tv Street Signs CNBC February 10, 2016 4:00am-5:01am EST
hi, everybody. good morning. welcome. you're now watching "street signs." i'm louisa bojesen. these are your headlines. european stocks trading comfortably in the green this morning after a seesaw start to the session. banks in europe, they've been outperforming, led by a sharp rally in deutsche bank on the report of a buy back plan. the shipping giant warning profits will fall significantly short of last year due to the impact of lower freight rates.
and shaking up the granite state, donald trump and bernie sanders soaring to victory in the new hampshire primary. so bernie, how was the turnout? >> because of a huge voter turnout, and i say huge, we won. >> he wants to give away our country, folks. he wants to give away -- we're not going to let it happen. hi, everybody. good morning. welcome. you're now watching "street signs." very glad to have you with us today. we have a packed show for you. fantastic show lined up and fantastic guests with us for the next hour. i want to kick off by showing you our european equity markets. we were called flat to a little lower on many european markets. we're looking at a bit of a rally setting in. we're up by just over 1.5% on
the stoxx europe 600. we had a big old seesaw session yesterday. also not ignoring the fact even if we are looking at a rally like this, the stoxx europe 600 is in bear territory itself. let's show you some of those main european equity marks as we're talking about them. the ftse up shy of 1%. xetra dax up 1.5%. the ftse mib higher by almost 4%. we've had the industrial output rising by just over 1% in italy. on top of that, also buying back into some of the banks that otherwise had been sold off on capital worries. let's move on and show you some of the other bigger movers out there. the vix, you might have noted yesterday, we saw significant
levels being hit. the vix now higher by more than 45% year to date. so pretty significant jump in the vix. the volatility index on a weekly basis. so over the past couple sessions, higher by around 25%. hitting a high of 28.31. for this week alone, just since the beginning of trade on monday, we're higher by right around 13%. we'll be talking more about this and what this indicates, how much nervousness really is out there. when it comes to the dow and the recap of our u.s. markets, a lot of volatility out there. you saw the s&p closing at its lowest level since april of 2014. massive swings here. closing flat to slightly higher. really, taking investors on this
massive ride throughout the session. if you add up all the moves, it was a 1,000-point move. back here in europe, we've been talking a lot about the health of the banks. we continue to do so. deutsche bank has been trading sharply higher after a "financial times" report saying the bank is considering buying back senior bonds, which some analysts say would be the best course of action. this comes after a sharp selloff seen in the shares amid fears that it's unable to service its riskiest debt. the german bank says it has ample cash to maintain payments on all of its bonds, including on its riskiest contingent convertible securities. the co-ceo sought to reassure investors in a letter he sent out yesterday, saying that the bank is, quote, rock solid. now, amid all the uncertainty seen in european financials, nomura has decided to downgrade its outlook on a number of the
big banks. ubs sticking to the banks, it's now set to free salaries for its investment bankers in the at least mid year amid ongoing market turbulence and a steep fall that's been seen from within its share price, this according to reuters. ubs has declined to comment. shares having shed around 30% of their value so far this year. and let's talk about unicredit. the numbers helping its board to confirm support for their ceo in the face of mounting shareholder doubts of whether he should remain at the top. italy's biggest banks notching profits, flying past expectations for a loss of 140 million euros. the lender also improving its core capital ratio. our colleagues asked the ceo what he saw as the key takeaways
from the results. >> what is important is the appreciation has been visible. we got some positive feedback. there's also better than expected in terms of profits and capital creation. we are massively surprised with the growth in just one quarter. so all in all, we're very happy with what we've done. clearly this is a big commitment to continue. >> so a relatively optimistic note there. among the main gaining stocks today. not much in worth of euro terms, nevertheless a 10% begin. and inetsa higher by 7%.
