Skip to main content

tv   Worldwide Exchange  CNBC  January 4, 2016 5:00am-6:01am EST

5:00 am
5:01 am
we're going to bring you the asian market close. top headlines from pages around the world. what's happening now and what to expect. the bottom line, we're here to get you up to speed and fast and boy do we have a set upto tell but today. >> absolutely right. let's get straight down to it starting with a major global market selloff this morning. chinese stocks plunging dropping so much that trading was halted. the shanghai composite down nearly 7% as we look at things. shenzhen composite down. weak manufacturing data showing china contracted for a fifth straight month in december. the rest of asia showing lots of
5:02 am
red numbers as well. the nikkei opening with its biggest one day slide in three months. check also the dollar yuan. >> china is setting its currency weaker. it's at the weakest level for years. that's a big uh-oh for markets around the world. it reflects that china's market is slowing. the weak manufacturing report that you told us about. obviously we have seen that when china devalues its currency it matters to the rest of the world. that slide in chinese stocks down 7%, circuit breakers were put in place to start today and they actually had to use it that day halting trading. >> as you say, it's more on the yuan moves than the pmis. it's passed 6.5, the first time since 2011. it reminds investors of the transitions that still have to take place before people can
5:03 am
think that everything is moving in a free market sense. so further devaluation today. just one further point, 5% devaluation last year against the u.s. dollar. on a trade weighted basis the yuan slightly slower. >> it's going to be a big question obviously going into 2016. the chinese economy, its currency. we also want to show you what's going on with oil prices. huge story overnight. they spiked early before retreating within the last hour. actually, are lower right now. only to rise again. this has been crazy to watch. so wti crude in the overnight session did get as high as $38 per barrel above that level. we're below that now, obviously higher. obviously the big driver is deteriorating relations between saudi arabia and iran. cutting diplomatic ties after the embassy in tehran was stormed by protesters. that attack coming after riyadh executed 47 people convicted of
5:04 am
terrorism charges including a prominent shia cleric. they've given them 48 hours to leave the kingdom. >> this is highlighting an extraordinary story that we've seen in the last 18 months. geo politics has not managed to push oil prices higher. in 2014 it was russia and ukraine. last year lots of middle east issues. we still saw oil prices decline. overnight we've gotten weak again even though now it's saudi and iran. >> i was going to say saudi arabia has been relatively calm throughout the geopolitical turmoil in the middle east. now that that's changing that could be a factor. it is the top opec oil producer. we have a great chart which shows all the world's major producers. iran is pretty high up there as well. >> we'e'll have to see if that escalates. now to u.s. stocks, actually futures under pressure to start the year. red arrows today would follow a rough end to 2015 of course. here's the final report card. the dow broke the six-year winning streak.
5:05 am
the s&p turned in the worst yearly performance since 2008. the dow transports fell a whopping 18%. here we've got the opening cause for today. the report card there. we're expecting about 1, 1.5% declines for the three major u.s. indices there. that follows declines across the globe. >> yeah. it's pretty ugly out there. you can see the earlier european action. red across the screens there. the ftse in london is coming off the worst performance dropping for the second year. it was beat by all the main rivals including u.s., france, germany, japan and china. what we're seeing to kick off the year is more selling in force. the german dax now down 3.5%. the euro stronger this morning. that's factoring in. overall pretty negative mood on oil and of course on china overnight. >> the dax the lowest of european trade today i think partly because it was closed a day earlier. >> the thursday, new year's eve.
