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tv   Worldwide Exchange  CNBC  January 8, 2016 5:00am-6:01am EST

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>> rough ride. $2 trillion wiped from the global stock index in two days. beijing takes action overnight. >> wall street connection. the dow and mazz dak dropping more than 10% below their 52 week highs but futures looking at the open. >> it's jobs friday. a key read amid fears of the slow down. it's january 8th, 2016. worldwide exchange begins right now. ♪
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>> good morning and welcome to worldwide exchange. >> it's been a wild week for the markets and a little bit of respite coming today. let's get you up to speed on what happened while you were sleeping. china suspend it's market circuit breaker system set the yuan midpoint higher as well for the first time in nine days. reuters is reporting that china's foreign exchange regulator ordered banks to limit purchases of u.s. dollars for the rest of the month. >> chinese stocks rising about 2%. a lot of wild swings in the first 30 minutes of trading and the rest of asia didn't fair too well. it was pretty mixed. opening year with five straight days of declines. the first time that has happened since 1949. you did see green from hong kong to shanghai. this was some relief but there are also new rules that came with it. we'll talk a lot about it in the next hour.
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i want to show you what's happening with u.s. stock futures right now because there is relief there as well. >> absolutely right and about time too of course after a torrid week and yesterday as well particularly soft 2.3% down for the dow. the s&p down 2.4% and the nasdaq down 3%. we're called to bounce back today. the dow to the tune of 20 points and nasdaq by 50 points. now the dow started the year with a record fall down more than 5% during the first four trading sessions. that's the worst start in at least 120 years. >> amazing. >> unbelievable. >> worst start to the year for the s&p 500 ever. the s&p 500 until today's session is down almost 5% for the week and china, stocks are down 10% for the week. obviously we'll see what happens today. things are looking better. you got on the front pages of the new york times which is not a business paper. the chinese currency, the chinese leadership plan, the
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global stock market. this is making it to the front pages and on top of everybody's radars. worldwide exchange has become the most important place to go in the trading week. can you believe we started a global market show on this kind of week. >> it's been great timing. i hope people have not been too put off by the volatile till of course which is tough to take for some. the most fascinating thing each morning has been waking up and going to the wall to discuss what futures are shaping up to do and discuss how big the moves are. how much they have been influenced when ultimately we had a little bit of fundamental data but this is all financial market contagion. >> you mentioned the futures activity. we were looking at futures this hour yesterday down 400. yesterday's session on wall street was all over the place. at one point when i was sitting on the desk on squawk on the street the dow was only down 100
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points and then only to finish down nearly 400. the dow has lost more than 900 points in the first four days of trading and we are heading into the jobs report which is notoriously the most volatile and tradeable piece of data on wall street. there's your set up. and things are looking calmer today. >> they were looking calmer and also europe where the contagion is stronger given that asia is up today. europe bouncing back as well. the dax up 1% for the week. as a whole it's down 6.3%. another indicator of the way we have been influenced by china this week. one data point of note. growth in german imports in november and industrial output fell down 0.3% for november. >> and it's been heavily hit because of the export economy.
