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tv   Street Signs  CNBC  May 2, 2016 4:00am-5:01am EDT

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hi, everybody. good morning. you're watching "street signs." in your headlines, the german pmi, and the nikkei slumps 3% in asia. depressed demand. italian banks tumble. forcing the country's rescue funds to step in. deutsch bank is in the spotlight as controversial documents warn of failings in the money laundering processes.
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and a merger abandoned. amid opposition from regulators concerned about competition. hi, everybody. good morning. happy holiday here in the u.k. and it's a bank holiday today but stuff is still going on, nevertheless. we have data hitting the wires right now. the eurozone factory growth. 51.7 versus 51.5 in the flash estimate, 51.6 on the march final reading. the march final pmi and the eurozone march output prices
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47.4 versus 47.7 on the flash estimate, the second lowest reading since 2010. so the manufacturing pmi edging up to51.7%. they're cutting their prices to the second deepest rate since 2010. factory growth weakening in april despite the fact that we've had pretty heavy discounting going on. the euro dollar 1.14. we were looking at a much lower euro dollar. we have a guest in a half hour's time so we can get more into what's going on notice currencies at that point. let's move on with the pmi data. japan's final raidirating shows industrial sector contracting
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with the earthquakes hitting manufacturing output. and in china, the official pmi fell slightly short of expectations. here in europe, our european equity markets mixed again. that's why you're looking at a gray spot on the actual map. but the xetra dax a little higher and the ftse lower. the nikkei off by a further 3.5%. air france having appointed a replacement for ceo. the replacement is familiar with the new firm after sitting on the board of directors of air france during the late 1980s. shares in the airline are off by more than 11% so far this year.
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looking at another story, a report is says the state is looking to put its positions in some of the largest firms up for sale in order to pay for an aid package. and the u.k.'s financial watchdog has now accused deutsch bank of quote, serious and systemic failings at its anti-money laundering process. the financial conduct authority has ordered a separate review into the firm's processes saying effective senior management engagement and leadership on financial crime has been lacking for a considerable period of time. and investors have turned their
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backs on vicenza. this means that italy's newly-formed bank will have to deal with the sale. we're seeing a lot of light on the italian banks, quite a bit of selling taking place after this new announcement. >> yes, louisa, and were you talking about the bank holiday in the u.k. there's no holiday for these banking stocks here in italy today, getting severely hit this morning by what you were mentioning regarding vicenza, so the good news was not enough to outlay the continued weak confidence towards these italian banks. the merger that is under way, a backstop fund that was created, laws to help facilitate bankruptcy procedures, all of this is not enough to outweigh what is the concern about this
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underwriting that will have to be made by atlantse. and what we are waiting for at this point is whether the italian stock exchange is deciding for their listing whether there is enough free float or not for this to actually go public. of course we still don't know that. but in the meantime, this is affecting all the banking stocks significantly. the big issue that the italian banks are facing is the 360 billion yoeuros in non-performi loans, and although a lot is being done, it's not enough to boost these stocks that have lost about 40% of their value since the beginning of the year. a very tough day for these
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banks. and remember that itense will be reporting their numbers in a few days. it the most troubled italian lender down by 5.5%. so it will be interesting to see whether the bank will have to take on the entire 1.5 billion euro capital. >> good to see you. live out of milan. thank you very much. here in the studio, we're joined by alan miller. happy holiday. not quite for you. since you're here. but we're very happy that you are here. let's talk a little bit about your strategy at the moment. you have three strategies, the bond reserve portfolio. you've got your absolute return
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portfolio and your long-term portfolio as well. what have you seen up to now in terms of returns so far this year, and how are you positioning yourself for the rest of the year? >> so far, it's actually been quite a good start for us on all three strategies. the bottom reserve is up 3%. we've benefitted from local currency, emerging market debt where some of the etfs are 15%, 16% up within the u.k. where the large cap is now starting to outperform the mid cap. emerging markets, we've seen quite a strong bounce in there. and when the markets slumped, it seemed a long time ago, in january, we added quite a lot to equities, particularly in the emerging markets which were out of favor. so those things are driving a return at the moment. >> european equities? >> european equities are still
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in a diversified small cap. we haven't had a large exposure to european equities. so the recent falls haven't really affected us. our structure is to keep wealth spread, reduce the cost from top to bottom and try to make opportune changes. sometimes, you know, the best thing is to actually not change it and keep what you have. >> are you considering currency fluctuations more now than you were in the past, given that we've seen these massive moves, the dollar yen, the euro dollars have been very volatile. >> interesting you say that, one of the very large etf companies said they did an analysis of our portfolios, and the result of it now was of course, would lead us, they said, to buy one of their japan hedge funds. and what's happened this year, japan in sterling is only down to 2% to 3%.