5:06 am
>> across the world and germany didn't take part in those. now what will today and this year bring for investors? let's check out the so-called january effect. the theory here is that stocks have dropped in december for year end tax selling reasons rallied back as investors buy them at cheaper prices. meantime, the stock traders almanac say the direction of trading in january predicts the course for the year 75% of the time. have to see if that holds. as for broader markets, check out the yield on the ten year. 2.22% this morning. a little bit of buying. a little bit of safe haven seeking. we're down from close to 2.3 level that we finished the year. the two-year treasury note yield is above 1%. we haven't seen this in about 5 years, the two-year yield best known for being influenced by the fed rate hikes. 1.028%. buying the safe haven japanese yen is very much in
5:07 am
vogue on this risk selloff overnight. what's interesting is to see the euro stronger. so far stock markets don't like that trade. the euro moving closer to 110. haven't seen that in a couple of weeks. dollar yen is a key mover. strong and unusual buying of the japanese yen. and the british pound remains higher. interestingly, gold is catching a bit on the so-called risk aversion piling into the safe haven trades. gold up 1%. up almost 13 bucks. coming off its third annual decline on the back of what has been a pretty strong dollar period over the past few years. >> interesting those points you make about the euro and en. clearly today is risk off day. >> interesting dynamic, strong euro, stocks don't like it. >> no, indeed. strong yen as well. of course, the nikkei was down by some 3%. developing story out of india this morning. at least eight people dead 50rks
5:08 am
injured after an earthquake hit the country. the powerful 6.7 magnitude quake struck while many residents were asleep. some buildings collapsed. the casual at this toll is expected to rise. in corporate news, new york is revising its lawsuit against draft kings and fan duel. arguing that they should return all the money that they made in the state. landon dowdy joins us with more on that story. good morning, landon. >> good morning, sarah. the two sides may be fighting for their lives to stay in business in new york stay. new york attorney general eric schneiderman amended his previous suit. he's asking fan duel and draft kings to give back to those and pay up to $5,000 per case. restitution wasn't part of the original case. they took in $200 million of entry fees.
5:09 am
fan duel has 600,000 kings. he's focusing more on the deceptive adds. draft kings offers a $600 bonus but that only kicks in when they spend at least $15,000. landon, that's an interesting development. what's the next legal step from here? >> well, if the two sides are set to duke it out today in an appellate court to see if they can continue operating in new york state. wilford, a big welcome to you on cnbc hq. >> great to be here. >> couldn't ask for a better day with all of the global stock market action. tesla meeting its lowered fourth quarter guidance for deliveries handing over more than 17,000 vehicles during the final three months of the year. hyundai and kia see their vehicle sales rising 1.5% this year. that is short of industry estimates. the two automakers missing their
5:10 am
2013 target for the first time since the 2008. phil lebeau will be joining us with more. yes, we managed to wake him up early in the next half hour. fidelity is dropping credit card partners american express and bank of america ending a 12 year relationship there. fidelity will team up with u.s. bancorp and visa. amex lost its deal with costco. microsoft is changing policy and says it will now tell e-mail customers when the company suspects there has been a government hacking attempt. the change comes after four microsoft employees reported the tech giant failed to warm victims of a chinese attack on hot mail accounts several years ago. airbus is selling three a 380 jumbo jets. the faa is reporting fixes to
5:11 am
boeing 767 slides. right, it's time to slip in a quick break. when we return, your kensho trade of the day. we'll head overseas to london and check in on how european markets are doing in trading. quick check on the map shows us we are declining by 2 to 3%. stay tuned, you're watching cnbc, first in business worldwide.
5:12 am
♪ while you're watching this, i'm hacking your company.
5:13 am
grabbing your data. stealing your customers' secrets. there's an army of us. relentlessly unpicking your patchwork of security. think you'll spot us? ♪ you haven't so far. the next wave of the internet requires the next wave of security. we're ready. are you? that's why i switched from u-verse to xfinity. now i can download my dvr recordings and take them anywhere. ready or not, here i come! (whispers) now hide-and-seek time can also be catch-up-on-my-shows time. here i come! can't find you anywhere! don't settle for u-verse. x1 from xfinity will change the way you experience tv.
