tv Worldwide Exchange CNBC February 9, 2016 5:00am-6:01am EST
breaking overnight, a global market rout. japan's nikkei plunges more than 5%. >> the flight to safety, what's holding up well amid this pressure. >> and the race to the white house. new hampshire holding its first in the nation primary today, and the first votes have already been counted. it's tuesday, february 9th, 2016. "worldwide exchange" starts right now. good morning and welcome to "worldwide exchange" here on cnbc. i'm sara sooeisen. >> and i'm wilfred frost. >> while you were sleeping, here's what happened in asia
overnight. big story. many markets are still closed for the lunar new year holiday, but the ones that were open got absolutely slammed. the nikkei in japan closing down 5.4%. it's been dropping for five of the last six sessions. main culprit, the dollar versus the japanese yen, dropping to its lowest level since november 2014. a strong japanese yen, a weak u.s. dollar. japan's finance minister calling the yen's moves, quote, rough, and saying he'll be watching it closely. as you'd expect, exporters in the japanese market closed down sharply. toyota, nissan, honda, and sony all among the biggest losers. and check out the japanese ten-year government bond. the jgb. we've been talking about that for a while. overnight, the yield fell below zero for the very first time. more negative territory for sovereign bond yields. it's absolutely stunning. >> and i think the yen point clearly crucial for this nikkei reaction. let's also highlight the point that yesterday the nikkei was up slightly. then we got this rout across
europe and the u.s., wiping market cap, you know, across the equity markets globally. asia wakes up. it has to play catch up. and there's only two big markets open in australia and japan. i think the rest of asia is closed for this lunar new year. clearly another thing to point out. the nikkei was up yesterday. it's playing catch up, i think. >> though part of it is this break down in trust and efficacy from central banks. how many weeks ago, less than two weeks ago, the bank of japan was out in a specific move to try to weaken the japanese yen. it went to negative interest rates. it has not gotten a weaker yen. >> i think just generally, one of the big fears of 2016 for investors has been that central banks no longer are all powerful. we've got to negative rates. this is marginal effects that central banks can have.
>> even scarier looking ahead to janet yellen testifying on the hill tomorrow, which we'll talk about. >> absolutely. right now we said the nikkei was down, almost stocks selling off down under. the main index in australia down by nearly 3%. let's have a look at european trade. that's in full swing. we're actually a little bit positive today. of course, sharp, sharp declines across europe yesterday. you might even say european financials were leading u.s. moves yesterday as well. we saw big declines for the likes of deutsche bank and credit suisse today. a little less bad. we were lightly up at the open. now down a little bit. the ftse 100 holding just above positive territory. france and germany down a little over half a percent. what does this mean for u.s. futures today? let's have a look. we are called to open down but only slightly. we've just softened a little in the last half an hour as europe has softened as well.
clearly that change in sentiment not as pronounced as this time yesterday. >> after a more than 200-point drop yesterday, recovering from a 400-point drop, these moves are crazy with the nasdaq getting hit the hardest. some people are still blaming oil. let's show you the commodities picture. oil did fall again yesterday. it's bouncing back a bit. 2% today. wti crude has managed to go back above the $30 a barrel level. we'll keep a close eye on that for you. that oil stock correlation is still very important. the brent international bench mark not gaining quite as much. gold has been one of the stories of 2016. it's been one of the only places that's actually working. strength in gold. we're going back to highs we saw last june. gold yesterday above $1200 an ounce. we're just below that right now, off half a percent. though it has made a huge move higher here over the last few weeks. >> this is really interesting. if you look at that rise in january, february, so the 2016
move in gold, but particularly yesterday, a 3% move. that's very, very big for gold in the scheme of the last 18 months. when you think about the last 18 months, gold has hardly moved e despite japan and europe. the fact we have started to see gold respond, particularly yesterday such a big move, does that mean things are about to get much worse? or does it mean risk sentiment is at its trough because gold is finally responding? i don't know which of the two it is. the fact that gold is responding is definitely a point. >> it's something we're going to talk about. it also gets to that trust factor in central banks. finally getting a move in gold. on the plus side, it's meant a weaker u.s. dollar, which is something corporate america very much would like to see right now as it continues that strong dollar to erode earnings. >> another sign of the risk-off sentiment, particularly in the face of a supposedly tightening fed, is of course the ten-year note. 1.745% we're looking at today.
