Skip to main content

tv   Worldwide Exchange  CNBC  April 6, 2016 5:00am-6:01am EDT

5:00 am
good morning. happening now a crude climb. oil prices bouncing back on support of an output freeze. pfizer and allergan set to end their merger over inversion rules. and ted cruz and bernie sanders win wisconsin, dealing a blow to front runners donald trump and hillary clinton. it's april 6th, 2016. "worldwide exchange" begins right now. good morning and welcome to "worldwide exchange" on cnbc. i'm sara eisen. >> and i'm wilfred frost.
5:01 am
a very good morning to you. let's have a look at u.s. equity futures. a disappointing day for markets yesterday. second negative session in a row, the dow having its first triple-digit loss since the 8th of march. we're looking at bouncing back, up 72 points today. the s&p up by nine. the nasdaq by 22 points. one of the reasons for this switch, this positivity today, as compared to yesterday, is oil prices. they're up significantly this morning, 3% for wti. just above 37 today. this comes on news that we have heard some comments most recently from kuwait's opec governor that there could be positive indications from any upcoming meetings in terms of controlling supply. >> in overseas trading, economic data overnight showed china's services sector strengthened overnight. that could be fuelling it the gains in commodities as well. the shanghai comp closed flat to
5:02 am
down. shenzhen, 0.5% gain. the japanese yen a real focal point overnight after going below 110. that's a stronger yen, weaker u.s. dollar. that's reversing again this morning, back above 110 with the dollar stronger and the yen weaker. better tone to the markets overall this morning. let's show you what it did for the japanese stock market. the nikkei falling for the seventh session in a row on the back of that stronger yen, which we saw really pronounced during yesterday's trading session in the u.s. as for the rest of asia, sort of a mixed picture overall. >> indeed as you said, the yen very pronounced trading. pretty much every safe haven trade was pretty pronounced yesterday. of course, yen being the safe haven currency of choice this year. let's have a look at europe this morning. german industrial output fell less than expected in february. early trading in europe right now, as you can see, it's positive. it's not that positive though. germany fractionally up. france up 0.6%. sharp declined yesterday.
5:03 am
we talked of a triple-digit decline for the dow. however, that was just shy of a percent. we saw over 2% losses in european trade yesterday. really, that would be the lesson for me yesterday. yes, we got big declines in the u.s., but it seems the u.s. is much more resilient than the international picture. for the first six weeks of the year, that was asia leading the international volatility. now it's europe. we've seen some level of resilience, particularly in the china market, over the last month or so. but europe still suffering significantly on those days of risk-off sentiment. >> the german dax down 11% for the year, where the s&p is flat. let's show you the broader market picture this morning. we mentioned there was strength in treasuries this week with yields lower. let's look at the picture right now. that's reversing a bit. still, the ten-year note yield below 1.80. we'll keep an eye on that. at the end of last year, we were
5:04 am
at 2.27. so already there has been such a sharp decline in yields on whatever it is. global easing from central banks around the world and just disappointing global growth. >> that chart highlights it very, very clearly we are near the lows of the year for yields, as you said, whether it's because people are uninspired by the economic picture or whether they're looking at the fed and no longer tightening. yesterday at the morning session when we were particularly risk off in terms of our sentiment, the german yield hit its lowest point of the year. it fell below 0.1%. it didn't hit negative territory. that just highlights that level of risk aversion in europe right now. >> as the ecb gets ready to buy bonds again. we'll go negative maybe. a quick look at gold here. after a bounce yesterday after a strong year for gold, pretty much the best first quarter for gold in several years. got another boost yesterday.