bmps being bought up as well. not sure it takes away the underlying certainty in regard to the overall health of italian banks. maybe we can shed some slight on that. good morning. a lot of green on our screens this morning. we were just looking at some of these italian banks buying back into these shares that have been sold off so much. >> it's about time, isn't it? it's been a bit grim. the month of january and into february has been a bit tough. for what is traditionally a good month for equities, it hasn't been a good month this month. >> why do to you think it's about time when looking at some of the italian banks? aren't we still worried about the underlying core liquidity levels? aren't we still worried about nonperforming loans as well? >> of course there, louisa. that's why the banking sector has been destroyed in europe over the course of this year. clearly there are worries about the bad bank plan. is it just going to paper over
the cracks? but i think you shouldn't throw the baby out with the bath water. there are some banks that are actually fairly decent and incredibly cheap right now. that's one of the themes we're playing at the moment, sifting amongst the wreckage of european equities to figure out which bits look attractive. there are a number of banks that look incredibly cheap right now. >> i'm surprised that you dare sift through, in this current environment when you're looking at janet yellen, the two-day meeting kicking off today in the u.s. and whether or not she's changed her mind on the global economic view, after the surprise hike we saw in december. isn't the global environment changing and the market volatility having an impact beyond what we would have imagined? >> i think it is changing, but i'm not sure that it has changed so quickly that janet yellen will change course at the moment. for janet yellen, in order to
say in march we're not going to raise rates again, i think would be -- well, there's a very high barrier to that change. why? it's tantamount to admitting they made a mistake in raising in december. so the likelihood is they will raise again in march. they will say, we remain vigilant, blah, blah, blah. but actually, they raise in march. and that's not what is priced into the market at the moment. the moment does not even price in one rate hike anymore. i think she will go. the question is thereafter will she do anything. i think the safest course would be to go on hold, given the economy. >> but they're also whispering to the banks to get ready with a stress test that includes negative rates scenario. >> i think that makes sense. ultimately, we have negative rates in japan, negative rates in europe. if the u.s. slows down, why not? that's a possibility. so they have to be able to make money in that environment. >> some extraordinary moves. i think we should just include
oil into our movers list. crude production could fall by 230,000 barrels per day in 2017. this following a shot in oil prices yesterday with brent falling almost 8%. we're currently higher by 2.5% to 3% on both contracts. pretty fantastic moves in oil continuing. then you've got things looking far from shipshape for moller-maersk. freight rates continue to come under pressure in 2016. the ceo says that the low oil price is the biggest short-term challenge for them. i was actually looking at the baltic dry index as well yesterday and tweeted something about it because pretty significantly, a year ago, we hit an all-time low of 554.
fast forward 12 months and we're below 300. >> what i would say, louisa, it basically reflects the trend in global trade we've seen over the last year, which has been down. that, to a large extent, is driven by the shift in china, the fact they want to concentrate growth more in domestic consumption. inevitably, there will be lower shipments on things like iron ore and coal. they can't escape that. >> so what do we do with the price of oil? do we think oil is going to hang on to these levels? are we going to see this narrow range for the time being? >> i think for the time being because there are two forces of play here. in the very short term, there is the risk in the u.s. that storage facilities fill up to full. if that happens, then the risk is that shale oil producers will dump oil on the market at any
price. and they could depress pot prices. that's the short-term risk, which people are very aware of. in the long term, of course, we've got shale oil, which is reducing production, russia, which is producing production, and global demand, which is slowly rising. >> where do you see value at the moment? what are you doing? >> value in loads of places. i look in europe, european equities. if you look at sectors such as the insurance sector, you can find very attractive companies. i'd say there are one or two banks. so if you believe that a bank will maintain that dividend payout, you're going to get 7%.
now, go to the bank and see what you get. go to the bond market and see what you get. 7% is enormous right now. of course there's a lot of risk. but a good, patient, value investor should be taking advantage of that in the short term. >> i had somebody say to me recently that there's something sick in the banking sector when you look at how they're priced compared to their value, at least in some of the major european banks. we'll talk more about that. we need to get viewers up to speed with what's been going on in the u.s. as well with regards to the big win that took place in the new hampshire primary for the so-called nontraditional candidates. donald trump and bernie sanders winning the night with solid margins. they ran off with a very big win. trump taking around 35% of the republican vote and said he was going to make america great the old-fashioned way. trump also telling spo ining su that the nation's business credentials wouldn't be underutilized on his watch.