we've seen yield compression pretty much throughout 2016. certainly picked up in the last couple weeks. if we look at the two-year note, similarly big moves there. we're now at 0.6%. >> not negative. >> exactly. >> that's what you need to know. >> but very low, nonetheless. let's have a look at the dollar. the dollar is not moving too much today. in fact, just that yen move the most pronounced one. the pound and the yaeuro relatively settled. >> earlier overnight, we got into 1.14 levels. among the hardest hit sectors of late is financials. take the u.s. mar morgan stanley posting its biggest one-day decline since 2012. shares are down 29% just since the start of the year. in europe this morning, deutsche bank saying it has sufficient cash to service even its riskiest debt this year.
we mentioned the cds story. shares of deutsche bank plunging about 10% yesterday. they've been absolutely hammered, the hardest hit so far this year. in the u.s., the s&p financials index is the worst performing sector of 2016. it's now down more than 20% since its july high. goldman sachs weighing the hardest on the dow yesterday. >> let's pause on deutsche bank. i think that's been one of the sparks of the turmoil of the last two weeks. european banks more broadly, but deutsche bank in particular. for me, this isn't a systemic credit question. i don't think investors i've spoken to are saying we're worried there's something in the balance sheet there. >> then what is it? >> i think we've seen an aggressive rerating of bank stocks in europe and that's been a capital issue more than a credit issue. i think people are fearful we're going to have to see more capital raises by these banks. don't forget, they've all had big raises anyway.
if you're suddenly thinking they're going to have to raise again, it would be a big hit. that's why we've seen this aggressive rerating. i don't think investors are thinking this is something systemic. we could contagion across all sectors. this is clearly a much bigger move than anyone expected. that's hard to explain, but i don't think it's something systemic. i don't think people are worried particularly about that. >> because they're looking at the credit default swaps and these brutal moves. 10% moves in a day. >> but 2016 has seen big moves. firstly sparked by china. joining us on the cnbc newsline to help make sense of the major market moves, guy adame. thanks for joining us. once again, it seems u.s.
markets have been led by international developments. would you say that europe and european banks are the things that spooked markets yesterday? >> 100%. and great job. you guys are in your sixth week. i think you have a great rapport. it's become a must-watch show at 5:00 a.m. congratulations on a great show. >> we manage to hold it together for an hour. >> well, it's genuine. to answer your question, absolutely. clearly there's something going on with deutsche bank. you're talking about a bank with probably the large rest derivative book in the history of the world. clearly there are some concerns. i think you addressed it earlier. the central banks, in my opinion, have lost control. bank of japan going to negative interest rates. you're talking about the third biggest economy on the planet. to me, that was the height of just complete -- again, i think they've just lost it. now they're pulling all the different levers. at this point, what's to stop
them from continuing on that path? so when central banks have lost control, the market confidence erodes. i think that's what you've found now. when you see currency moves on 2.5%, 3% on a daily basis -- when i did this for a living 15 years ago, these were moves that took weeks, if not months to happen. >> it really has been amazing, guy. >> it's just something that by definition can't end well. in a global race to zero as everybody tries to torch their currency, how does it end well? and what's the last resort? i think that's one of the reasons gold is doing as well as it's doing. >> so where do you put your money? where are you finding safety? i know you have been a fan for treasuries. and i should give you a lot of credit. i've given you grief about the fact you predicted the yield would go to record lows. and it's gone in your direction, pretty much all year. >> sara, i appreciate that. i think it's going to continue to go that way. if you look at ten-year yields in the u.s. yielding 1.75%, just think about it on a relative
value basis. you almost got to believe it's going to continue to grind down. that sort of flies in the face of everything you've been told over the last year. my contention is, yes, although the fed controls the front end of the yield curve, that's it. they control nothing else. our fed has lost i don't really of our markets to a certain extent as well. and they're sort of getting bailed out because our dollar is moving to the downside. but a lot of bad things are happening on our side of the equation as well. and there's really -- there's not a lot for them to do at this point. they're now at the mercy of the market. you mentioned financials. on top of what you're seeing in europe, this flattening yield curve doesn't help either. >> a lot of people own these growth stocks, facebook, amazon. the nasdaq is down 5% in the last two days. what do you do if you own those stocks? >> you needed to have a plan ahead of time, respectfully. i'm not trying to play monday
