tv Street Signs CNBC February 8, 2016 4:00am-5:01am EST
♪ good morning. everybody, welcome, i'm louisa bojesen. this is "street signs." >> and i'm nancy hulgrave. these are your headlines. well, will the year of the monkey bring more uncertainty to the markets. european stocks holding on to that flat line following last week's sharp losses after light trading across asia. >> but basic resource is the clear outperformer, shares rally offsetting a profit after the gold prices in two years.
were veer focused on free cash flow and continuing to be able to deliver a long half term viable business. >> well, an influential investor in credit hints that the bank may be better off without its ceo. shares in italy rising to the top of the markets. and they're rounding in on rubio. the junior senator from florida comes under attack in the last republican debate ahead of the new hampshire primary, as his rivals point to a lack of experience and amemorized lines. >> marco, the thing is this, when you're president of the united states, when you're governor of the state, the memorized 30 second speech when you talk about how great america is at the end of it doesn't solve one problem for one person. hi, everybody. good morning, welcome to the program. >> good morning. >> how are you, naengs? >> very well. happy new year. >> i love it, we can celebrate a zillion times, right?
the monkey. i wonder what this year has to bring, markets this morning opening in a little bit of a cautious note. >> not giving us any telltale for kicking off. >> precisely. a little hire. stock share 6% lower. a little bit more if you want to get finicky about it. the majority of our markets trading in negative territory, the ftse, the dax and the ftse mib gaining a tad higher by 0.5%. we'll talk about the italian banks in a little while. now, when it comes to some of the sectors out there, you might have noted that basic resources is the best performing sector. >> that's right. >> this morning, on the stocks 600 right now. the only ones on the green. gold 3%.
glencore by 3.5%. >> randgold is rallying after producing a dif kend by 10% to 60% per share. speaking on "squawk box," a bit earlier, the ceo was a little more optimistic. >> still tough times in the golden industry. for end gold resources we're very focused on free cash flow and continuing to be able to deliver a long-term, viable business. >> we're keeping an eye on that. this comes after precious metal turned its best week in over two years. that is rallying almost 5%. gold miners following their
price had their best week since 2008. >> the recent rally is not turning everyone out there bullish. anglo-american ceo said he's sees no reverse anytime soon. speaking at a conference, he said the industry had his to blame. michael, good morning. >> thank you. >> we have ourselves to blame that's the message from the anglo ceo, that the industry has nobody else to point heir finger at as far as the supplies? >> i think the industry focused for a long time with lower production, cutting production costs and prices came off lower. and then the technology that they're taking they're forced by the market almost to take, the production out of the market that should have been taken out five years ago. so, in a way, a lot of the pain is self-inflicted yesterday.
but the bonus for us is we're looking at it coming through. the message is they're actually coming through, we're actually having adjustments coming through. >> then i look at gold. you say gold is in the process of bottoming out. what makes you say that that we're bottoming out at this stage. >> we look at the gold prices. one of the model runs on four variables. briefly all of those variables had variables. you look at the dollar, you look at market volatility which has been very denying as well. so you're now looking forward, oil prices starting to bottom out. with the bullish argument i can bring you a bearish argument. this is where the market price is, and you then look at the volatility that had-t had at the beginning of this year. i think central banks had lost the bang. and i think the trading manner that we had in the past few
years haven't necessarily been out there. there are positives. >> you just mentioned the central bank bang, if you will. it's hard to determine what came out of that number on friday in terms of where it puts the fed going forward. of course, this will have a major impact on the gold price. it's an unusual time. in one sense, we could have the dollar getting stronger. yet some recessionary fears are still out there. how does this play out? >> i think the market is focus more -- the gold market is focusing more on the structure. and the potential gdp is well below the level where it used to be. arguing for an accelerated rate hike cycle is really different. especially when you look at the dollar strength. there's one factor actually pushing the manufacturing sector into a session. in a way, i think there's a lot of structural underlying issues and monitoring policy seems to