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europe as a whole is more exposed to china. big question is the chinese currency. for the first time after 8 sessions of weakening the currency which was so worrisome around the globe it strengthened it overnight and there was a goldman forecast that caught your attention. >> goldman sachs changed it's yuan forecast with an apparent shift in policy makers reaction. a shift in the emphasis if recent months and the likelihood of further cyclical weakness later in the year. so they have altered their forecasts expecting to reach 7 by the end of the year. so we crossed 6.5 all important and they think it's going to go further. quite significant shift in their forecast from goldman sachs. >> and the big question for the markets is going to be how fast they let the currency depreciate and the other big question is why? i read a lot of research overnight. is it because they're trying to make a growth target and they're following behind so they need to beef up exports and weaken the
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currency to do that or because the outflows from china are so heavy and intense that they can't help it. they have to devalue the currency under the pressure of money rushing out of china. >> that's exactly the debate that framed this week's market moves and investors have been torn on which side of the bargain the reality is. what i hope we get from the chinese authorities is some clarity and communication. that's the one clear thing that's been terrible so far. >> so it doesn't feel like they're making it up as they go along. we'll talk to your former boss about this. >> we are, indeed. now let's have a quick look at oil prices. rebounding this morning. a little bit of reprieve everywhere today. 33.64 for wti. it's up 1.1%. >> i want to show you also the relief in the safe haven trade which is have been rallying strongly over the past few days. ten year treasury note yield. we have seen the longest winning streak in about a year for treasuries. going the other way, selling a little bit today and yields rise
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just a bit though still under the 220 level. as for the dollar it's been selling off. the two have been marching together right now and you're seeing strength in the dollar-yen. a good sign that things are calmer on the equity market front and the chinese currency everybody is watching as well went the other way. gold which had been rising above the 1100 dollar level which is the key technical level is on the back burner today down 1% along with everything else we have been seeing in risky assets. they're hoping it can stay around the 1,011 level. >> we have seen a reaction in safe haven assets. the u.s. treasuries particularly responding second half of the week. i'll still surprised we didn't see more buying of u.s. treasuries this week given the size of selling in u.s. equities. >> perhaps that's a sign. i'm on the floor. the stock exchange and a lot of it and you're not seeing the
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systemic stress. the fear index is elevated and nothing too alarming and that's what we saw during the china sell off as well to your point sits equity focused. >> equity correlation rather than fundamental cause asian. most investors want to say good-bye to the start of 2016. investors with drew $12 billion from u.s. based stock funds in the week that ended on wednesday. $2.7 billion was pulled from taxable bond funds and even low risk investments weren't immune. they pulled $16.7 billion. >> all of this talk about china and the china fuelled volatility may overshadow a key investment catalyst today. the december jobs report. this is the first one since the fed hiked interest rates. landon joins us with more on what to expect. >> good morning. happy friday. happy jobs friday that is. the data that hits at 8:30 a.m. eastern is likely to show u.s. employers kept up hiring at a
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healthy pace last month and that suggests the recent slow down in economic growth lead by the manufacturing sector could be temporary. forecasts call for an increase of 410,000 in non-farm payrolls. the economy has added an average of 210,000 jobs a month in 2015. unemployment is expected to drop to 4.9%. a 7.5 year low. hiring has been strong in the fourth quarter the past few year with gains seen in most stris. employment wasn't likely disrupted in december thanks to the unusually warm weather in much of the country. average hourly earnings. forecast to a 0.2% matching the average monthly rate in 2015 and that would push wage gains over the past year to 2.8%. the fastest clip since 2009 facing a short supply of skilled workers companies are under pressure to raise wages to attract and hold on to their current employees. guys. >> certainly the fed is going to be watching for any sign of wage growth or inflation. thank you very much. the december jobs report will
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command the bulk of the attention today but other notable items to tell you about. november wholesale trade numbers at 10:00 a.m. eastern time followed by november consumer credit at 3:00 p.m.. san francisco fed president jon williams and jeff lacquer both speaking out about the economy today and also look for earnings from acuity brands. we'll be talking a lot of earnings in the next few weeks. >> we are. i have to get my head around how often we hear from fed members in the united states. in the u.k. you wait for every breath out of mark carney. >> janet yellen doesn't. but they all have their own opinions and they want to make them clear. >> they certainly do. let's get note of the corporate news and the stocks to watch. december same store sales missing expectations. the retailer blamed challenging traffic trends especially in it's old navy brand. the stock is down about 40% in
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the last year. sharply down as you can see in the premarket trade by about 9% but guidance is weak. shares falling down almost 2%. urban outfitters reported it's holiday season comps fell 2% down overall but it will have clean inventories heading into the spring season. >> coin taner store posting an unexpected loss. >> alcoa closing a smelter in indiana. this will be the lowest level in 65 years. the industry has been battered by falling commodity prices and raising trade tensions with china. samsung sees a mild recovery but is warning it's going to be a tough year ahead. samsung is dealing with a continuing slow down in the
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global smartphone market and cooling semi-conductor prices. >> still to come here on worldwide exchange, our news maker of the morning, citigroup's chief global equity strategist robert buckland. he turned underweight on stocks this week. the reason behind that call straight ahead. >> check out these stats. the worst start to a year ever for u.s. stocks. in four days the s&p 50 down nearly 5%. $864 billion in market value is lost and things are looking a little bit better and calmer. we're on top of it for you here on worldwide exchange on cnbc first in business worldwide.