>> we have the greatest business people right now in the world. they call me all the time. they want to be involved. we have political hacks negotiating our deals for billions and billions of dollars. not going to happen anymore. we're going to use the finest business people in the world. we are going to do something so good and so fast and so strong, and the world is going to respect us again. believe me. >> now, the story of the night for the republicans, though, was arguably the second place finish for john kasich, who made the granite state the strong focus of his campaign. on the democratic side, bernie sanders' so-called political revolution took another step with a decisive win over hillary clinton. taking to the stage afterward, he credited the beltway establishment. >> thank you, new hampshire. together, we have sent the
message that will echo from wauflt to washington, from maine to california. >> now, in around 30 minutes' time, we'll go live to the campaign trail in new hampshire. we'll get a lot more details on that. also coming up here on the show, heineken raising its pint and dividends to a healthy 2015 profit boost. we'll be hearing what the boss of dutch booze maker had to say on the results. and also, the force fails to awaken disney investors. why did "star wars" fail to make magic in the markets. stay tuned to find out. you're watching "street signs." you can find us on twitter @streetsigns.
session, following a session yesterday where we saw a lot of selling off. we now reportedly are hearing of this big buy back of senior bonds they're looking at as their share price has been so depressed. the ceo putting out this letter yesterday to all employees saying, look, we remain quote/unquote rock solid and we're okay when it comes to our capital strength out there. hello, edmund. we just saw you briefly. what do you think of deutsc deutsche bank? >> a lot of people were short the banks, probably taking their money out off the table. >> 10% move to the upside. listen, january saw the 22nd
consecutive month of capital outflows from china. that's according to figures estimatesed by the institute of international finance. chinese markets remain closed for the lunar new year holiday. japan's nikkei dropping to its lowest level in more than a year. sri, a lot of volatility on your markets. >> yeah, absolutely. you mentioned that the chinese market is closed. a lot of the risk aversion, a lot of the flight into relative safety of the japanese marks was a big thematic. when i say japanese markets, i'm talking about the currency markets, the safe harbor of the japanese yen, and into jgbs as well. it was absolutely dramatic today what you saw with the jgb, the yee yields on the ten year in negative territory for the first time. that really is the global rush into safety writ large.
we've seen yen at 15-month highs against the u.s. dollar. is that this correlation between the currency markets and equities markets, very, very strong. stronger japanese yen puts a lot of pressure on exporters. the banks, again, are suffering. heavy losses for the likes of nomura and mitsubishi financial, et cetera. negative interest rates compounds a lot of the stresses surrounding profitability margins at the japanese banks. the nikkei off by 2.3%. wild swings in the mark. big volatility. all eyes now on janet yellen and the congressional testimony tonight, what tone she strikes, what it means for the pace of normalization, and what it means for the u.s. dollar. that's where we stand. back to you. >> sri, thank you very much for that. heineken is toasting to a 16%
rise in 2015 profits and a better than expect eed dividend hike thanks to a strongly performing american market, despite warning that the volatility could continue. the dutch brewer predicted 2016 growth. speaking on sidewalk sidewalk earlie -- "squawk box," the ceo explained the tie-up. >> mind boggling, that's what i meant to say. it's very big. bear in mind that competition in our industry is often and by and large a local fight. it's fought market by market with brands fighting for consumer preference. if you look at the footprint of s.a.b., the combination of s.a.b. and abi, it changed for the total group, but for a competitive situation market by market, it doesn't change that much for us.
