tv Worldwide Exchange CNBC November 23, 2015 5:00am-6:01am EST
welcome. you're watching "worldwide exchange." i'm carolyn ross. >> i'm wilford frost. here are your headlines around the world. brussels remains under lockdown for the third day with the paris attack gunman still at large. meanwhile, u.k. prime minister david cameron urges lawmakers at home to sign off on airstrikes in syria. >> i firmly support the action that president hollande has taken to strike isol in syria and it's my firm conviction that brittain should do so, too. pfizer and allergan are
expected to announce their merger and challenges the u.s. government's efforts to curb tax inversions. wti crude slides more than 3% as the dollar bounces to a seven-month high. energy stocks leading the declines across europe. today's headline of the man who's taking las vegas by storm one nightclub at a time. kneel moffitt joins us live from palm beach in 20 minutes. good morning, everyone. it is 5:00 a.m. on the east coast. 10:00 a.m. here in london. quick check on u.s. futures. the s&p 500 seen off by half of 1 point really. the dow jones seen off by 25 and the nasdaq seen off by 3 or so. maybe this, a little bit of profit taking given that we've come off the best week in a year -- this year, rather, for the s&p 500. the nasdaq hasn't seen its best since july. last week the s&p was up 3.3%.
so really ignoring fears about the terror attacks, ignoring fears about china and maybe thanking the fed for more certainty. now they know the first fed hike might come in december. the ftse 100 under a little bit of pressure. off by 2/3 of 1%. many of the mining and energy stocks in that market given the slump. the industrial metals but also in oil. the cac 40 off by 0.9%. only the italian market is eking out a very modest gain. much of the weakness in the commodity space has got to do with where the dollar is trading. seeing the euro dollar at 1.0629 is where we're currently at. down 0.1%. the dollar index at a fresh seven-month high. in terms of the oil prices, we're seeing wti under quite a bit of pressure this morning. off by nearly 3%.
very close to the crucial 40 handle. currently changing now it's at 40.61. brussels is waking up to a third day on lockdown as authorities continue to warn of the sustained terror attacks. let's get the latest from brussels. julia is there for us now. julia. >> reporter: thanks so much, wilford. dramatic scenes in brussels over the last 24 hours. 22 separate raids in brussels and surrounding areas. authorities now have 16 suspects in custody. they can now question them for 24 hours. that's all they've got. the main target of those raids though was a man suspected to be one of the gunmen involved in the paris attacks. they didn't find him. he's believed to still be at large here in belgium and clearly the hunt for him is going to continue. what we're left with is a city operating under the highest maximum security levels.
we're on one of the main shopping streets in brussels. there's a definite increase in security. on my left just out of shot they have six or seven military police, also soldiers. if you look behind me, i don't know if you can see it, but there's two military vehicles right down at the bottom. you can see an armed gunmen walking towards us. just in terms of the heightened level of surveillance and security we're very aware of it on this street. there are some restaurants and bars, but mainly shops have remained shut. that's what we saw over the weekend. shops closed. the bars and restaurants shut at 6:00 p.m. this is the environment we're operating under. the prime minister of belgium saying they have specific information that they believe there is an imminent risk of some kind of terrorist attack, perhaps even in multiple locations, so we're looking at a copy cat of what we got in those paris attacks. i've heard some comments this morning that this might be an over reaction here but as far as
the belgian authorities are concerned, they're apparently not taking any risks at this moment. >> julia, do we know exactly how long this lockdown will take place or is it until that escaped gunman has been tracked down? >> this is clearly something we don't know, carolyn. it's a great question. even if they manage to find that suspect, if we're talking about the risk of terror attacks, i'm not necessarily sure that the lockdown that we see at the moment is tied to him specifically. obviously there's concern that there are other cells operating in belgium and they can carry out further attacks. this is clearly a wait and see situation. the authorities said they'll ses it on a daily basis and wait for a press conference to see whether or not even the metro stations, subway here opens up tomorrow. that and schools and universities all locked down at least for today. guys, back to you. >> julia, thank you so much for that. u.s. intelligence has been overly optimistic in its report
on the fight against isis. this according to the chair of the house intelligence committee who called this, quote, a containment policy. let's get out to hadley. she's live outside of the u.k. parliament in london with a view on this. hadley. >> reporter: good morning, wilford. so this is true, it can be incredibly damaging to the fight in the islamic state in terms of what the french, the russians, even in the u.k. the british really want to do in terms of taking this fight to the islamic state. what we know so far is most of the information that we have that's been made public at least in terms of what the coalition partners, the united states and the coalition partners have been doing in the fight against the islams, comes from central command, comes from the pentagon. the question over whether or not the reports have been exaggerated in terms of how effective the airstrikes have been can be very damaging. take a listen to what president obama said over the weekend. >> we will take back the command
