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tv   Worldwide Exchange  CNBC  January 19, 2016 5:00am-6:01am EST

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good morning. breaking overnight, china gdp growth hits a 25 year low. >> asian stocks closing higher. major european averages off to a positive start and u.s. equity futures pointing to a strong open on wall street. >> and whatsapp. how there trying to change the way businesses reach customers. heres' a hint. money's involve. it's tuesday, january 19th, 2016 and worldwide exchange begins right now.
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u.s. equity futures pointing to 230 points on the dow. >> first sad news to deliver from the world of music again. glenn frey died at age 67. you'll know he formed the rock band the eagles in 1971. more on his legacy later in the hour and we'll be remembering him through his music throughout the hour as well. >> absolutely right but first the big stories we're watching at this hour. that's the weakest reading since the financial crisis though it was in line with estimates. 2015 full year growth coming in at 6.9%. the slowest in 25 years. chinese stocks rising in late trading. the rest of asia also closing a little bit higher. japan up .5% and shanghai comp
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up 3%. eunice will join us from beijing with the break down of the numbers in just a minute. in other news out of china, beijing is denying it's top market regulator is out. yesterday a reuters report said a chairman offered to re-sign after critics said mismanagement was in part to blame for the massive drop in chinese stocks in months. we're also watching oil closely this morning. the iea out with the latest report in the last hour. the agency suggests unseasonably warm weather and rising supply will keep the oil market oversupplied until at least late this year. >> let's dig into gdp numbers overnight. big story, china's economy and it was more than just the gdp figures. eunice joins us with a break down of some of the chinese economic at a at a and interestingly why we saw the market rally afterward. >> yeah, we had a relief rally today. the gdp numbers as you guys have
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been reporting came in line with expectations. q-4 figure came in at 6.8%. for the full year 6.9% and those numbers were telegraphed very heavily in the past couple of days, especially by the top leadership, the chinese premiere had said it was going to be nearly 7%. so most people were expecting these numbers which is why we did see that bounce in the stock market. however, investors as well as economists have been focussing now on the december numbers. retail sales, industrial output as well as the fii for the past several months missed expectations and that's one thing that has been worrying people. that even though we did see these numbers that came in line with expectations going forward they're still going to be trouble. now a lot of investors have been pointing out that that is probably going to mean we are going to see some pollicy that
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will help lift the markets. stimulus in the form of rrr cuts or a combination of both. there's been a discussion about it before the lunar new year. >> we have breaking news right now. international monetary fund lowering it's 2016 and 2017 global growth forecast. this is the world economic outlook. it is scheduled to be put out right now and what they have said is they now expect 3.4% global growth during this year, 2016. that's a downgrade of 0.2% since the last time they made a forecast for 2016 back in october they took down the u.s. 2.6% growth this year. they expect and that is down 0.2% this year as well. everybody is talking about china. they kept the chinese forecast unchanged at 6.3% in 2016. that's less than the official growth forecast we're getting now. inner thes of other headlines i want to bring you the biggest downgrade in terms of global
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growth came from brazil where it expects that economy to contract sharply this year. the imf on the u.s. says that growth momentum is now expected to hold steady rather than gain further steam. they say a number of risks and say the growth risks are to the down side this year. one of them is a sudden rise in global risk aversion. something we're keeping an eye on because of the way dploeglob markets started out the year. they also blame on emerging markets. we'll talk about this today because we have the imf chief economist. the man that wrote this report will be joining us a little bit later in the hour. first on cnbc interview to talk about why they cut growth, what the risks are and how ugly it looks given the start we had to the year. >> we'll also touch on today's actual china gdp numbers with him. interesting just to touch on that market reaction because the numbers were a little below expeck t expectatio
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expectations. so far this year markets have been way more negative than the fundamentals in economies have been. today we have growth was just below 7%. so rather than what the stock market has done or rather than what the currency has done we have a bit of a rally today. it's not as bad as some people feared. it could have been. >> it was in line with what economists were forecasting. the economy has been slowing since 2011 and as long as it's close to that official growth target of 7% economists say it's okay. the other argument as to why we're seeing a rally is hope of stimulus along the way and that's got to be a big open question. how much more room do they have to cut rate ifs they're trying to stop outflows from leaving the country and stop their currency from getting too weak. >> still a big policy lever they could go with as well. >> a lot of people say they'll go supply side. >> wouldn't be helpful in the long-term but could be in the short-term. retail sales today 10.7% growth. slightly down from 11% in china.