be more limited by that. >> and if that view holds, where do you seal the price of gold by the end of the year? >> 1250. we said that actually before. >> do you think the traditional correlations are going to be broken? or we going to come back and see them, you know, solidify themselves? >> as we're coming back to the model that i mentioned before, that has continued to rise reasonably well, i think. a lot of the traditional relationships at least in the market indicators seem to work. i think that the gold is reassessing at the moment is the overall global approach, this picture, the lower potential gdp gross is pretty much out of there. and whether that makes a more compelling case to gold. >> 1165 now. you're saying 1250 by the end of the year? >> yeah, it's a market that needs a bottoming out. >> that's not a huge move in the next months? >> i think that's fair enough. i think that's quite a change in
a market that actually has been in a protected bear market for years now. >> michael widmer, thank you for being with us. if you want an answer to the questions whether or not metal, getting more precious, head to cnbc.com. ministers from eu steel ismaking states ministers from tats including the uk and germany, they've warned the european steel sector face a, quote, impending risk of collapse. earlier, "squawk box" spoke to the ceo of one of russia's largest field producers. handy pointed out the difficulties faced by the chinese steel industry. >> i think we'll what we'll see
is bake results of the china market. and really believe there are issues with sustainable pricing. first of all, russia remains a market for steelmakers, the biggest retail. and yes, that is say partial effect. >> meanwhile, italian shares are bouncing back this morning after some recent heavy selling last week. in focus here, intesa sanpaolo boosts dividends. as the bank contributed to a fund designed to rescue four small italian lenders. the mixed review from analysts from barclays cutting its rating on the bank. don't forget coming up a bit later on cnbc, we'll be talk be to the ceo, car low messina, in a first on a cnbc interview.
a lot going on this morning. unicredit sharehold leonardo l delvecchio would credit the market with continuity in no other way. and credit suisse has asked the bank's board to cut its bonus up to 50%. that's after the first four-year loss in eight weeks. credit suisse described the request as an act of solidarity by its boss, given that bonuses have been slashed across the group. julian spoke to them last week and asked if morale was low. >> morale is not low. do you think with up 25%? >> what about europe? >> europe is profitable
businesses, of course. you live in london, london, i'm sure morale is not great but london is a morale challenge. >> meanwhile, analysts expect british back hsbc to keep its headquarters in london. the board is expected to meet to make a decision. it's smart, it's smart, isn't it, when you have a ceo who says, look, i can't ask everybody else to cut their bonuses and mine be left where it's supposed to be. he's saying he'll take a cut of 25% to 50%. he's also said in the past that he's very happy that his employees, that they move their bonuses up and down, depending on performance. the problem is if they don't
like the bond. >> and when you have the shareholders dictating how much you get paid on performance, rather than regulators saying we're going to cap pay on this, cap bonus us. i think it's smart to say, look, executives are willing to adjust their bonuses accordingly. you wonder if other ceos will follow. it also raises the issue of whether or not the board would have demanded a cut, too. >> true. keep in mind, as well, it was the first losses they've seen in eight years so, more focus on the bank because of that. also in the past, they had promised that the bonus pool would be 11% lower than the last years. it was expected that we would look at the bonuses being lowered a bit. get involved in the top of the hour, at street signs @cnbc. you can tweet me @louisa
bojesen. we will discuss as the lunar new year kicks off and several markets across asia are shut for the holiday. but that's not stopping many traders from protecting their portfolios. plus, the group casino trading at the top of the stoxx 600. all the details on that in just a few minute. >> a bit later on. things to do in the city of denver when you've won the super bowl. the broncos cause a huge upset in california. that whole story coming up. ♪ if you have moderate to severe ulcerative colitis or crohn's, and your symptoms have left you with the same view, it may be time for a different perspective. if other treatments haven't worked well enough, ask your doctor about entyvio,
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market news out there. we're looking at the various asset classes. we've been checking under the safe haven players out there. we have been seeing quite a bit of safe haven bond buying. we're just seeing this morning that the portuguese ten-year government bonds moving to its widest audience since 2014. the widest since august of 2014. the issue is whether or not that's going to continue, right? >> exactly. so much of this resting on the portugal debt talks we is saw with brussels to make their target. and brussels essentially outright rejected it so back to the drawing bank. meanwhile, keeping an eye on china's foreign exchange, reserves falling by almost $100 billion. this after the central bank intervened in strengthening the
