tv Worldwide Exchange CNBC January 11, 2016 5:00am-6:01am EST
breaking overnight, china shares slammed again, even after the country tries to calm volatile markets. trillion dollar wipeout, u.s. stocks off to the worst start ever. right now investors pointing to a rebound. new this morning, retail details. kohl's exploring taking itself private and macy's coming under pressure from an activist investor. it's monday, january 11th, 2016, and "worldwide exchange" begins right now. ♪ ♪ good morning.
welcome to "worldwide exchange" here on cnbc, i'm sarah ivan. >> i'm wilford frost. hold on to your hats. the global markets look to be on another wild ride. we'll bring you up to speed on the major moves. first, some sad news out of the world of music this morning. singer david bowie has died at the age of 69 after an 18-month battle with cancer. his hits include the one we're listening to, "let's dance." more on his life, his legacy and a lot more of his music. first, here are the big stories we're watching at this hour. china's central bank setting the yuan's midpoint higher. china's foreign exchange regulator urged them not to be alarmed talking down the yuan saying the chinese currency remains relatively stable. despite the high yuan, chinese stocks dropped sharply in late day trading. the major indexes dropped at the
lowest level since september. economic data of note from china adding to our consumer inflation barely edged up last month whilst consumer prices continued to fall. let's see how it's all impacting the trade. sri has the morning wrapup. >> good morning, sarah. what this all boils down to is a real lack of confidence amongst regulators, in the policy makers and in the currency authorities as well in beijing. there's not a clear roadmap in terms of currency market management and the reforms. yes, you always do see these type of rushes in the early innings of currency stabilization. investors say this is getting out of control. we're getting mixed signals. shanghai composite, this is looking very vulnerable. we could break it over the
course of the week if you continue to see negative momentum. let's not forget, the next test of the market will come with the data. we have the chinese trade balance mid week on wednesday. that will be quite critical. that's where we stand. will and sarah, thank you very much. sri, thank you very much. as for the broader question this morning, showing relative calm compared to what we saw early. they were red earlier, green now after the european open. dow futures set to open higher, 48 points. it's early still. s&p futures up 7.5. nasdaq futures up 15. this comes after the worst start to a year ever. not even a very strong jobs report in the u.s. on friday could lift the u.s. stock market. 292,000 jobs were added in the month of december. that was good. it didn't do it. let's show you what's happening in europe. that's where some of the strength is being derived from right now after china closed lower, a little action on the
currency. you did see green on the screens. in early trading things look better. >> europe opened down to about 0.4% and rallied quickly to become positive. that's when the u.s. futures picked up again. no specific data out of europe. no reason why we were down and up. generally up 1.8%. only thing i can point to is a bit of bargain hunting. yes, china was down. once we got into trading -- >> but as sri mentioned, you don't get the sense there will be quick resolution. they didn't come out with any bazoo bazooka. they didn't come out and cut interest rates especially with the inflation number coming out giving them room. they're halfway from where they want to be on the inflation targeting. a lot of people think they need to come and stimulate policy to calm their markets, their economy which means the world right now. >> i agree we didn't get much out of them over the weekend. i wasn't expecting a rate cut
but what i was expecting was clear communication to what they were trying to achieve. set us a target so there's not that uncertainty. we didn't get that answer, you're right. when we look back last week, what was the biggest surprise? was it the fact that all of these moves happened that we weren't expecting or was it that international markets were reacting quite so strongly? that was the biggest surprise that we saw such sharp declines in the u.s. and in europe. that still remains the question. how will that play out this week? >> especially with earnings really kicking off with the big banks coming later in the week. we are looking potentially at an earnings recession which is basically marked by two declining quarters of profit growth. last quarter they declined, this quarter 4% decline. poor earnings growth. we'll see what the numbers start to look like and if the u.s. can turn around on u.s. earnings. >> absolutely. we'll see if we can focus on earnings. oil prices, they're dropping again this morning on continuing fears of that china slowdown.
traders have increased their net short positions to a record high. look at that. crude prices at 32.7 for wti. brent is at 33.1. down around about 1, 1.5% today. >> no bottom in sight. we're going to talk about this. i want to mention corporate news this morning. macy's coming under more pressure from an activist investor. starboard is urging the retailer to strike real estate deals. in a letter to management starboard suggests two separate ventures, one for macy's land plark properties like harold square and a second for other shares. they say spinning off macy's real estate holdings could, in its words, create meaningful and lasting value for shareholders. the activist investor thinks macy's stock could trade $70 dollars per share. we're a long way from that. have you been to harold square yet? you have to go.