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>> yeah. >> and i think that's another thing to rally on because it continues to point to that reallocation of the economy toward that. very painful transition still to go through but still a strong consumer coming through. what does this mean for european trade? we're up in europe. a little bit of negativity yesterday. europe was open unlike the u.s. bouncing back today in line with asian markets. germany up 2%. ftse 10 up slightly less, 1.7%. as for the broader markets, we have a bit of risk on today. that means the yield is ticking up in the bond market. we got close to 2% yesterday and friday down to about 2.02 or 2.03 at one point. back to 2.06% so we haven't crossed that level yet in terms of bearishness. let's also look at the dollar board. what's happening there. more similarly as we have seen a little bit of a bounce back in today's equity market trades. we've seen a bounce back in terms of the currency trades of the year.
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a little bit of u.s. dollar strength to the tune of 0.2% for the broader index. >> marching higher along the way. it's a short weak. u.s. markets were closed yesterday. but that doesn't mean it's short on data or earnings. the national association of home builders. that comes out at 10:00 a.m. eastern time. another big day of earnings. bank of america, morgan stanley and united health report before the bell and after the bell word from imb and netflix and a lot more data coming later in the week as well. especially on housing. >> netflix, we're looking forward to these earnings because over the last two years or so whenever it reports it has big moves on that day. like always in and around the earnings day. on top of that it's been absolutely whacked this year along side concerns about china and oil so i think earnings are a chance to really reassure. >> but with some of the other high flyers like last year, amazon is down more than 15% for this year. not just netflix, google,
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facebook. >> but netflix earnings always crucial for its stock price on the day and this year more than ever i'm sure. in corporate news, they expect to boost fine oil production shipments this year. last year they said the outlook for commodities is sobering but strong output and strong costs should help keep the dividend in place. a contrast to its rivals. reaching at a deal for nearly $3 billion. they raised the stock offer to complete the month long fight for its rival. and royal dutch shell is exiting a major gas field project. it's up 2% today in line with a little rally in the oil price. >> so whatsapp has more than a billion users and may become more popular. >> good morning to you.
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you can now text send pictures or video for free to your closest billion friends. whatsapp is dropping it's $1 a year subscription fee. they're charging businesses to communicate directly with users. that could mean your bank could message you about a recent transaction or an airline about a flight delay similar to facebook's messenger able to hail a ride with uber. also insuring user privacy. authorities criticized that saying encryption hurts their ability to monitor terror plots. it was bought by facebook for 19 billion and making online payments still remains difficult guys. back to you. >> it's not the only social media app making changes.
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any other similar themes going on in other apps? >> that's right. shortly after this announcement they announced instagram would be extending advertising and ramping up businesses outside of the u.s. and this is huge because 75% of the user base is based outside of the u.s. >> thank you for that. sarah, you still look at instagram for only 1 billion. looks so cheap. >> and the numbers keep growing. when we come back here on worldwide exchange watching futures carefully after a long three day weekend. traders are coming back and hitting the buy button early. futures indicated to open up more than 240 points on the dow. 31 on the s&p. 77-on-the nasdaq after china data overnight came in line with forecasts. which stocks are poised to lead the way? we have an indicator with names you need to know about oversold conditions. we're talking technical. >> plus peter boockvar will join us on set.
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find out why he's staying bearish on stocks. you're watching worldwide exchange.