that they are currently in. we will cut off their financing. we will hunt down their leadersh leadership. we will dismantle their networks and their supply line and we will ultimately destroy them. even as we are in the process of doing that, we want to make sure that we don't lose our own values and our own principles. >> of course, president obama there continuing to sound pretty strong in terms of the rhetoric in terms of this fight that he says the united states at least is taking to the islamic state with the airstrikes in syria. later today the prime minister of the u.k. later will be speaking here in london. he'll be talking about ramping up defense spending. talking about $178 billion. that's 12 billion more than they originally anticipated in terms of security, spending on the military. he'll have airstrikes. he wants rapid deployment. major uptick in security
spending. at the same point there will have to be discussion about whether the u.k. will put airstrikes in syria. we were here two years ago in 2013. a resounding defeat for mr. cameron in terms of doing more for the islamic states. carolyn? >> hadley, thank you so much for that report. let's take it back to the markets. san francisco fed president dch willing is speaking on saturday. he sought to make clear rate hikes won't only be gradual but the fed won't follow the stair step pattern during its last hiking psych when will it raised rates by a quarter point at every single meeting. the federal reserve board is meeting to review the advance and discount rates. the board of governors could
move to reduce interest rates on loans it offers to federal banks. it would pave the way for a december rate hike. joining us is mike bell, global market strategist at jpmorgan asset management. mike, we've seen the umpt .s. markets being pretty resilient. last week u.s. markets were up by more than 3%. at what point will the market get worried about the strength of the dollar again? >> we think probably it needs to go quite a long way further before the markets will worry. the u.s. economy isn't too badly impacted. so we think it's extremely likely that the fed are going to increase interest rates in december. the market's only pricing about 70% probability. i think that's proven to be too late by december. there's a high chance it will be 100%. >> if we take a look at what happened overnight, we're seeing wti crude down by 3%. many commodity prices are at six, six and a half year lows. i can't see how the u.s. markets
will continue to ignore that. that has a disinflationary impact. >> it's disinflationary. if you think about the falling market prices that will put money in the pockets. when you strip out the fact of costs and market prices, core cpi is 1.9%. i don't think that will stop the markets. >> last year was the best year for the s&p 500. we also saw a pretty strong bounce back in october following the late summer's malaise. have you been surprised by the ability of u.s. markets to bounce back against short-term declines albeit we're not in a roaring bull market but they have continued to bounce back following it? >> i think what's shapd the markets moved from being afraid of fed increases and interest rates to now thinking when the fed increases interest rates it's a sign of strength for the u.s. economy. now that the fed are looking more and more likely to go, we
saw a very strong jobs report and wage growth finally starting to pick up to 2.5% year on year. market is starting to view that positively as opposed to a withdrawal of stimulus. that's why the markets are rebounding. >> do you think santa brings a rally from here? >> i think so, in fact particularly in europe. it looks very likely that the ecb will do more, expand the ecb. it looks like mario draghi will deliver a present for the european investors. >> in the meantime, steer clear of anything commodity related i would think? >> we think that the copper price, for example, can fall further from here. it needs to get down around 4300, maybe lower, before meaningful supply comes up. oil perhaps going forward from here, if you look at the first quarter of 2016, may actually be a sort of bottom for oil prices. we think if you look forward to the end of 2016 you can see oil prices are around $60 a barrel.
>> we've heard that before, bottom for oil prices. very tough to call that at this point. mike, thank you very much for that. mike bell, global market strategist at jpmorgan asset management. let's give you a rundown of what to watch. october housing sales are out at 10:00 eastern. u.s. housing market has been held back by a shortage of homes for sale which has driven up prices and kept first-time buyers on the sidelines. u.s. beef tyson reports at the opening bell, as does gamestop. and we hear from palo alto networks. a bitter pill for the u.s. companies to swallow. pfizer and allergan are expected to complete a megatax merger. more on that to come. opportunities aren't always obvious. sometimes they just drop in.