>> now, carlsberg has reported a loss, but it's not as bad as thought. now, arm holdings has hiked its dividend by a quarter after profits jumped. the british semiconductor maker warned that rising economic uncertainty may hit customer spending on its products. the ceo spoke to this show about the impact of the slowdown in the smartphone sales. >> smartphone growth has been slowing for the past few years. it's something we've always anticipated. the thing about smartphones themselves, they're getting more sophisticated. so the arm content is going up, and we expect that to continue. so unit growth may be lower, but opportunity to put more compute power in each of these portable computers as they now are is going up.
so we look at the market still as very, very healthy. but these other markets are fascinating to us, putting very tiny, very low-cost microcontrollers in lots of things, connecting them, solving the security problems that arise from that, the cars. there are lots of places where imbedded computing is going to make consumer devices and nonconsumer devices a lot more sophisticated, a lot more efficient. >> edmund is still with us. global head of equity derivative strategy at bnp paribas. you're very aware of how the world is changing and demographicins and what that do to future investments. >> when i look at what's happening in the global economic scenario, we are seeing shifting patterns of consumption. we are seeing rolling waves of deflation. i think one of those triggers is not just talking about china, but actually talking about the demographic shift, this shift towards the millennial
generation. i'm generation x. you're a lot younger than me. i think you're a millennial. so that's in the 18 to 35 bracket. that's very important for consumption because that's now the biggest demographic in america. and globally, that's becoming true as well. what we see there is these millennials have rising worries over jobs. for instance, more and more of them are in freelance jobs or temporary jobs, not in permanent jobs. so there's a lot more uncertainty about the future. at the same time, they're very keen to experience assets. rather than spending the money on buying a car or even buying a flat, they'd rather rent the flat, rent the car, even using uber, for instance, and spend the money on experiences. that's a big shift from previous generations. we're seeing that hitting a number of consumption related sectors. retailers are finding it harder and harder going.
as this generation moves through and gains more purchasing power, we're going to see these sectors remain under pressure. what benefits are things like budget airlines because people in the millennial generation take many more of these short trips abroad. >> is that a tech investment as well? >> that is of course a tech investment. if you think about the business mode models, they're all driven by technology, by cloud computing service providers like the amazons, googles, and microsofts of this world. a long-term theme is to look at something like the nasdaq index, which is very heavy in these names. this is going to be a big favorite of millennials going forward. >> big old moves yesterday in nasdaq. a lot of markets still remain in bear market territory at the moment. >> absolutely. again, that's where the value
investor should look, where others fear to trade. that's the case at the moment. >> edmund, thank you very much for being with us. i was mentioning the baltic dry index. i'm reminded by a smart viewer out there who tweets through, ju justin says on the notion a year ago the baltic index was at an all-time low. he says back in 2008, it was 11,793. below 300 now. anyway, thank you very much. i want to mention to you some flashes we're just getting through coming from russia talking about how iranian oil -- he see the oil output rising by 5,000 to 6,000 barrels a day in
2025. iran will be coming on tap soon with oil. but talking about how oil supply is exceeding demand only because opec is overproducing. he's kind of blaming opec's overproduction. also saying they're welcoming the privatization idea as it would increase transparency for the market. this just coming out of one of the bigger oil officials in russia. now, when it comes to the u.s. session yesterday, worth a recap there. flattish to slightly lower, but that doesn't really tell the whole story because we saw all of this intrasession volatility. the dow seeing a 255-point range alone. the s&p 500 closing as its lowest level since april 2014. and you have a whole bunch of sectors looking at their worst performances in bear market territory. markets awaiting their first public appearance from janet yellen after the much anticipated fed hike that took
hi, everybody. welcome back. you're still watching "street signs." i'm louisa bojesen. let's get you those headlines. deutsche bank shares spiking more than 10% as investors cheer reporte reports of a buyback plan. banking sector outperformance pulling europe well into the green this morning after a volatile session stateside with a 1,000-point swing in the dow. the shipping giant moller-maesk shares sharply lower. and shaking up the granite
state. bernie sanders and donald trump soaring to victory in the new hampshire primary. so bernie, how was the turnout? >> because of a huge voter turnout, and i say huge, we won. >> he wants to give away our country, folks. he wants to give away -- we're not going to let it happen. hi, everybody. welcome back to "street signs." i'm just glancing here, looking at the latest data to hit our wires. you've got the u.k. december industrial output seeing its biggest month on month fall since 2012. december manufacturing output minus 0.2% month on month. when looking at the polls, we were anticipating a slight rise month on month according to reuters. minus 1.7% year on year, which is quite a bit worse than the poll for minus 1.4%. so net net, you're looking at the biggest annual fall since
july of 2013. our european markets having none of this. none of this soft data here and there. none of worries about the banks. we are just being bought back across the board. all of our european indexes higher. some rallying to the tune of more than 3.5%. many of the italian banks coming back with a vengeance today. you're also seeing buying across the board in some of these other markets. i'm just glancing at our sectors. definitely seeing the banking sector steaming ahead, followed by insurance, up some 3.5%. let's look at the fx majors as well. some of the bigger crosses out there. 1.1259, the euro-simildollar at moment.