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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, let's get you up to speed on the market action and ireland spoiling the picture of green across the rest of the european screen today. positivity bouncing back from declines yesterday and matching gains in asia where we saw gains of around about 2 to 3% for japan and china after chinese gdp came in basically in line
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with expectations. so we're looking at about 2% of gains. what does that mean for u.s. equity futures? gains of similar amounts are expected at the open. a 240 point open to the positive side for the dow. similar gains across the board. the nasdaq called to open up by 1.6%. sarah. >> wilfred that brings us to today's trade of the day. after it's worst two week start to a year ever the dow standing just below 1600. that's a key ipsychological level. our data team crunched the numbers to find out which dow stocks could lead the way if the blue chip average does snap back. here's what we found, cisc cisco visa, ge and boeing topped the list based on how oversold they are. just a snapshot based on what has happened in the past according to our data. go to and check out cnbc pro. >> among today's big themes for
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the markets, questions about the global economy and earnings season getting into full swing. joining us is the chief market analyst at the lindsey group and cnbc contributor. good morning to you. >> good morning. >> great to have you with us. when you joined us a couple of weeks ago pretty bearish in terms of the outlook. has that changed? there's been a few positive bits of data that suggest the recent market moves may have been overdone. >> what's most interesting is that the bear market actually started in the middle of last year in small cap stocks and then spread as the year progressed. the biggest noteworthy thing in the first couple of weeks of the year is it finally effected the untouchable mega cap stocks that everyone hid in last year. so this is just to me another step of the bear market that right now we're very oversold. we're due for a bounce. we can bounce for days. we can bounce for weeks but unfortunately this bear market will continue over the rest of
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the year. >> it was week and has a week headline weakest in years and headlines. everyone else is rallying built on the deal that maybe they'll add more stimulus to the economy. does that give you hope? >> well, the physical stimulus and monetary stimulus, every time there's a hiccup has us in the position we're in because it's built up extraordinary amounts of debts. so i don't want to see them do anymore stimulus. i want them to rip the band-aid off and get to a more sustainable level of growth rather than these continued steroid shots every time there's softness in the global economy. >> there's been huge amounts of steroids injected into western markets over the last six or seven years. as we come off those is that the bigger reason for the sell off? >> sarah heard me say there. no consequence that every time the fed takes their foot off the pedal we run into trouble and the rate hike was the second phase of the tightening. the first one being the end of
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qe and as qe ended a lot of stocks started to top out. this is just another phase. you inject stimulus and you get this rush. once it wears off you fall back down again. i'd rather see the economy adjust on its own rather than continuing to get these steroid shots because it's an abnormal distorted form of growth that's not natural and eventually you have a hang over which we're experiencing right now. >> we know your thoughts on qe. we know you're a hater of the central bank stimulus. as far as the fundamentals of the u.s. economy though it is a little confusing to hear jp morgan out with earnings saying it's credit card business is as good as it's ever been. there's a fundamental disconnect with certain parts of the economy and other weaker spots. >> certainly in the service area the economy is doing better. manufacturing is essentially in a recession but the services part will be -- the key will be the consumer. the consumer is getting a great benefit from lower oil prices but for those that rent they're getting hurt. that's 35% of the households.
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health care costs are higher. which is also a cramp on consumer spending. so as we're still in this state of the economy which is okay because it's better than a recession but it's not what we're used to and it's more of a muddled long situation unfortunately. >> are there any bright spots? >> we're finally reaching a point where central bankers are losing their effectiveness. so in the short-term it's going to be extraordinarily painful but hopefully lessons can be learned from this and the economy can adjust without the constant intervention from central bankers. >> a lot of people coming around to that view as well. when we come back a force too powerful for star wars at the box office over the holiday weekend. which movie was finally strong enough to unseat the month long winner but first, nbc's grant johnston joins us from dallas ft. worth with today's business travellers forecast.