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>> and the central bank setting the yuan higher for the first time in nine days. that helped recover just a bit. they closed up 2% on the shanghai composite and hong kong up. there were reports overnight that state funds were in the market buying. relief there means help for u.s. stocks. battered and bruised after a rough start to the year. futures are indicated to open higher. we're looking at nearly a 200 point gain on the dow at this early hour. nasdaq futures up 48. >> absolutely and a 200 point move in the dow futures seems
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small given the week that we had. but good to see a bit of green on the screen. i didn't know if you had that color out here. to today's trade of the day. if this vicious sell off continues where can investors hide? our data team analyzed the volatility index. they found the best performing etf when that index jumps 20% in a month which it is predicted to do this month. they include the tlt, the xlp, the xlu, the xly and xlv. that's a mouthful to read there and some of the average returns they do on that 20% rise in the vix. go to cnbc.com and check also our cnbc page. >> i like this stat and those
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are some of the defensive names that people load up and do better during times of market panic or extreme selling and no question about it that trade has worked out. >> only one of them was in the green. >> also perhaps on the idea that it was the worst performing dow component of last year. down more than 30%. >> cold weather. cold gear. >> walmart earnings coming up soon. some of the retailers were repo reporting. coming up, a major milestone for an nba legend and who will be joining coldplay next month. but first, grant johnson joins us with today's business travellers forecast. grant.
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>> good morning to you. happy friday. we are starting off with rain in the mid-section of the country. chicago, some showers passing on through. some snow in minneapolis. shouldn't be a big deal but certainly some light snow up there. also rain in kansas city. as we take a look at the big picture, scattered showers in the southeast including atlanta here this morning and through the day. also a few scattered showers in florida. fog will be an issue down toward houston for much of the morning. out to the west finally a break from the rain in the west coast but another system coming on shore this weekend. snow for denver. could see a couple of inches today. the northeast looks quite with clouds approaching perhaps a few scattered showers toward philadelphia later in the day. chilly to the north and down right cold. another intrusion of arctic air. the west stays cool. 46 in portland. the south stays nice and warm. 60s and 70s down into florida and across texas. highs in the 40. chilly in new york city and d.c. back to you.
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iall across the state belthe economy is growing,day. with creative new business incentives, and the lowest taxes in decades, attracting the talent and companies of tomorrow. like in the hudson valley, with world class biotech. and on long island, where great universities are creating next generation technologies. let us help grow your company's tomorrow, today at business.ny.gov joining us is the man that heads up the team behind that call. robert, great to have you with us. a very good morning to you and happy new year. we'll get to that particular call on u.s. equities in a moment but first off have to start with the international environment and do you think the
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reaction in europe and the u.s. has been too strong following what was really a china related issue? >> i think talking to my colleagues around the world we see what's going on now as a mini version of what happened in august and september where if you remember we saw a devaluations and the chinese stock markets fell sharply and took the stock market down with it. so i think we have got precedent here. i'm not entirely surprised by how global markets are reacting to what's going on in china. >> robert, we have seen 6 or 7% decline in the dax this week. sharp falls for u.s. equities. is it a time today to dip your toe back in? is there a time to replace the calls that investors had ahead of this week? >> well, we're describing our view on this market, it's a tired old bull market where volatility is high. it's important for your viewers
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to understand that in these tired bull markets you have to buy when people are selling. so buy into aggressive dips. is this quite aggressive enough yet? i'm not sure. but down 15% is about right in the last sell off in august-september. we're down about 8 or 9. >> sounds like you think there's more room to fall here before we get that wash out moment where you can step back in. >> of course. i mean, it's a bit of a game trying to time markets in the very short-term but i would be hoping to find a further correction and buy into that. buy when they're scared and not bullish. >> you cut your outlook on u. s. equities for the year ahead. that was ahead of the international induced turmoil. >> the u.s. outperformed for six consecutive years in this cycle. earnings momentum is fading. other central banks are cutting. our u.s. strategist who i know
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you know is toward the bottom end of the market target forecast around the world. that pushes us underweight the u.s. >> i wonder if oil has anything to do with your forecast and the carnage we have seen in the oil sector in this country. another equity strategists before the new year and it has to do with another downward leg in the price of oil. how do you tie into this economic and equity forecast. >> u.s. earnings in 2015 was coming from the commodity sector. it's interesting and it's important to highlight to you guys that as the commodity sectors fall, earnings fall last year they become less important in terms of driving the markets earnings. so yes we do still see risks this but their impact upon market earnings will start doe kline given the falls we have already seen.
