's still a challenge ahead of them. so i'm not sure that we're out of the woods quite yet on this european story. >> dan, thank you very much. dan cummings, bank of america merrill lynch. kate. >> u.s. prosecutors have charged sac capital michael steinberg
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with insider trading. he's the most senior employee of steve cohen's hedge fund to be indecid indi indicted. it alleges he used inside information related to dell and nvidia to generate $1.4 million in illegal profits during 2008 and 2009. after being arrested by the fbi agents, steinberg pleaded not guilty to charges of securities fraud and conspiracy to commit securities fraud. >> you know, you're an expert on this and you know these guys. there's a couple of quick things that come to mind. one is they have gains smaller than i thought they would be. but the $600 million fine that sac was levied with that hasn't paid yet, are they done? that's what everyone is asking. is steven cohen still lible for more here? >> the short answer is yes. and the tricky thing about this story, brian, legally speaking it's a bit like whack a mole.
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the sac settles on civil stocks ared to other trades. >> right. and you're seeing pictures of steinburg, not steven cohen, by the way. >> correct. >> and he had an arraignment earlier in the -- later in the day, rather, in federal court. but the sac tried to settle these civil charges. a judge is reviewing the bigger portion, the $606 million portion of that and may want sign off on it because the sac has not admitted or denied wrongdoing. is there are other issues out there. a former trader there connected to the case settlement i just mentioned has been indicted and has pled not guilty. so that's ongoing. there are concerns that steve cohen maybe charged himself as part of that. he's connected to the steinburg matter. he was steinburg's boss. steinburg was one of the first hires at sac. so he has a lot of history at
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the place. if he were to cooperate with prosecutors, it could be very damaging for the firm. but that said, one final thought here, we don't know the other side of the story. while these indictments reign in a very scary way, and i would include the steinburg one in that thinking, you don't know what sac's defense is. in the case of marto may, you thought you had $250,000 of ill gotten gains there and sac had an opposing position on its books elsewhere, so the profits were apparently actually moved. they look like profits, but they're essentially flat the stocks. now, the ncaa men's bnl tournament, did you watch the game? >> i didn't watch. >> i was going to say, you had on npr, you might have been on the car. we're down to the major four. we'll have your highlights, plus a look at the stunning valuation of mlb's media franchise. >> as we head to break beyond just hedge funds, cnbc's kayla tousche has a look at what to
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expect for the financial sector in the coming quarter. >> here is what to watch for on the banking beat in the quarter ahead. from tampa to salt lake city, bank shareholders will gather to vote on pressing issues like pay packages, whether chief executives should serve as chairman. this proxy season comes as sentiment against the big banks hits a fever pitch. in april, the senate will issue new penalties for too big to fail. and mortgage refinancing was a hearty business for banks in a low yield environment could keep drying up with spring the busiest time for home buying, banks may get creative in search of new business. i'm kayla tousche. that's what's haepd for banks in the second quarter. are you flo? yes. is this the thing you gave my husband? well, yeah, yes. the "name your price" tool. you tell us the price you want to pay, and we give you a range of options to choose from. careful, though -- that kind of power can go to your head.
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at t. rowe price, we understand the connections of a complex, global economy. it's just one reason over 75% of our mutual funds beat their 10-year lipper average. t. rowe price. invest with confidence. request a prospectus or summary prospectus with investment information, risks, fees and expenses to read and consider carefully before investing. let's get another check on the u.s. futures this morning. slightly thin trading. >> not a lot of trading going across the gloen right thou. we're the only game in town on. right now, about had 1/2 points against relative value in the dow. the sloth for the ncaa men's final four are now filled. louisville pulled it together after a gruesome injury to sophomore guard kevin ware. he broke his leg in the first half. they beat the duke blue devils.