5:14 am
welcome back to "worldwide exchange." if you're just waking up, hold on to your hats. coming off the worst year for u.s. stocks since 2008, u.s. equities futures pointing to a sharply lower start. dow futures down more than 250 points. s&p futures down 30. nasdaq futures down 72. a lot of worry out there about what happened in china overnight. of course, the tensions rising in the middle east. you've got to be watching oil. sharply higher overnight. gave back the gains. on the move higher. brent crude oil, the international benchmark, we're seeing the biggest move up more than 1%. wti crude was up at $38 a barrel. now back in the $37 range. the volatility in crude coming from deteriorating relations between top oil producers saudi arabia and iran. cutting diplomatic ties with iran yesterday after the embassy in tehran was stormed by
5:15 am
protesters. wilford? >> let's get back to equity markets, sarah. chinese stocks getting slammed overnight and european markets opening to a sea of red. cnbc's global market team has it covered. let's begin with sri in sipping ga poor. sri. >> wilford, lovely to see you, sir. what a mess. what a deeply inauspicious start in asia in 2016. let's start with the china markets. that was by far the biggest story of the day. that was the first time china has halted trade in the trades. the reality related to the circuit breakers is that it is supposed to contain volatility so ultimately, yes, it is early days. the first days of implementation, but ultimately it was self-defeating. let me just talk you about what happened. the softer china pmi seemed to be the capitalist. csi was down by about 5% at quarter past 1 singapore time.
5:16 am
that was the first threshold that we crossed that triggered the circuit breakers. trade resumed 15 minutes later. soon after that we saw the selling snowball. down by 7%. bang, the next trigger for the circuit breakers. that effectively froze trade for the rest of the session. so i'd say there was an element, as i said, of shouting fire in a crowded movie theater. investors essentially did panic, they tried to rush for the exits and sell to try to preempt the circuit breaker. that's how this meltdown really snow bald. what we can say is the volatility seems to be back and in earn yes. we get the trade balance for the month of december at the end of the week on friday. let me pass the baton over now to my colleague carolyn in london for the market update over in europe. hi, carolin. >> hey, good morning to you, sri. a pretty ugly start to 2016 as well here. we took the cues from the asian
5:17 am
trading session. the main culprit once again concerns about china and those due to political risks in the middle east. the stoxx europe is down at this time. if we take a look at the indices one by one, we'll see that the dax in germany is being hit the hardest. off by 3 1/3. 10,382 points. keep in mind that the dax has rallied. the ftse 100 continuing last year's weakness. down 5% last year and this morning. we're seeing another drop of 2%. many of the commodity plays doing very poorly as well. now in stock specific news, guys, there's one stock that has seen plenty of buzz. ferrari completed its spinoff from fiat chrysler. started trading in milan today. i want to show you what the shares are doing. 43.20 versus the issue price of 43. this comes after fiat sold 10%
5:18 am
of ferrari in a highly anticipated sale. the free flow is 67%. back over to you guys. >> great stuff, carolin. to you and sri, thank you very much. >> your friends miss you over there but we're glad to have you. it is time for the trade of the day. when the last week in december has been negative, what do stocks usually do during the first week in january? it turns out since 1990 equities do rebound from that. the average return from the nasdaq 101.5%. nasdaq 100. 1.5%. the s&p 500 turning in an average of 1% each although judging by today's early market action it looks like we may break that trend. there's a lot of negativity out there. >> there's a lot of negativity out there. that's that looking at the final week of the year. a lot of people with u.s. equities looking at europe as a whole saying it was flat down for most of the indices. i want to throw in one extra factor in q4 all of the major
5:19 am
u.s. indices were up. >> you keep mentioning that. >> depending which time frame, we're due about a year, we're due about a year. are we due about a quarter. >> flat markets, last time that happened, 2011. the following year you saw double digit gain though we are in the new territory. end of zero percent interest rate. >> the futures were called down by 1.5%. that's less than we've seen in european and asian trade. japan, china, france, germany, all of those guys were up around 10% last year and the u.s. wasn't. again, reason why the declines in the u.s. -- >> china giving almost all of it back dropping 7%. obviously a wild day shaping up in the global markets this morning. stay tuned, we've got you covered. plus, this morning's business travelers forecast. highlights from a wild weekend in the world of sports and the political agenda ahead as washington returns from a holiday recess. as we head out to break, check out the dollar. interesting action, buying of
5:20 am
the japanese yen, buying of gold, selling of the dollar against the euro. you've got a global market selloff. china in the eye of the storm. stocks there getting obliterated overnight. stay tuned, you're watching cnbc, first in business worldwide.
5:21 am
5:22 am
good morning and welcome back to "worldwide exchange." oil is up 1%.