just remind you the headlines. brussels in lockdown for a third day while the search continues for a paris attack gunman. pfizer's board reportedly approves a takeover for allergan and wti crude falls over 3% as the dollar rises to a seven-month high. back to one of our top stories. pfizer's board has reportedly approved the acquisition of
allergan for more than $150 billion in what would be the biggest deal this year and the biggest ever in the health care sector. wow. it's expected to be announced later today. reports say pfizer will pay 11.3 shares for each allergan share. there's a small cash component for less than 10% of the entire deal's value. pfizer will move to ireland to secure a lower tax rate. ed reed will head it and brett saunders will take on a senior role. pfizer shares off by 2/3 of a percent. allergan up 5.5%. a big slap in the face for the u.s. treasury department because they've really been looking to crack down on the tax inversions. allergan has found a creative way of circumventing that because now according to many sources, they're going to be buying pfizer but pfizer shareholders will still hold the majority of the new company. >> exactly. even though allergan is, in fact, the one doing the buying, shares in allergan were up
because of the structure. it's a little bit clever that way. really interesting stats here. it will be 150, 160 billion. by far much bigger than the sab/abi deal. also by far the biggest inversion deal we've seen yet. i wonder as well in some of the finer points how long will that new management structure work? never tends to work when both of the former ceos remain and maybe that will only be temporary but we'll have to see. we don't have exact details. >> it might also be a prelude to the company splitting into two, one into the generics business and the other into the higher margin business. i don't think that's been ruled out. >> that's exactly right. that's making the most of ireland and dublin's tax rates. nothing more needs to come until the u.s. authorities tighten things up. you can't fault them for doing this. >> no. >> petco is close to a deal to
be bought by a firm cvc reportedly for $4.7 billion. the group is a u.s. pet retailer. c cvc and leonard green. u.s.-based deibold has made a 1$1.8 billion offer for winco. the view will value wincor at $4.7 million. we are going to go for a quick break. still to come on the show, putting his money where his mouth is. we speak about the group's international expansion. that's coming up right after this break. guage skills, guage skills, i've read all of your lyrics. you've read all of my lyrics? i can read 800 million pages per second.
try align, the undisputed #1 ge recommended probiotic. the markets change... at t. rowe price... our disciplined approach remains. global markets may be uncertain... but you can feel confident in our investment experience around the world. call us or your advisor... t. rowe price. invest with confidence. welcome back to the show. maybe adele should take off four or more years between every album. billboard is projecting her new album "25" will break a 15 year reco record. it went on sale friday and sold 900,000 copies just on itunes. she appeared on "saturday night
live" and will be on the "tonight show." this may not be the farewell that catness aberdeen is looking for. that was below estimates of 120 million. worldwide the movie has earned 247 million, less than 275 million. lions gate spent nearly 200 million to make it. investors reacting negatively on friday. lions gate fell 3.3% on friday. entertainment group hakkasan is launching a group in the united states by noepg houston and honolulu. this follows recent openings in shanghai, los angeles, and london. the group is known for, amongst other things, its nightclub at the mgm grand at las vegas.
joining us live is neil who is the ceo. to what extent have you seen a slowdown of people coming to your restaurants? >> so far we've been very fortunate. we haven't seen any decline in our attendance. obviously what happened in paris is awful and i think that hopefully we can as soon as possible get back to normal and move forward with a positive outlook, especially in major cities around the world but obviously our condolences go to those families that were affected by that awful day. >> neil, your company is planning 25 new openings for 2016 and 2017. are you holding on to this despite the increased terror threats or is that really
predicated on better economic growth and better consumer confidence? >> obviously all of our decisions are based on pure economics. prior to last friday we have to consider such acts and how that will affect the market moving forward obviously and the tragedy that happened was very, very new, not only to europe but to the rest of the world. we will obviously look at each and every market and try to make the decision based on the merits at the time. >> neil, carolyn and yourself have mentioned the size and scale of your current expansion plans. given that you are a high end brand, a luxury brand, is there a point where you have to pause that expansion because the multiple sites starts diluting the image that your brand
carries? >> that's a very good question. we have a wide portfolio within our structure currently. hakkasan is a super high chinese restaurant founded in london. we've been cautious with how we expand that. it's a new expansion for us into the u.s.a. we have a site in soho in london. we expanded in the core gate circle which has been successful. we'll move into america in houston and in hawaii. so as far as i mentioned, high end restaurants are concerned, yes, we will be very cautious of how we enter them. we have a high end portfolio which we're looking to expand. >> i wanted to touch on the nightclub part of your business. in particular the fees d.j.s get. something we've talked about on your show a couple of times. huge figures that the top global d.j.s get. is there a direct correlation with you attracting the top d.j.s and what you make on a certain night?