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carpals face wichita state next saturday. earlier, the michigan wolverines had zero problems with florida, beating the gators by 20 in the south region. it will be a battle of two number four seeds on saturday. michigan was unbelievable. and they may be coming off back to back seasons, and have the lowest payroll in baseball, but the stos kicked off the 2013 season and trounced the texas rangers, 8-2. they have a $25 million payroll, the highest payroll is $213 million. so they're basically spending nothing. the dodgers have the most. a-rod has $90 million and isn't even playing because he's hurt. >> wow, that's terrible. and i'm sure folks saw the "new york times" story yesterday about the cost of having a-rod on this current contract. and with his injury -- from an economic perspective, you almost hope that he's unable to pay so
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insurance pays out. >> and that may well happen, too. and i may want to stay on the game of baseball for a second. we had baseball last night, but today is the official opening day. it marks another year for mlb at-bat. it's the most profitable mobile app in all of sports. >> i did not know that. >> yeah. so the nfl might be the country's most popular league, but they have not figured out how to monetize mobile like baseball has. the app was downloaded last year. when forbes assessed the franchise values for all major league teams, they pointed to themaker and manager of the app, mlb advanced media. according to michael zainey who did the research, the group's revenue was run $650 million. and if it was its own entity, it would be worth quite a bit more. >> well, in about ten years, the value of major league baseball advanced media has grown to be roughly a $6 billion enterprise.
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now, each team owns 130th of that. so when you factor in what teams are worth, that's adding roughly $200 million to each team's value. >> that's just for the media. and that's 200 million in value with no players, no tickets, no anything. and at 8:30 this morning eastern time, we're going to talk with larry, the ceo of the red sox, more about that stuff. >> sounds fantastic. still to l tocome, we fass the fiscal cliff and the sequester, washington still has a big budget problem on its hands. we'll take a look at how the next big debate could play out and what it could mean for the markets.
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welcome to another edition of "worldwide exchange." i'm kate kelly. >> and i'm brian shactman. let's take a look at the stock futures here as we get to more matters of politics and businesses. against fair value, we're down about 13.5 points. in the dow, coming off the best quarter since 1998 and is we have never gained 8% in a quarter, not that it's positive for the year. down about 2.5 points in the s&p, the fass dak about 4.5 points. the trading day is still four hours away. >> a lot of time to kill after a holiday weekend, isn't it? thank god for sports. all the major european markets, the ftse, cac and dax are closed
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for the easter holiday. in japan, the nikkei 225 down 2%. >> the tankan survey was down. >> a lot of hedge fund managers have been benefiting from that. in south korea, the kospi is looking relatively flat. so kind of hard to see the detail there because my eyes aren't -- >> down about 4%. >> down about 4%, right. in china, the shanghai composite looking a little choppy and leveling out here, i guess. >> basically flat. >> basically flat down 0.1% so far for the day. >> let's turn our attention back to the u.s. we kick off the second quarter, washington, d.c. will likely play a pretty big role or bigger in deciding the fate of the markets as it did in the first quarter. john harwood has a look.
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>> here is what to watch for in washington in the quarter ahead. here is the supreme court justices will decide the fate of two cases that have been argued the involving the right of same-sex couple toes marry. in the capital, the house and senate are both going to try to work out a compromise on comprehensive immigration reform. and at the white house, the president and his economic team are going to continue to try to work with leaders on capitol hill and the rank and file to come up with a long-term budget deal involving some tax increases and cuts to entitlement. that's your second quarter channel check. for cnbc, i'm john harwood. >> for more on what's next for lawmakers in washington, let's bring in cnbc contributor and former white house deputy press secretary tony fratto. welcome, tony. thanks for joining us so early today. >> thanks, kate. great to see you guys. >> good to see you, too. give us a sense of the sequestration debate, the debt ceiling, the next couple of