of course, we're now glancing towards janet yellen's two-day testimony to congress as the first public appearance she's making since the controversial rate hike seen back in december. so a lot of people will be hanging on her words. glancing at the u.s. futures, five hours a. w -- away from the u.s. hoopen. the dow jones being called higher. keep in mind the volatility is set to continue. that's what a number of people still think. and the dow chart, just to recap. you're looking at flat closes on the u.s. markets. huge swings during trade yesterday. the dow seeing a 255-point range. down by as much as 146 points, up by as much as 110 points. it puts you a 1,000-point swing
when looking at all the intraday trades made yesterday. as mentioned, janet yellen kicking off this two-day testimony to congress today. the fed chair will be giving her first public appearance since she announced this controversial rate hike in december, as said. and the key here is it will be taken live from 1600 cet today. that's here on cnbc. now, jpmorgan has said that in the event of, quote, recession-like conditions, the fed may be forced to not only reverse its recent rate rise but also join the ecb and bank of japan by setting negative rates. the ceo and cio at tatten investment management is with me. how are you? >> very well. >> how do you think janet yellen is feeling these days? >> challenged. she has a big job today to do. really, what the markets would love to hear from her is some sort of soothing words around the economy is actually better than you think, but we won't
raise rates in march anyway. that's the sort of real challenge she's got ahead of her language-wise. how do you sell that? >> how do you think she will sell it? >> i think she'll do a good job, as she always does. everybody's threatening before hand, but her communications tend to be really quite good. i think it will be a continuation of their last announcement from january, basically saying, look, the economy is not that bad. we will look in march at whether we need to raise rates or not. but you know, it's data dependent. >> it's funny because you have jpmorgan talking about how in recession-like conditions, they might be forced to look at negative rates. it's always good to prepare, i guess. so the unexpected doesn't take you by surprise. at the same time, we're looking at the hiking cycle still supposedly in place in the u.s. >> all the negative focus is on at the moment with the markets doing what they're doing.
