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tv   Worldwide Exchange  CNBC  January 7, 2016 5:00am-6:01am EST

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>> break news. a chinese market melt down in minutes. trading is quickly suspended for the rest of the day. u.s. stock futures are dropping fast. >> the energy route continues. oil prices in free fall this morning. >> plus a rough ride for a major retailer. macy's cutting jobs and closing stores. it's january 7th, 2016 and worldwide exchange begins right now. ♪ >> here we go again, good
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morning and welcome to worldwide exchange on cnbc. what a week to launch a show about the global markets. >> absolutely right and a great choice of song by the director there. under pressure. wall street waking up to another wild market story. chinese stocks halted for a second time this week. this time trade was suspended for less than 30 minutes after the open. so very short bit of trade today. >> the main catalyst is the chinese central bank setting the official midpoint rate on the currency at the lowest level since march 2011. it was spt 5% weaker than yesterday. that's a big move. if biggest daily drop since last august. >> chinese security regulators announcing new rules restricting trading by shareholders. they can't sell more than 1% of a listed company every three months. >> let's check on the global ripple effects and boy are they far and wide. starting in the u.s., under pressure is a understatement.
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a steep sell off yesterday. s&p futures down 42 at this early hour. this is another ugly set up for wall street. nasdaq futures down. >> and it's effected europe too. let's look at european trade. shark declines across the board. the dax bearing the brunt of this. france and the u.s. also off some 2.6 or 2.7%. >> it's the chinese exposed exporters in the dax. that's why you see the 3% decline there. stocks plunging today after china suspended trade early. we have to get a break down. this was a crazy session. sri joins us from singapore with the round up. a less than 30 minute trading day in china, sri. >> well, it was actually 15 minutes because about a quarter of an hour off that, 29 minutes to be precise was actually the first trading halt after that 5% intraday slide was triggered.
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anyway, that's by the by and i think this raises multiple issues here. the first one is the chinese currency. clear depreciation on the yuan and at the lowest level in almost five years. so this is the negative feedback loop. this is really central in my mind and i think what really spooks the market is that the weaker currency is really highlighting and underscoring perhaps a deeper than expected malaise in the broader chinese economy. the other factor here is that to be fair this is an evolving capital market. policies evolving as well. the regulations are evolving with them and what this week has told us so far that is that the circuit breaker mechanism does need to be refined. it does need to be fine tuned. let's face it. it is counter productive. it's not containing the volatility. it's fuelling it so there needs
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to be refinement of this market mechanism. we'll leave that to the regulators in the here and now. remember when we saw this type of volatility during the summer route in 2015. the pboc stepped up to the plate with supportive measures. possibly as early as today maybe friday or the weekend. we have seen this forever. >> we all remember last august. drag this down as well. sri thank you very much for the set up. out of singapore this morning. clearly he mentioned the currency. that's the big concern that something more rotten is happening in the chinese economy that they have to resort back to the export model to prop up the exports to meet the growth target and what does that do to the global economy? even if the u.s. isn't as exposed via corporate earnings or exports to the chinese economy, china impacts every single country's economy on the globe and the question is what does it mean for global growth?