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issues, current or next issues we're facing. obviously, this is having a realistic on the economy and in washington. however, the markets seem to be shrugging off a bit of it and baking it into prices and expecting dysfunction to continue. what's your prediction for the next month or two? >> well, look, ooing we've gotten rid of some of the cliff happening events. when i say got rid of them, we've put some of them off. we've gone through a whole series of cliffhangers, the fiscal cliff and whether sequestration is going to take place and some of the tax increases. we've gotten some of those. we've put off a few more of them. the debt ceiling won't be an issue until much later this summer. certainly it's not a secretary quarter issue, certainly not a third quarter issue. there's a lot of data and information that's going to come through between now and then to see what the real impact is going to be. it will be nice if we can get to a point when market participants can look more towards a real economy rather than what's happening in washington. we're not quite there at that point yet. >> tony, we've seen a total
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failure of the attempt on both sides to reach any sort of grand bargain. we're sort of arguing over the more ancillary bit by bit stuff. how do you think obama is feeling at this point in terms of how strong his political capital is? and what about the republicans? it does seem there's a lot of talk about a splintering in a party and a lot of disagreement over a swath of issues. we've seen turn around owes a number of things, including immigration recently. how would you gauge the confidence level on both sides? >> on physical issues, not a whole lot has changed kate. incomes above $400,000 a year, that took the air out of a lot of -- you know, some of the real tension. i mean, the tension is still there, but the possibility of getting, you know, a grand bargain kind of deal. there's still a lot of people who kind of want to do that. both republicans and the some democrats want to do tax reform. the president is going to be
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introducing his budget a couple months late, but the budget comes out next week. and i think he feels pretty good about where he is on some of these issues. but it's mostly some of the nonfiscal issues that he's spending a lot more of his time on gun control, immigration, reform. there's the expectation it will turn to climate change and some other energy issues and less of the fiscal issues. the ingredients don't really seem to be there to get to a real deal. we talked about, you know, he wants tax increases. republicans think it's realistic that we need to do entitlement reform. those aren't the kinds of things, you know, that add up to a lot of winners. you have a lot of losers in that deal. that's why i'm not very optimistic that they'll get to that grand bargain type of deal. >> in terms of the gop, there's a lack of consensus there, right? you've got the difference between the john boehner folks and the john cantor folks.
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do you think the party can come together? there seemed a lot of optimism coming out of cpac. but there's a lot of issues to develop a more uniform voice. >> i think the one thing where there is uniformity is on the question of tax increases. and, you know, so with the party agreed to the tax increases at the end of 2012, they said no more, right? so whether you're in the most conservative corner of the party or more centrist in the party, there seems to be great unanimity that the president forced them to accept tax increases. they gave in on tax increases. once. and they're not going to see it again. that's why i feel like there really isn't, you know, agreement there. i think there is some -- there are some splits on some other issues, especially some of the social issues on immigration, i think there's some splits on immigration. we may see some forward movement on some of these other policy webs but not really on the question of tax increases. and if you don't get it on tax
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increases, it's hard to see a deal. >> tony, brian shactman here. good to see you, bud. >> hey, brian. >> i thought it was good that the senate passed a budget. i learned in my middle school social studies that one passes the budget, the other passes a budgets, they get together and they solve their problems in conference committee. why is this not a more positive story? >> it's just -- it doesn't work. i mean, i love -- the founders of the republic, you know, did a lot of good things. one thing they didn't do well is create a good budget ross. and when we have a split house and senate, it's really hard to see how they come together on a budget. >> and sorry to interrupt, tony, but, brian, that's the least they should be able to do. >> you're right. it thought it was good news and we got a budget, so i thought that was good news. >> there are lots of novel things going on here. each house passed the budget. now we have a president, this is the strangest thing, the president is presenting his
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budget next week after both the house and senate are passed their own budget. structurally, we don't work very well this way to be able to get budgets done. we need to figure out a way to fix it so that the house and senate can get together and get to a conference committee and agree, but it's hard to do with split party control. >> no, absolutely. deputy press secretary tony pratto, thanks very much for joining us this morning. thanks, guys. coming up next on "worldwide exchange," the ipo market off to a good start for the year. will the happy days roll off the in the second quarter? we'll look at the pros and cons of going public versus staying private right after the break. e. ♪ ♪ the new blackberry z10. with time shift and blackberry balance.