therefore, yes, of course theoretically if the u.s. was heading towards a recession now, then that, yes -- but it's quite -- >> you don't think so? >> no. >> how about when i look at the vix? it's up 13.5% on the week. almost 50% year to date. 45% year to date. isn't that telling you people are just super nervous? >> absolutely. markets are super nervous. we've got a real market washout at the moment with all the -- everything around it. great buying, great selling opportunities. a lot of the fund managers we talked to are getting very excited at the moment. i'm just glad we kind of saw this coming, this volatility around the first rate rise and have kept our part. >> it's interesting you say the opportunities that are coming because i look at some of the corrections that we've had in various asset classes. the corrections have been worse
than what we've seen at the height of the financial crisis for some of them, right. so why is it that we're not seeing the same nervousness as what we were at the height of the financial crisis. >> we were coming from a different basis. the economy is actually doing quite well, quite steady, and it has been more resilient to these shocks in the last couple years than the markets give them credit. the markets are very nervous and on edge because they know they're lacking confidence. what they're lacking in confidence has been made up by quantitative easing. it's now on the way out because the economy is doing better and it's not needed anymore. therefore, we're having a big market jitter. it's just the way it is. >> okay. you're staying with us. so by all means, get involved in the conversation here in the studio. again, we're on twitter @louisa bojesen. you can also find us directly on e-mail. firstname.lastname@example.org. that's the e-mail address. alphabet's youtube is making
moves to compete with netflix and amazon, launching its first original content through its youtube red subscription service. it will include several full-length movies and a reality adventure series from the executive producers of "the walking dead." twitter is set to report full-year and fourth quarter earnings after the bell. many analysts there seeing this as the most important release in the company's history. let's get straight out to wilfred. why is it so important this time around? >> louisa, very important indeed, as you correctly pointed out because they've been under so much pressure recently. the shares have lost about two-thirds of the value over the last year and down about 38% just year to date. so a lot of pressure, of course. lots of changes. they reported 11% growth in active monthly users, that key
metric the share price really reacts to. so it is still growing, but the trend rate of that growth has been very steadily declining over the last two or three years. that's the main number people will be looking at. will it be able to turn the corner from 11% and start ticking up again, or will it be a bigger fall? now, other areas we want to get some guidance on, they've launched the one-off effort moments which showcases twitter's best tweets and content. that failed to take off as expected. so an update from jack dorr -- dorsey on that. now, just to sum up, look at facebook and how big it responded to its own earnings a few weeks ago. apple as well. these tech stocks responding clearly to the earnings that
hi, everybody. welcome back. you're watching "street signs" here on cnbc. a big win for the so-called nontraditional candidates in the new hampshire primary. donald trump and bernie sanders winning the night with solid margins between them and their closest rivals. nbc's tracie potts is in manchester, new hampshire. tracie, for once, the polls got
it right. >> reporter: well, the polls did get it right, and fairly accurate, too, in terms of the numbers here. let's start with the republicans because it was such a large field. it had been whittled down a bit before we got to new hampshire. but the big question was with the polls predicting donald trump's big win, and he did win here two to one, with 35% of the vote in a crowded field. he was the very clear winner here. it was a first win in this election for donald trump. a big question had been, though, who would come in number two. that was, to some degree, a bit of a surprise. there were a lot of republicans who were polling right behind donald trump altogether, four, maybe five of them. john kasich, the ohio governor, who was a bit of a long shot, came out as a very strong number two. he said last night that it had to do with his positive campaigning, that he tried to stay away from those negative ads. on the other side, it was just a landslide. bernie sanders with 60% of the
vote. double digits ahead of hillary clinton. it was forecast. it was worse than they thought. she said she's moving on. she's going to south carolina, where her numbers look a lot better. but sanders plans to be very competitive there as well. there's a huge african-american vote there. this morning he's headed to harlem, new york, to try to pick up some of those endorsements. he clearly plans to be competitive with hillary clinton for some time. so we might not know who this nominee is going to be on either side for weeks, maybe months. >> tracie, thank you very much. great roundup. tracie potts from nbc news. now, speaking to supporters after his victory, donald trump reiterated his plans to reverse the u.s. trade deficit if elected. >> we are going to make america great again, but we're going to do it the old-fashioned way. we're going to beat china, japan. we're going to beat mexico at trade. we're going to beat all of these
countries that are taking so much of our money away from us on a daily basis. it's not going to happen anymore. >> now, taking to the stage after his victory over hillary clinton, bernie sanders heralded his win as a shake-up to the beltway establishment. >> thank you, new hampshire. [ cheers and applause ] together we have sent a message that will echo from wall street to washington, from maine to california. >> well, ben white is a chief economic correspondent from politico. he's with us. good to have you along this morning. trump and sanders have been leading in the polls for weeks, but a lot of people thought they wouldn't have been able to maintain this momentum, yet they managed. >> yes, they did. they managed relatively easily. trump's win was large. he distanced himself from the