5:05 am
coming off a bit today. we'll obviously keep an eye on that. for me, the big event of the day is going to be the fed minutes coming out at 2:00 p.m. this is the notes from the march meeting. the meeting where janet yellen and the federal reserve changed their entire trajectory for interest rates from december, where they projected four hikes this year, to two hikes now projected for this year. she sounded extremely cautious about the international developments, weak global growth, and financial market volatility. i will be looking for discussion on how much agreement there is inside the federal reserve, that international developments are a real risk. ly also be looking for the discussion on inflation. we've seen core consumer prices tick up a bit, but she sounded pretty cautious about whether that's for real. i wonder how the rest of the february members react. >> agreed, 2:00 p.m. big focus of the day. although, i would say since any typical fed meeting, we've had more commentary that's switched focus over the last couple weeks. certainly the big domestic focus
5:06 am
of the day. >> well, the fed saved the markets again. every time we get into this slump, it feels like janet yellen at the new york economic club, janet yellen at the fed meeting c ining comes and rescu market. after a 1% slide yesterday, that was my question going into today. >> okay. let's get to today's corporate story news. of course, the big one yesterday, pfizer and allergan will mutually terminate their merger following inversion rule changes. pfizer will pay allergan a $400 million break fee. both sides agree the treasury overstepped its boundaries. sources say neither drug maker watched to risk launching litigation against the government. >> a lot of people are getting hurt on this. i was just looking at some of the hedge fund losses. so many people are in this name allergan. with the 15% slide yesterday,
5:07 am
john paulson lost 215 million estimated on paper. so many other big names are in this as well. and there's a lot of discussion on whether the treasury did this sort of surprise move -- i think jim cramer called it the nonchalant moving of the goalpost. he did a deep dive into the fact they've tried this three times in the last two years and haven't given much indication ghoek farther and do more and be more aggressive. but boom, they did it yesterday. >> they got in it. we're in an election race as well. >> today's other big story is on the race for the white house. donald trump facing a significant setback in his quest for the republican nomination as ted cruz wins big in wisconsin. >> tonight is a turning point. it is a rallying cry. it is a call from the hard-working men and women of
5:08 am
wisconsin to the people of america. we have a choice. a real choice. >> nbc news reporting cruz won 33 of the state's 42 delegates with trump taking three delegates. two districts yet to be allocated this morning. to clinch the nomination, a candidate needs 1237 delegates. it's still possible trump gets there, but the math is getting tougher. in a statement last night, the trump campaign said, quote, ted cruz is worse than a puppet. he is a trojan horse being used by the party bosses, attempting to steal the nomination from mr. trump. never a traditional statement from the trump campaign. >> exactly. but no speech from donald trump, which is interesting. usually he does a speech. he just released a statement. i think the level of his loss was so resounding. >> both parties are charging to new york. hillary clinton needs new york after sanders' defeat.
5:09 am
certainly trump to make his math work better is going to need it as well. should be fascinating. trump from new york. bernie born in brooklyn. hillary clinton as a senator from new york. this is going to be the battleground. get used to political ads on local television. >> i'm looking forward to it. >> let's also sum up what happened on the democratic side yesterday. bernie sanders the projected winner in wisconsin with 57% of the vote. >> with our victory tonight in wisconsin, we have now won seven out of eight of the last caucuses and primaries. >> the win will likely mean a fundraising boost for sanders, but it doesn't help him much getting closer to clinton in the delegate count. the momentum clearly behind him in wisconsin.
5:10 am
>> some stocks for you to watch today. the justice department is preparing to fil a lawsuit to block the proposed merger between halliburton and baker hughes. the $35 billion deal would combine two of the world's three leading oil services providers. the lighting maker cree announcing revenue will be lower than expected because of delays. that stock getting hammered, down 18%. wynn resorts expects lower revenue this year at its macau operation. >> we'll get you the rest of the stocks to watch later in the show. still to come, your trade of the day. then later a rechargeable protective case for your tablet. we'll tell you what apple has up its sleeve. first as we head to break, we want to hear from you. our twitter and facebook question this morning, are corporate inversions unpatriotic? certainly the treasury and the
5:11 am
white house had said so, blocking the pfizer-allergan tie-up. we want to hear from you. we'll share the results later on in the show. you're watching "worldwide exchange" on cnbc. what's going on here? i'm val, the orange money retirement squirrel from voya. we're putting away acorns.
5:12 am
you know, to show the importance of saving for the future. so you're sort of like a spokes person? more of a spokes metaphor. get organized at voya.com.