yuan. china's rates declined less sharply than they did in the previous month. china's fx now stands at its lowest level since may 2012. traders are reportedly going to cash in on the fact that chinese markets are on holiday this week. looks fun, doesn't it? >> it does. >> speculators looking to capitalize on low trading volumes and the lack of central bank interventions to put pressure on the offshore yuan. michael bell is a strategist from jpmorgan asset management. good morning, michael. how are you? >> very good, thanks. >> the chinese yuan under pressure. is it going to continue or are we going to see people taking advantage of the lunar new year? >> you could see it bottom down. that would allow it to be huge. i think markets in quite a panic that there's going to be a 20% or 30% devaluation and we just
don't think that's the case. >> you've been looking across the board also at the what the various central banks should be doing next. i like how you think at the bank of japan, they're going to be cutting further into negative territory. why do you think we need that? why do you think that's necessary? >> i think i'm going to lean against the inflation pressures on the downside being caused by the oil. the worry there is that impacts on expectations answer the ecb in particular, with the boj over the weekend had gotten some credibility after the markets had lost some since october. i think really the key implication in what the boj has done with the potential to take interest rates potentially quite a bit. further into negative territory because it limits the negative impact on the banker. >> michael, how does this play out in terms of european equity? we've seen a sharp sellout
specifically for the global sector. and the global headwinds one of the things people are concerned about. do you think the sectors will be sold at this point? >> we think in general, the german equities will be sold. particularly some impact on the european bank. we don't think it's going to be that big. generally, if you look at the european economy it's doing fine. you'll see that the labor market is improving quite nicely. you can see that confidence is picking up particularly in places like italy. the pmi around 1.5% to 2% level. and the market pricing in at least a 50%. >> except the great inflation rate? as the low oil stays there doesn't this seem like a pressure on the downside? >> i think historically, what's caused deflation, it's been a massive credit. the demand for credit is pick up. actually, you're also seeing
overall credit being extended. so this improvement in the credit environment in europe. indeed in places like the u.s. and indeed in china as well you're not seeing the contraction in credit that you normally need. those inflation fears are somewhat overdone. >> if there's more than a 50% view that you'll see a slowing in the global economy, how do i protect myself? >> one thing that investors should be doing it increasing exposure to the kind of funds that can benefit when markets fall. they can take back not clearly that the equity markets will rise or bond markets will rise, they can take relative value players within the market and do things like options and shorting in order to protect values on the downside. >> when we look at the euro dollar trade there, really still above where you think the central bank wants to see it. this comes even with expectations of fed tightening
the year ahead. does it mario have to come out with more stimulus? >> i think the chances of mario draghi coming out with stimulus is extremely high. you could see deposits or further cuts as well. or expansion in the ecb balance rate. >> you've just been talking about trying to call the bottom here when it comes to certain miner, commodity prices. how do you view the sector in europe? >> i think some commodity prices like oil are probably going to be a little choppy over the next three to six months. what we're looking at industry to start coming down but we generally think the oil prices are going to end the year higher than now. on the other commodities, thing like copper. >> i'm still trying to figure out what you as a global market strategist, what you'd tell your clients with regards to the year
ahead. we've hadn't atrocious beginning to the year. january was horrible for equity investors out there. do you tell them to sit tight? do you really say, you go, gear up on your oil protection as you were talk about? do you take a wait and see stance? what do you communicate to people who want to be actively engaged in the market? >> i think firstly, now is not the time to be selling. there are going to be opportunities to selloff. you need to sadd risk. both of those markets, the market is in a high recession that we think is likely this year. also within that, to balance out exposures there that can provide downside protection. >> okay. michael, thank you very much. michael bell, global market strategist from jpmorgan asset management. >> we're giving you a look at how markets are faring.