rest of the field. sanders easily beat hillary clinton obviously. the question is, how much can each of them sustain it? i think trurp has a bmp has a b of it than sanders. trump will go to nevada, south carolina, and a bunch of southern states on super tuesday, where hillary clinton polls much better. it's a more diverse electorate. i don't know that he's got a path to the nomination. trump is going to be harder for republicans to stop. >> ben, tracie potts just making the point that john kasich was the real surprise coming in number two. he's got an uphill battle ahead of him when looking at the rest of the race. they're heading to south carolina. he's been polling there near the bottom. >> yeah, it's hard to see a path forward for him. he's a bit moderate for the current state of the gop. new hampshire tends to reward
that. he also had some independents cross over and vote for him, which won't be the case for a lot of the states going forward. he doesn't have much of a shot in south carolina. super tuesday, there's some midwestern states. he's obviously the governor of ohio. michigan, pennsylvania. he could do decently there, but i do not think he's got a path to the republican nomination. the question now on the republican side is who emerges as the so-called establishment friendly centrist challenger to cruz and trump. i think jeb bush did fairly well yesterday in beating marco ra rubio. it's probably going to come down to bush and rubio as the challengers to trump and cruz. so i'd look at how they do in south carolina. then it will be a big fire going forward. >> a great read this morning for me. politico putting out this piece, five numbers that explain why
trump and sanders won. we've made some of these numbers up on a still. just talk us through what it is, who it is that's voting and what they're voting for. >> right. well, in sanders' case, he is supported by the hard left wing of the democratic party. people are angry at wall street. as you see own thn that chart, of female voters. hillary clinton has trouble with her e-mails, on a number of fronts. that's really a vulnerability going forward. it may not cause her to lose to sanders, but going into a general election when you have such questions about your honesty and straight
forwardness, she's got to deal with that or she's going to have trouble with whoever the republican nominee is. on trump's side, he's got voters who are angry at the republican party, think they've been betrayed, sort of blue collar voters. some voters in the republican party that have lower levels of education. those folks supported trump in large numbers. they're upset with trade, as he's talked about. they just feel left out. republicans who would want to beat him have to tap into that. it's not clear rubio and bush have been able to tap into that anger in the republican party so far. they're going to have to try to do that to knock off trump. >> ben, do you think that we'll see more attempts, stronger attempts by bush, christie, kasich to come forth as the standard bear for the gop? >> yeah, i think you will. christie, i think, might be done after new hampshire. you saw him say yesterday that he's going to go back to new jersey and take a breath and reassess.
he finished very low in new hampshire. that was his best shot. so i don't think he'll be doing too much. i wouldn't be surprised to see him get out of the race relatively soon. but bush and rubio will make the case that donald trump is appealing to you, he says a lot of things you might want to hear, but his policies are not the correct ones. they're not going to help the economy. the stuff he says about trade he's not going to be able to deliver on. he's not going to be able to build this giant wall with mexico, and he'll get crushed in a general election. if you want to win this thing, beat hillary clinton, you're going to have to voted for somebody who's got broader appeal nationally and can take the case to clinton and make an economic growth case that trump really can't make. so i think you'll see rubio do that and bush do that. christie, i don't think we're going to see too much of him after today. >> ben, thank you very much. ben white, chief economic correspondent from politico. still very early in the u.s. so thanks for getting up so early to be with us. now, president obama has sent
his final budget proposal to congress. it includes a controversial $10.25 per barrel oil tax, which has been slammed by the republicans. ayman javers breaks down the details. >> the grand total, $4.15 trillion. that's the amount of money president barack obama is requesting in his final budget. republicans on capitol hill not so receptive to his proposals here. take a look at some of the numbers of exactly what the president is throwing out there as his idea for how the u.s. government should spend money next year. total rereceipts, he says $3.64 million. a lot of wish list items for the president, including some that will be of interest to wall street and the financial industry around the world. obama wants to double the funding for the fcc by 2021. there's also a proposal for $111
billion over ten year financial fee on financial liabilities for the largest u.s. financial firm. that's a big tax on wall street. not likely to go anywhere necessarily. $19 billion in here for federal resources for cybersecurity. also, $11 billion in funding to hunt down terrorists. $1 billion for a moon shot to cure cancer. and $1 billion for drug abuse treatment. for cnbc business news, i'm eamon javers in washington. >> just want to bring you up to
date on some of the comments that have been made by the head of the russian state oil company. talking about the idea of oil output cuts. he talks about how oil supply is exceeding demand only because of overproduction coming from opec. on top of that, there's been a lot of speculation about privatization of large russian companies and also russian oil companies. he says that russia's -- that it would make sense to privatize when oil prices rise to $100 per barrel once again. so that coming from the head of rosneft. u.s. futures, we're 4 1/2 hours away from the open of the u.s. markets. we're going stronger there. the dow jones index being called up higher by 130 points plus.