morning quarterback here. what i will say is when a name like google reports and you see the move from 780 to 820 in the after market, you come in the next day, granted with the lousy tape the stock is trading back down to the 780 level, but at a certain point when it goes from 780, below 700, you have to ask yourself, what's going on? is it time? if you basically -- you have to have a plan or you plan to fail. that's what's going on here in terms of trading. i happen to think google at these levels is interesting. i don't think it's rich on valuation. i think netflix is another great example of a stock that rallied post earnings, gave it all back within a 24-hour period. that price action suggests that something is wrong with the stock. maybe not necessarily the company, but something's wrong with the stock. so when you get into names, you have to have an exit vat ji, if nothing else. when it hits that point where you said i need to pull the rip cord, you got to pull it and
live to fight another day. >> guy, thank you for calling in this morning. thanks for the support on the show as well. see you on "fast money" later. >> looking forward to it. thanks for having me. now to today's calendar. after a late day monday, the data flow picks back up today. the national federation of independent business puts out its monthly small business optimism at 6:00 a.m. eastern time. it's followed by december wholesale trade and job openings and labor turnover survey jolts. that's become a fun one. 10:00 a.m. then the earnings kickoff. coca-cola, viacom reporting earnings before the bell this morning. disney is out after the close. make sure to check out our interview on "squawk on the street" with coke's coo james quincey after the earnings report. he was just announced number two, making him a likely successor to take over as ceo. >> absolutely right. i'll certainly be watching. other stocks to watch today,
yelp reports smaller than expected fourth quarter loss. the results hitting about three hours early on monday due to an error by pr news wire. shares slumping about 11% in regular trading. a slieg slowdown in growth of its mobile app users. yelp's cfo will step down later this year. 21st century fox reporting a drop in second quarter revenue. it's the third time in five quarters fox has had to cut its outlook down premarket. gap same-store sales fell 7% in the fourth quarter, including a 14% decline at banana republic and 8% drop at old navy, which had been a bright spot. shares rose 3% in after hours as gap expects adjusted profit for
the year to be at the high range of its forecast. more stocks to watch today, sanofi's fourth quarter profit fell sharply. the french drug maker it predicting earnings will be stable in 2016 and says sales of its new insulin drug have more than doubled already. xpo logistics says it's rejected bids for the shipping business it acquired. the ceo telling "the wall street journal" he plans to hold on to the unit. the division had been on sale since last summer. truckload shippers typically carry goods on long distance hauls for one customer per truck. shares unchanged. alaska air has reportedly set to order 60 embraer jets. still to come on "worldwide exchange," japan's nikkei
plungesing overnight. we'll see if investors in europe and the u.s. get spooked or if they can shrug it off. your trade of the day is coming up after the break. in new york state, we believe tomorrow starts today. all across the state the economy is growing, 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. and in albany, the nanotechnology capital
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get one-touch credit lock, plus your score and report at transunion.com. get in the know. watching tvs get sharper, oh remotes, you've had it tough. bigger, smugger. and you? rubbery buttons. enter the x1 voice remote. now when someone says... show me funny movies. watch discovery. record this. voila. remotes you are back. the x1 voice remote is here. x1 customers get your voice remote by visiting xfinty.com/voiceremote. welcome back to "worldwide exchange." a very good morning to you. let's get you up to speed on the overnight market action. i'm afraid more red. the nikkei down sharply, 5.4% as you can see. do bear in mind that yesterday the nikkei was up to the tune of
about 1%. we had big declines in europe and the u.s. as asia woke up this morning, the two major markets that are open, japan and australia, bearing the brunt. the chinese new year holiday, meaning lots of asia is closed. therefore a big reaction in the markets that are open. australia was also down. let's have a look at the japanese ten-year government bond, falling below zero for the first time. this is a ten year. not just a one or two or three. so all of the first ten years of the japanese bond market in negative territory. that also has seen separately the yen rally today. now, a lot of red in asia. u.s. futures, although in the red, not too bad to look at. the dow expected to open down by about ten points. nothing like the type of moves we saw yesterday. of course, the dow at one point down 400, although it closed 200 points down. sara? >> love when you do that. around negative rates. love the reaction. we've got today's trade of the day. volatility is spiking as the