getting kicked off just in positive territory. very early minutes in trade, but now, sharply lower. we have all the major markets up by 1%. except the ftse, 0.7%. china is one country condemning north korea for launching a rocket. they pledged new solutions in response. the united states nations samantha power said a security resolution is, quote, urgent and overdue. critics say the launch is being used to test technology for a long-range missile. >> we just gave you a view of the overall european markets. let's home in on independent moves. shares at casino at 3% of the stoxx 600 after the french retailer said it will sell its majority stake in thailand's big
supercenter. that's being said to the tcc group for 3.1 euros, casino said it would help reduce its debt as part of an ongoing plan. volkswagen has offered a generation plan for customers. the report comes after volkswagen postponed the release of its 2015 results as it wants to count the cost emission scandal. shares are down 38% since the crisis hit. now, siemens is reportedly transferring jobs. the german conglomerate is slashing the head count or transferring shares abroad. shares are falling by some 10% over the last three months. bt is stage started to search for a new finance director. the telecom giant made the
announcement in response to reports that was apparent to accept down but no formal decision had been made on his replacement nor when the change would be taking place. and rolls royce, you've been watching the stock for some time, one of the worst performers on the ftse 100. this after the carmaker to cut its dividend for the first time in 12 years. rolls royce issued its fourth profit warning in november as it struggles to cope with low oil prices and the slowdown in the a eero supervising. the vince lombardi trophy was hand the out in california. nbc's jay gray has this report. >> i told almost everybody around here, it's unbelievable. >> reporter: first, the fans
went gaga -- then the lady did. the broncos opened the game with a long driving field goal and then scored again in the first quarter. >> the ball is out in the end zone and it's recovered. >> reporter: the panthers got on track to start the second. cutting the lead to just three. bone teams gave the ball before halftime before a long punt return, though, led to another denver field goal, giving the broncos a 13-7 lead at the half. ♪ >> reporter: a halftime that started with coldplay. ♪ >> reporter: and ended red hot with bruno mars and beyonce joining the show. ♪ >> reporter: in the second half, the teams traded field goals and late in the fourth quarter with the panthers down by six, they turned the ball over again. their fourth of the game. the broncos then pushed the ball across goal line securing the franchise's third super bowl win and a second super bowl ring.
for quarterback peyton manning. and as the celebration continued on the field, it became very clear that a driving force for these players in the super bowl win was to make sure their leader, the sheriff had one final championship left. >> it's just a blessing from god for him to go out his 18th year in the league and win the super bowl. we definitely want to send him out the right way. >> reporter: manning said he'll take a little time to enjoy this win and talk with his family before deciding his future. jay gray, nbc news, santa clara. >> did you watch any of it? >> i didn't, it was too late. i've seen a few clips. i haven't seen the halftime show, though. >> i might watched lady gaga, twitter was going nuts with the red eye shadow. beyonce getting very political in her message. black lives matter. they were dressed in black panther outfits.
malcolm x was prominent in her performance as well. >> to think, though, it's interesting, the big announcement of was coldplay was going to be headlining. >> i know. >> now, beyonce. >> it's hard to chris martin, right? >> i know. >> with the ladies, yeah, right. >> well good, it's always good to have an underdog winning the super bowl. this actually might be my favorite story of the day. take a guess at how much this 1950s ferrari is worth? you can tweet us, e-mail us. we will reveal how much the world's most expensive car fetched at auction. before break, we'll give you another one how european markets are trading. the stoxx 600 at recession lows. we're seeing red arrows across the boards. we'll be back.