5:13 am
great time for a shiny floor wax, no? not if you just put the finishing touches on your latest masterpiece. timing's important. comcast business knows that. that's why you can schedule an installation at a time that works for you. even late at night, or on the weekend, if that's what you need. because you have enough to worry about. i did not see that coming. don't deal with disruptions. get better internet installed on your schedule. comcast business. built for business. welcome back to "worldwide exchange." now to today's trade of the day. we mentioned the minutes from the federal reserve's latest policy meeting could show janet yel season putting the brakes on the fed's 2016 aggressive rate
5:14 am
increase plans. if that is the case, as we heard from the statement a few weeks ago, it could spark a further decline in the u.s. dollar. so our data team crunched the numbers. they screened for the best performers. no surprise here, multinational companies like international paper and caterpillar benefit. also, those companies tied to commodities, which also benefit from rising commodities prices on the back of a weaker dollar. certainly their earnings and sales improve when products are sold into international markets. on the back of dollar weakness, it's been a big theme lately. making headlines this morning, the first political casualty of the panama papers. iceland's prime minister has resigned. leaked documents showed his wife owned an offshore company with big claims on iceland's banks a conflict of interest the prime minister had not declared. earlier this week, protesters took to the street, hurling eggs and bananas, while calling for him to step down. meantime, the u.k. prime
5:15 am
minister david cameron is denying any offshore holdings. his late father and members of the ruling conservative party were named among the list of clients of the panama law firm at the center of the controversy. but cameron says neither he nor his wife and children have benefitted from offshore funds. attention retirement savers and money managers. today the u.s. department of labor is set to propose new rules for brokers to act as fiduciaries. so they'll be forced to put clients' best interest first when it comes to fees and invest want choices. tom perez will be joining "squawk box" later this morning to explain what it means. circling back to markets now. the dow posting its first triple-digit loss in nearly a month on tuesday, while the s&p 500 is barely holding on to positive territory for the year. let's discuss this further. joining us from london is eric
5:16 am
steen, portfolio manager. good morning to you. thanks for joining us. earlier in the show, we were discussing the fact that, yes, we saw losses yesterday, but there seems to be much more pronounced volatility overseas in europe in particular at the moment. what's leading that disappointing sentiment in europe at the moment? >> well, first off, thanks for having me. great to be with you here from london now. you know, i think what's leading that sentiment, i think europe's been weak. europe's been weak for a while. we have the euro going a little strong we are some of that recent dollar weakness we have seen. yes, mario draghi and the ecb has done a lot, but the european recovery probably leaves a lot to be desired. >> it feels like everything changed in the fed statement a few weeks ago. i know we'll get the minutes from that meeting later today at 2:00 p.m. it also feels like janet yellen and the fed have bought time when it comes to hiking interest rates. a breather perhaps for emerging markets and for stocks and for
5:17 am
commodities. but how long is that going to last? it doesn't feel like that window can last forever. >> sara, thanks for the question. i don't think it will last forever, but certainly i think at the meeting and particularly in yellen's speech last week, was a notable dovish turn. we've seen a pretty big rally in risk markets since the february 11th low. to me, the fed's dovish tone is saying that yellen really wants to take things slow. ultimately, we think she's going to raise rates. i think the fed will have to raise rates due to the strength of the u.s. economy, the fact inflation is picking up. i think yellen is concerned about not only the international picture but wants markets to continue to do well. >> with that dovish fed, eric, what are the best assets to be buying? >> what we think about in credit, high yaeld and bank loans are attractive. also, selecting areas of emer emerging markets. we're in a low interest rate environment. not only in the u.s. but
5:18 am
particularly even outside the u.s. and the developed world. i think they should continue to do well. >> ericing, thanks so much for joining us this morning. much appreciated. when we come back, big wins for ted cruz and bernie sanders in wisconsin last night, but does this derail the path to the nomination for front runners donald trump and hillary clinton? we'll tackle that question from washington after the break. but first, here's today's national forecast from the weather channel's reynolds wolf. >> good morning, wilfred and sara. let's take a look at what's happening around the country. we're going to wake up this morning with rain drops moving across parts of the mid-mississippi valley into the ohio valley. some snow in the dpraix. pleasant conditions toward the west. dry air moving into the front range of the rockies. much of the eastern seaboard looks spectacular. maybe a few scattered showers in miami. in terms of temperatures, it depend on where you happen to
5:19 am
be. if you happen to be in the southern plains, looking at 80 in dallas, 60 in bismarck. 54 in chicago. 71 in atlanta. 78 degrees in miami. out to the west in seattle, 67. los angeles, beautiful times with 81 degrees. all right, folks. more coming up right here.
5:20 am
5:21 am
welcome back to "worldwide exchange." after a 1% decline in the s&p yesterday, the tape looks a lot better today. s&p futures up almost ten.