market selloff accelerates. how can investors trade the rising volatility using history as a guide? our data team looked back for which etf securities tend to move if the vix continues to rally. turns out investors flock to etfs like the tlt, the treasury bond etf and gold related etfs. all, by the way, have been working very well over the last few weeks. on the flip side, emerging market countries, the materials and the energy sectors, those are the worst performers. for more, you can go to cnbc.com and check out cnbc pro. worth saying on the vix, that fear index on wall street, we are elevated and rising on those levels. we are not as high as the panic moments during last summer when china caused a major spook about its currency. >> which saw a huge one or two-day move. this year, the levels have been lower, but it's been six weeks. >> staggered. >> six weeks of elevated risk
aversion. i go back to the bond markets. not just in japan, but in the u.s. gold yesterday, that's a clear example of risk aversion. >> and jeffrey gunlock of double line says he's watching that level. he says maybe it'll get to 40, then we could see a bottom in the junk bond market, which is one he's worried about. when we come back, it's primary day in new hampshire. we'll talk expectations for both parties, plus talk about another well-known name who could be ready finally to jump into the race. first, as we head to break, here's today's weather forecast from the weather channel's jen carfagno with storms on the horizon. >> on this fat tuesday, we've got winter all across the midwest, the ohio valley, the northeast. all the sudden after a fairly mild start to winter, we are now getting snowstorm after snowstorm, and more snow today back into the area. fairly light, moving into philadelphia, new york city. snow showers nonetheless by the end of the day. in the south, cold too. temperatures in atlanta running more than 15, 20 degrees below average. you're going to feel that all
the way down into new orleans and mardi gras. there's going to be a windchill factor making it feel like 40 degrees best case scenario today. a record of 88 in los angeles today. we're likely going to hit a record today. phoenix has started the first 80-degree stretch of the season. it's there to stay for the week. plus, great weather today in denver to celebrate the parade.
welcome back. a very good morning to you. it's primary day in new hampshire. nbc's tracie potts joins us from manchester this morning with a preview of what to expect today. tracie? >> reporter: hi, wilfred. we're expecting first of all hillary clinton hoping to become the comeback kid again here like she did eight years ago. also, we're expecting to learn with which of these four, possibly five, republican candidates could come in second to donald trump if, in fact, the polls are correct and he's got a huge lead here. we've already seen some of the early results. three small towns voted just after midnight. kasich and sanders won tiny dicksville notch. cruz and trump, sanders and clinton tied the others. >> lines out the door. >> reporter: candidates continue their final arguments today. >> it's christmas eve for politicians in new hampshire.
and you all get to play santa claus. >> this is now crunch time. >> reporter: donald trump on the competition. >> they're politicians. all talk, no action. they're good at one thing, getting re-elected. >> reporter: trump has a huge lead here, but the number two spot seems up for grabs. polls show cruz, rubio, even kasich or bush have a shot at it. >> you are the ones that is going to make this happen. >> get up early tomorrow and vote. get up early tomorrow and get your friends and family to vote. >> reporter: bernie sanders fired up supporters. he's way ahead of hillary clinton in the polls. >> i will ask you respectfully to please consider giving me the chance to do this job for you. >> reporter: today's the last day, and polls show more than half the electorate is undecided or willing to switch their vote at the last minute. now, they're expecting a huge
turnout here, wilfred. the secretary of state said that they are looking at maybe half a million people in this state actually voting. that would be two-thirds of all voters. >> it is sort of interesting with such a large independent contingent there, tracie. can you run us through the timing of when we'll get the results today, when we'll know who wins new hampshire an when the candidates go off to south carolina? >> reporter: sure. exactly. so the polls close east coast time at 7:00. depending on how those results are rolling in, how close some of these races might be, it could be fairly quickly, within an hour, within two hours, that we start to see some results. what the polls have told us is true, then as these results start to come in, we'll start to see whether or not the huge leads that bernie sanders and donald trump have, in fact, hold true. if that's the case, we probably