good morning, welcome back to "street signs," everyone. i'm nancy hulgrave. >> good morning, everybody, i'm louisa bojesen. here are the headlines. >> the year gets off to a rocky start with stocks firmly in the red with resources fails to keep the vital markets in green. shares of randgold rallying offsetting a profit miss after the gold point logs its best week in over two years. >> still tough times in the gold industry, and i think for randgold resources, we're very focused on, you know, free cash flow and continuing to be able to deliver a long-term, viable business. >> an influential investor in euna credit thinks the bank may be better off without its ceo. that's sending shares to the largest lenders atop of the market in milan. and rounding in on rubio. the junior senator from florida
comes understand attack in the last republican debate ahead of the new hampshire primary. the rivals point to lack of expertise and memorized line. >> marco, the thing is this, when you're president of the united states, governor. state, to rem miez a 30-second speech when you talk about how great america is at the end of it doesn't solve one problem for one person. good morning and welcome back to "street signs." well, it was another rough week on wall street with all three of the major indices ending in negative. especially a difficult showing for tech fair. let's give you a picture of how markets are set to open. ted, red arrows with the dow jones lower by 123 points. the nasdaq still in negative territory called to open down 31 points. s&p 500 falling slightly in negative territory according to futures at this hour.
european equity markets were trading in slight negative territory. a tad bit higher but a slight reversal on that front with some of these markets off close to 2% now with the cac. a little bit of selling taking place. looking at other markets out there, india is expected to cement itself as one of the fastest growing economies in the world. reuters poll predicted growth 3.3% the dates and methodology used but many think they're overestimating india's growth in the face of weak exports and investment figures. >> that's right, not a pretty picture. >> no, it isn't. >> relatively speaking not so bad. >> in the booming lending emerging markets is over. what comes next might not be
pretty. this is a warning from the bank of international certainliments. the bank known as the bank of central banks with market downturn. data shows that it's under way with emerging markets logging the first decline since the first quarter of 2009. welcome. the world has started to see say reversal of these flows essentially? >> yeah, i think it's a natural process. you've seen emerging market as the you were saying growing much more than former markets but becoming part of the global economy. this is part of reality. this is why corporate debt in markets has increased so substantially in the last several years. >> we're not go together see safe haven flows with the thinking being this still say long way to go for these nonmature markets? >> correct.
i mean if you look at the -- the one saving factor in the whole equation is the fact that developed markets, the public sector that the gdp has increased substantially, way above that of emerging markets. publ sectors have less you crowding out. one of the things we've been talking about investors about both in europe and also in the u.s. is the difference between the quasisolvents like the likes of petro in south africa, and whether the risk premium being paid is enough. >> you mentioned those looking for at the corporate sphere. with the u.s. corporate defaults actually overtaking those defaults in the emerging markets. does that level with what you're seeing? >> i think if we look ahead,
especially given the oil prices at current levels. you've got it falling in the u.s., the huge debt especially in oil gas producers, definitely at some stage, you'll see that take over, especially because corporate debt is from a nominal point of view so much larger. >> simon, let's talk specifically on markets. we just touched on india's growth. here in india, we have a country where they should be benefitting from oil. is it just a matter of time that these benefits kick in? or is it just an offset in demand for exports and other growths are offsetting those demands? >> india is a very interesting story. given what you say india and indonesia and asia are two countries that should be benefitting most from this deflation story coming out of china. china used in two years the same amount of cement that the u.s. would have used in 90 years. the drop in chinese demand