5:22 am
dow futures up 70. nasdaq futures up 23. a 3% bump up in the price of oil is certainly helping out the mood along with better services number in china. >> let's get to politics. presidential front runners donald trump and hillary clinton are looking to bounce back today after losses in wisconsin. nbc's tracie potts joins us live from washington with all the details. tracie? >> reporter: good morning, wilfred and sara. make no mistake, there were actually three winners in wisconsin. you had bernie sanders, ted cruz, and the anti-trump movement, tweeting this morning that trump has been trying to hijack the party. the trump campaign in a statement saying it's ted cruz, the winner in wisconsin, who's trying to steal that nomination. >> tonight is a turning point. it is a rallying cry. >> reporter: ted cruz won double digits over donald trump in wisconsin. our exit poll shows he dominated among wealthy voters, those looking for experience, and
5:23 am
republicans determined to win in november. >> hillary, get ready. here we come. >> reporter: trump down played wisconsin. >> i'm millions of votes more than anybody else. >> reporter: in fact, cruz and his supporters admit it could take a second vote at july's convention for cruz to win the nomination. >> this is the guy who can bring the party together. >> reporter: bernie sanders celebrated his double-digit victory from wyoming. their caucuses happen this weekend, but he's already looking ahead to new york. >> do not tell secretary clinton. she's getting a little nervous, and i don't want her to get more nervous. but i believe we've got an excellent chance to win new york. >> reporter: clinton tweeted to all the voters and volunteers who poured your hearts into this campaign, forward. sanders benefits from a huge turnout of men and young voters who signed up the day of the primary. republicans also saw a record turnout, nearly 1 million
5:24 am
voters. so today you have the democrats in pennsylvania, the republicans, cruz and trump, in new york. that primary is coming up quickly now, less than two weeks. >> tracie, everyone is trying to figure out the math, how tough trump's chances become from here to getting the necessary delegates. what if he does win new york and california, which i guess are two of the biggest prizes up ahead? >> reporter: well, then he goes in with a significant lead and likely hits that 1237, that magic number he needs to two in. but the focus now for the others, especially for the cruz campaign, for that anti-trump pac, is to try to slow him down. their game plan is get to the convention with no one having the number of delegates that they need to get the nomination and get to a second vote and hope that some of those people supporting trump in the first vote will defect and go for ted cruz or someone else after that. >> we'll see what happens to his momentum after wisconsin.
5:25 am
tracie, for now, thank you. tracie potts in washington. donald trump may have an ally on one issue with a democrat. in an interview with "the new york daily news," bernie sanders says he wishes apple would make some devices in the u.s. instead of china. trump has railed against apple for not creating more u.s. jobs. analysts have said if apple assembled the iphone in this country, the price would surge nearly 60%. i would say this is not the only issue where donald trump and bernie sanders have sort of sounded similar. they talk about trade. they talk about bad trade deals sort offed in t in the same way. and this is related. >> more generally, the anti-establishment nature of both of them. >> of course, after we learn that ford is going to be investing in a new plant in mexico. "the wall street journal" reports huawei will unveil a new device in london today with a
5:26 am
jewel lens camera, promising better contrast in low-light conditions. in other tech news, amazon is working on a higher end version of its kindle tablet with a rechargeable protective case. "the wall street journal" saying the case will provide better battery life. amazon is also developing a solar charge kindle case. ceo jeff bezos did tweet on monday the latest version of the kindle is ready and details could be unveiled next week. in sports, with just five games to go in the nba season, the golden state warriors need to win four out of five to beat the chicago bulls' record of 72 wins. the minnesota timberwolves came to town tuesday night to take steph curry on. the wolves come back from 15 down to force overtime. in the extra period, andrew wiggins hits a long two to put minnesota up by three. with the wolves up seven, curry
5:27 am
misses a three pointer for a change. minnesota goes on to win 124-117, giving the bwarriors only their second home loss this season. it's okay, steph. you still had a good season. >> poor mr. tcurry. on monday night, villanova took home the men's ncaa title. tuesday, it was the women. the huskies beat the orange by 31 to win their fourth straight national championship and cap off a perfect season. uconn coach geno auriemma passing john wood within 11 national titles. well done. congratulations. right "harry potter" is hoping to cast a spell on southern california. universal studios holwood held a grand opening tuesday night
5:28 am
for the much anticipated wizarding world of harry potter attraction. just like in orlando, it includes hogwarts castle. the attraction officially opens to the public on thursday. i am probably going to go visit that at some point. >> oh, are you? you're going to go to disney world? >> why not? when we come back, this morning's top stories -- because you need a child to do that. >> no, because "harry potter" is epic. >> a lot of british people like it more than americans, i think. this morning's top stories are coming your way. plus, your local coffee spot could soon get a lot bigger. we'll tell you about starbucks' new plans for its largest store ever coming to the neighborhood of mr. frost. >> indeed.