5:23 am
it was up 3% overnight. it gave up the losses to be in negative territory now settling up 1%. so the general global risk sentiment, negative risk sentiment being outweighed by the geopolitical concerns in saudi arabia, meaning oil has caught a bit. all three major indices for the u.s. equities expected to open down by 1, 1.5%. that follows declines of 2 to 3% in europe and much more than that in asia. nikkei off 3% and shanghai down 7% almost. now that global risk sentiment of negativity manifesting itself in the currency market strangely with a bit of u.s. dollar selling. it's not acting as a safe haven today. the yen is moving 1.1%. euro catching a bit. at 109.21. a 0.6% move there. dollar yen about to break the 119. now for today's business traveler's forecast. brian james joins us from kxas
5:24 am
in dallas fort worth. good morning, brian. >> good morning. starting off on a much colder note throughout the united states. lake effect snow bands. the main storm system is off to the east. there is another one coming on shore back towards the west. back towards the west we'll see some of that rain and snow develop across the central part of the u.s. cooling down certainly. high pressure in control. the weather will stay pretty quiet for most of the day today. like i said, the cooler air finally filtering in. it finally feels more like winter. look at some of the high temperatures. teens around marquette, toronto, 12. new york city just above freezing for today. down here around dfw mid 50s. back towards the west, low 60s around los angeles. overall starting to look a little bit more like winter. big chunk of cold air makes its way not northern central part of the u.s. back to you. >> brian, thank you very much for that. right. in washington news today,
5:25 am
president obama is expected to map out a strategy to increase gun control. he'll meet with attorney general loretta lynch this afternoon. nbc's edward lawrence joins us from washington with that story. edward. >> reporter: good morning, wilford. president obama outlined gun control as the most important issue to tackle this year. he's expected to bypass congress in order to make it happen. president obama fresh off his hawaiian vacation and taking aim at gun control. he meets with attorney general loretta lynch to talk about ways to increase background checks for people who buy guns. the president during his weekly radio address defended his position. >> a policy that is supported by some 90% of the american people. it was supported by a majority of nra households, but the gun lobby mobilized against it and the senate blocked it. >> reporter: democratic front-runner for president applauds the move to use
5:26 am
executive orders to increase background checks for gun buyers. republican candidates disagree. >> now this president wants to act as if he's a king, as if he's a dictator. fact is, go to congress and convince the congress that they're necessary. >> so he's going to sign another executive order having to do with the second amendment, having to do with guns. i will veto that. i will unsign that so fast. >> his first impulse always is to take rights away from law abiding citizens and it's wrong. >> reporter: still, this is at the top of the president's agenda for his final year in office. president obama is expected to conduct a three-month review of other items, other ways he can stop gun violence in the united states. reporting live in washington. back to you. >> edward, quick question for you. the white house clearly has an uphill challenge when it comes to dealing with the developing story out of saudi arabia and iran. saudi arabia, a key u.s. ally. iran trying to finish the nuclear deal there.
5:27 am
how does president obama walk the line? >> reporter: at the moment the white house is asking for diplomacy. the white house and the u.s. government want the two sides to start talking again. obviously you heard the volatility in the oil -- crude oil prices right off the bat. again, that has leveled off. still, the president would like to see the two countries get back together, come back to the table and talk to one another in order to ease tensions and hopefully ease prices around the world for oil long term. >> that's going to be difficult. thank you. edward law recommendati edward laurence. this morning's top story. a major global market selloff. u.s. equity futures selling off pretty sharply. dow futures down nearly 260 points. buying japanese yen, buying gold. chinese equities down 7% overnight halting trade. s&p futures under pressure to the tune of 30 points in this early hour. the nasdaq futures down 75.
5:28 am
and as we head to break, here's a look back at the best and worst performing dow components in 2015. nike at the top up 30%. stay tuned, you're watching cnbc first in business worldwide. i know you're my financial advisor, but are you gonna bring up that stock again? well you need to think about selling some of it. my dad gave me those shares, you know. he ran that company. i get it. but you know i think you own too much. gotta manage your risk. and you've gotta switch to decaf. an honest opinion, even if you disagree. with 13,000 financial advisors, it's how edward jones makes sense of investing.
5:29 am
while you're watching this, i'm hacking your company. grabbing your data.