is that what people fundamentally come to see is the d.j. as opposed to other things the nightclub might offer? >> i think it's a combination of the two. d.j. fees are driven by market and also by economics. you know, i've been in this business a very long time. i've seen d.j. fees start at basically zero and go to where they are today. the d.j.s today are not necessarily as we remember them. i think calvin harris is the perfect example of that with over 50 -- 50 million sales in over 5 billion streams of his music in the last 12 months. i think that's an astronomical number of sales and views. i think that that really is not -- we're not talking about a d.j., we're talking about a celebrity, superstar, one of the biggest in the world. him attending our venues that basically correlates into revenue. we're very, very analytical in our business. we look at d.j.s and if we can't
get the return that we require, then we wouldn't book them. obviously the d.j.s we're booking, we're very happy with the financial performance. >> you've been accused of monopolizing the las vegas club scene. is there some merit to that? >> probably something i'm quite proud of as a british person in america. i came to america. i didn't have any venues. now we have 51 with seven new venues. we don't monopolize the scene in las vegas no more than any other casino operator would. mgm resorts has obviously multiple casinos on the strip. i think it's the people with singular units that poke fun at that and make that claim. as far as we're concerned, there are other successful operators on the strip that we both work with and work against but generally those claims are made by people who maybe aren't doing so well in that market. we obviously all would like someone to blame. >> neil, pleasure speaking with you. thank you so much for your time.
neil moffitt, ceo of hakkasan. do you like hakkasan restaurants? >> i do. i've been to the hakkasan club in las vegas. let's stop that. still to come on the show, most of us tended to take a social media vacation every now and then, but now even mark zuckerberg is taking a little pause for breath. we'll explain that more after the break. we'll leave you with a look at u.s. futures ahead of the open on wall street. we're expecting a soft open and a strong week for the markets. "worldwide exchange" back in a few minutes.
well come. you're watching "worldwide exchange." i'm carolyn ross. >> i'm wilford. brussels remains locked down with the paris attack gunman still at large. meanwhile, u.k. prime minister david cameron urges lawmakers at home to sign off on airstrikes in syria. >> i firmly support the action that president hollande has taken to strike isol in syria and it's my firm conviction that brittain should do so, too. pfizer and allergan expected to announce their $150 billion merger before the u.s. open in a deal that creates the world's largest drug maker and challenges the u.s. government's
efforts to curb tax inversions. wti crude slides more than 3% as the dollar bounces to a seven-month high. energy stocks leading the declines across europe. driving a deal. the united auto workers union narrowly approves a four-year contract with ford meaning all three detroit automakers have ratified pacs. good morning, everyone. it is 5:30 a.m. on the east coast. 10:30 here in london. if you're just tuning in, thank you so much for just joining us here on the show. here is how u.s. futures are fairing at this early hour. at this point this time we're expecting slightly softer start in trading. the s&p 500 seen off by 2 points. dow jones seen off by 13 and the nasdaq off by 1.5 points. this is after the s&p 500 has had the best week in almost a year. we're up by more than 3.3%. the nasdaq seeing the best week
since july. today we're going to be focusing in on existing home sales and some pmi. we have pmi numbers from europe. they are in large part better than expected. some weakness in the french market. the cac 40 is down by 2/3 of 1%. the xetra dax off by .5%. they're being weighed down by many of the mining stocks. this is very closely correlated to what we're seeing happening in the currency space. in the euro dollar here we're seeing some declines once again. the dollar close to a seven-month high. currently changing hands in terms of euro dollar at 1.0620. the wti crude off almost 3% at 40.67 after we've seen another very choppy week. thanks, carolyn. let's have a look at some of the other top stories hitting the headlines today. the united auto workers union
narrowly approved a new four-year contract with ford after a late push from leaders. more than 51% of production workers and 52% of trade workers voted in favor after more than a week of voting that ended friday night. on wednesday the uaw's lead negotiator said 52% of the members were rejected in the contract. ford has 3,000 uaw workers. with this deal, all three detroit automakers have come up with this. walmart has decided cyber monday should not be on monday anymore. the retail giant will launch all the cyber monday deals on sunday launching 2,000 online deals at 8:00 p.m. eastern time. walmart is fighting for online demand with amazon which is already rolling out preblack friday deals. they are projected to make $3 billion up 12% for last year. walmart shares in germany down.