get some results earlier rather than later. what could take a long time is to see which of these four or five republicans end up coming in second or third. >> absolutely. >> tracie, thank you very much for that. sara, both tracie and you in red today. is that a -- >> we were just feeling patriotic in honor of the new hampshire primary. meantime, it is the candidate not on the ballot in new hampshire today getting a ton of attention. we're talking about, again, former new york mayor michael bloomberg, telling the ft he is considering a run for the white house. bloomberg has criticized the quality of the current debate in the presidential race. he says he is, quote, looking at all of the options. if a run is in the cards, bloomberg suggests he would need to start putting his name on the ballots by the beginning of march. again, this was a big deal because previous reports had indicated and sort of reported according to people familiar he was looking into it. he's actually telling the ft now, with critical words about the debate process being unfair to voters. >> this is, as you say, big news
because he's clearly admitted it. still rests on hillary, i think. if hillary gets the nomination, he probably steps back. >> we'll see. >> still to come on "worldwide exchange," this morning's top stories, including that big selloff in asia overnight. check out our official "worldwide exchange" facebook page. like it for behind the scenes clips, guest commentary and news to get your day started. lots of silliness there. as well, of course, the hardline news that you've come to know us for. the flu virus. it's a really big deal. and with fever, aches, and chills, mom knows it needs a big solution: an antiviral. don't kid around with the flu, call your doctor within the first 48 hours of symptoms and ask about prescription tamiflu. attack the flu virus at its source with tamiflu, an antiviral that helps stop it from spreading in the body. tamiflu in liquid form is fda approved to treat the flu in people two weeks of age and older
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good morning. hold on to your hats. a volatile trading session already and the sun still isn't up on wall street. >> india isn't liking mark zuckerberg today. >> and will the earnings force be with disney, or are cord cutters too powerful to stop espn's slide. it's tuesday, february 9th, 2016, and you're watching "worldwide exchange" on cnbc. ♪ good morning. welcome to "worldwide exchange" on cnbc. i'm sara eisen. >> and i'm wilfred frost. while you were sleeping, here's what happened in asia. many markets remain closed for the lunar new year holiday. the ones that were open saw stocks slammed. the nikkei closing down 5.4%.
it's been dropping for five of the last six sessions. the dollar-yen dropping to its lowest level since november 2014. it had fallen further than it was already. it hit the 114 handle. it's now at is 15 -- it's now at 115.36. exporters closed sharply down. toyota, nissan, honda, and sony all big losers. worth pointing out, of course, that yesterday japan was slightly up. then we had those big falls in europe and the u.s., given that most of the big liquid markets in asia are closed. there's been an outside response by the nikkei today. check out the japan ten-year government bond, the yield falling below zero for the first time. quite extraordinary for a ten-year government bond, no matter what the central bank is doing. >> it makes you wonder whether
central banks are going after their currency or after their bond markets. they're getting what they want on bonds. just moving further into negative territory. but it's not helping economies. they're losing the battle against inflation. and they're now losing their battle against their currencies, with japan not able to keep its currency weak. >> or it begs a bigger question, are they totally desperate, running out of things to do and throwing everything at it. that is really monetizing the curve. it's not the big kind of moves we got to see this time last year when the ecb introduced qe for the first time and it was a big surprise. the only central bank that's got ammunition to make a big move is the pboc. >> i would say the fed also. the fed is in a tightening cycle. janet yellen is going on the hill tomorrow before the house financial services committee, and a lot of people are expecting her and are hoping
that she will pare down the rhetoric when it comes to raising interest rates. no hurry from the federal reserve. they do have the power to do so. some on wall street have been saying the next move is going to be easing. >> the fed could change direction. clearly there's room to cut the yield. but do you really want to see negative rates or low rates for the long term? i certainly hope the british central bank doesn't do that. >> they also have to signal they have the tools and they're willing to use them. let's show you what's happening with europe in early trade. mario draghi talking tough on easing. the german dax down 20% from its recent high. the dax is flat right now but has been taking a beating over the past few weeks. we're seeing pretty much calm in europe overnight after the big selloff we saw in japan.