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good morning, grant. >> good tuesday morning to you. the cold air is in charge. current temperatures below zero. minneapolis, chicago at 3. not going to get much better up there. highs in the teens and 20s. wind chill advisories for the region up there. the great lakes especially. the northeast. new york at 28. d.c. only 29 for a high temperature. milder air across the south. across texas. and chilly conditions out on the west coast. tracking some snow through the heartland from nebraska, omaha, kansas city seeing snow. that will spread toward st. louis later today. meanwhile another wet system coming on shore. the pacific northwest. denver seeing snow here this morning wrapping up. a couple of inches across missouri and the cold conditions in the northeast. snow by the weekend for new york. more on worldwide exchange coming up after this. he ran that company. i get it. but you know i think you own too much. gotta manage your risk.
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an honest opinion is how edward jones makes sense of investing.
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rising steadily this morning following the lead on europe and asia after the china gdp numbers. nasdaq up 70. s&p 500 up 28 after what has been a few weeks of battering for u.s. stocks. >> nice to see a little bit of green. >> race to the finish. new poll numbers due out this morning just days before the iowa caucuses tracie potts is following it all for us from washington. >> we are following not only the campaigns but the numbers tracking the campaigns because they can give us a good sense of what's happening especially as we head into iowa. the latest nbc wall street journal poll shows us that republicans more than democrats are taking a hit from the tone of the campaign. >> donald trump and three are candidates are at the same event in iowa today.
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ted cruz is packing in six meet and greets in new hampshire. trump's increasing attacks on cruz not mentioning hill by name at rallies. >> i heard somebody say we're going to build a wall. where did that come from? nobody ever said that but me. >> he won't launch personal attacks. >> if he or anyone else wants to engage in a battle of insults. he's welcome to do so. i don't intend to respond in kind. >> our lathest results released last night show the battle for the republican nomination has given four in ten voters and my negative view of the party but not having as much of an impact among republicans. >> you can support someone that has the experience in getting results for people. >> our poll shows more democrats value experience over change. that could benefit hillary clinton. bernie sanders greets voters in iowa today. >> they want real change in the way we do business. >> the poll finds more than half of democrats unphased by the tone of their companies
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campaigns. now we are also learning more about the candidates themselves. taking a look at the poll numbers and who voters like they are in this order, highest positive numbers for hillary clinton and right after her bernie sanders, rubio and cruz are tied, ben carson and then donald trump. >> thank you very much for the update. busy week in politics. it was a night full of upsets in sports. college basketball for instance. doesn't pay to be number one this season because oklahoma taking on iowa state monday night. tied at 75 late in the second half. the cyclones would go up for good on this two point jumper. iowa state stunning the sooners 82-75. oklahoma becoming the fifth number one team to fall before the month of february which hasn't happened since 1948. 1949 season. big upset. >> meanwhile, syracuse went down to carolina to face duke with just two seconds left the orange
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miss the free throw giving the blue devils one last chance but matt jones drips and falls as time expires. coach k and the fans can't believe it. syracuse upset. 64-62. duke hasn't lost three straight in nine years. there's your sports round up. >> another upset at the box office. move over star wars. the force awakens has been dethroned after holding the top spot for a month. this weekend it made more than $32 million bringing it's total earnings to $850 million in north america but ride along 2 starring kevin hart and ice cube was the topper forming movie in nor north america. it took in 41 murder in the second degree over the long holiday weekend and i was wondering who saw this and it turned out the demographic is age 13 because he just said his son was first in line friday night to see it. >> i went to see 13 hours this weekend. >> you did? >> it was good. >> i didn't know you were a
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movie buff. >> i like a movie a week. >> when we come back, this morning's top stories including the all important china gdp number. plus uber teaming up with airbus for on demand helicopter service. but first check out the futures this morning in rally mode after a three day weekend coming back to buy on better china numbers. dow futures up 234. you're watching worldwide exchange on cnbc first in business worldwide. ♪ globe in under an hour. whole communities are living on mars and solar satellites provide earth with unlimited clean power. in less than a century, boeing took the world from seaplanes to space planes, across the universe and beyond. and if you thought that was amazing, you just wait. ♪ in new york state, we believe tomorrow starts today.