americans are filling up for less. the latest bloomberg industry survey shows the average price of gas fell 11 cents in the past three weeks to 2.14 a kbgallon. the 5% decline comes as gas wholesalers and retailers are passing on lower oil buying prices. bloomberg says the prices may continue to falling due to abundant supply. i love this story. mark zuckerberg says he'll take two months' paternity leave when his wife gives birth to their daughter early next year. and a post on his facebook page zuckerberg says this is a very personal decision. studies show when working parents take time to be with their newborns outcomes are better. silicon valley firms have been extending parental leave policies this year. facebook allows employees to take up to four months paid leave. zuckerberg did not say who would run facebook but it's likely
cooscoo sharyl sandberg will. fan duel and draft kings couldn't have become multi-billion dollar businesses if it hadn't been for the credit card. visa, master card, american express, banks of major u.s. sports leagues and companies who irch vested in it. it accuses them of taking parkt in a racketeering scheme to have illegal gambling. it took a 32 yard field goal for the cardinals kicker chandler to secure a 34-31 win against the cincinnati bengals sunday night. the win was driven by a breakout performance from wide receiver j.j. nelson displaying a blistering pace for a 65-yard touchdown in the third quarter. arguably his most important catch was his 19-yard gain on
his final drive to help set up the game-winning field goal. now as we head to break, we'll leave you with a look at the rest of the scores from week 11 of the nfl. worldwide exchange, we're back in a couple of minutes. day, we'w technologies make healthcare more personal with patient-centric, digital innovations; from self-monitoring devices that can interpret personal data and enable targeted care, to cloud platforms that invite providers to collaborate with the patients they serve. that's why over 90% of the top 25 global pharmaceutical companies are turning to cognizant. our domain experts, technologists, digital and data specialists, clinicians and scientists are transforming the way clinical research sites collaborate
they're vowing to bring reform to the country. saying it is, quote, the change of an era. for more on the conservative party's plans to turn around the third largest economy, head to our website at cnbc.com. brussels. brussels is waking up to a third day on lockdown as authorities continue to warn of the sustained terror threat. in washington, d.c., the police chief says it's unrealistic to think authorities will make it to the scene of an active shooter in time to save lives. in an interview on cbs's 60
minutes cathy lanier said victims have to prepare to run, hide or fight. if you're in the position to take a gunman out, that may be the best option before police can arrive. >> i always think you can get out. getting out is your first option, your best option. if you're in a position to take the gunman down, to take the gunman out, it's the best option for saving lives. that's kind of counter intuitive of what cops tell people. we tell people, don't take action, call 911. don't intervene. you know, we've never told people take action. it's a different -- this is a different scenario. >> lanier said her comments aren't meant to frighten people but to heighten awareness of their surroundings. the row over intelligence is heating up. they've called the policy a, quote, containment policy. let's go down to tracie potts for a view on washington.
tracie, over to you. >> reporter: well, what we're finding even on the campaign trail with the presidential trail, there's a lack of policy for dealing with isis and terror. we're hearing it from donald trump who wants to register i mishly he said muslims coming into the country. now he says syrian refugees. he would bring backwater boarding as an interrogation technique and now he says we should be monitoring muslim mosques. ben carson saying we should monitor shopping centers, schools where people can be radicalized. we have candidates such as john kasich and rand paul who say that's absolute nonsense as kasich put it. it's a lot of push back because republicans and now even some democrats don't think the president's doing enough to fight isis. dianne feinstein, powerful democrat here on the senate side, said we need more boots on
the ground. the 50 special ops forces that the president has authorized just isn't enough. >> tracie, thank you very much. want to show you what the s&p has done last week. we were up a whopping 3.3%. that's the best performance for that index in roughly 11 months. why? well, it seems to be ignoring the terror attacks in paris. seems to be ignoring the dollar strength. seems to be ignoring the ongoing worries. the commodity prices are slumping overnight and putting a lot of pressure on the european markets. we saw all sectors in the green last week, even energy. even energy eked out a very modest gain. for the year we're only up 1.5%. nasdaq is better, up 7%. >> exactly right. if european markets are learning to go by, we'll get a bit of a correction. u.s. futures are pointing for a negative open. unless, of course, a couple of m&a deals are in the markets. pfizer and allergen are