it's an iconic building. that's one of the big prizes obviously in this potential real estate play. nobody knows what exactly it's worth. i've seen 3 to 4 billion, but that is the prize. >> i will have to go bit it. market research. a bit of fun. other stocks to watch. wall street journal says kohl's is considering taking itself private. there we g. it's at 47.9 this morning. illumina is launching a new company for blood-based screening for cancer. alcoa is winning $1.5 billion long-time contract from g.e.'s aviation unit. "the wall street journal" says the deal will be announced along with alcoa's earnings report. it's a big significant first earnings report from that sector. up $8 a share. >> china, weak commodities
prices all factoring into this stock price. in other corporate news thermofisher is buying affymetri km for $1.3 billion. pfizer raising its u.s. prices for 100 drugs on january 1st. pfizer notes that the list prices don't reflect considerable discounts to governments, health care plans, governments, others. walmart turns out it was the only dow component that rose. it was the dow's worst performer in 2015 down more than 30%. boy, did it catch a bid. >> one little bit of green. it's been six month since apple launched the music streaming service and it's hitting a milestone.
landon dowdy joins us. >> apple music has topped 10 million subscribers taking six months to reach what took spotify six years. one industry analyst tells us that apple music has the top subscription service. spotify had 20 million servers with 75 million monthly listeners. it's the third highest grossing app. thoer' paying for their subscriptions with their itunes accounts. the 9-5 says it will lose the head phone jack on the next iphone. instead it will connect to the lightning port which is used for charging and transferring data. it can boost sales of wireless headphones which already connect to the iphone via blue tooth.
jie zee stijay z still has the service. you have title, which is backed by major artists like rethan and madonna. it took it six months to reach the 1 million mark whereas apple has a giant user base which is helping it get its boost here. the cupboard is bare in terms of data flow, but this week really starts picking up on wednesday. fed's beige book is on wednesday. thursday, that weekly jobless claims number and then december i import prices also come on thursday. a clue into inflation. earnings season kicks off with jpmorgan, american express and intel after the close. friday, i had a i'd say that'se big economic data point.
ppi consumer prices, citigroup, morgan stanley and wells fargo. >> retail's definitely the big economic data. i look forward to those banks earnings on thursday and friday. it will be really interesting. lots of volatility. we'll get comments on that. the first fed rate hike -- >> the impact on china. banks were supposed to pick up on this idea that the fed was finally raising rates. that would help their profits. not much because of all the market volatility. >> thursday and friday have to watch those. still to come on "worldwide exchange", oil prices down 20% since 2014. hitting a record high. call from rbc capital market's global head of commodity strategy next. by the way, this is my favorite, david bowie "changes." what's your favorite it david bowie song? tweet us your responses. we'll read them on air. as we head to break, check out
the early trading action in europe. there's green for a change in 2016. that's helping u.s. futures. we're all over this market action for you. stay tuned. you're watching cnbc. first f business worldwide. ♪ those who define sophistication stand out. those who dare to redefine it stand apart. the all-new lexus rx and rx hybrid. never has luxury been this expressive. this is the pursuit of perfection.