5:29 am
5:30 am
great time for a shiny floor wax, no? not if you just put the finishing touches on your latest masterpiece. timing's important. comcast business knows that. that's why you can schedule an installation at a time that works for you. even late at night, or on the weekend,
5:31 am
if that's what you need. because you have enough to worry about. i did not see that coming. don't deal with disruptions. get better internet installed on your schedule. comcast business. built for business. good morning. global market alert. oil prices jumping this morning, and so are u.s. futures. new this morning, pfizer and allergan get to officially end their merger over inversion rule changes. and starbucks ready to open its biggest store ever. we'll tell you where. it's wednesday, april 6th, 2016, and you're watching "worldwide exchange" on cnbc. good morning and welcome to "worldwide exchange" on cnbc. i'm sara eisen. >> and i'm wilfred frost. a good morning to you. >> the fed is in the spotlight again today. the minutes from the fed's last
5:32 am
fomc meeting in march are out at 2:00 p.m. eastern time. investors cheered janet yellen's cautious tone last week, easing rate hike concerns for the year. now they'll be looking for clues in the minutes for when the fed may raise rates again. a trio of policymakers are speaking today. we've also got earnings to tell you about. constellation brands and robert mondavi wines report before the bell. after the close, we'll hear from bed bath & beyond. >> a miraculous store i've only discovered recently. >> it's very good if you're moving. >> amazing. and they say you can take anything back at any point. >> i find it a little daunting. they do send a lot of coupons though. >> i've been there a lot recently. anyway, let's check in on global markets. u.s. futures pointing to a positive open. a rebound after yesterday's triple-digit loss for the dow.
5:33 am
we're expecting the dow to bounce back by 67 points. the s&p by 8 1/2. the nasdaq by around about 23 points. one of the biggest reasons for more positivity in terms of risk sentiment today is oil prices. as you can see, crude up nicely 3%. just below the 37 mark. this comes on news that the upcoming meeting with opec, russia, and many others could, in fact, yield something positive. the kuwaiti oil minister saying something positive could yield from that meeting. let's have a look at europe. we're seeing a bounceback, not in germany though, which is flat, but across most of the other markets. now to the overnight action in asian markets. sri joins us from singapore with an update. >> hi, wilf. the correlation in our markets and what the oil price is going
5:34 am
is still very, very strong. the picture hasn't really changed in terms of the fundamental outlook. still seeing a lot of stresses externally. the data your side and europe's side wasn't really a great deal to write home about. so that's put the markets on the defensive to a certain degree. i do want to talk about the currencies because the yen, the stronger yen -- we have seen 17-month highs for that currency. continues to be a big course for japanese corporations that have been budgeting for a much lower yen. so this is a big danger. the fact you have yen at a 17-month high, some believe it could go even higher. dollar-yen continues to get creamed. we did see it in something of a holding pattern around 110. let's not forget also the correlation between currencies
5:35 am
and equities very strong in japan. longest losing streak since the abe administration started. so bad news for the japanese corporates. all in all, we are still watching the data, still watching the currencies, still watching the trajectory for the fed. that holds big implications for what these markets do. that's where we stand. back to you. >> thank you. we'll see what the minutes show this afternoon. today's top corporate story. pfizer and allergan will now mutually terminate their $160 billion merger following those inversion rule changes from the treasury. sources telling our very own david faber that pfizer will pay allergan a $400 million breakup fee as per the tie-up agreement. both companies believe treasury overstepped the bounds of its regulatory authority with a crackdown on inversions, but sources say neither drug maker wanted to risk launching litigation against the u.s. government and therefore will
5:36 am
agree to walk. other stocks to watch today, the chief executive of the london stock exchange group hitting back at critics at the proposed merger with deutsche boerse. as you can see, not much reaction in any share price today. glenncore has agreed to sell 40% of its stake to canada's largest pension fund for $2.5 billion. and daimler saying it expects its business to improve later in the year after it introduces the new e-class model. the firm saying weak truck sales weighed on the first quarter. now for today's top trending stories. starting with the largest starbucks in the world, which is set to come to nu's very trendy meat packing district. the 20,000-square-foot roast ri and tasting room, as it will be called, will showcase how the company roasts and brews coffee. it will teach consumers about
5:37 am
the method. it's not set to open until 2018, but it will add to the 200 starbucks locations already in new york city. just in case you thought new york city was already full of starbucks and saturated. >> i don't know what it is in percentage terms, but it's high. they're big in london. >> 20,000 square feet. >> sounds quite interesting to talk to them about the education. >> and it's in our neighborhood. trendy. by the apple store. >> i don't know if you can describe me as trendy. >> you're getting there. >> maybe. right. good news for the rolling stones fans. the band is releasing their 30th studio album. it's their first in ten years. the band has yet to name a release date, but of course they've been quite in the spotlight recently with that trip to cuba as well. whatsapp is ramping up encryption. the messaging service is introducing end-to-end encryption for all devices. that means that each message is encoded with an algorithm that can only be unlocked by the
5:38 am
sender, the recipient, or the company, which of course means a lot more to people after the big apple fight with the fbi. governments cannot, sounds like, access those messages under any circumstance. >> it kind of was founded on that initially. it stems from the soviet union. dubai is using drones to crack down on littering. the drones will monitor waste dump sites, beaches, and desert camp sites for violators of the city's strict sanitation laws. so far, they're using one. they're adding two. it's not huge. they're really trying to expand it. interesting. i don't know. >> government surveillance. >> be careful chucking a piece of rubbish out in the street. >> or gum. tonight, the premiere of a cnbc series called "follow the leader." it profiles 48 hours in the life of billionaire entrepreneur in an effort to discover the secrets to his success. have a look.