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welcome back to "worldwide exchange." kelly and ross are off today. we're doing cnbc "worldwide exchange" from here in new jersey. best buy and the fallout from see-througho ba pants at lululemon, the retail drama of the first quarter will carry into the second quarter. courtney reagan has been checking out the circular and looking ahead. >> in the retail sector in the quarter ahead, it does start later than many other sectors, but looking ahead, deutsche bank expects continued economic improvement for target, macy's and nordstrom. wall street st waiting to see if
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jp penny will turn around. and while analysts believe normally colder weather has made for a challenging start of spring, retailers may made up sales lost to the influence of mother nature. that's your channel check. for cnbc, i'm courtney reagan. jeffrey durat wants to remain private longer. toys r us has pulled its ipo citing unfavorable market conditions and a leadership position. the retailer, which first postponed its ipo in 2011 continues to struggle with weak sales. jackie deang his has be anan ad tracking this market. >> before we look at where we're going, sometimes it helps us to look at where we've been. we saw 31 ipo deals.
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that was according to renaissance capital. resans knows that ipo performance has generally outpaced the broader market with an average total return for the quarter of 18%. they also highlight a shift towards yield plays. now, that said, everyone is, of course, wondering what's in store for the second quarter, the rest of the year in light of the jobs act. that's sort for jump start our business start-up. most companies have elected to final confidentially. that has reduced the visible pipeline. but paul tells me there is a lot of activity occurring behind the scenes. it's unclear if the overall pipeline has been reduced at this point. and a confidential filing process has caused yields to move quickly. 31% of the yields in q1 have priced within 50 days of filing, but it has shifted the visible pipeline to some of these larger company. that's because those with a revenue of $1 billion cannot take advantage of that profit. some of the notable deals that
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we'll be watching for include b bausch & lomb, ing u.s., coty. they say there should be more tech deals later this year. most recent reports indicate others have filed confidentially. on tap this week, independent bank group expected to price between $24 and $26, offering 3.2 million shares and a smaller deal harvard apparatus regenerative. >> jackie, stay with us. let's bring back dan cummings, head of bofa's international wealth management business and a veteran. dan, what are your thoughts on the quarter that just shaped up and what kind of environment we're operating right now? do you believe that it's a difficult market environment or perhaps was there a tailor made issue there? >> listen, i think jackie had some key points. it's supply and demand. the volume in the first quarter
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was up 20% over the same quarter in 2012. so there was adequate supply. demand is strong. the investors risk appetite for new issues is there as concerned abate about the economy and some of the political concerns. we have the largest backlog since 2007. so i think that the buyers and the sellers are coming together at a point that intersects that makes sense for them. i think that we will have a very good, very robust level of activity. but every company needs to have a lot of things happen simultaneously for a good ipo. and so as you look at the different companies, you have to evaluate where they are, where the market is, where their industry is and all of those things need to come together in order to orchestrate the symphony into something that is acceptable. >> so here is a quick for jackie, but i want you to weigh in on this, too. pinnacle foods did pretty well. that was a big sponsor back
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deal, of course. and is one question in the market has been will these private equity firms be able to monetize their investments from five to seven years ago? this is probably an example of that. do we expect to see more such deals to come? >> that's a great question. let's talk about pinnacle for a second. they priced at the high end of the range. the deal did perform quite well. in terms of those deals, they actually have been flat over the last several quarters, which has been interesting, even though it feels like we've been talking about them a little bit more. at the same time, they're 50% what we saw last quarter last year. 15% below that number. we are seeing a little bit of a decrease. in the meantime, the return that we've seen those for deals, they are up 26% in their first quarter performance. that is better than what we've seen in terms of the overall average of 18% for the ipos. >> with low interest rates, what's the impact? is it easier to see private can get cheap money doing these? >> that's the one point we haven't touched on, brian. interest rates, low interest rates, obviously, make financing
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much more attract i. i think importantly, though, the buyers of ipo today understand balance sheets better than they have historically. and can capitalization can be a competitive advantage. yes, there's more debt. but when you compare it to debt of prior stages, it's much lower cost debt. it's much more flexible. and as people look at these opportunities, i think they now have the ability to weigh the balance sheet into their calculus just as much. as jackie just said, the response for pinnacle was very strong. there was a good yield. investors are starved for yield in what is virtually a zero percent interest rate environment. >> jackie, you mentioned the pop was about 11%. that's actually what you want, right? we all get excited about an 80% pop or some other huge event on the first day, but, really, you want about a 10% to 20% rise, right? >> yeah. >> you don't want to see money on the table, but you want to see a nice aftermarket performance.