definitely reduces the demands for input just in terms of infrastructure rebuilding. we are having negativities in the short term. but in the midterm, i would be quite optimistic in both countries. >> how about other markets, brazil, for example. or turkey, some markets that have been fantastically volatile? is that going to settle this year? >> yeah, i personally don't think it's going to settle anytime soon. brazil and south africa two countries that markets are to be downgraded to junk status across the board for more rating agencies. i think that's something that's driving. and what you're seeing there is no reform ready in brazil or south africa to support the story. and the reason why we're seeing this gradual downgrading until something really happenses. unfortunately, that's probably going to be a shock. >> simon, good to have you with us. simon quijano-evans chief market
strategist. del pino said he held a, quote, productive meeting with his counterpart. with a way to stabilize venezuela's oil producers to drum up support for coordinated action. as we take a look at how oil price, faring, brent and wti, brent off .3%. and wti off 1.2%. argentina has offered to pay $6.2 billion in cash to u.s. creditors in an attempt to put an end to a long-term debt dispute. it would represent a hair cust 25% of claims around $9 billion. the u.s. court-appointed mediator said two out of six creditors had accepted a proposal in what he called a, quote, historic breakthrough. and in the u.s. presidential race, mexico has been front and
center of some immigration policies especially in donald trump's campaign. but what do candidates make of the republican's plans. talking to the president calderon. >> good morning. >> good morning. well, it's no secret or surprise when you look at what donald trump has managed to do in terms of machiencouraging his base in republican primary he's leading all the polls essentially but you have to remember there is another element here. that's how he's play ago broad. i had a chance to catch up with the former president of mexico. take a list ton what he had to say. >> it's incredible that quite a society like the americans could produce such candidates. i cannot understand that. no offense, no offense to americans, huh? so donald trump is not exactly,
i think he's ambitious, but not exactly a very well informed man. i don't want to say ignorant. he's not very well informed. one of the things he ignores is the mexican migration labor force which is the traditional problem between us, to say that. which some years like even 8% of the labor force, went to zero since 2010. and it has been zero five years in a row, even in 2015. so the flow of mexican people going to work in the united states is decreasindecreasing. >> reporter: immigration, of course, being a major hot button issue for republicans, certainly, when they head to the polls tomorrow in new hampshire. of course, a bigger question going forward is going to be for donald trump. what else can he say and how
offensive can he really be? the big question we've been hearing over the last several days he's even suggesting under a presidency that he would bring back waterboarding and other things as well. i asked the former president of mexico what he had to say about that. take a listen. >> he can spend all his money. building a wall, mexican people, we are not going to pay any sing single cents for such a stupid wall. it's useless. because the loser is the united states. who are the best buyers of american products? we, the mexicans. we love american products. maybe we're crazy, no? not very rational. >> reporter: not a good preview for how a trump presidency might be playing abroad, guys.
louisa. >> hadley, thank you very much. from cairo. we have so much issues and of course the debates continue as well. >> that's right, the rhetoric is even more heated to the new hampshire primary. donald trump that we were just speaking on was on nbc's "meet the press" this weekend. that was covering a range of issues including strategy for health insurance. on the other side of counterterrorism he explained comments made at saturday's gop debate that he would, quote, go a lot further than waterboarding. >> when they fly planes into the world trade center and till thousands of people and many things you hear around the world, paris or anywhere else. you can do waterboarding it wouldn't bother me a bit. >> perhaps not to forget, marco rubio placing third in the iowa caucus. the florida senator's performance before the final debate before the new hampshire primary was widely criticized.
rubio faced an onslaught from new jersey governor chris christie for lacking the ability to be president. and he was slammed for repeating an anxious with a memorized speech. >> i will say if politics becomes about electing people who have been in congress and senate the longest, we should all rally around joe biden. >> let's dispel with this fiction that barack obama doesn't know what he's doing. he knows exactly what he's doing. >> every morning when the senator wakes up they think about what kind of speech can i give or bill can i drop. every morning i think what kind of problem can i solve for the people who actually elected them. >> i would add this dispel the conviction that barack obama doesn't know what he's doing. he knows conta s exactly what h. >> that's what washington, d.c. does the drive-by with incorrect information. and the memorized 25-second speech is exactly what comprises it.