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>> right. the currency has been the sparked that caused all of this last week and i was writing in an article in november and i mentioned the fact that 2% declines, 3% declines that we saw in august, they're nothing. we need to see much more to see all of this flushed out and we're starting to get toward the highest single digits. they might be managing things and this is all planned and there's such a run of private capital out of the country that the state cannot stop it falling quicker than it is and there's
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such a rush that it's speeding out the door. >> this is your wheel house. you were on an asian trading desk. you were an asian fund manager. >> yeah, for five years i was managing asian stocks. >> so read the november commentary, cnbc.com. predictive power. >> and we have to mention the circuit breakers they have come in and accentuated the falls. two views on that coming in earlier in the week. this is from steve sun. he says that state intervention provides stability and will allow capital market reforms to take effect. but they are saying that the spikes in volatility are temporary. so he has a positive view on these of course you lock in the loss. >> obviously they need to get on top of this plunging market. >> absolutely right. let's have a quick look at the other major market story this
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morning. oil prices. brent plunging to levels we convenient since april 2014. oversupply and near record output levels. 33 -- almost below 33 for wti. just above it down 2.8. we felt china was leading oil prices down. overnight these falls in oil probably accentuate china's moves as well. >> absolutely. this is after a 5% slide in the price of oil. but still oil getting pounded. a bold call from boone pickens getting a lot of attention today. he talked to jim cramer last night on "mad money" and he has been calling for higher prices for awhile. here's what he says now. >> close to the bottom. i was just a year off. we'll be back up to 70 or 75 by the end of the year. if you look at the long stretch we had in the 80s we were 20%
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oversupplied. today the world is using about 95 million barrel ace day and we're oversupplied by a million barrels so it won't take much to balance the market. >> down 70% since 2014 and a lot of fund managers are predicting that recovery but you wonder with the sharp moves and sharp declines on oil what is going to get us there? what's going to turn it around? everybody said it has to bounce back and they fell another third. >> it was like catching a falling knife. >> we can't have another year of falls and look at what happened this week. crazy stuff. the world bank is cutting it's global economic forecast for this year announcing growth accelerating to 2.9% down from
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the june forecast of 3.3% growth. the bank argues weak performance will slow activity overall. >> and a programming note here on this wilfred t world bank's chief economist will be joining me on squawk on the street at 10:00 a.m. eastern and he will talk through the downgrade and the world bank is warning about the weaker commodity prices and the spill over effect on the emerging markets on china. how much more room do we have to go? >> i look forward to watching that and amazing how many other economists or banks or analysts downgraded just this week. really reacting to the short-term volatility. let's have a quick look at stocks to watch today. shares of burberry are down in european trading. many luxury retailers have been hit hard by fears of the china slow down. you can see that's down 3.6% off a bad year already. united airlines ceo underwent heart atransplant surgery.
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he should return to the job by the end of q-1 or the beginning of q-2. now shares of apple one to watch today. the stock dipping below 100 dollars yesterday for the first time since august. investors are worried about slowing iphone shipments. lots of fall out on news that they have cut orders from their supplies. >> all leeading into the big earnings report. >> transcanada is suing the u.s. over president obama's rejection of the keystone poop line. >> watching netflix shares again today. the to be soared on the news that the company's video streaming service went live in more than 130 countries and the notable exception here is china which might help shares today. morgan stanley, promoting it's
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head of institutional securit s securities. greg fleming will be leaving the bank and the reason that wall street is going to be talking about this one today is that greg fleming was considered heir apparent to james gorman. trying to read into what exactly this means. one thing that i find strange about it and i read all the reports is they announced this major change, upping the role. leaving a few weeks before earnings and they didn't preannounce earnings and they didn't give any guidance so now analysts are wondering if the wealth management isn't doing as well as they thought because greg fleming oversaw a very big recovery in morgan stanley's business because of wealth management. >> he is also quite a lot longer and people thought he was groomed and the one coming through. >> which could also say something about whether he wants
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to stay on board for quite a bit longer. >> there we go. that's morgan stanley. let's have a look at macy's. pink slips after a dismal holiday season. a bad omen for other major department stores and retailers. landon joins us with more on that story. >> good morning to you. the nation's largest department store chain will cut about 4800 jobs and close 40 locations. it's a move that will save about 400 million dollars. the cuts include 2700 store employees although half will be moved elsewhere and several back office and management positions. same store sells fell 4.7% in the past two months. far worse than what it estimated in november. it's cutting it's earnings outlook for the second time in two months. macy's expects sales to drop 2.7% for the year ended in january. bigger than previously forecast. the majority of the sales decline is due to the unusually
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warm weather in november and december diskournling purchases of winter clothes. it's also blaming the strong dollar for keeping tourists from visiting the u.s. analysts say other retailers are also facing a similar lack of demand for apparel. and the stock up nearly 3% in after hours. >> thank you very much for that. >> the stock is down more than 40% in the last year. when we come back, global markets selling off hard this morning after chinese stocks halted for trading. the second time this week. check out the map of europe. red across the board. especially in germany. we'll take you live to our colleagues overseas for a run down of the market action next. our twitter question of the day, will china drag down the global economy into recession? take our poll. speak out, give us your comments. we're going to keep you -- we're going to air it. we're going to talk about the results a little bit later. this is a wild morning. we're watching the futures down
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more than 300 on the dow. you're watching cnbc, first in business worldwide.