reportedly reaching a deal on what could be an historic merger. let's get out to cnbc hq. landon has all the details. >> reporter: this will not only be the biggest investment, but it would be the largest ever in the health care sector. reports say pfizer will buy allergen for more than $150 billion based on the company's share price. the deal is expected to be announced this morning. pfizer will pay 11.3 shares for each allergan share. this is a small cash component. it would be the largest tax inversion ever coming days after the u.s. treasury unveiled new rules to curb such transactions. to potentially get around these rules the deal will technically be structured as a reverse merger with allergan based in dublin buying pfizer headquartered in new york. ian reed will reportedly lead the new country with saund ders in a very senior tleel could set
him up as reed's possible successor. reed has been vocal about high tax rates which puts companies at competitive disadvantage. pfizer's tax rate is 25%, the highest among its peers. by linking with allergan it will lower that below 20%. allergan's rate is about 15%. the deal combines two drug makers with more than $60 billion in annual sales. the top selling products such as pfizer's pneumonia treatment prevnar and botox it says it could launch more than a dozen new products over the next several years. it could generate $15 billion in sales. it's the result of several mergers. it was previously a generic drug maker called watson pharmaceuticals. in 2012 it bought companies
actavis. allergan is up more than 5% and fooiz jer is down more than half a percent. >> landon, thank you very much. quick look at your headlines this morning. brussels in lockdown for a third day while the search continues for a paris attack gunman. pfizer's board reportedly approving a takeover for allergan for $150 billion. wti crude falling roughly 3% as the dollar rises to a seven-month high. it's easy to buy insurance and forget about it. but the more you learn about your coverage, the more gaps you might find. like how you thought you were covered for all this... when you're really only covered for this. hot dog? or how you may think you're covered for this... but not for this... whoa! no, no, oh , oh! ...or this... ...or this. ...or that... talk to farmers and see what gaps could be hiding in your coverage. my heaven! ♪ we are farmers bum - pa - dum. bum - bum - bum - bum ♪
sometimes they just drop in. always obvious. 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. welcome back. let's have a look at european markets which are predominantly in the red today. italy is eking out a bit of a gain. elsewhere declines for france, germany and london. the ftse 100 behind with the commodity related names after oil prices declined around 2 to
3%. bear in mind, last week was strong for europe and we're correcting. san francisco fed president john wheeling says there is a strong case for the central bank to raise rates as long as economic raits does not disa point. williams is a voter on the fmoc. he sought to make clear that while rate hikes won't only be gradual the fed also won't follow their stair step pattern where it raised rates by a quarter point at every meeting. the federal reserve board of governors is meeting at 11:30 a.m. eastern. speculation is mounting that the board of governors could move to increase the interest rate it offers on loans to commercial banks. such a move could pave the way for a december rate hike. quick look at u.s. futures. we're looking a little softer across the board. the s&p 500 after coming over the best week up by 1.3%.
the dow jones off by 13 and nasdaq off by 2. let's give you a rundown of what to watch this trading day. october existing home sales are out at 10:00 a.m. eastern. sales likely fell following big gains in september. the u.s. housing market has been held back by a shortage of home for a sale which has driven up prices and kept first-time buyers on the sidelines. u.s. beef and pork producers tyson reports before the bell as does gamestop. after the close we'll hear from network security firm palo alto networks. joining us live is michael guerga. it's a holiday shortened week. everyone getting ready for the big turkey on thursday. what are you going to be focusing on? can we expect more resilience in the u.s. stock markets? >> still very positive u.s. stock market like that level up at 2100 in the s&p. i think with the shortened week one of the things that's going to really signal for myself is the liquidity in commodities
markets. probably won't see any of these bounces, these technical breakdowns, specifically in copper and silver. they've been extremely bearish and there's tons of room now down below the market since we've gotten through these levels. >> michael, we already had a strong week last week. today seeing oil prices fall again and that in particular is weighing on the commodity names here in europe. can the u.s. be resilient in the face of declines like that? >> i think so. i mean, really as you mentioned already earlier in your broadcast, the strength in the dollar has been kind of an ominous start to most of these weeks. we've seen it clearly against the euro and a little bit against the sterling to start. obviously you're starting to see that carryover into the commodity groups. i think the stronger dollar is really going to continue to take the lead and that's one of the reasons why i'm not looking for these large technical bounces just yet. again, fourth quarter was our determinant.