midpoint higher for the second session. we saw red arrows across the stream. in the u.s. you're seeing green. europe shrugging off the weakness after its worst week since 2011. u.s. equity futures pointing to a higher start. zhou futures up 31. s&p up 5. nasdaq up 11 after what was the worst start to a year in history. right now to today's trade of the day. gas prices are still plunging down a penny to $2.05 a gallon accord to go lundberg survey. they're already down 10% for the year. you may be wondering which companies benefit from the falling prices. here's the list. dollar tree has posted an average return of more than 2% followed by o'reilly automotive, kroger and walmart. for more on that go to cnbc.com and check out cnbc pro for those details. the big issue over the last year
and a half that we haven't seen bigger moves. >> from any consumer companies. we thought we were going to get this huge windfall from gas savings and what we've learned is that consumers are saving, paying off debt and not spending it as much, although a little bit in the restaurants, dollar stores. >> it is a big surprise, that aspect. when you think how far gas prices have fallen as well. not that much response in terms of consumer spending. >> maybe. the optomists say we'll still see it. it's coming. speaking of crude oil, the underpinning of all of this. down again, 70% since the energy downturn in 2014. tension in saudi arabia, the middle east not sure to have an energy effect on prices this year. you might expect with two major oil producers and the tensions you would see some tension. we have the head of rbc capital right now with the geopolitical tensions and focus. it's hard to believe that we continue to see these sharp swings down. >> this has been a couple years ago, sarah, we were having this
conversation, oil would be substantially higher. i think it shows you just how strong the oversupply narrative remains in the market, how bearishly it's positioned. right now you need to see a physical supply disruption for anyone to get excited. we had isis attacks on libyan facilities. the market shrugged it off. we had a saudi aramco bust, and the market shrugged it off. >> if we saw an issue with -- >> we already have proxy wars. what's amazing is we have a direct proxy war in yemen where the saudis are actively involved. we have syria and yet, again, i think it goes down to how over supplied -- the perception of oversupply. again, you need physical barrels off the market. >> is there a question of demand being more important relative to last year? supply clearly has been an issue for some 18 months. over this last week further sharp declines when people
thought we'd get a bounce. is that because of china and fears? >> of course. when you think about last year, demand was exceptional. we were at a five year high for demand and look where prices are. if we have a situation where demand were to soften, that's the support that we think is in the market. if that goes away, we don't know where price is going. >> yet we continue to see signs that u.s. companies are pulling back on their exploration projects which is going to eventually weigh on production. we got another lower rig count last week. when does that start to matter? >> we think it starts to matter in the back half of the year. u.s. production has been coming down since april. we're off the highs of 9.6 million. in the u.s. gulf of mexico has been surprisingly resilient. this is what the middle eastern producers were expecting. they were expecting higher prices now. they did not expect we would be in this price environment with u.s. production slowing. >> we've seen a lot of correlation in equity markets and also a lot of correlation in
commodity markets. are there any way they're due a bounce where we should be stepping in? the supply situation isn't quite as bad as it is for oil? >> i look at supply situation. u.s. production is coming down. people talk about the saudi/iranian power struggle. only the iranians can put additional barrels on the market. some fears that you're going to see millions of additional barrels out of opec, i don't think there are millions of additional barrels. i think the iranians can do 375,000. i don't think they'll produce the type muof gains. >> let's talk levels. goldman sachs put out the $20 per barrel range. it seemed crazy then. not so much now. >> we've taken out the '08, '09 lows. the question is where is the support? we could certainly in a bad macro headline crash through the 30s into the 20s. given that u.s. production is
going down, is it supported in the 20s? is it supported in the low 30s? >> i don't think so. >> can the saudis swallow it? >> look at the aramco story last week. the saudis are take pg on austerity measures. >> they say they can handle it. >> helima kroft, rbc. coming up, the weekend sports news that everyone will be talking about this morning, plus, "the force awakens" in china. disney's biggest box office awakens. first, as we head to break, nbc's grant johnson joins us from kxas with the business traveler's forecast. >> you mentioned t"the force awaken awakens". these are current temperatures, minus 7 in minneapolis, marquette subzero temperatures. the cold is the big story. in the northeast, 35 in new york city today.
d.c. at 39. boston, 37. cleve land only 19. chicago, 24. minneapolis at 8 for a high temperature. there are wind chill advisories up there. cold jett were through the rockies. los angeles, 65. texas, temperatures in the 50s and 60s and 70s in far southern florida. the cold anchored in place. moving on shore in the west later today and especially another round of rain later this week. more on "worldwide exchange" on cnbc coming up.
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if you're just joining us, chinese stocks closing lower. we are seeing green on the screen in terms of u.s. equity futures as you can see pointing to a higher start. europe opened weaker and turned higher after the worst start for european stocks since 2011. that's helped give us a boost in the early action. it's nothing big and nothing like the declines that we saw for u.s. stocks last week. it's early. earnings season kicks off in full. earnings details next week. the focus seems to be on overseas action, including china, another weak section. >> a little bit of green. nice bit of reprieve. time for sports news. the first week of the nfl playoffs is in the books.