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we're ready. are you? welcome back. buckle up. the shanghai composite plunging 7% before suspended trading for the rest of the day. less than 30 minutes after the open. the rest of asia not reacting well to the news. losses of more than 2% in
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australia. equity futures are down triple digits this morning. down 375. looking at session lows after what has been the worst start to the year futures down 45. the worry is china. >> nearly 400 points now on the dow futures. as you'd expect europe also sharply lower after the gate. the dax dropping below 10,000 for the first time since mid october. julia joins frus from london. shared almost all the gains the dax in four trading days from hast year. >> you're absolutely right. we are 20% off the highs hit in 2015 back in april for the german markets but it's an ugly picture across the board. two factors you have been saying all morning. the intensification of the oil
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sell off and also in china overnight. a lot of people saying to us is this about further liberalization of the currency or is this saying something really serious, more serious about chinese growth? well the exporters stocks are telling you what they think. some of the auto across europe. bmw off more than 4% and volvo off more than 3% clearly reliant off chinese sales in particular. it's a broader picture of losses here. angelo america with a downgrade today. what we saw yesterday was gold now at 9 week highs and some of these benefitting in the session and more broadly we have european bonds higher. we have the dollar high. we have yen stronger. broad based selling across
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equities. a real risk off feel here in europe. back to you. >> a quick question, we also have data out of europe this week. inflation data underwell ming a few days ago. what percentage would you attribute that to moves in the markets? is it anything to do with fundamentals or just the broad fear from china. >> i think it's about risk off. it's about what we're seeing in china and the concerns overall more broadly. european data disappointing on the inflation but most guys you speak to her saying it's not going to be great growth in europe but it's going to be okay. maybe the sell offs that we're seeing is giving them opportunities. the question is when do you get back in here with everything else going on. >> that's a question for the u.s. too. the bad news spieling up. julia, thank you. when we come back we'll give you a report overnight on the market mess in china.
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you'll want to see the play by play in the chinese market. you're watching cnbc. first in business worldwide.
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welcome back. dow futures at this early hour. concern on markets everywhere this morning. nasdaq down 127. we'll take you live to hong kong in just a moment but first we want to get you covered here and
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get today's business travellers forecast. grant johnston joins us from kxas in dallas ft. worth. good morning, grant. >> good morning to you. happy thursday. another wet day on the west coast. can you believe it? also tracking a system here through the southern plains. it has cleared through dallas ft. worth so should see some minimal weather delays there but rain for little rock and memphis later today. st. louis and kansas city starting off wet. here's what it looks like through day. watch the time line there and that system in the plains moves very slowly and out west. the rain sticks around for los angeles and san diego. a chilly day in san francisco. snow through the rookies spreading up through the northern plains and midwest. chicago should stay dry today and the east looking good. chilly temperatures, new york city, boston and d.c. but nothing dramatic for this time of the year. nice and mild in the southeast and warm in florida with the 70s hanging on. 60s and 70s across the lone star state.
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cold air in the northern rockies but not arctic of nature. chilly though on the west coast. back to you in new york city. >> thank you very much for that update. let's get back to markets. this is absolutely nuts what's happening. questions, china was off 7% but the huge reaction. the huge carry through we're getting through to u.s. equities is a surprise. we have the nasdaq. the s&p off. if you thought they were supported this week you were wrong. if you think the u.s. was the global safe haven you were wrong as well. the dollar is weaker against the euro, yen. it's weaker again today. the yent big beneficiary this week of safe haven trades. 11755. up as well today 10847. >> china is the culprit again. sparking a global market sell off.