>> the bottom line that barack obama doesn't know what he's doing is -- >> there it is the memorized 25-second speech. there it is, everybody. >> that's why this campaign is so important. >> well joining us with more to go to new hampshire, tracie potts is on the campaign trail in manchester, new hampshire. tracie, thank you for joining us. just watching that heated exchange there. headlines say rounding in on rubio. how much will his hurt him at the primary? >> well there's a lot of talk here in new hampshire, about important this last debate and this exchange with chris christie had a negative effect on rubio. keep in mind that rubio came out of iowa in the number three position, expected to do very well. he's polling second behind donald trump. in many of the more recent polls in the last few days. but there is also now a lot of talk about whether or not this has hurt him. and how much it may have hurt him here in new hampshire.
in new hampshire, his numbers still look good. and rubio's numbers have been moving upward as opposed to ted cruz who has been more stag nant stagnant. donald trump is moving but more stagnant. the rubio numbers are moving and that's why people are watching him so closely. if he becomes number two in new hampshire what might that mean moving forward. but one of the main criticisms as you heard from chris christie has been his lack of experience. christie just hammered in on him on that. we were talking to people in the manchester area, we heard this come up, the fact that they don't think rubio was very strong in that debate. obviously, it remains to be seen when the primary actually happens tomorrow whether or not voters think this was sort of a fatal mistake for rubio in the state. or whether it's something they won't necessarily remember when they head to the polls. >> tracie, good to see you.
thank you very much. of. tracie potts, joining us live there from man chechester, new hampshire. >> the media might be over marco rubio performance. all of the candidates looked awkward. when the stage turned into a mess. ben carson caused a confusion. he refused to walk out despite his name being called out. that led to a domino effect of candidates getting stuck, not knowing whether or not to overtake him or whether to wait their turn. he kind of stopped. said, oops. and then you got cruz not going. >> they're laughing at each other there. >> yeah. >> but, anyway, it happens. >> a little wave. >> this looks more like a "saturday night live" skit than the actually skit we showed earlier. >> it does. >> watch out. it's just walking in, right?
it is because we put so much into the entrance. >> it's a tape for you. >> i think his program guessing that they've been told that there's a camera shot of them, right. >> at some point, you just need to get on stage and get on with the talking. >> that's right. >> awkward moments there at the debates. good for the ratings, i suppose. >> let's get a check where the european markets are trading. they're firmly into negative territory. each of the major boards off by more than 1%. the french dax off by more than 2%. those stocks now trading down 10.25% with trading suspended that far drop. meanwhile, so much more to come here on "street signs," more than just pennies for penny lane. stay tuned to find out how much the beatles actually contribute to the economy over 50 years,
hi, everybody. welcome back to "street signs." our european equity markets were initially called higher. and we've had a strict reversal. we're now off by around 2%. with quite a bit of selling takes place across the board here in europe. the volatility definitely continues. we had a pretty atrocious week last week with many of the markets, the way they closed out. the u.s. saw significant drops. >> here in europe, and especially when we talk about the concerns from european banks. we did get a rebound friday. we'll get into that just a little bit.