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good morning, breaking overnight, china gdp growth hits a 25 year low and that's just the tip of the iceberg. a complete break down of new economic data out of china today. straight ahead. >> netflix was the topper former in the s&p 500 last year before seeing it's shares swing wildly this month. now the company is announcing a new line-up as it prepares to post quarterly results this afternoon. >> and there's an uber for that. the ride sharing service headed higher launching on demand helicopter service at the sun dance film vefestival. you're watching worldwide exchange on cnbc. ♪ among the top stories front and center today, china's gdp to 6.8% in line with forecast and the slowest pace in 7 years.
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raising hopes of more stimulus measures out of china. separate data falling short of estimates. the imf cutting it's global growth forecast for the third time in less than a year. the group citing the sharp slow down in china trade and weak commodity prices that are hammering emerging markets. we're going to speak to the chief economist first on cnbc later in this half hour. the iea says the global oil market will remain oversupplied for most of 2016 due to unseasonably warm winter weather which cut demand growth in the fourth quarter. >> let's check in on the global markets this morning and we're looking at a higher open for wall street. futures suggesting the dow is going to up up by about 240 points. the s&p called higher by 30 points and the nasdaq by 72 points of course u.s. markets were closed yesterday after a torrid week last week. let's have a look elsewhere around the world and futures taking their lead from europe and asia.
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europe is up around about 2% as you can see. germany up 1.84. france up 2% now. yesterday europe was down. in fact, germany down now 10% over the last 30 days. let's have a look at asia. while being slightly below expectations did really suggest that things are perhaps quite as bad as the moves in the markets have suggested over the last two weeks and a bit of a rally off of that because retail sales are all right and a bit of a rally because some thing we might get more stimulus. >> you wonder if this is it. if stocks can find their footing after a bumpy few weeks. a lot of data in the u.s. coming this week. particularly on housing. a ton of corporate earnings and a lot of uncertainty about the global economy. so far so good. we'll see what happens. >> ecb meeting as well on thursday this week. that's one to watch for sentiment. sentiment around the euro and on
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all the heavy exporters in european equities. >> we have stocks for you to watch today starting with qualcomm announcing a venture in southwest china. that will focus on the design, development and sale of advanced server technology. south korea bringing a criminal case against the local volkswagen chief. a recall plan for emission cheating cars fell short of legal requirements and could carry up to a five year prison term. in german court dozens of large shareholders in vw plan to sue the auto maker. more legal trouble as institutional investors are seeking compensation for the drop in shares due to that emissions scandal. watch shares of yahoo! today. an article over the weekend suggesting shares could jump 35% if the company sold it's core internet business and stakes in alibaba and yahoo! japan. the company's estimated asset value is nearly $48 a share which would make it significantly undervalued here below 30.
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>> another internet stock to watch today netflix which reports earnings after the closing bell and for the streaming service the subscriber numbers really add up and drive the stock. up more than 140%. performances have been different from that. landon joins us with more on what to expect. landon. >> that's right. all right a lot of drama this year. the company announced its global expansion but fell 9% last week as after analyst predicted fourth quarter u.s. subscriber numbers would miss forecasts. netflix is expected to earn 2 cents a share down from 10 cents a year ago with revenue rising 23%. the company is protecting 5.15 million new subscribers with 2-thirds from overseas. they're looking for 1.13 million u.s. subscribers well short of
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netflixs forecasts of 1.3 million and the third quarter, netflix fell 270,000 short of its u.s. customer target. investors will also be eyeing netflix content costs. the company is only in the fourth year of making original shows and said it will spend $5 billion on content this year and this weekend netflix announcing it will double down on children's shows including, sarah, the remake of full house which gets a big thumbs up and you got it dude. >> i don't know what full house is. >> oh my god. iconic show that we grew up with in the 90s. mary kate and ashley oleson. >> you have a lot to catch up with. >> thank you for that and sarah, the one i'm most looking forward to apart from more frank underwood, later this year we get the crown which is hugely hyped. it doesn't come out until about q-3 and that's written by peter morgan that also wrote the queen and now it's a new period drama in the u.k. about the queen when she was becoming queen. so quite a interesting one.