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eunice yoon is joining us live from hong kong. for the second time this week we saw the circuit breaker halt chinese stocks with a move down 7%. >> that's right but the panic has really set in. we had the shortest trade dag in china's 25 year history with the stock market and it was ugly. the chinese investors have been concerned and spooked by the big downward adjustment in the currency. and people are fretting about how the government is lifting the restrictions on some of the big shareholder who is had been holding on to their shares. tomorrow they'll be allowed to sell some of the shares or at least after tomorrow and people have been worried about that. now circuit breakers designed to limit the volatility. they're having a counter productive impact. in fact there was a poll today that showed that 86% of the people polled believed that the
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circuit breakers were not reasonable. a lot of chinese investors online were calling for and end to the circuit breakers and they also believe over half of them said that they they the breakers are going to be triggered again tomorrow so a lot of panic in the markets right now. the regulator said they're going to try to limit the damage by putting in any rules so they can only do it in limited bunches. so about 1% or so but still it hasn't been able to turn around the sentiment. in fact, online, public fund managers have been advising their clients to sell that are shares. >> thank you for that. switching gears to corporate news this morning, shares of disney down again. this would be the 7th straight day of declines for the dow component but a bit of good news for the company, it's official, star wars, the force awakens has
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become the highest grossing movie of all time in the u.s. and stripping avatar of the title. it crossed the 800 million dollar mark. to beat the global record the film must rake in more than 2.8 billion. it's currently earned $1.5 billion globally and it hasn't even been released in china. i'm not sure if people got much money. this week the movie has only been in theaters for 20 days. wow, doing really well. the stock built in a lot of that ahead of the movie. >> opening shanghai disney and perhaps that's the concern this year and lingering concerns about espn and cord cutting. the major league baseball hall of fame is getting two new members. ken griffey jr. and mike piazza. he played for the seattle mariners and my home team the cincinnati reds. was the mvp and hit 630 home runs which is 6th all time.
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he also received the highest hall of fame vote percentage ever at 99%. and then there's mike piazza making the hall in his fourth year on the ballot. he 427 home runs over 16 seasons. mostly with the l.a. dodgers and the new york mets. all this for a guy that was drafted in the 62nd round back in 1988. and speaking of baseball, major league baseball will be coming to beijing. via the web. the mlb commissioner announcing a three year deal at the consumer electronics show to stream america's past time live to fans and potential fans in china, hong kong and mccaw. it's trying to capture a new audience and move into new technology. baseball is trying to move into the new era. interesting for a country, china, that banned baseball. >> did they really? >> back in 1960. >> they love the english soccer
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league as well. maybe they'll start to love baseball. still to come, we have you covered on this morning's global market turmoil. numbers that you have to see the believe. futures right now pointing to a sharply lower open on wall street. the dow by more than 400 points. will china drag the global economy into recession? take our poll. have your voice heard. the results coming up after the break and much more market analysis here on worldwide exchange. ls, and fever, there's no such thing as a little flu. and it needs a big solution: an antiviral. so when the flu hits, call your doctor right away and up the ante with antiviral tamiflu. prescription tamiflu is an antiviral that attacks the flu virus at its source and helps stop it from spreading in the body. tamiflu is fda approved to treat the flu in people two weeks of age and older whose flu symptoms started within the last two days. before taking tamiflu, tell your doctor if you're pregnant, nursing, have serious health conditions,
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>> global market turmoil. european stocks are slammed and u.s. futures dropping fast. >> and oil prices also in free fall. >> is this the beginning of a painful bear market? definitely says dennis. he's writing about it this morning and joining us straight ahead. it's thursday, january 7th, 2016. you're watching worldwide exchange on cnbc. ♪ >> good morning. another major sell off and ugly set up for wall street. chinese stocks halted this week. suspended less than 30 minutes after the market opened. the chinese central bank with the official midpoint rate at the lowest level since march 2011. >> let's check in on the global
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ripple effects this morning and u.s. equity futures pointing to a severely weak open. 400 point decline for the dow. the nasdaq expected to open down by the best part of 2%. 135 points as we look at things right now. european stocks also red in early trade. quite significantly as well. the dax almost giving up all of it's 9.5% gains from last year. the dax down 3.3%. france is off the best part of 3% as well as is the u.s. let's get perspective from china. joining us now from hong kong, breaking news asia editor. good afternoon where you are. thank you for joining us. the spark really is the currency. is this intentional from the authorities? is it something we shouldn't be worried about or is it caused and sparked by private capital outflows and something the government is struggling to
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control? >> that's the $3 trillion question. the point is we don't know because the pboc isn't really telling us what the plan is if there is a plan. there were basically two schools of thought. one school of thought is this is a managed depreciation to the currency and despite from china to the country that they decided that basically the thing to do is to devalue the currency and that's the one big way out of china's economic predicament at the moment. and the other theory is that they're trying to hold things steady. we saw today for example the foreign exchange reserves, another $100 billion in september. it suggests they're intervening to try to manage the currency and that suggests that they're losing control of this process and that they're struggling to keep a grip on the currency. the key point about this is that whatever theory is accurate, neither of them bode well for the rest of the world.