5:30 am
stealing your customers' secrets. there's an army of us. relentlessly unpicking your patchwork of security. think you'll spot us? ♪ you haven't so far. the next wave of the internet requires the next wave of security. we're ready. are you?
5:31 am
global market alert. chinese stocks slammed and a rough open on wall street. crude reality. oil prices swinging wildly right now on unrest in the middle east. mark zuckerberg sets a personal goal for the new year and it involves artificial intelligence. you're watching "worldwide exchange" on cnbc. first in business worldwide. ♪ ♪ a very good morning and happy new year to you. welcome back to "worldwide exchange" on cnbc. i'm wilford frost. >> i'm sarah eisen. major global market selloff across assets starting in china. chinese stocks plunging overnight. dropping so much that trading was actually halted there for the rest of the day. and the rest of asia also posting lots of red arrows in response. stocks in hong kong, australia, japan, south korea and india all
5:32 am
closed sharply lower. the nikkei opening the year with the biggest one day slide in three months after what was a positive year for the japanese stock market. all of that is weighing on u.s. equity futures under pressure. the dow futures set to open lower by more than 250 points at this early hour. that's actually worsened over the last half hour or so. dow futures now down 275. s&p down 33. nasdaq down 81. this all coming after the worst year for stocks. the s&p and the dow since 2008. financial crisis. >> a dreadful start to risk sentiment again this year as we just saw for equities. let's also look at oil prices because they have been pretty volatile themselves. overnight they were called up 3% because of that tension in the middle east. then they went into red territory. back in the green as you can see. wti, 33.5. brent at 37.8. the big driver those
5:33 am
deteriorating relations between saudi arabia and iran over the weekend. saudi's cutting the diplomatic ties after the embassy in tehran was stormed by protestors. that attack came after riyadh executed a prominent shiite cleric. they've given them 48 hours to leave the kingdom. early european trading is pretty ugly this morning. losses across the board, the german dax is now down almost 4% in the early action here and france down 2.5%. more than 2% declines across the region. stronger euro not doing much to help buying gold, buying the japanese yen is really souring the move this morning. obviously the biggest fear is of course in china and what's happening in the middle east. exactly right. those moves bigger than we would have expected. 4% on the dax. wow. let's have a look at broader markets. a little bit of buying in the ten year in the u.s. as risk
5:34 am
sentiment tails off. looking for safe havens. not too significant. 2.225% the yield on that. let's also have a look at the dollar which trkly hasn't saw a safe haven because of the move particularly against the yen. 118.9. 1.1% there. the euro catching a bit up half a percent. 109.15. sterling up a little bit. sterling has been pretty weak in the final month or two of last year. >> one thing we're watching as we go into the u.s. open is the nasdaq. bright spot for 2015. the u.s. gaining nearly 6% on the year doing better than the other major averages. the only major one to close in the green thanks to the leadership of the so called fang stocks. all four of them rose by 35% for the year, facebook, amazon, netflix and google's alphabet.
5:35 am
amazon and net flick finished the highest in that group as well. you wondered how far down stocks would have finished without the help of those two. >> absolutely. i wonder if they can do it again. they were such fundamental stories last year. they've run up. the other tech name, the flip this year around a notable name missing from those fang outperformers was apple. the company snapping a six-year winning streak last year and closing 2015 down nearly 5% but that number doesn't tell the full story because apple shares hit an all-time high closing at $133 in february the same month the company was awed to the dow. from that point the stock dropped 22%. wiping out $57 billion in market cap. sarah, it still remains totally an iphone story for investors. >> we're looking at a premarket quote which shows that apple selling continues. down 1.7%. there are a lot of overseas
5:36 am
concerns which are weighing on all dow futures. it was a brutal year for apple. the new apple watch, pay, tv. we have to see if they gain traction to offset the dependence on the iphone. slowdown in growth from iphone and china. >> i think some analysts are saying this is the first year where iphone sales actually decline although i think that would be a big surprise if it did happen. if it did, we'd be seeing a decline. >> well, many of us have probably made and broken our new year's resolutions already, but one high profile tech ceo is pledging to stick to his this year. landon dowdy joins us with more. who is it, landon? >> that's right. new year, new resolution. facebook ceo mark zuckerberg sets himself a new goal every year, including mandarin, meeting a new person every day. this year he's decided to build
5:37 am
an artificial intelligent assistant. he compares it with jarvis, remember the computer in the "ironman" movie. he plans to teach the system to understand his voice and face recognition. he prefers his room cooler than his wife does. zuckerberg wants to design it to turn data into video that he can see with a virtual reality head set. vnss in artificial intelligence have led some top tech figures, smart machines could one day jeopardize the human race. zuckerberg says potential dangers are farfetched and less likely than disease or violence. >> if elon musk is worried about ai, then i think we should be worried about it. it's a great goal. what's he doing on the facebook side? >> that's exactly right. life is mirroring work. facebook has three ai louns.