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>> that's going to appeal to you. it's a big part of the netflix story. they're spending $6 billion on original content. they don't break out the audience numbers. >> some people are arguing over whether that original content is what people are going there to watch for. we'll have to see. >> now to top trending stories a few good ones including donald trump. he said he'll stop apple from making iphones in china. couldn't hear it quite well but he said he was going to order them to make it here. he targeting other u.s. companies from manufacturing abroad including ford motors suggesting a 35% tariff on cars made in mexico. he has gone over mondelez for making them in mexico which is not actually fully accurate. i don't know if the president has that kind of jurisdiction but this is his message focus on
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the u.s. and the u.s. economy and we're going to bring our jobs back and stop with this competitive business overseas. >> doesn't have much sense behind that. goes against pretty much all economic wisdom around the world so we'll see howell -- >> did you watch the u.k. debate? >> i didn't. i'm glad that was behind us. that's fairly embarrassing that debate. could never happen off the back of the debate. >> a lot of people in your country wanted him. >> it's been blown out of proportion because a petition online received a certain number of signatures therefore the parliament is bound by the terms of british law to at least debate it but there wasn't even a vote at the end. >> a highly entertaining conversation and deliberation. >> i hope we can forget about it soon enough. glenn frey eagles guitarist and co-founder died on monday. he was 67. the eagles have had 17 top 40
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hits and sold more than 120 million records as one of the most dominant bands of the 1970s. >> sad week for music following the taidavid bowie passing. i was actually by his apartment and there's flowers all down the street. >> huge outpouring for him. >> uber will partner with airbus for the on demand helicopter service at the sun dance film festival according to a spokesman that told cnbc that on demand helicopters will make it easier to navigate the event. >> i love this. i love this. we're going to wait until the prices really come down but if they are plausible for anyone to get one that's going to be so awesome. >> a start up company in new york takes people from midtown to the hamptons. >> how much does it cost? >> 100 or so. >> that's doable. >> it's expensive but, for a helicopter it's sweet. >> but more supply there is i wonder if the price will come down.
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>> when i was lost in los angeles on the uber app you already know this, they have uber vegas so it's a car that takes you straight to vegas. i like that. i was tempted every single day. thank god i didn't do it. let's move on from the uber story and reports of tennis match fixing. according to an investigation by the bbc and buzz feed over the past decade 16 players who ranked in the top 50 have been repeatedly flagged for suspicions of throwing matches. novak djokovic was offered 300,000 to throw a first round tournament match in 2007. this rocking the world of tennis. he is not accused of wrong doing. just saying he been offering it once. tennis was always thought of as a slightly cleaner sport than others. >> like soccer and fifa. >> exactly. and other news saying nadal crashing out of the australian open in the first round. >> i wonder how tempting it was.
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they are paid less than other athletes. >> not at the top. >> well at the top they're paid more so you don't think they were tempted one bit. >> i don't know who the other people were accused. i doubt they were and i don't think novak was and there's no accusation of that in the story but it's sad to hear that it's even offered because it's view as a clean sport. >> the mornings must reads. three ways the world can wean it's off of government stimulus but first check out futures. nice rally to start the tuesday morning after a three day weekend with dow futures up 252. s&p up 31.5. nasdaq futures up 77 following a rally in europe and asia. off china's gdp. stay tuned you're watching cnbc first in business worldwide. ♪ at every turn...