it was a wild finish in minnesota on sunday. the vikings trailing the seattle seahawks by 1 point with less than 30 seconds to go. kicker blaire walsh attempting a 27 yard field goal but he hooked it way left. the seahawks holding on to a 10-9 kick. i could have made that kick. that was terrible. walsh spoke to reporters after the game. he had this to say. >> you know what, it's my fault. you know, i want you guys here when i make the game-winning kicks and i realize i have to have you here when i miss them. that's the life of a kicker. this team has so much in store for t. besides from where this team is going to go, we needed this one. i didn't come through for us and that hurts. >> in the late game the green bay packers beat the washington redskins 35-18. here's how the nfc playoffs match up. the packers move on to face the arizona cardinals on saturday while the seahawks will play the carolina panthers on sunday. in the afc the kansas city chiefs head to new england to take on the patriots on saturday
while the pittsburgh steelers who edged out sarah's bengals will face denver broncos on sunday. it was also a big night on the ice for alexander ovechkin. have i got that right? probably not. >> i'm not a hockey fan. >> washington capitals fan scoring his 500th career goal becoming the first russian nhl player to match that mark. downed the senators. i want to go to a hockey game as well. >> i'm not so much of a hockey fan. as you mentioned, i am a bengals fan. this was a depressing weekend. that was crazy, the two personal fouls at the end which lost the game for the bengals. just the stupidest, even i know how stupid a way to go that was. >> was that worse than that missed kick from mr. walsh. >> yes, it was, because it was personal fouls. they pushed the referee and lost 30 yards tots steelers. a lot of doom and gloom in cincinnati.
"star wars" breaking records around the world and now you can add china to that list. "the force awakens" taking in $53 million on saturday and sunday lifting its global total to 1.73 billion. it attracted big crowds with many fans who had watched pirated copies of the older films of "star wars" because they weren't available earlier. china's expected to become the world's biggest film market in the next two years. that was one of the questions here. because the earlier films were not officially released in china, what would demand look like. obviously disney was happy with the release though still trailing the "avitar." >> time to catch up. i went to see "revenant." had a strong opening. >> what did you think? >> i thought it was long and boring. >> it got a golden globe award. >> it was quite like well-made film but it wasn't -- it wasn't award winning for me. anyway, let's switch focus.
if you ride home this weekend, if it was a little bit cheaper, you're not imagining things. uber has cut prices in more than 100 and u.s. canadian cities. that's part of efforts to boost rides in what the company calls the winter slump. the size of the discount depends on the city. i'm surprised that it slows and with the bad weather you're likely to take a cab. >> you're more likely to sit on your couch and watch netflix and the nfl. i don't think the price cuts come to new york city yet. i think that's what uber is a saying. phil lebeau will be joining us live from the detroit auto show with a sneak peek of major announcements. plus, parking of the future. how elon musk will let you land the perfect tight spot. i need that. i'm a terrible parker.
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it's gotten squarer. over the years. brighter. bigger. it's gotten thinner. even curvier. but what's next? for all binge watchers. movie geeks. sports freaks. x1 from xfinity will change the way you experience tv. good morning. global market a lirt. china markets slammed but the bull markets in the u.s. and europe are fighting back. behind the wheel. we'll bring you behind the detroit auto show where they're trying to out do each other. and the winner is the highlights and low lights of the golden globes coming up. plus, leo and lady gaga momenter one is talking about
this morning. it's monday, january 11th, 2016, and you're watching "worldwide exchange" this morning on cnbc. ♪ ♪ another good david bowie song. here's the stories we're watching. at this early hour, china, the central bank setting the yuan's midpoint higher. meantime, china's foreign exchange regulator urged them not to be alarmed by foreign institutions, quote, talking down the chinese currency saying that the yuan remains relatively stable. despite the higher yuan, chinese stocks closed at their lowest levels since back in september. economic data of note out of china adding to investor worries, consumer inflation barely edging up. consumer prices continued to fall sparking some worries of
actual deflation in china and some economists this morning to write, where is the rate cut? they've got room. inflation is low. all right. let's check in to what all of this means for global markets. futures are now slightly positive but not as much as they had been. we saw china down sharply some 5%. the open in europe, we were in the red and we rallied to have a bit of strength. that helped futures in the u.s. into positive territory. some of the gains slightly up. 3 points up. dow up by 15 points and nasdaq by around about 8. european trade where we are still in the green as well. a little bit of barring gabe hunting really pulling up those markets as you can see. germany up about half a percent and ftse 100 is flat. oil falling a percent or two. we had a note out of morgan stanley this morning saying there is an fx problem and it may get worse. this is in relation to commodities. although people think it's a