5:39 am
>> look who we have. special visitor. you're in your comfy clothes. >> welcome to the world headquarters. >> i'm in his office, and i'm thinking, the place is totally serene, sparse. there's no computer. not at all what you would be thinking would be the global headquarters for a billionaire. >> there's no computer. >> no, i don't do e-mails. i'd be inundated. >> at what point did you realize, i don't want to deal with technology to that extent? >> well, i never had a need. when technology came around and e-mail came around, i saw people like that all day long. then the personal touch gets away. i do phone calls, a little bit of texting, but i like the personal touch. >> don't miss the premiere of cnbc's "follow the leader" at 10:00 p.m. eastern time. of course, known for paul mitchell and patron tequila. >> and not e-mails or computers. >> and comfy clothes, apparently. still to come, today's must
5:40 am
reads. inversion deals are front and sernlt. could killing these these strategic mergers weigh on job growth? we'll explore that question after the break here on "worldwide exchange." cathy's gotten used to the smell of lingering garbage...
5:41 am
5:42 am
...in her kitchen yup, she's gone noseblind. she thinks it smells fine, but her guests smell this. ding, flies, meow febreze air effects heavy duty has up to... ...two times the odor-eliminating power to... ...remove odors you've done noseblind to [inhales] mmm. use febreze air effects, till it's fresh and try febreze small spaces... ...to continuously eliminate up to two times the odors... ...for 30 days febreze small spaces and air effects, two more ways... [inhale + exhale mnemonic] to breathe happy. welcome back to "worldwide exchange." let's show you futures this morning. positive start early. we're off the highs of the early session here. dow futures still indicated to open higher by 67 points. s&p futures up eight after a 1%
5:43 am
slide yesterday. nasdaq futures up 22. a 3% bounce for the price of oil. the japanese yen goes back to its weakening ways. overall, a better tone fr wall street setup. >> let's get to today's must-read stories catching our attention. in "the wall street journal," my pick is entitled "jack lew's corporate tax ambush." of course, this is focused on the latest development in the anti-inversion tax rules. there's sort of three themes in this article. the first clear from the hit until the word ambush, saying that pfizer and allergan are being slightly unfairly treated. that comes across in this article. the second one is the fact this red tape is going to hurt all people making deals, particularly folks on an explanation of that earnings strippings rule. also, the third theme is of course congressional leaders would love to do a much more wide-sweeping reform, but
5:44 am
there's no political agreement. which ever side tries to lead the debate gets blocked by the other side. i think it's an interesting take in the word ambush as a clear theme. >> because of the inversion legislation, the latest one, which was one of three that we've seen out of the treasury in the last two years, a lot of people said it was specifically aimed at this merger, which was so ginormous with the three-year look back. it is trying to stop future inversions as well, but it was interesting they made it so retroactive. i also picked one relating to this issue. i went to "usa today." the former ceo of best buy wrote a piece called "inversions might actually create jobs in the united states." he says some examples here, u.s. jobs at those companies skyrocketed in the years afterwards.
5:45 am
he also looks a the canadian chain, doubled its number of u.s. stores in the years following its merger. the whole idea there, if the company can save big on taxes, then it can invest more in the u.s., which is still a critical market, and then it can hire more people. just another look there. and app critical take, i would say, as well on the treasury. but a look at just how much you can get done. these companies can get done if they are able to save. and they are penalized being overseas and not wrong bringing their money home to the u.s. >> this administration has got this rule change out there. either way, i think, straight after the next election, it's going to be absolutely top of the agenda for more wide reaching reform of the u.s. tax code. >> we've already heard this play out on the campaign trail. >> right. let's move on with some other corporate news. billionaire investor bill ackman plans to walk investors through hour pershing square will handle
5:46 am
its biggest ever quarterly loss. they've blocked off one our this morning for ackman and analyst to answer questions. he's seth to explain how the fund will tackle a 25% loss in the first three months of 2016, mostly from bets on valeant and herbalife. >> an update on sumner redstone's legal battle. he's entered legal talks with his former companion. she claimed last november that the 92-year-old who controlled nearly 80% of the voting shares of cbs and viacom was mentally incompetent when he removed her as his health care manager. the trial was set for may, but litigation has been suspended pending those settlement talks. we're approaching the top of the hour. that means the team at "squawk box" is getting ready in new york city.