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the iea came out and said the market will be oversupplied until at least the end of the year. perhaps an oversold bounce in terms of oil. either way that's helping the vibe overall for u.s. stocks and global stocks too wilfred. >> it is, indeed. let's get to today's must read stories catching our attention.
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in the financial times this one is titled how to wean the world of monetary stimulus. the author writes if in 2016 there's no shift from monetary to growth policies the future could prove more likely sluggish growth and currency conflicts and popular politics and fights over distribution. this article brought together the views of experts that argue we need to keep rates lower for longer. larry sommers who is saying the solution is big government spending on infrastructure and the like and people like michael spencer saying they have to boost productive. the bottom line of the article and brings together views quite nicely is i don't see which of the options is readily viable. certainly not in the short-term. certainly not as an outcome. that's a key reason for negativity is it is the realization that we're coming off the stimulus. irrelevant to oil prices it's
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the realization that the six or seven years of central bank support perhaps has passed. >> but i like that the call to action is more on physical policy makers to stimulate growth and the private sector to step in where monetary policy left them where they have done all that they can. my morning read is from the wall street journal. it's on oil. it's titled after the carnage shale will rise again. optimism on the u.s. industry energy. talking about the technology developed here. don't write it off, shr shale 2 will be better. the riggs are getting cheaper. efficiency is brought from the greatest tools to robotics and advanced materials have yet to be deployed. this comes from mark mills and he says don't underestimate the technology. once we see the end of falling price which is it could be awhile. we'll see mergers and
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acquisitions from the distressed companies. we may see bankruptcies but the government should go to great lengths to fund energy research and highlight what's happened technologically in this industry. >> huge developments. this is a medium to longer term outlook piece than any short-term call on oil prices. we're approaching the top of the hour. that means it's almost time for squawk box. michelle joins us today. most of the team of course off in davos where they'll start their coverage tomorrow. michelle very good morning to you. another day being lead by international news flow particularly out of china but although the headline perhaps a little disappointing. it wasn't as bad as markets have been. so we're getting a bounce. >> and to talk about the conversation you were just having the hopes are in china that since it wasn't quite what expectations were maybe they'll have more stimulus in china. so as you guys have been reporting we have a nice rise in
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the futures this morning. a lot coming up on the show. markets, markets, markets. talk a lot about china. we have on the ceo of macy's. if you look at the macy's stock, that along with transports, those guys telling us that something was coming down the pike here when it comes to the u.s. economy or what was happening overseas they have been behaving poorly despite the expectations that the u.s. economy was improving. >> governor jeb bush on ahead of the big primaries and see what he can do to try to improve his sa standings at the poll and talk about markets this morning and what they can expect. >> see you in over ten minutes. when we come back here on worldwide exchange the health of the global economy is in question. the imf out this morning with it's new view of the global economy downgrading it's forecast. we'll talk to the chief economist in a first on cnbc interview, next.
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welcome back. u.s. markets having had a breather yesterday expected to open positive today. lovely to see some green on the screen. expected to open up 230 points. we're looking at a gain of 1.5% for all of these markets. taking some positivity out of asian trade and china up 3% after gdp was basically just below expectation but not too bad at all and europe up also to the tune of 2% today. >> yeah, brent up 4% helping too. the imf just downgraded global growth today for the year. joining us is the imf's chief economist here from the bank of england to discuss the updated world economic outlook. it's good to see you again. >> good morning. >> so first tell us the reason why. is it all emerging markets and commodity prices or is the u.s.