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>> are there any big cyclicals or big caps versus small caps earnings or something like that. >> speaking to my colleague one consistent theme i have is we're all overweight financials. it's relatively cheap and not in favor. it's been ignored over the last year or two. we see value there. >> where do you see the turning point? financials have been among the hardest hit during the sell off we have seen next week. treasury yields are not moving higher and you're starting to see the yield curve flatten a bit which is also contrary to what people are predicting. especially at the long end of the curve, the yields are going lower reflecting the economic doom and gloom out there. isn't that a huge problem for banks if financials are doing that we understand the problems that financials have. we just see deep value starting
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to emerge there and you're not really trying to catch a falling knife in the way you are if you're trying to call the turning commodity stocks. it's a to buy into financials selling off as they are right now. >> thank you for joining us this morning. a pleasure as always to see you. chief equity strategist at citi group. >> with the call of the week. we'll switch gears and tell you a little bit about sports news this morning. kobe bryant scoring career point number 33,000 in sacramento and he did it with style of course. the 37-year-old is the third player in the nba history to score 33,000 points and is the youngest player to do so. there's only other player with more career points. not a bad way to end as he heads toward retirement. >> i just got my first basketball tickets. i'm going to see the knicks verses the clippers.
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>> on a friday night. >> which is very new york. >> beyonce will be performing during halftime at super bowl l. pepsi confirmed she will join coldplay during the show. the last time beyonce performed was in 2013 when she was briefly joined by her band mates. >> very good choice by the nfl. >> very good choice by pesi which sponsors the super bowl. >> coldplay. >> but that's sleepy compared to beyonce. >> possibly my favorite band. >> more on this morning's global bounce back. we'll talk to head of strategy for asian income and important conversation about what you do if you're an asian investor in that region with the rules changing but we want to hear from you. our twitter question of the day. is now the time to jump back into u.s. equities? we have relative calm. head to twitter. please vote. we'll read the results on air. stay tune. you're watching cnbc first in business worldwide.
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exchange on cnbc. a very good morning to you and welcome to worldwide exchange here on cnbc. >> boy has it been a wild week for the markets. china suspended it's system. and they set the yuan higher for the first time in nine days. and some limit purchases of u.s. dollars this month. >> chinese stocks rising to finish the week in positive territory. a lot of wild swings in the first 30 minutes. as you can see we dropped into negative territory but we have ended the day up 1.98%. the rest of asia a little bit
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more mixed. the main relating to china up as you can see but japan was down .4%. of course the nikkei opened the year with five straight days of declines. the first time that happened since 1949 and the nikkei is hampered by the fact that the yen is the global safe haven currency. >> really shot up this week. let's check out the action in u.s. stock futures. looks like a relief for this friday though it's early and it's jobs friday. anything can happen with the jobs report. for now though dow futures up. s&p futures up 18. nasdaq futures up 43. worst start to the year for the dow and the s&p ever. a record fall. the s&p is now down more than 5% during the first four trading sessions and as i mentioned we haven't seen moves like this to start out a year. at first it was the worst start since the financial crisis but it has gotten even worse with yesterday's major nearly 400
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point slide in the dow. >> all of it sparked by issues in the far east and issues in china. let's discuss that further. delighted to say joining us now is my former boss. he is head of strategy for asian income. good morning to you and a very happy new year. >> good morning, wilf, happy new year. and to you sarah. >> jason, you managed $8 billion worth of asian equities. of course you left that and you're about to launch your new fund in march. if you were launching that fund ood, jason, would you be overweight or underweight china and why? >> underweight. i do think holiday travel shares in china probably have further to fall. the government as you said earlier is propping them up at what i think is an artificially high level and i think chinese related stocks listed elsewhere, such as hong kong, probably feel the brunt as we see further down side in the shares. >> of course the spark this week