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either we're heading toward a currency war or we are learning, again, in real time, just how limited the ability of the chinese authorities is to control the world's second largest economy. >> so peter, what stops the free fall of the can chinese stock market? >> well, the stock market is basically linked to the current sy. the short answer to your question is what stops the fall in circuit breakers. that's what we saw within a half hour of trading everybody went home again. the stock market is basically linked to the currency. so the currency is depreciating. there appears to be a lot of pressure for people to get their money out of the country. ordinary chinese citizens are allowed to take out 50,000 u.s. dollars. as of the first of january their allowance was reset. you might expect a lot of people are take out what they can take out legitimately in a hurry and that bha coming out of the stock
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market but it's exacerbated by the circuit breaker system they put in place but already triggered twice in four days. >> we'll leave it there. our pleasure speaking to you as always. the breaking asia views editor from reuters. crazy moves. >> the result from our poll question, will china drag the whole world into recession? keep tweeting at us. we put this poll out early this morning about the china question and global recession. 47% say no. 3 5 3 say yes, china will drag the world into recession. that has the foed into the fears overnight and with the chinese economy. let's get a check on what traders may be watching today. weekly jobless claims. it's thursday, so jobless claims 8:30 a.m. eastern time. expected to drop to the 270,000 level. they got a good bounce last week. claims held below 300,000 for more than 40 weeks.
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the richmond fed president and chicago fed president charles evans are both speaking out today and the earnings flow will pick up with results from alliance, constellation brands and then bed bath and beyond suffered recently. big retailer after the close. alcoa, that's the official kick off to earnings season. perhaps the focus can shift back to the u.s. we have the big jobs report on friday. that's been a bright spot for the u.s. economy. we'll see how corporate america is hanging in there. >> we will but i wonder whether anything domestic can hide the tide from the east. >> that's the question. >> big round of lay offs may be coming from yahoo! as they struggle to get it back on track. landon joins us with more on that one. >> yahoo! may be getting set to cut at least 10% of its work force or more than 1,000 jobs. the cuts could start as soon as this month and they're expected to effect all parts of the
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company but may hit yahoo!'s european operations and platform technology group which supports the company's services. yahoo! was declining comments but will announce additional plans on or before it reports fourth quarter earnings january 26th. a major focus of the restructure as good yahoo!'s properties and last week they closed yahoo! screen after taking a write down last year. business insider says the division hasn't seen a budget for 2016 which could halt coverage of major events like the golden globes this weekend. the move comes after the activist investor sent a letter on wednesday imlying ceo marissa myer and her management team need to go without naming her. >> down 34%. thank you. now for a look at this morning's top trending story. apple executives getting a pay
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raise. tim cook's compensation rose to 10.1 million last year. software head earned 25 million while the retail chief is apple's top paid executive bringing in $25.8 million. apple had a mostly positive year under cook with the iphone 6s but ended 2015 negative. shares down 4.6%. they're under the 100 dollar a share market this morning. china has been such an important double digit growth area for apple as well as the concerns leading into earnings about slower iphone growth. >> absolutely right and called to open by 3.25% but markets are called to open by similar amounts anyway. >> macy's closing 36 drugstores and cutting 4,500 jobs across the u.s. after what they called
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disappointing sales on earnings last year. the cuts mean an average of three to four jobs at macy's and bloomingdale stores. there's time to buy tickets for the largest powerball drawing in u.s. history. wednesday night's $500 million jackpot. the next drawing is set for this saturday. the #is trending. people talking about what they are doing. do you have to be a u.s. citizen. >> you're allowed to be a ticket. just go to a gas station. >> i'm going for it. i'm going big. >> you have no chance. sorry to tell you. >> i might. i might. >> when we come back, he's writing about a bear market this morning. we'll talk to him about why. we also have drew matus, chief u.s. economist at ubs. see if u.s. economic data can help turn around these markets. dow futures down triple digits. we're on top of it for you here
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on worldwide exchange.