5:38 am
they've hired the guy. all of his resolutions trump mine. i was trying to get to the gym a little bit more. eat a little bit healthier. we've all learned to wake up at 3:00 a.m. >> that's going to only be mine, stick to getting up at 2:30 a.m. >> landon, thank you very much for that. coming up this morning's must reads plus we'll also hop behind the wheel with elon musk. first, as we head to break, check out the biggest s&p 500 winners and losers of 2015. stay tuned, you're watching cnbc first in business worldwide.
5:39 am
5:40 am
5:41 am
if you are just waking up, let's get you up to speed. sharp declines. the shanghai composite down. hong kong down 2.7%. japan off some 3%. that's weighed on european trade if we have a look at that. we can see all of europe in the red including my hometown, london, the ftse 100 down 2.2%. let's look at the biggest markets in europe. we've got france and the u.k. down 2.4, 2.2% weighed by that
5:42 am
sentiment from china. germany up 3.7%. that's also weighing on the expected open for the u.s. markets. all three are in the red. the s&p down by 31 points, the dow by 270, the nasdaq by 80 points. we're expecting 1.5 to 2% declines for u.s. equities at the open for the u. r first trading day in 2016. >> just brutal. tesla meeting its lowered fourth quarter guidance for deliveries. phil lebeau joins us. 2:40 a.m. in vegas with the news on tesla. >> reporter: hey, i just walked away from the craps table. why don't i do an update on tesla sales for the fourth quarter and 2015. sarah and wilford, tesla did meet the guide dance. here's how the quarterly sales
5:43 am
came out. 17,400 vehicles delivered in the fourth quarter. that allows tesla after averaging 10 to 11 1/2 vehicles delivered to hit 50,580. the breakdown, most of them delivered were the model s. no surprise there. over 17,000 were model s. how many model x? the electric suvs were delivered? just 208. keep in mind, they are ramping up production and delivery. that 208 number, a little hard to read too much into that. overall annual sales growth for tesla, 50,580 was in the range of lowered guidance between 50 and 52,000. the 2016 estimate we're showing you here of 70,000, that's what i'm hearing from talking with analysts. we have not heard guidance from tesla. keep in mind the company has yet to give a full actual guidance on how many deliveries for this year. as you look at shares of tesla,
5:44 am
there was a fire at a super charger station in norway a few days ago. no injuries and still too early to know the cause of the fire. was it the equipment at the super charger station, something with the tesla model s that was being charged? again, there was nobody injured in the fire. authorities are investigating it there. tesla spokesperson tells us we are undergoing a full investigation and we'll share our findings as soon as possible. so, again, tesla meeting its lowered guidance of delivering between 50 and 52,000 vehicles last year. guys, back to you and congratulations on the new "worldwide exchange." >> happy to have you on our debut. just a quick question here. all we hear about is autonomous driving. speaking of tesla, we know it's in the game as well. new estimates on the market 1, -- $100 billion. who's in the race and who's going to get there first? >> everyone's in it. it was just about a month, month and a half ago that we had a chance to test out the tesla
5:45 am
auto pilot system. that's semiautonomous drive allowed us to take our hands off the wheel for short periods of time. the vehicle was actually steering itself, controlling, braking and acceleration. that's the next step, guys. everybody is moving in that area. that's why we're here in vegas at the consumer electronics show. we'll hear from general motors, ford, volkswagen. all of them are here to stake a claim that they'll be ready as the technology comes on. >> come on, that's not the only reason you're in vegas. you'll get back to the tables before your next hit. >> absolutely. >> thank you very much for joining us. pleasure as always. to this morning's must-read stories catching our attention. in the wall street journal entitled the mullahs thank mr. obama. the author saying that from his first days in office mr. obama begged iran to negotiate and
5:46 am