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>> at the risk of being critical to all my hosts here -- >> you don't know what you're talking about. >> >> no. i think you frequently look for a one size fits all. i think in the context of most transactions, the buyer wants to see some pressurizatiappreciat n appreciation. i think the buyer and seller is fine with that, but doesn't want to feel as if they mispriced the transaction. i think that the deals that we referenced in the performance and the aftermarket have given people more .more confidence to buy future deals. that's important. >> jackie, you should wrap that and put it on the web. there's a ton of information. >> there's a lot to look at and digest even more in terms of the renaissance report that we saw. i want to add to what you said is that sometimes slow and steady win tess race. a nice pop on that day, but they want to see growth going into the year. >> six months down the road, they don't want to see that the stock is tanking. still to come, we visit commodities corner and get an
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gold, oil and is natural gas had a mixed quarter with gold falling. nat gas and is crude futures ridesing. let's bring in anthony grizani. what's up, buddy? >> how are you doing, brian? good to see you. >> good. i guess i want to start with natural gas. 250. is this the kind of thing that's going to keep on going and is this going to be our source for energy moving forward? >> definitely it's our source for energy moving forward. brian, i think the move it made in that first quarter was stronger than i thought. let's look back at net last year. we had the warmest summer on record. here we are, a very normal winter and here we are trading 400. i expect it to come off a little
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bit as we get in between seasons. we're not using it to heat our homes, we're not using it to cool yet, but down to 3.75. i see it at the end of the quarter trading at about 4.75 if demand picks up a bit. >> what's your outlook on oil? we're seeing demand starting to fall a bit in the u.s. even though it's been relatively resilient considering the financial crisis in the aftermath after that. what do you think oil price res going to do in ti and brent in the month to come? >> i think you're going to see brent start to come in and ti rally a bit more on. >> is that spread is start to go collapse a little bit, right? >> absolutely. that spread has come in from $20 over the last few weeks to about $13 right now. that's because of the pipeline opening up and wpi being more viable on the world market. >> now, does the arkansas spill, the rupture of that pipeline over the weekend affect prices today? will we see some choppiness as folks react to that? >> though. i think what it shows is pipelines are the way to go.
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it's not like if you have a rig out in the middle of the gulf where you lose millions of barrels of oil or a big tanker. we're talking thousands of barrels of oil at this time. >> when it comes to retail gas, we've gone all over the map. we've gone over year over year and now it's lower on a year over year basis. based on your crude outlook, what does that mean for the retail gas picture? interest you know, brian, let's face it. if crude oil is $120 a barrel, nobody is going to care if gas is at $350 a gallon. i do not see a record this summer. i think what we saw earlier was the margin to take crude oil and produce gasoline was very high. so it forced refiners to produce as much gas as possible. and in the gk gulf coast, you're seeing a lot of supplies out there. gas supply res tight on the northeast and that goes back to sandy and what happened there when the refineries were off-line. i do not see a record for refineries this summer. certainly if we get some geopolitical event or some major
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refinery problems, then all betts are off the table. but demand in the last five years, cars have become more fuel efficient in this country. actually, 17% more on the road right now. so i don't see gas rallying to the levels that we've seen over the last few years. >> so all that is going to be good news for u.s. consumers and the all-important driving season. one final question, anthony, about gold. what's your outlook on the yellow medal? we've seen a slightly volatile year so far. there continue to be troubles with the miners in south africa and other places. we're doing about 1600. what do you think is going to happen here? you know, i see the miners with the problems in south africa. it's all about the dollar right now. and as long as the dollar and the dollar index remain strong, we're at the 83 handle right now. i see weakness and gold throughout the year. we could actually in this second quarter touch that 1500 area. >> that will do it for this special edition of easter monday's "worldwide exchange." kate. >> stay tuned because "squawk box" is coming up next. >> we'll see you.
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good morning. it's a new quarter dawning on without street and the bulls have a tough act to follow. but that's okay. dow coming off its best first quarter since 1998. all this amid geopolitical concerns. north korea making noise and vowing to keep its nuclear arms and in corporate news, dell is warning investors of risks of remaining public. it's monday, april 1st, 2013. and "squawk box" begins right now.


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