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for global markets, partly the a-shares but probably more the currency, what do you expect to happen from here with the currency? >> i would expect the currency to continue to weaken. we have seen foreign reserves in china, dollar reserves decline by the tune of over $100 billion in december. i think a lot of people are trying to get money out of china. a lot of u.s.-dollar debt is people are scrambling to cover that and as equity investors settle down, that causes a weakening. of course it had been very strong for a number of years and to an extent it's playing catch up with the falls that other currencies saw against the u.s. dollar. now that the fed has increased rates and with commodity prices continuing to fall which has reduced other emerging market currencies it continues to decline. i wouldn't be surprised if we're
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closer to the 7 to the u.s. dollar level. >> there's so many ruls whes wht comes to investing right now. i can't keep tracks on them. there's limits to how much you can buy and trade or sell. how do you invest in this market and can you explain what the chinese regulators are trying to do? >> i'm not a fan of communism and this week there's been a couple of key back flips. the calling off period having been introduced they had to step in and shut the market down twice this week which is a bit embarrassing. the ability for owners of more than 5% of companies to sell their shares, they thought they would be able to this week. they have been told no, you have to wait longer. so things are changing. we don't know how many hundreds of billions of dhars the government spent on propping up shares since last summer but it's a lot of money. they can't keep doing it at this rate on a daily basis. so, look, the bottom line is we're not investing in a-shares.
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it's difficult market to invest in. there are great companies in china. many of which are listed in hong kong and do trade at better valuations than you find on the local a-share market. this morning we had a conference call with ten cent. that's a company doing very very well but the ag dprksgregate ma levels come off. >> it's not all doom and gloom. countries where you will be overweight at the launch? >> a lot of valuations are starting to look interesting. capital flows will be moving markets in the short-term and i'm hope fwig time we launch the firm in early march there will be bargains there. i still like the philippine versus much. that has a terrific growth
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story. non-mining is look good. the new zealand market has further to go. there's some property stocks across the region which sold off quite a lot since may of 2013. the taper tantrum which look good value now. >> great stuff. great to have you with us and good luck with the launch of the new fund in march. >> many thanks, wilf. >> beyond the broader market, stocks for you to watch today including ford. sales in china rose 27% in december thanks to beijing's tax cut on small engine vehicles. sales rose 3% and that was a sharp drop from the 19% gain the previous year. apple crashes out of the $100 a share club falling below that level thursday for the first time since october 2014. closing below that level. the stock has lost 28% since hitting an all time high last april. that's roughly $208 billion in
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market cap. and third quarter guidance blaming weak at the hand for certain portable products. that is confirming what people had been worrying about which is slower demand for iphone sales. >> and the average is still well above the 100 level. >> wall street is so bullish on this stock. >> right. in other corporate news consumers didn't pull back as much on spending during the holiday as some feared but a last minute surge didn't help some retailers that weren't able to deal with changes in shoppers behavior. >> that's right. numbers from credit card processor first data showed same store sales rose 3.3% between october 31st and january 4th but those gains came despite a more than 6% drop in foot traffic. we're getting more individual sales numbers following macy's disappointing results this week.