potentially a reaction to what we saw in the u.s. sharply lower close yesterday. let's show you what futures are doing. we're looking at futures pointing to a higher start. they've been lower all morning. there is a sense of calm. it's not the 100-point moves we saw over the last new days, though it is early. we get economic data later in the session. dow futures now up 17. s&p futures up three. nasdaq futures up nine. the nasdaq, the tech-heavy index s the closest to bear market territory, which would be down 20%. we're about 18 federal reserve t -- 18% from the highs we saw last june. >> let's have a look at commodity prices. higher to the tune of about 2.7% for wti. gold was really the main story yesterday. bouncing about 3%. the chart highlights the move we've seen since the start of the year. of course, that safe haven
reacting to the bearishness that's been out there. in particular, that 3% move yesterday, one to note. gold over the last 18 months despite the debasement of various currencies around the world has been very slow to respond. this move yesterday and over the last month, something worth noting. in corporate news, google ceo is set to become one of the top eight executives of a publicly traded firm. this after alphabet awarded him restricted stock worth nearly $200 million. he took over as chief in august. staying with tech, a set black for facebook. the company's efforts to roll out basic free internet services to the masses took a hit in india. the country launching new rules to prevent internet service providers from having different pricing policies for accessing different parts of the web. so far this year, shares of disney are down more than 12% on cord cutting fears.
the dow component will report earnings today. while the force of "star wars" bol stered the most recent quarter, there's another area they'll be yieg. landon dowdy has the story. >> expected to report earnings of $1.45 a share on revenue of $14.8 billion. here are three things analysts will be watching. the biggie, espn subscribers. they've lost millions of subscribers as customers are cutting the cord. also a expectations for the new disney shanghai park. plans expected to move forward even with slowdown in china. number three, increasing strategy around hulu as a way to combat subscriber losses. as a bonus, "star wars" was a force here in box offices but not so much with chinese
audiences. we'll see if that plays a role. >> down 21% over the last three months. landon, thank you. now a look at today's top trending stories. viacom will start selling ads through snapchat. the multiyear deal is an effort to connect with millennials and for snapchat to beef up revenue. the company's ceo is expected to expand on the deal on the quarterly earnings call later today. t funny they announce it the day after we join snapchat. >> viacom needs to be cool again. hardest hit media stock last year. >> do you think by us joining snapchat we become cool? >> we tend to set trends. this is just the beginning of the potential for snapchat.
we're trying to learn it. i still kind of don't get it. oscar nominees will definitely not go home empty handed this year. the goodies in the $200,000 gift bag include a ten-day first-class trip to israel, a year worth of unlimited audi rentals, a 15-day walking tour of japan, and a lifetime supply of skin creams. >> this is crazy. now i'd be like, who cares if you lose? >> only actors in the best acting and best directing categories. >> probably the people who won't even use those potential gifts. >> it's ridiculous. monica lewinsky is launching a new emoji keyboard in honor of safer internet day. she says the idea is for people to feel less alone when bullying incidents happen online.
very nice idea. i'm a fan of emojis myself. >> i thought you were going to say a fan of monica. >> when you're rude to me on twitter, i'm going to fight back. >> a mean face? a bullying monica lewinsky emoji. future search and rescue missions could be led by hordes of robot cockroaches. researchers at cal berkeley found the insects' exoskeleton is unique ly automobile to fit into small spaces. aech robot would be fitted with sensors and part of a genre of soft robots, which means they can stretch, contort, and squeeze into small places. anything that can help, certainly supported. during fukushima in japan, they sent robots in. a lot of practical uses. >> hopefully they work and make a difference. up next, this morning's must reads. facebook, amazon, netflix, and google, the so-called f.a.n.g.
stoc stocks, are getting crushed, bringing down the overall markets. this morning, economists questioning those big names. do stay tuned. you're watching "worldwide exchange" on cnbc. friends coming over? yeah, so? it stinks in here. you've got to wash this whole room are you kidding? wash it? let's wash it with febreze. for all the things you can't wash, use... ...febreze fabric refresher whoa hey mrs. webber inhales hey, it smells nice in here and try pluggable febreze...