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>> concerns are intensifying about china's market. it's weighing on u.s. equity futures in a big way. dow futures down at this hour. this is already after what had been a pretty ugly few first trading days to the year.
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we're going to talk more about the china story and bring in dennis gartman right now. he never sleeps and he's here to talk about why he sees a bear market. are you talking about a bear market in u.s. stocks because of what's happening in china and around the world? >> actually this is a bear market in equities around the world generally. i keep a very simple index. i have kept it for the last 30 years which is really just a very simple model of the ten largest stock markets around the world. it reached it's peak on may 25th of last year at about 11,186. it's now at 9800. down 16 or 17% from the highs. that's sufficient to tell me that a bear market has begun. the u.s. market lagged behind. our economy was doing better. the dollar was stronger. money was flowing here but even we have begun to turn lower so i think this is a bear market generally. if you missed the start of the bull market in '08 by 6 months,
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7 months, 8 months, you still did well. if you missed the top of the bull market and yes we're down 15%. i think the wise move is to go to the sidelines. take what cash you have. i do think this say bear market and i think it's going to be quite serious. >> you mentioned your index looks at the top ten sized markets around the world. so i guess that includes hong kong but it won't include shanghai. do investors need to be reminded that the spark of all of the moves is a retail investor driven mainly domestic market which is a lot smaller than hong kong and the nikkei. >> yes but if you put brazil in and the united states in and all the european economies in. if you put canada's market in and japan's market in it tells you something. perhaps the shanghai may be
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small. i understand that. but on balance if you take a look at what's going on around the rest of the world and it really doesn't matter. you can look at the saudi stock market or any other stock market almost anywhere in the world. all of them have broken upward trending the trend lines. all of them failed to make new highs. all of them are going lower. this is not just a one off circumstance. this is a global universal circumstance and attention should be paid. >> thank you for jumping on the line. some of the negative sentiment that is out there right now on the global markets and the global economy with dow futures down 400 points. >> we're approaching the top of the hour and joe, becky and andrew are getting ready for squawk box. joe joins us right now. another crazy day. why isn't the dollar reacting. in the last minute we hit august 24th low of yen dollar, 11730. we have the euro strong against the dollar today. why is that.
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>> euro was like 107 and suddenly it's 109. nothing would sur piez me at this point in terms of fair is foul and foul is fair. i'm not sure how the markets are going to react but it's getting into one of those areas now where it actually gets a little bit scary. i don't ever remember i was going to hold up and show you a picture of the wall street journal. i don't ever remember being able to summarize on the front page what the chinese stock market did by 5:00 in the morning. i already have this, you know, ready to go. that's what happens when it's the shortest trading day in 25 years. only 30 minutes. something that also i was thinking about talking to you guys about was oil because we used to look at, you know up at 90 or so and we said wow, was it in the 30s that recently? 2008? oh yeah, that was the depth of the financial crisis. and now we're down below that
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and here we are, the s&p when oil was down there last time the s&p was at 666. so i don't know what -- i know it's all about supply now. i know it's all about fracking and doesn't have anything to do with global demand or at least it's mostly about supply. but when you see numbers in crude like that, if you were to tell someone that in 2016 crude would be at $33, where do you think the stock market would be? it just makes me think, wow. you know if it was 666 last time and we have barely given back anything from that 6 or 7 year recovery from the financial crisis. >> good point. >> i don't know if i'd say i'm getting scared but there's a lot of people, i have other people, long time hedge fund guys and many are saying this is beginning to look concerning at this point about whether the bear is here and whether it could be a savage bear.
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>> and whether sentiment is getting too negative. you have to wonder when we reached the peak and whether the concern is justified. given that so many people say the chinese stock market is not the chinese economy or u.s. economy and doesn't reflect corporate earnings that much. we have given you a lot to talk about. this crazy market sell off and questions about the global economy. we'll see you in just a minute. >> i do think very important to pick up on your point in the run up, first half of last year that we saw in the shanghai market before it collapsed that wasn't correlated with the economy on the way up. it doesn't mean it's correlated on the way down. >> read wilfred's piece from november. he used to trade these stocks in asia. good insight on the economy. when we come back is the u.s. economy in trouble? we'll ask drew matus when we return. he'll help him help us make sense of these market moves. you're watching c nsh nbc.