it's no surprise that iran has concluded to oppress its military ambitions with impunity. it compares the approach of reagan negotiating cease-fires at the end of the cold war with russia but saying reagan was doing it from a position of strength and obama doing it from a sense of weakness. this latest span of aggression has stemmed from saudi arabian responding. >> it puts the white house in a tough space. >> it certainly puts them in a tough space. as we've discussed throughout the show, iran and saudi being involved. >> two top ten oil producers in the world. so because you picked a right wing wall street journal piece, i picked a left wing one. it is titled the great malaise. joseph stiglets. talking about global growth slowing. he has plenty of solutions here. they're all very left wing. some of the world's most important problems will require government investments, such
5:47 am
outlace are needed in technology, the environment facilitating the structural trans formations that are needed in every corner of the earth. it's a good read if you want to sort of -- if you want to get everything out of the liberal mind set when it comes to stimulating growth. he goes after the banks, he goes after the financial equality. this is advice for governments who do listen to joe stiglets, spend more, buy more. >> he basically says borrow so you can create more investment. seriously monetizing debt. pretty extreme perspective. you're right, very well respected columnist. we'll have to see if people do that. that's not the approach that the u.s. is currently taking by hiking rates there we go arguing that. we're approaching the top of the hour and that means joe, becky and andrew are getting ready for "squawk box." joe joins us from new york. joe, happy new year to you.
5:48 am
very happy new year to you. we wanted to kick off before we get to markets. for a britt just landing here, who should i be supporting now that we've gotten to the crunch point. >> you have a co-anchor who i think hasn't smartend up and is still thinking that the bengals have a chance to get to the second round of the playoffs. >> hey, aren't they going? >> they're going to the first round. >> oh. >> i said the second round. to get to the second round they would have needed a bye which isn't going to happen now after peyton manning came back in and led the broncos to a win. so i don't know. cincinnati versus pittsburgh, got a lot of pittsburgh flaends want to bet me. >> maybe you should take pittsburgh so we can have a rivalry here. >> maybe green bay, something like that. i'm he not sure. we'll have to continue this debate. i was sad to see the jets go out. >> that was very disappointing. anyway, great to have you guys. i don't know whether to blame you -- you're not a jinx for the markets first day here.
5:49 am
i'm glad you're there to cover this. >> right. >> you're doing articles -- i would have thrown out anything that's already been writtin and stiglets, you know what you're going to get. a lot would say that the government activism we've had on the fiscal side and monetary side is one of the reasons we're in this mess now growing 2% or so. anyway, this is the one that i might have -- what i might have kept if i kept anything. last year they called china the year of living dangerously. this is what's setting us off this morning. the first day of some new circuit breakers in china and they had to use them immediately, down almost 7%. >> right. >> there's an old adage that as the first day goes so goes the first week as the first week goes so goes the year. let's hope that's not the case because it's going to get dicey right from the start. dow call down 260 points or so so far this morning. so that's -- we have mark rand coming up this morning. he's negative on just about every market. this is not a way to start the year, especially i thought that all the selling pressure from
5:50 am
last year was supposed to abate on the first day and we were supposed to get a bounce. that's not what's happening. more of the same. >> the question with china always, joe, how much it impacts our markets. i was sitting on the desk with you back in august. last time this happened they were throwing all kinds of desperate measures at the economy. it did take us down and did keep the fed on hold, we were able to rebound after a few sessions. i think that's going to be the question here again. >> if you look at last year on the chart you can see the august break was totally started by and sort of mirrored what was happening in china. the rebound mirrored the rebound in china. i don't know if i would say we're resistant to global forces. this is an interesting piece as china tries to transition from the old way of doing things to the new way. whenever the market goes down, all those reforms get thrown by the way side. so we are definitely a global market and it's slow everywhere in the world so i don't know what joe wants us to do.