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join now and get lifelock risk-free for 60 days, using promo code "bank". protection begins immediately. call 1800 lifelock or visit lifelock.com sometimes they just drop in. always obvious. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances. you're watching "worldwide exchange." now to today's must reads. the stories that caught our attention this morning. my pick is in "the wall street journal." it's titled "bernie's wall street slander." the author, finally someone standing up for wall street.
bernie sanders says wall street is fraud, so the author's questioning, is sanders sugge suggesting some large proportion of those 900,000 people that work in financial services is in on the fraud that every manage among them is a madoff? and if they are criminals, he alleges, does he mean to put a few thousand of them behind bars? making the point here that 6 million people work in a financial related industry in this country. 900,000 in financial services. why aren't people questioning what bernie sanders is saying when he says that wall street is fraud? there's a lot of wall street bashing in this campaign. >> i could not agree more. >> and clearly this is a populous stance. this is the attitude from what's left of the financial crisis. if this is going to be the center piece of his campaign and his pep rallies, why not question exactly what he means by that. >> i couldn't agree more. i have to have say as well, banker bashing, as it's called in the u.k., even more severe in europe. you wonder when is this set to get a little bit of a break, in
the media at least. >> it resonates with the american public. this election, eight years later, became a referendum on the financial crisis. >> switching to tech for my pick, which is in the "financial times." an interesting article saying huawei, xiaomi and lenovo will snatch at apple's crown. samsung's world market share has fall frighten oen from one-thir one-fifth. apple may be a little more trekked but certainly under threat. this article goes on to talk about other u.s. tech firms as well as apple. it says until recently, these chinese tech groups largely focused on the domestic market, but increasingly, they have global ambitions. the big tech companies may soon be competing more directly with the chinese companies. google is a good example of
that. such dominant share in the english speaking world. very much behind in china. it's ahead with android operating systems. i think at the moment, the competition is at the low end for these companies. as these companies get bigger and better, i think they're going to face competition across the board. >> and more global. alibaba going public in the united states in the biggest public offering ever. what are the global ambitions of these chinese companies, which have done well in their own market. >> all right. we're close to the top of the hour. that means joe, becky, and andrew are hard at work prepping for today's edition of "squawk box." becky, thankfully, has taken a brief break from that preparation to join us now with a look ahead at what's coming up. becky, yesterday a crazy day. 400 points down for the dow at one point. >> yeah, we're going to be digging through that a lot today. we're trying to figure out what's happening. obviously you saw the technology stocks suffered more than the overall market. we're going to be digging into technology and what we're calling tech wreck today.
really trying to get our arms around what's happening. why all of these stocks that were so in favor, the f.a.n.g. stocks r now so out of favor, whether or not it's justified and if these are bargain prices. we'll also talk about the media stocks. you have viacom out with earnings today. disney is reporting after the bell. we'll dig through what's happening with cord cutting and what people are thinking about disney in particular. and we're going to talk about politics this morning. obviously the new hampshire vote coming up tonight. we'll have a lot of people joining us to talk about that, including ed rendell. by the way, guys, i should tease, you said it was joe, andrew and i here at work. joe is out today. we have a special guest joining us, and i'm not going to tell you who it is, but he's here working away. >> how fascinating. very much looking forward to that. we have "squawk box" up in 11 1/2 minutes. still to come before that, a shake-up in japan's markets today. joining us with his take, chris
wow, it smells good in here. so you and your passengers can breathe happy. welcome back. if you're just getting up, a very good morning to you. let's get you up to speed on the overnight market action. the main story, the nikkei off sharply as you can see, 5.4%. this partly because of the yen strength. today we saw dollar-yen hit the 114 handle. it's now back at the 115 handle. it's worth pointing out that yesterday we saw the nikkei up 1%. we then had big falls in europe and the u.s. most of asia is closed with the lunar new year holiday. those markets that are open, like japan and australia, have been hit hard today. u.s. futures not following suit, thankfully. we're called to open by about 30 points for the dow. the dow yesterday down 400 points at one point. >> joining us now to discuss all
this is chris rupkey. good morning. good to see you. the global distress is acute right now. is it justified by the fundamentals? >> yeah, you wonder, the market is talking about the fed skipping a meeting here in march. you have to wonder what type of signal that sends to people. does it frighten them that policymakers are concerned? you know, how much have financial conditions really tightened out there? i just looked, the dow is down 8% year to date. s&p, 9.3%. that's not enough yet, right. it felt pretty scary yesterday. >> it's not enough to keep the fed from raising interest rates in march? >> it's not enough financial market turmoil for the fed to pause, i don't think, unless it's giving a signal that, yes, the u.s. economy is going to turn down in the future. >> how long do markets have to fall, and how far do they have to fall for it to actually