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gap says core sales fell 5% in december with dechiens across all of it's brands. analysts expecting a drop of 3.9%. gap which was one of the loan bright spots fell 8% in after hours. urban outfitters says holiday same store sales fell 2%. partly due to a decline in same store traffic. shares rising 2% in after hours although the stock is down 37% in the past year. bed bath and beyond's third quarter profit falling 21%. meeting lowered estimates but revenue came up shy. the home furnishing sales. >> falling 2% in after hours, guys. >> landon, great stuff. thank you for that. right now to today's must reads. stories catching our attention. first this piece in the washington post titled the hand
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fisted government that made china's stock market stumble. here's an excerpt. the sooner they grant their society more economic and political freedom t better off they they, the chinese people and the rest of the world will be. we have to differentiate between the way china controls the economy which has been very good and the market and you would even say president xi and the current leadership were making great transitions toward free market. a long way still to go. >> but do they get set back this week? >> i think they got set back in august. they were moving toward it trying to boost consumption and free up the market and things like that but since august they have stepped in and tried to control the market as well as the economy. they failed in august. they failed again. i wonder what announcements we get this weekend. can they telegraph better what they're trying to do? >> no, it's an important read and gets to the psychology behind beijing and how they managed to do this multiyear transition into a new economic
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era. one where they let market forces take over. it's something that the times has on the front page today. >> have the new york times op-ed that everyone is buzzing about. president obama is continuing on his gun control theme. it's been a big week for him. the title, guns are our shared responsibility and following executive action on gun control he does say quote i will take every action i can as a citizen. i will not campaign for, vote for, or support any candidate even in my own party that does not support common sense gun reform. he also did a town hall with cnn and talked to anderson cooper about the issue. big week for him on guns. hard to tell about the public opinion on this because this say nation sharply divide on this issue and a lot of the reports coming out saying his actions -- well, they're important politically for him but won't do that much to actually curb gun
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sales and you saw that in the stock this week. >> very important politically for him but the next president can flip it as quick as a pancake. >> executive action. >> soul cycle wants everyone to sweat in style. we'll tell you about their latest collaboration. but first a look at how rough this week has been for some big names. alphabet, amazon and apple losing tens of billions. stay tuned. you're watching cnbc, first in business worldwide. we're back in a couple of minutes. friends coming over?
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wall street is waking up to a hispanicier friday in the global markets. china bouncing back today to a tune of about 2%. u.s. futures responding well. dow up by 150 points. s&p by 16 and the nasdaq by about 40%. don't forget the monthly jobs report is due at 8:30 a.m. eastern. forecasters say the economy is likely to add 210,000 jobs for the month of december. >> now for the top trending stories. a missing u.s. missile somehow ended up with cuba. according to reports the missile sent to europe for a training exercise was wrongly sent to cuba. a loss of sensitive military technology that is one of the worst known incidents of its kind. >> that's scary.
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>> edward snowden made an appearance at the consumer electronics show. luckily for snowden he said they the fbi cannot arrest a robot. interesting appearance. >> target it turns out is teaming up with soul cycle to offer free classes and bargain athlesure wear. they have been known to partner with trendy brands and it's helped target rebound a bit and soul cycle is a little bit cuttish in that the people that take the classes, the spinning classes and buy the gear are very devoted. >> it's obsessive. >> and also very expensive. so this target collaboration will be good. >> it's class based fitness has taken over core collective.
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>> boxing is now. >> people get obsessive about it. >> will ferrell will be the co-owner of a new mls team. the club announced him as a co-owner on thursday. after being introduced he assured this crowd this is not a joke. other co-owners are magic johnson and mia ham. >> i want to know what happened to beckham's miami franchise. >> not happening. >> he's still trying. >> maybe you should book him on worldwide exchange. >> i'm working on it. >> we'll ask him about it. >> i hook forward to the launch. have to pick a team as well. >> we're approaching the top of the hour and that means joe, becky and andrew are getting ready for squawk box. so some relief here in u.s. equity futures after china managed to finish higher. lots of new rules though and we have a jobs report at 8:30. do you think this market wants to see a good number when it comes to jobs?