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welcome back. crazy moves this morning. shanghai market is down 7%. germany down and the rest of europe suffering too. dow opens at almost 400 point declines. and interesting the u.s. dollar is weaker against the yen and the euro. >> all about the japanese yen and gold and treasuries in terms of safety. with the health of the global economy in doubt we turn to true that joins us in studio. the chief economist at ubs. thanks for joining us. your thoughts on china and the spill over effect. maybe not such a big exposure as far as u.s. companies and the u.s. economy but certainly a big exposure globally. >> it's certainly a kicker. it's important to note. if you look at the data, it will show a pick up in u.s. export orders. so either they're filling out their surveys wrong which they
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have done for 50 years -- >> you're saying it's not hurting us? >> there's no evidence that it's hurt us. there's evidence that it hurt us before but there's no evidence of new weakness overseas and there's no evidence of an impact on u.s. economy. so this all seems to be a sentiment driven financial market story. >> globally as we think about the last five years. but globally ems have as well a great carry trade. that's been a dividend to develop market growth. and as we come out of that loose monetary policy period is that not going to hurt the economy? why are prices so, so low if it does not really effect global growth? >> we're in a bit of a transition period for a lot of these economies. china is trying to move into a domestic driven economy. there's always going to be pains with that.
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but they expect it to slow this year relative to last year. that's a consensus view at this point. but it doesn't mean -- that slowing doesn't have to be something that triggers a worldwide recession. there's no signs of weakness in the united states. even among the most highest frequency stuff. no one is being laid off. there's just no one. there's something going on someone would be being layed off. >> but to his point the bull market has been fuelled on central banked stimulus. there is a feeling that 2016 begins with a lot less of that. the fed is hiking rates. there's not a lot of confidence in the chinese policy makers right now. are you saying that it doesn't matter? you can still have stocks rising and the economy keeping up without the central bank support? >> it's great to be addicted to things but you eventually have
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to go cold turkey. there's transition pain and the longer you were an addict the more painful it will be but you'll be better off having made the transition. >> but what does it look like along the way. >> anything good for our economy for the next three months or u.s. financial markets is probably bad for the u.s. economy over three years and vice versa. so we're in a weird period. >> let's quickly hit the u.s. data front. what did we learn from the fed and either way it's going to make the sentiment coming from the east. >> it might calm people down. expecting a pretty good number and unemployment to drop below five. average hourly earnings with u. s. consumers still in the ball game and the u.s. consumer versus any country on earth is the winner if you talk about in terms of importance. in terms of what the fed told us, they told us gradual is four hikes and we all better get used
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to that idea and i think some of the weakness we're seeing in markets, some of the concern we're seeing in markets is the fed is being too aggressive on that front but also very consistent on that front. >> thank you for joining us this morning. much appreciated. drew matus joining us here on worldwide exchange. >> just want to show you the set up of wall street before we say good-bye. circuit breakers went off after less than 30 minutes of trading and that spilled over into u.s. futures. dow futures down 400 points. >> it's coming out of those names that were flyers. we'll see if u.s. data can turn the tide. >> good luck out there. that's it for today's worldwide exchange. jeff solomon will join us ahead of the big jobs report.
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stay tuned to cnbc for much more coverage of the global market sell off. squawk box is coming up next.
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tripping circuit breakers for the second time in three days having the shortest trading session in it's 25 year history. 30 minutes plunging 7% and suspended then. europe obviously when you see that, you can imagine what european stocks are doing now. they're sharply lower and u.s. stock futures plummeting. it's 2% and change but 400 points will get your attention. we're a little less than that right now. but sell off not limited to just stocks. wti crude now trading near 12
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year lows and that 2 handle is not that far away from oil and new consumer concerns here at home. retailer macy's closing stores and cutting thousands of jobs. it's thursday, january 7th, happy new year and squawk box begins right now. ♪ >> live from new york where business never sleeps this squawk box. >> good morning, everybody. welcome to squawk box here on cnbc. i'm becky quick with joe kernen and andrew ross sorkin. another wild morning for the markets. chinese stocks halted for the second time this week. this time around trade was suspended for the day. just 29 minutes after the market opened and by the way, for the 29 minutes, most of the time the market was suspended for that too. there

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