affect the economy? >> well, i hope if i put that number out the market doesn't do that, but i would think down, you know, 15%, 20% and sit down there. it has to be a serious decline. >> that's where the nasdaq is falling. >> yes, the nasdaq has its own special issues. i don't know if that's the broader market. >> when we look around the world, perhaps, you know, the markets have overreacted to the changes in fundamental data in various economies. there might have been pockets of bad data. is that reaction also in part due to the belief that central banks can no longer step in so if the fundamental data does get worse, we're stuck this time. look at japan, look at europe. look where rates already are. >> we'll find out what yellen has to say on that. i'm sure central bankers think there's something else they can do. realistically, what did even draghi get from the qe and the two rate cuts in 2014. monetary policy is supposed to improve financial market
conditions. they got that. stocks went up in germany. now they're right back down to square one. i mean, central banks have been very activist. i think bank of japan's move a week ago scared people about negative rates. now they're saying, could we have negative rates here in the u.s.? >> could we? >> don't do it. i think it would scare the american public. >> i agree. >> is that what's happening in banks? what is the action, the relentless and brutal selling in u.s. banks and global banks telling you? >> yeah, i'm not sure. i'm not an expert on that sector, even though i work at a bank. i think people, in addition to concerns about whether they can pay their debt, like what happened with deutsche yesterday, people are wondering if the business models change. frankly, the business model -- look at europe where bond yields are down to very, very low levels.
maybe these banks can't produce the income they used to. that's not the case in the u.s. yet. hopefully rates will stay up here at least 2% for ten-year treasuries. >> chris, you come from bank of tokyo. got the nikkei down sharply again today. the ten-year yield falling into negative territory. >> amazing. >> how bearish a signal is that? is japan, the economy, a basket case now? >> i don't understand that. all these central banks are very different. the ecb is doing qe, but they have 10% unemployment. japan, unemployment rate is down at 3%. that's the time-honored signal of a strong economy, low unemployment. everyone has a job. so why are they doing it? >> you're saying it's a strong economy. >> everyone has a job. unemployment is very low there. >> but look at the u.s. it's been 4.9% unemployment, but it doesn't signal a strong economy. we just came off a quarter where we grew 0.7%. >> yeah, it's kind of hard to
know what your measure of a good economy. we got to focus more on the jobs market. >> so you're in the yellen camp. >> not just gdp growth. yeah, it's all about jobs. the economy right now is fine. there's some worries. you know, people are talking recession, increased odds. at the moment, we're fine. >> so bottom line, because of some of those employment pictures, you think perhaps an overreaction to markets at the moment. >> i think so. we had the three big worries. china, crude oil, world growth. it terrified people. it sent some shares going down and panic sales. but i think we're going to stabilize here. >> his notes are great on the economy because you almost cheer on the good data. >> well, it's good at the moment. >> chris rupkey, thanks for joining us.
no time for what we're watching today. but thank you for joining us. >> have a great afternoon, morning, and trading day ahead. >> walk squa-- "squawk box" is . i'm vern, the orange money retirement rabbit from voya. vern from voya? yep, vern from voya. why are you orange? that's a little weird. really? that's the weird part in this scenario? look, orange money represents the money you put away for retirement. save a little here and there, and over time, your money could multiply. see? ah, ok. so, why are you orange? funny. see how voya can help you get organized at voya.com.
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good morning. global market alert. stocks in japan and australia plummeting overnight while much of asia remains closed for the lunar new year. also, new doubts about oil's recovery from the international energy agency. and the race for the white house. new hampshire holding its first in the nation primary today. first votes have already been counted. it's tuesday, february 9th, 2016. "squawk box" begins right now. ♪ live from new york, where business never sleeps, this is
"squawk box." >> good morning, everybody. welcome to "squawk box" on cnbc. i'm becky quick along with andrew ross sorkin and scott wapner. joe is off today. breaking overnight, the nikkei closing down by 5.4%, dropping for five of the last six sessions. the dollar-yen fell to its lowest level since november of 2014. in fact, japan's finance minister calling the yen's moves rough and saying that he'll be watching it closely. also, take a look at the ten-year japanese government bond. this is unbelievable. the yield falling below zero for the first time. stocks also selling off down under. the main index in australia closing down by nearly 3%. the biggest drags here, the energy, materials, and financial sectors. take a look at how things are shaping up here in the united states.