5:47 am
andrew ross sorkin joins us from new york. have a feeling you're going to talk a lot about this deal and the inversions and the treasury blocking pfizer-allergan. >> we're going to talk about all that. on inversions, we have grover norquist. he'll be on at 7:00 to talk about inversions and its impact. i want to add a must read to your list today. i happen to usually agree or virtually almost always agree with jenkins. i thought his comments this morning on trump, almost writing a memorial about the entire campaign. he's sort of calling it early. given what took place in wisconsin, it's one that i would add to your list of must reads. by the way, and i don't know if you had this on your must read yesterday because i thought people didn't really -- it didn't trickle out until later in the day. the "new york daily news" article with bernie sanders i thought was a fascinating piece. did you get a chance to see that? >> we didn't, but we did talk
5:48 am
about it on this idea that he was sort of in the same position, same camp as donald trump when it comes to apple, and it would be nice if apple made more of its products in the u.s. we were wondering just how many ideas are similar between trump and sanders. >> by the way, another must-read piece, if you're talking about apple,s did you see the ft piece this morning that really laid out the relationship between the taxes? did you just talk about that? >> no, but wilfred reads the ft cover to cover. >> valuable story. we have all that. we're going to talk politics. we're going to talk inversions. as i said, grover nor wis. we also have steve case on the program. we have the labor secretary. a lot to get to this morning. >> excellent. >> andrew, great stuff. we look forward to it. "squawk box" coming up in 11 minutes' time. still to come, our next guest says there are still some green chutes appearing this spring. chris rupkey will offer more insight straight ahead.
5:49 am
you're watching cnbc, first in business worldwide. don't go anywhere. now? making a cake! ayla reminds me of like a master chef and emiana reminds me of like a monster chef. uh oh. i don't see cake, i just see mess. it's like awful. it feels like i am not actually cleaning it up what's that make mommy do? (doorbell) what's that? swiffer wetjet. so much stuff coming up. this is amazing woah. wow. now i feel more like making a mess is part of growing up. stop cleaning. start swiffering.
5:50 am
you gein your car. odors you think it smells fine, but your passengers smell this. {ding} eliminate odors you've gone nose blind too, for up to 30 days with the febreze car vent clip.
5:51 am
wow, it smells good in here. so you and your passengers can breathe happy. welcome back to "worldwide exchange." today's market story to watch, the fed minutes due at 2:00 p.m. eastern time. joining us to discuss that and much more, chris rupkey, management director and chief financial analyst. always important to focus on, but over the last couple week, we've seen so much clear change in sentiment anyway. does that make the minutes less important, or are they as important as ever to see where the divisions between the doves and hawks are? >> yellen spoke for an hour after the meeting, so how much more could we get? but the committee is split. when she speaks a lot of times, it sounds like she's representing the center of the committee, but i think he's expressing her own view. there's kind of a noisy minority who want to the go three times
5:52 am
this year. june, september, december. there's 7 of 17 votes that want to go three or faster this year, rate hikes. i would be in that camp. but, you know, they're kind of noisy, but you got a solid ten, i assume yellen as well, saying, hold on, don't go so fast. she even said the stock market had climbed back to unchanged on the year, but there was still some concerns about what that meant for, you know, the economic outlook here. i'm not sure -- i've never really understood her caution. and bernanke before her as well. they're both very, very cautious, risk-management oriented people. >> you've been very firm on your position that the u.s. economy is in better shape than all the gloomsters say. if you look at the ten-year treasury note yield, we're in the 170s. we closed last year at 2.20 something. what is that sub-1.8% treasury
5:53 am
note yield say about the economy, about the global economy? >> it means we're doomed, doesn't it? people seem to be reacting. it's like the old inflation vigilantes in the bond market are now deflation vigilantes. you know, we saw oil come down below $40 the other day, and all the sudden the bond market is taking off. how crazy is that? it used to be $20 oil made us think that the winds of the deflation were blowing here. now it just coming down a little below 40 and people say wahoo and start buying bonds. >> so what are those bond buyers missing? clearly you don't think we are doomed. >> i think the fact the fed has kept rates down for so long, it's really imparting -- it's the new trend. you know, i try and tell our customers rates are going to go up here, here's a rising trend. they're going to normalize. they say, okay, fine, you're looking for higher rates, but in the meantime, i'm going to swap from floating, and i want to pay -- i mean, i want to pay