fundamental supply/demand issue that's pulling it down, it's highlighting the inverse correlation which is rising sharply and commodity prices and saying that although this isn't the base case, we could hit $20 a barrel. >> echoing the goldman sachs view that we could hit 20. they've mentioned the $20. helena kroft told us that because things are so bearish and it's so tied with the currency, oil could be pressured into the 20s. a lot more talk of that. want to mention some big corporate stories we're following this morning. starboard is urging macy's to strike real estate deals. one for macy's landmark properties like harold square and a second for hundreds of malow cases. all of this according to "the wall street journal." separately the paper reports kohl's is exploring taking itself private. shares of the retailer down 40%
from the peak in early april. retail woes continue into 2016. >> retail numbers come on friday. the world's leading car makers gathering in detroit for the annual auto show. that's where we find phil lebeau this morning. good morning to you. give us the latest news. >> reporter: wilford, a lot of reveals coming up and they started yesterday with a number of interesting vehicles that were shown to us. here's one that's getting a lot of attention, mercedes showing us the new e-class. a lot of people might be saying it looks like another high end sedan. mercedes is saying this is the master piece of intelligence. they put in a lot of forward thinking technology, if you will, including auto steer lane guidance as well as vehicle to infrastructure communication. the head of daimler says this is where the future is, combining luxury and the latest technology. >> it's a question of responsibility. at the end we want to add value
to the customer and if we would go too far and potentially create risks to the customer, we definitely would be on the wrong path. i think we are leading the industry in that direction but we could do more by accepting some risk. that's what we're not doing. >> reporter: and for the second year in a row buick is getting plenty of attention before the auto show begins showed a concept car last night. it announced it will be bringing this vehicle, envision cross overutility vehicle into the u.s. selling it here spring of this year. why is this important? the envision is built in china. this is the first model from a big three automaker that will be built in china and sold here in the u.s. shares of general motors, like many of the automakers, really hasn't done much in the last year as the auto stocks looking for some love despite the fact
that they had record sales in north america. guys, coming up on "squawk box", 6:20, you do not want to miss this. we will be talking with detlev von platen. he is a porsche board member. >> good tease for eye candy with new cars as always, phil lebeau. you know how i feel about autonomous driving. i told you before i'm a terrible driver. i'm a worse parker than i am a driver. that's why i found the tesla news particularly interesting. it goes into your garage and parks itself? >> right. the idea, this is what we'll see more from automakers. elon musk and tesla said this would be a feature coming to the model s and x. you get out of the car, you tell your car, this is where i'm
going and it will park itself. there are limits here. it's not like you can be a half a mile away and say go park yourself somewhere. it's within distance and, yes, sarah, for people like yourself who -- >> parallel parking -- >> -- were never taught the parallel parking. >> you know how many times i'd have to do that? >> shame on you. if i were there, i would take you out there. >> i don't know. >> phil, reports of your own driving, i'm glad i don't have to sit this close to you. phil, thanks very much. very good morning to you. right. let's switch focus. if you didn't have a powerball fever before, you might have to check your temperature now with no winner's in saturday's drawing, myself, i fell for it and bought a ticket. i'll probably do it this weekend. a world record by wednesday, i can do it again by wednesday. north of 1 billi$1 billion the
estimate. landon dowdy. >> you don't have to wait a week, just a couple of days. this began on november 4th at a pal try 40 million. it's estimated to hit $1.3 billion with no winners in the past 19 drawings. powerball tickets are sold in 44 u.s. states, the district of columbia, puerto rico and the u.s. virgin islands. the ticket costs $2 and you must match five white balls and the powerball. the chances are 1 in 292.2 million. you'd have a better chance of being hit by lightning, but despite those long odds that's not discouraging people from lining up in stores to buy tickets. reports say lottery officials calculated that tickets were selling at more than 7,007 tickets a second. spain's fat one paid out cash prizes of $2.4 billion in
december but it's awarded to thousands of ticket holders, whereas, powerball winnings could go to one winner. >> only in america can you have a $1 billion lottery. that's epic. >> but you can have 2.4 billion in spain in elgordo. love the name. >> now to this morning's top trending stories. award season kicking off last night with the golden globes hosted by ricky gervais. several big wins for the "revenant." best picture, best drama, leonardo dicaprio with the best actor. guess your taste isn't on par with the foreign press. >> i tend to find quite strong correlation. if it wins awards, then it tends to be boring. if it does well in the box office, it's "star wars", james bond, transformers, i like it. >> it did do well in the box office. another moment getting a lot of attention.