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behind this downgrade as well? >> well, depends who you look at. for the advanced economy group, the u.s. is behind the downgrade. to some extent. we have reduced our expectations for growth for next year for the u.s. that being said we do still see a small up stick for 2016 compared to 2015. for the emerging markets, same. they're facing continuing challenges from low commodity prices, in particular oil prices. also geopolitical or political tensions in some countries and as in the case of the advanced economy group we do see an up tick for 2016 and 2017 but less of one than we would have predicted three months ago. >> less for 2017. i wanted to ask you about china. it's the topic on everyone's
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mind after the official gdp report. you guys left your china forecast for the year unchanged at 6.3%. i wonder why you didn't take it down further given what we have been seeing in markets so far this year and out of the china policy makers and whether you think it's realistic for investors around the world to expect more policy stimulus whether monetary policy or physical policy and that's why we're rallying today. >> well, you know when we forecast china back a year ago we were pessimistic relative to markets and our forecasts turned out to be right. the year forecast for 2015, the outcome for 2015 is 6.9%. that's what we expected. 6.3 for 2016 is right in the range of 6 to 6.5 would leave
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you as feasible and safe for choo in a. we're quite comfortable keeping that unshangechanged. we haven't seen surprises. >> let's bring it back to the view on the u.s. one of the saving graces is the thought that it's a consumption led economy and the consumer is strong. it's going to benefit from lower oil prices. what do you make of that view? do you think the consumer can support the u.s. economy or are there fundamental weaknesses lying under the surface there. >> well, we have seen consumer strength notwithstanding the weak outcome in december but confidence remains high. deleveraging has proceeded the pace. the head winds for the u.s. come more from other factors. one has been the very strong strengthening of the dollar which is putting pressure on manufacturing and putting pressure on trade. another has been the response of
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investment in the energy sector associated with low oil prices but as far as the fundamental strength of domestic demand we remain fairly confident. >> have you been puzzled to see how unwelcome this move is in oil prices down more than 70% since the highs globally? >> the markets have reacted very, very badly to it and frankly for a number of economies that depend on oil exports the consequences are very harsh and particularly it's the price of oil that gets very, very low, below $30 barrel they have to consider serious cut backs in spending both private
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and public. there's still positive effects on consumers and con companimpa rely on their production processes and are benefitting from lower production costs. >> thank you for joining us fresh off publishing that report. the world economic outlook. that's the chief economist at the imf. joining us just outside the bank of england where they announced their new outlook. >> absolutely right. we're almost done but let's have a quick look through the main market boards for the morning and we're looking at a positive open on wall street. the dow called to open up by about 235 points. the s&p by 30 points and the nasdaq by about 72 points. coming off the back in asia and europe today. >> in oil we're going to get a lot of data in the u.s. starting with home builder sentiment today and netflix after the bell. it's busy later in the week with ge and the other dow components. tomorrow we have tim adams with us. the former under secretary of
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the treasury with brand new data on international flows out of the institute for international finance. that will be big news. >> one not to miss. thanks for watching. born with a hunger to fly and a passion to build something better. and what an amazing time it's been, decade after decade of innovation, inspiration and wonder. so, we say thank you america for a century of trust, for the privilege of flying higher and higher, together. ♪
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>> good morning, breaking overnight, china's economy slowing to levels not seen since the financial crisis but the u.s. futures soaring more than 200 points. earnings central getting busy this morning. bank of america, morgan stanley, imb and netflix all on the calendar today and another rock legend has fallen. glenn frey of the eagles passing away at the age of 67. it's tuesday, january 19th, 2016 and squawk box begins right now. ♪
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>> live from new york where business never sleeps this is squawk box. >> we're going to miss glenn frey. welcome to squawk box on cnbc. joe, becky and andrew are on a plane headed to the world economic forum in davos. our top story here is actually coming from china. china's economic growth slowing to 6.8% in the fourth quarter. that's the weakest reading since the financial crisis though it was in line with estimates. 2015 full year growth coming in at 6.9%. that is the slowest growth in china in 25 years. but take a look at the boards. stocks in china rising in late trading. strong rally there. expectations that there's going to be more stimulus from the chinese government. we'll check in with eunice in a few moments to get an update. higher by .5%. not quite a rally but they'll ta


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