5:54 am
floating rates. i'm going to do the interest rate swap. that's bringing down ten-year treasury yields. it's bringing down the path of future rates, euro-dollar futures. you know, they've kept rates down for so long, people are starting to alter their behavior, and they believe that rates are going to stay down here. so we really need the fed to start going sequentially, like going june, september, december to wake the bond market up. otherwise, we're going to have very low yields. >> wouldn't that be a disaster for emerging markets? the dollar would shoot up. >> i know, but the dollar move somoves so far. the dollar has gone a long way. forget dollar-yen. it's going its own thing. i would be surprised if the euro goes to 90 cents. you look skeptical. >> the challenge i would have to
5:55 am
you is next week alcoa reports. we're going into the third quarter of declining earnings. it's not just in the energy and materials sector. so we're in an earnings recession. the ten-year note is at 1.70. we're not getting all the clues that everything is okay in the economy. >> well, that's the disappointing thing. maybe they've waited so long to normalize rates that we're past -- we're near the end of the cycle, you know. the business capital spending is slower. it's apparently just farm machinery and oil and gas drilling. but there's some other things going on. it is a little late in the cycle, but i wish they would have started normalizing rates, getting it up to 3% something. they don't have to tighten. they don't have to take the punch bowl away. doesn't have to go to 4.5%. just put it back to normal please, like before lehman. the gold old days. >> just quickly, one of the reasons for the dovishness has been fears of the international situation. we had ongoing volatility in international markets.
5:56 am
is that a fair fear for yellen to have? >> i don't know. i believe we're getting the imf forecast this morning. i don't know if it's the analytical chapters. i hope it's their forecast for world growth. so we are a little nervous about that. every time the imf comes out and downgrades the world economic outlook, you know, it tends to bring yields down. people are very pessimistic here. i don't know. i think the fed should probably normalize rates here. this is a chance. >> chris, thanks so much for joining us this morning. >> always refreshing to get his positive view. a minute left. i want to show you the dow transports. yesterday broke below the 200-moving day amplg. it's been a leader in this market. it has gone down in the last few sessions. is that a bad signal for stocks or will it rebound today? >> quickly, results of our twitter question. 48% said yes.
5:57 am
52% said no. much more on that debate coming up on "squawk box." that's it for "worldwide exchange." have a nice morning. going on h? oh hey allison. i'm val, the orange money retirement squirrel from voya. val from voya? yeah, val from voya. quick question, what are voya retirement squirrels doing in my house? we're putting away acorns. you know, to show the importance of saving for the future. so you're sort of like a spokes person? no, i'm more like a metaphor. okay, a spokes-metaphor. no, i'm... you're a spokes-metaphor. yeah. ok. see how voya can help you get organized at voya.com.
5:58 am
great time for a shiny floor wax, no? not if you just put the finishing touches on your latest masterpiece. timing's important. comcast business knows that. that's why you can schedule an installation at a time that works for you. even late at night, or on the weekend, if that's what you need. because you have enough to worry about. i did not see that coming. don't deal with disruptions. get better internet installed on your schedule. comcast business. built for business.
5:59 am
good morning. crude oil climbing. oil prices bouncing back on reports of support for an output freeze. and new this morning, pfizer and allergan are set to officially end their mega merger over those inversion rule changes. and battleground wisconsin is now in the rearview mirror. ted cruz and bernie sanders winning in the badger state, dealing a blow to the front runners donald trump and hillary clinton. it is wednesday, april 6th today, 2016. "squawk box" begins right now.
6:00 am
live from new york, where business never sleeps, this is "squawk box." >> good morning, everybody. welcome to "squawk box" hear on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. we're playing this music because john popper is joining us later this hour. let's take a look at the u.s. equity futures this hour. after declines yesterday, you see green arrows for the futures. s&p futures are up by close to eight. the nasdaq up by 21. this comes after the dow's first triple-digit loss in almost a month. take a look at energy prices. they were higher yesterday. obviously that's split between energy prices and stocks. you can see wti right now up by another 2.6%. that's a gain of 93 cents to 36.82. overnight in asia, the markets were flat. in europe right now, things are looking a little bit better. at least for the bulls. if you want to take a look right now, you'll see that the dax is essentially flatut

36 Views

info Stream Only

Uploaded by TV Archive on