a lot of times on how we started to look at foreign stock markets. i think that's one of my triggers as to why i'm starting to really like japan. >> you like japan? okay. do you also like europe given that by and large we're expecting more to come from mario draghi even though the pmi data wouldn't call for more easing from the ecb? i guess they're going to go ahead with it anyway. >> which is positive. that would be main line into the whole forecast of 2016 which is the outperformance of european equities. i think this is a great time to piece into any weakness. i think that's going to be an outperformer. >> michael, talk to us about your positivity on japan. is that a short-term trade or are you fundamentally bullish in the long term? >> no, i am. i think i was asked this question back in june. i think that it was more of a timing scenario but the reluctance for the globe to really get involved i think from the stand point of acceptability
through their central bank policy is starting to really show. it's not that i am overwhelming earlytive growth but i think a lot of the japanese companies are starting to show really good balance sheets and for the same reason i think pent up demand in that market is showing itself probably to show up at year end and we're starting to see it. >> michael, before we let you go, give us your playbook in terms of sectors for the end of the year. do you like everyone else like financials given the impending rate hike? >> yes. i also think that infrastructure will continue to take a hit here and that's one be of the pent up demands that i'm looking for for '16 to where there's going to be a lot of value. it's not that caterpillar has to be the stalwart for the sector. specifically i think infrastructure is going to continue to outperform via the financials on a swap as we get into the first quarter. >> michael, thank you so much. michael guerga.
brussels is waking up to a third day on lockdown as authorities continue to warn of the sustained terror threat. 16 people have been detained in overnight raids throughout the belgian capitol. speaking at a press conference yesterday the belgian prime minister outlined the reasons for the continued lockdown. >> translator: i confirm as i was able to indicate yesterday that we are fearing a similar attack to that which took place in paris involving several individuals who might launch an attack on several different locations at the same time. we have information that leads us to believe that the potential targets are places which are regularly freaked. we are thinking, for example, of commercial centers or streets or another example might be the public transport system. >> it was really interesting listening to julia before on the show and she said that many people in brussels actually
thought there was a certain degree of fear-mongering in the government's reaction, that they thought this was excessive. obviously a lot of people are scared, but you've got to wonder how long the lockdown will actually last. >> sure. as you say, important to highlight those stories. i imagine the authorities are thinking better safe than sorry and feel like it's the right approach. how long exactly does this -- how much of an effect is it having on markets in europe, indeed? brussels not just limiting to itself but it's a big law making center for the european as a whole. >> the european union is going forward so i expect heightened security. u.k. prime minister david cameron has met with president hollande in france. meanwhile, cameron is looking to get support from westminster to carry out airstrikes joining france, russia and the u.s. in a speech alongside mr. hollande prime minister struck a
defiant tone in the fight against the ongoing terrorist threat. >> the world is coming together to tackle this evil terrorist threat. that was clear on friday night when almost one week after the brutal terrorists murdered people here in paris and sought to divide us the world united in new york. we've shown our firm resolve and together we will destroy this evil threat. >> all right. let's just look in again on markets and the euro dollar, 1.0622. it's been hovering around the low 1.06 handle over the last week or so predicated on central bank action as opposed to anything else. >> we're seeing a slump in commodity prices overnight. wti crude off almost 3%. currently changing hands at 40.67 getting very close to the 40 handle once again. it's been very choppy and volatile trading. that's it for the day's show. thanks so much for joining us. i'm wilford frost. >> i'm carolyn ross.
good morning. a major european city remains on lockdown. the man wanted in connection in the paris attacks remains at large today. in deal news, drug companies pfizer and allergan agreeing to a $150 billion deal. crude is being crushed once again. oil prices dropping about 3% this morning on worries of oversupply and that strong dollar and the sweet sound of success, adele's new album on sale for just days. it's already smashing records. monday, november 23rd, 2015. hello. "squawk box" begins right now.
live from new york where business never sleeps, this is "squawk box." good morning, everyone. welcome to "squawk box" here on cnbc. i'm becky quick along with joe concern than and michelle caruso-cabrera who's in for andrew. we have a developing story out of europe. this is footage that you are looking at right now that shows what's been going on on belgian television. it shows some of the 22 raids that security forces carried out in brussels. police there detaining 16 people but the paris attack fugitive, salah abdeslam was not among them. we have a live report from brussels which remains at its highest terror alert. that's coming up in a moment. first, let's check out the markets this morning. last week was the best week for the s&p 500