nasdaq and s&p also being called higher. when looking at deutsche bank shares, just to bring you up to speed, we saw this huge selloff in deutsche bank yesterday on worries about the strength of the bank and nonperforming loans, underlying capital. the ceo sending out a letter to all employees saying they were rock solid, essentially. deutsche bank today being bought up be a vengeance. there are unconfirmed reports they could be looking at buying certain types of debt from within the company. a share buyback program, if you would. when it comes to the italian banks, very strong showing there today as well with many of these italian banks being bought back again as well. there are some of the other banks on screen, higher by 5% to 10%. i wanted to get to some viewer questions. you've been writing until on e-mail. a lot of you getting excited about the baltic dry index. i was tweeting about it last
night. many of you saying go to bed. i couldn't help it. >> yeah, i saw that as well. >> i was up. justin tweeted and made the point about how we're at this all-time low in the dry index of some 300 and something. he says amazing considering that back in 2008 we were at almost 12,000. we then have another viewer who writes in, david, and says, if you think the baltic dry index is at 290 due to china focused on internal consumption versus exports, then i have a bridge i'd like to sell you. you said you don't believe in the dry index. >> it's falling from 12,000 to 300. if that actually was an indication of global trade, we wouldn't have much of global trade anymore. what the baltic dry has indicated is we had a huge overcapacity in -- well, in transportation assets, just like we had in commodities. it was a misjudgment.
it was cheap credit. there's way too many chips out there. if i look at global trade figures, they're still going up. so i'm afraid the baltic dry doesn't have quite the same meaning to me at the moment as it used to have. >> john writes in, he says, does the possibility of negative interest rates in the u.s. confirm there's more deflationary pressure than inflationary pressure in the economy. realistically, how negative could rates go. >> well, rates can go negative. but i think if i look at the employment figures from the u.s. last week, the thing that upset the markets was not the lower than expected figure of jobs, it was that actually wage growth has been higher, and that tells markets there's still quite a possibility for the fed to consider a rate rise and hence why today all the focus is on yellen's testimony to congress. >> so the largest opportunity is where then at the moment? >> i think -- well, i'm not a great fan of bank shares, but
yesterday i said, wow, these are a buy. we can see this morning in the markets, it just went a bit silly. as i said early on, i'm currently overweight all the stuff that i don't actually want to be overweight in the medium term. so we have a long position in duration. we took risk off before the rate rise. that was all good cause. but i have to reverse them eventually. at the moment, the technicals are a little shaky, still not really saying this is yet a bounce back. that's what we're looking at. >> we've got to go. show is done for now. thank you so much. that's it for today's show. i'm louisa bojesen. we've got much more here on cnbc. remember, we will be bringing you janet yellen life today at 1600 cte.
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good morning. breaking overnight, japanese stocks slammed again. >> the force is not strong enough. disney earnings beat the street, but shares are selling off this morning. we'll tell you why. >> and decision 2016. donald trump and bernie sanders win the new hampshire primaries, but there's still a long road to the white house. it's wednesday, february 10th, 2016. "worldwide exchange" begins right now. good morning. welcome to "worldwide exchange" here on cnbc. i'm sara eisen. >> and i'm wilfred frost. very interesting song choice. >> they get