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>> i would will ferrell would either be basketball or nascar because those are the two roles that he played previously. >> interesting response. >> i don't like getting steered into things. >> you are busy preparing and you have been working all night. i thought you might have thoughts on jobs. >> did wilfred actually big a -- are you a soul cycle guy. have you picked a new york gym yet? >> do you know what? because there's one in this fantastic cnbc hq i haven't committed to one yet. >> you have spun? you must look funny at like 6'8". that must be a sight to see. >> it probably is and that's why i have only been one. it's not the most flattering of moments for me. >> 2% up in china is better than 8% down but who knows how much money they threw at it and
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that's the best they can do and 150 points here i guess we should start getting used to what we talked about. i'm trying to figure out whether the jobs number even matters for us. it always does, i'd rather have the jobs number in china. what do they add? 4 million jobs in a month or something? i don't know how that works. but usually we say it's the most important jobs number. we say that every month. the stuff in china refocused where we're actually looking but we're going to cover this and we do have a great american joining us at 8:00 a.m. lawrence of america, larry kudlow will be with us to discuss why we're still anemic. so and we'll talk about that and with the adp number from the other day it looks like all of this hasn't yet effected
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fundamentals here. >> but the fed pays attention. >> the fed does pay attention. but how important is the fed at this point. >> as much as this international turmoil. we have to leave it there. we look forward to squawk box in ten minutes time. working for the weekend. we'll get you ready for the jobs report. first we have been asking you all morning on twitter is now the time to jump back into u.s. equities. the votes are close. 52% say yes. the rest saying no. 51% now say no. this we go. it's that close. it's shifting around but people torn of what to do with u.s. equity exposure. we have a guest to help you sense the mood here in the u.s. that's here on worldwide exchange coming up next.
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will it take a backseat to the turmoil in china? former deputy assistant labor secretary under president reagan. we're all focused on china but i would argue that the backdrop of this is a federal reserve that started to hike rates for the first time in a decade and therefore the job reports matters. does the market want to see a good report of bad report? >> the market wants to see a good report. anything that shows that the labor market is strengthening is good for the u.s. economy. we know where we are in the rate hike cycle. >> they would like to be a one and done. there's not a lot of political appetite really to put a little
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bit of confidence that markets aren't as bad as we think they are. >> given the international focus this week, is this the least important jobs number we've had a year or so. >> this would have been unimportant under most circumstances because we're just beginning the year. i think this is one where people many any position get few calls from reporters. >> jeff if we think more about the different sectors in the economy what are you focused on this year? where are you positive on where there's going to be market activity? >> we think two things. health care will continue to be strong i think there's a tremendous backlog of great companies that need to be financed and will be financed
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and you'll see health care continue to out perform because it lasts for the next decade. people will be surprised about the u.s. consumer. the trends we're looking at suggests that they're in pretty descent shape. and i think with low oil prices i think the u.s. consumer will surprise people. and we're a consumer driven economy here. i'm a little bit more bullish than a lot of folks are but it's going to be okay. it's not going to be what everybody would like it to be. >> the economic linkages between the u.s. and china might not be that great. certainly we learned this week that the market interconne interconnectedness is very close. >> that's true and the flows back and forth. we talk about -- typically in the united states we look at our trade deficit rather than looking at the fact that
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international trade accounts for more than a quarter of the u.s. economy and china is a very big element of that. not just because of the bilateral trade but because of the influence throughout the market. >> we'll put you on the spot. they took u.s. to underweight versus other stock markets this year and this week. he says looks like we could go down 15%. we're only down 9% on stocks so there's more room to go before time to step in and buy. do you agree? >> i think markets are going to overreact. so you have a lot of correlation. a lot of people enter the market by buying every stock. i think markets will tend to overreact. so we could continue to see a pull back here but that's the volatility you expect. it's healthy for the market. it's good to have pull backs where people can reassess when they want to enter the market.
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that's a positive thing. >> pleasure having you with us this morning. that's it for worldwide exchange today and this week. coming up we've got squawk box in just a couple of minutes. . age neutral. age defiant. age agnostic. olay is a purveyor of ageless. only the best 1% of ingredients make it into our products. for transformed skin without expensive brands or procedures. it's the ultimate beauty victory. nobody has any idea how old you are. with olay, you age less. so you can be ageless.
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>> good morning, u.s. stocks look to bounce 150 points or so after the dow and nasdaq dropped into direction territory but everything could change when we get the employment report in just 2.5 hours from now. i'd like to get an employment report from china because that's where we're focused right now and asian shares did manage to finish higher after china dropped it's market circuit breaker. we don't know how much perhaps that they threw at the market either and it only managed a 2% bounce and coldplay getting high
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profile help with the super bowl halftime show adding beyonce to amp up the star power. now are they backing her up or are they still first? it's friday, january 8th, squawk box begins right now. ♪ >> china's exchanges opened without the circuit breaker system and this may be the more important part here. the pboc set the yuan a midpoint higher after devaluations really sharply hit the stock

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