did you see this on twitter. lady gaga bumping in to leonardo decap pry owe. quite the side eye. watch it again f. didn't see it. she runs into him and he makes a funny face and because of this little images on twitter, we've all seen it a thousand million times. >> i don't read into t. i think leo's pretty epic. >> i agree. when we come back, the morning's must reads. why former u.s. fed treasury secretary says you should be paying attention to china. you're watching cnbc, the morning's first in business worldwide. with creative new business incentives, the lowest taxes in decades, and university partnerships, attracting the talent and companies of tomorrow. like in utica, where a new kind of workforce is being trained.
be. to today's must reads. larry summers says the financial teams, heed the fears of the financial markets. tempering his conclusion he says the stock market has predicted nine of the last five recessions of course saying how markets can move ahead of things when they don't, in fact, materialize. he also goes on to say though that the best indicator of a country's future economic prospects is the decisions of its citizens keeping capitol at its home implying that what we've seen of that capital fight is showing us the worst to come. the conclusion the global risks,
domestic in the u.s. and europe and as many emerging markets is the worst as i can remember. >> here's my problem with the larry summers piece. almost became the fed chairman. he's not advocating any action. he says policy makers need to be watching and understanding. this from a man who has been critical of this current federal reserve for raising interest rates into what he calls secular stagnation. a lot of doom and gloom from larry summers. he's not suggesting what to do. that's the problem i have. >> i agree. he doesn't suggest this is the magic response. >> pay attention. >> pay attention. we saw last week huge responses in the international responses. is that a bit overdone? he's clearly saying, beware. there are fundamental issues. >> you wonder what he would have done as fed chairman if he would have gotten the job. >> you're not going to let that go. we're approaching the top of the hour. joe and becky are getting ready for "squawk box." becky joins us. >> good morning, sarah.
great to see both of you guys, too. let me ask you a question. i stayed up a little too late last night watching the golden globes. i know you get up earlier than we did. did you catch any of ricky gervais? >> i did. i stayed up to watch his opening monolog. it's sunday night. >> i'm so glad he's back. >> do you like ricky gervais? >> i love him. >> when he first did the golden globes, four or five years ago. >> 2010, 2011, 2012, people thought they'd never bring him back again. he makes watching the awards ceremony worth it because you never know what's coming out of his mouth. >> steve corral's version of "the office" if you want to watch british comedy, the first season well over a decade ago is some of the best british comedy in the last 20 years, all ricky gervais. >> i have to say, i thought he could have been meaner for how much was teased who he was going to go after. >> you know what, if you went to bed early, you didn't see him introducing mel gibson.
that was worth the price of admission. >> that's very good. >> i'll have to look at that one. >> becky, on the markets here, we're noting that the futures look green for now, but you have oil under pressure and china closed with a 5% decline. you wonder how sustainable that is coming off a week like we had last week. >> you know, that's a great question, sarah. we have wilbur ross, the billionaire investor. i just saw him walk in. he thinks china is going to be far weaker than far longer than people are expecting. he's talking about the economy and not just the stock market. probably the economy is much more important if you are looking at the global implications for what's happening. we have him here in studio to talk about what he sees happening. he's obviously somebody who goes in and swoops in when he sees opportunities. i'm not sure he's ready to call any of those when it comes to china. we have him for a good portion of time to talk us through all of that. we also are going to be focusing on the detroit auto show and everything that's happening there. we have some biggests joining
us. i saw phil lebeau on "worldwide exchange." he'll be joining us on "squawk box." we have great interviews with mark fields and dan ammond. a lot to look forward to this morning. i think our biggest questions i'm most excited about wilbur ross. >> on the markets. >> global markets are a huge flux point. we'll talk to him and get some words of wisdom from him. >> becky, great stuff. >> also, you'll have wilford. he's coming down to see you. >> you're actually coming to studio? >> i am, indeed, the last little bit of the show. >> i'll save some coffee. >> china, bear, we've got our own china bull joining us after the break. wpp ceo sir martin sorrell. he remains positive on china. i wonder if anything has changed over the last week. we will be asking the advertising supremeo after the break. stay with us after the break on "worldwide exchange."
another selloff in china overnight. down as you can see 5.3% for the shanghai composite. it was down last week. but wpp ceo martin sorrell remains bullish on the country. he did in his last piece in december quoted on the drum.com. i remain a raging chinese bull. good morning to you, sir martin. happy new year. >> good morning, wilford. >> has that perspective changed? >> you've sort of underlined the point in your intro. you said long run. i think that's the point. i know what you said to becky quick, you'll have wilbur ross there. far be it from me to contradict wilbur. he looks at it on a shorter term. we're looking at it from the longer term. when you think about the increases in population, asia remains the key point for us.