5:51 am
maybe he wants us -- is the united states, do we tax people here to prop up the whole rest of the world. do we do infrastructure in indonesia. >> i knew you would love that, stiglets in the morning. >> i'm here for the malaise. >> which governments? cuba? >> cuba listened to him. he's a nobel laureate. >> nobel laureates in economics are a dime a dozen. >> joe, thank you. >> it's not a real nobel prize anyway. it was not -- it was not a nobel sanctioned prize. >> look at you all fired up. pleasure seeing zblu good to see you. >> thanks, joe. coming up, where are the markets and global economy headed in the new year? new call out from david kelly to jpmorgan. important day to speak to him with that 7% move lower in china and u.s. equity futures down more than 250 points. we'll be right back on "worldwide exchange."
5:52 am
5:53 am
5:54 am
270 on the 6% slide in china. clearly what happens over there impacts us here. how concerned are you to start out the new year? >> well, i'm not that concerned. i do think this is going to be a rocky week but let's think about what actually happened in china. if you go back to last august the basic problem in chinese stock market is one of liquidity and no maturity, i guess and the problem is when you introduce these new circuit breakers, literally that i think scared some investors that there was going to be a lack of liquidity if the market went down. it's like if you say the bank is going to close as soon as people take a certain amount of money out, you want to rush out and get your money now. so it is not a coincidence that the first day they introduce these circuit breakers the market goes down to test them.
5:55 am
it's annoying and it will worry people, but it doesn't change the fundamental economic outlook this year which is a global economy which should be growing. if we get some stabilization in the dollar in oil, i think equity prices ought to go up for the year, not down. people just need to focus on that. >> david, how do we play that global market that's, as you're saying, growing? i know that the shanghai market can be hugely volatile. that scares foreign investors. a great indicator. last year shanghai up 9%. hong kong down 7%. is hong kong a good buying opportunity for people wanting global exposure? >> i think probably it is. i think it's part of the story. i think that there are continued long-term problems in the chinese economy which will affect hong kong, but i think there are a lot of global opportunities. i mean, i actually think that europe is still a very good opportunity this year. you know, obviously a lot of
5:56 am
european returns for american investors were ruined by a high dollar last year. i think the european economy will continue to grow. we'll get a good european number. global pmi numbers look a little bit better. maybe southeast asia. personally i like europe the best. i think emerging markets more for the long run. i also think the u.s. market should have a better year after basically a dud last year. >> all right. sticking with the optimistic call, david kelly on a tumultuous morning i should say for the global markets. thanks for joining us. david kelly from jpmorgan. >> right. that's it for this morning's show. tomorrow the lindsey group's chief market analyst, peter boockvar will join us. up next continuing coverage of the global market selloff on "squawk box." do stay with us. you're watching cnbc first in business worldwide. uh right now you can get 15 gigs
5:57 am
for 100 bucks plus $15 per line that is perfect because we are about to start the whole long distance thing yeah and lots of data will mean lots of video chatting how much is that? 15 gigs, that's over 40 hours of video chatting wow whoa 40 hours, that's a lot of communication yeah yay love! get 15 gigs for 100 bucks, plus $15 per line
5:58 am
5:59 am
good morning, a global market plungeoff. europe and the u.s. are both following asia lower. big selloff in this market indicated so far this morning. if we match germany, look out below. tensions are escalating between iran and saudi arabia. this probably isn't helping. that unrest driving oil prices higher and setting the region on edge. and at the box office, "star wars" ticket sales hitting light speed. passing the domestic take for
6:00 am
"titanic" and "jurassic park" with "avitar" now in its sites. it's monday, january 4th, 2016, and "squawk box" continues right now. live from new york where business never sleeps, this is "squawk box." good morning, everybody. welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. breaking overnight, a global market selloff. chinese stocks plunging dropping so much that trading was halted and ended up closing early for the day. you can see the hang high composite was down by almost 7%. the hang seng off by 2.7% and the nikkei even down by 3%. that's a decline of 580 points in japan. among the reasons there was weak manufacturing da

234 Views

info Stream Only

Uploaded by TV Archive on