nevertheless, taking a look at the finer side. the super bowl kicking off. >> yes, go lady gaga. but the denver broncos have officially beaten the carolina panthers 24-10 to win super bowl 50 in a big upset. now, the win marks a third super bowl title for the broncos. and a second win for the 39-year-old quarterback peyton manning. broncos linebacker von miller was named the game's most valuable player. this is a big deal. you did see is that there was a bit of a -- a bit of flak given to the pictures that have been taken of the super bowl. how fuzzy a lot of them had been from the apple iphone. >> not happy with that? >> no. >> it's not just the game that's getting the traction. it's the super bowl ads. already the verdict is out there was a clear winner in the battle of super bowl commercials. the woman getting an ultrasound
while her partner causally eats a pact of, yep, this is right, tortilla chips. the man offered his unborn child a dorito. he intends to personally exit his mother to get to it. it was 140,000 posts associated with the brand of twitter during the first quarter. a lot of media generation there on social networks. a lot of backlash as well. people wondering if -- >> how you offer your unborn child a dorito. to each their own, right? residents of liverpool are still receiving a little help from their friends. according it new research, the city's most famous sons, the beatles, they're still adding 82 million pounds a year to the local economy. it's been almost 50 years since the group left liverpool, but the report suggests the beatles basic economy is growing at 15% with no sign of a hard landing. >> well, is this a story some of you have been waiting for to
find out just how much this 1950s ferrari sold at auction. it was a whopping 32 million euros at this auction in paris. making it the most expensive car in history. now, there is a bit of a debate on this one. >> in euro terms. >> exactly. the spyder was designed to compete in a 1,000-mile race to italy. but a different ferrari was sold in 2014 for $38 million but that was only worth 28 million uros, i should say, and that's followed the fluctuation here. at this stage, the most expensive car ever sold, a f ferrari. >> i wonder if you drive that. in u.s. corporate news, well, the rally in tech stocks led the u.s. indices lower. the tech stocks well 3.2%. among the biggest faller was the
online retail giant amazon who saw shares dropping by 6.4%. patrick spencer is managing and vice chair of equities. michael, why is tech being sold off more than some other sectors? >> well, you mentioned amazon, amazon was up 100% last year when the market was flat. so it's a bit of profit taking, i think. when credit spreads start to blow out which you've seen over concerns about oil and banks, people actually tend to sell their winners and get to the sidelines, brokers ourselves, a lot of our client, are fed up with volatility. it doesn't mean that amazon is a business model that's broken. far from it. >> do you think they wanted to move from the sidelines or reposition from the big safer stocks? the traditional blue clips out there? >> well, it basically made them
the tech market last year and they're showing great profits. i think a bit of rotation in a slightly more value tech. as rates rise, what tends to. what, people tend to rotate to more value-based stocks. the bottom line about tech is earnings. as long as earnings are going up like facebook, the stocks over time will, in fact, respond. >> patrick, how do you view the u.s. banking sector? there was some thinking that u.s. banks were getting dragged down in part by the european banks by the oil and gas exposure? what's the real story here? >> that's a great question. over the weekend, back in '08 when we were in real problems, back in '08, 40% of gdp was represented by mortgages and subprime. you know, you're now looking at oil loans in emerging markets at least 7, 8% of gdp. in context, the credit spreads
have blown out. some of the oil companies will disappear. they're bound to. but at the end of the day, it's not about demand in oil. it's about supply. that eventually will work itself through as well. i think people once again are getting concerned about margins in banks because of what yellen and other stocks. and credit flow which is not as bad as what we just talked about. >> add to that the economic growth fear. and once we're, we're talking about recession. when you look at the earnings picture do you think that recession is in the cards here? >> i don't. i think oil is in recession, to your point. but that's more a supply issue than demand. maybe manufacturing in the u.s. is in a slight recession. but that's mainly the strength of the dollar. but the consumer. my very first job a million years ago in the city, i remember my first boss telling me, never, ever underestimate the power of the consumption of u.s. consumer. and consumer is two-thirds of
the economy. consumer sentiment is good. wage earnings. employment sector is good. the consumer is the most least leveraged than he's been in the last 30 years. he's in lead strength. and i assume that the consumer will come to the rescue of the economy. >> patrick spencer, managing director and vice chair of equities at baird. when we look at u.s. futures it shaping up to be another down day on wall street. the s&p 500 and nasdaq all a bit lower. we'll see whether or not the monkey brings that in. that's it for today's show. i'm nancy hulgrave. >> i'm louisa bojesen. have a lovely day.
global market alert. european markets getting slammed. new this morning, china's foreign currency reserves, dropping to a four-year low. what that could mean for global markets. and twitter is trending. we'll tell you why social media users are so upset today. "worldwide exchange" begins right now. ♪ good morning, welcome to "worldwide exchange" on cnbc. i'm sara eisen. >> and i'm wilfred