fast growth markets albeit with digital and data remain the three sort of strategic pillars or the strategic parts of our strategy. so china in the context of the bricks in the next 11 remains extremely important and i remain as bullish as i was before christmas. >> but, martin, if we look at the ability for a company to operate in china -- >> yes. >> -- when the authorities are moving the goalposts like they are, it must make it harder saying, gosh, i wish you'd set long-term targets rather than moving them around? >> it reminds me a little bit of policy in other parts of the world. people in glass houses shouldn't throw stones. i think you, wilford, about three or four months ago picked up on the fact that chinese stock markets were heavily valued or over valued, and i think that still is the case despite the fact that stock markets have come back quite sharply, and it depends on which exchange you're looking at,
whether you're looking at shanghai, shenzhen, wherever, because sometimes these companies reflect state-owned enterprises, sometimes they reflect private companies, but private companies tend to be heavily valued. still heavily valued and some would argue over valued. so i think what you're looking at is stock market correction. as far as stock market, obviously when the rnb devalues or weakens, that has an impact on translation. we don't hedge because we naturally hedge our revenues and costs across the countries in which we operate in are matched, but the issue about currency weakness, because we now have dollar strength which helps us as a sterling report. in fact, probably outweighs what we're seeing in the fast growth markets, but the fast growth markets have been very volatile from the currency point of view, and that goes back -- actually,
it's not just recently. goes back two or three years. i think it was at quarter 4 of 2013 where we saw sharp currency devaluation. i remember the south african rand going down 25% in a quarter. we've been exposed to that for a period of time. i was looking before you came on at our numbers that we're budgeting for china next year. i haven't had the final numbers for last year, but i do know that q4 of last year was actually lower than we saw in q1, 2, 3. i have to say q1, 2, 3 were very volatile and 2 and 3 were weaker but 4 we saw a little bit of a recovery. it's still very volatile as you indicated. >> that's good to hear. wanted to ask you about north america. >> right. >> for your own business in the last quarter or so, i know north america was helping to offset some of the weakness in asia and latin america? is that still the case?
do you still see the underlying strength coming from the u.s. economy? >> yes. i think north america is more fragile than you think. you certainly see that in the differences in retailer sales although that shows the changes that are taking place in ecommerce and the big stores, the big out of town stores that changes are taking place in the pattern of retail behavior, but north america together with western europe in particular western continental europe, germany remains strong. the currency weakness of the euro gives importers strong play. we've seen recovery in spain. recent election result won't help increase certainty, probably introduces uncertainty if you've seen what's happened in the catalon economy in the last few hours, i guess, but having said all that, italy there's a recovery. france remains the one spot where there's still uncertainty.
u.k. remains strong. we're getting into an election cycle. that sounds strange. we're still starting to see the impact of that as the conservatives build a long term economic strategy. you're right. in north america and western europe have compensated for the weaknesses that we've seen in asia, in latin america, in africa, in the middle east and central eastern europe. fast growth markets that have slowed in recent times. >> martin, i'm going to have to wind that up. very sad news about david bowie. we've been asking viewers favorite bowie song. what's yours? >> i didn't have one to be absolutely honest. you've picked the wrong person to ask. >> the only person who is not a bowie fan. >> thank you very much. >> much appreciated. i went for "star man." >> i went for "changes." keep your responses coming.
lots of "heroes." this is the week of david bowie. >> back at the same time tomorrow. >> stay tuned for another volatile morning in the markets. 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
breaking overnight. literally, breaking. another selloff in china. stocks hitting four-year lows. it's a big selloff. oil prices slumping. crude could fall to the 20s this week, and it's time to consider government protection for u.s. drillers. we'll be here to explain all of that. hall of fame rocker david bowie has died at the age of 69 after a battle with cancer. it's monday, january 11th. "squawk box" begins 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. stocks falling in china to four year lows late in today's session. check that out. you see the shenzhen composite down 6.6%. shanghai composite off by 5.25%. in the united states you'll see that at least at this point futures are standing pat even with all of those losses that we saw in china. however, watching oil, watching what's been happening with the dollar, this could be one to pay attention to today. >> okay. we have other stories that we're watching this morning. macy's coming under more pressure from an activist. "the wall street journal"