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had you bought a japan hedge fund, you'd be down 12% to 13%. so it shows there's a balance when you're investing overseas to actually not invest in a hedge because when it tends to be when the currency goes down the market goes up and vice versa. so unless you have a very strong view of the currency, i think there's been a lot of issuance of hedged classes of funds, and they've all, of course, in the normal way come about at exactly the wrong time, particularly in europe and teparticularly in japan, and there are a lot of foreign managers particularly in the u.k. who probably wish they could never spell the word "hedge." >> we've had major corrections in some markets as well, for example the u.s. we've had at least two big corrections in the last year or so. and when looking at valuations in which markets look expensive, the u.s.'s is one of the more expensive markets. do you want to be exposed to a
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market where supposedly we're seeing the most growth, the best of the bad sisters, but at the same time, it's more expensive. >> i don't know if you saw the mckinzie report saying the returns on u.s. equities last 30 years, and they expect the next it 10 to it 20 years, and part of the valuation is today. it tends to be the most important factor. so you're starting from a high valuation point. so if you start at a high valuation point, that means you're probably going to have low future returns. and in the u.s. where we do have exposure, we have a strong bias towards the value of stocks which have had a horrendous time over the last five years. and it's interesting the results last week from apple, from twitter. you can see some of the more high valuated stocks are beginning to weaken on earnings
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downgrades. >> alan, you're staying with us, that's fantastic. can we get you anything? coffee, tea? >> tea with milk. >> there was nothing open. oh, to be a bird. anyway, alan's staying with us. e-mail the show. the address is street signs europe at cnbc.com. the twitter handle, the show handle, @street signs cnbc. you can tweet me directly @luisa boilson as well, still to come, on "street signs", going out with a bang. we'll bring you the highlights of president obama's final white
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house correspondents dinner coming up. >> i just have two more words to say, obama out. [ applause ]
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hi, everybody, welcome back. i'm louisa boilson. the mayday protests were marred with violence as 300 people
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clashed with police over a labor reform bill. the bill due to be debated in parliament would give employers more flexibility over working hours and pay, but it's been met with stiff opposition. in istanbul, police fired tear gas and water canons. meanwhile, in los angeles, protesters carried an anti-trump theme. in the u.k., the sun on sunday published a poll showing the majority of brits are in favor of a brexit. they say they'll vote to leave the eu despite president obama's intervention last weekend. they are predicting a victory for the remain camp. and a rerun for the spanish election set for june 26th will not break the political stalemate, according to a mu
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poll that suggests that the ruling people's party will fail to win the majority. the survey also found an additional 4% will abstain from voting in the next election. pretty messy when looking at the spanish politics. and we have a guest on the line, daniel, good to have you with us. we have this new poll suggesting the ruling people's party won't win a majority. what will happen? how messy can it get before you have an economic impact felt? >> caller: i think it is quite complicated. i think that the poll presented this weekend show that, as you very well said, there's still no clear majority. however, we will have to think about a coalition. and the programs, the messages are still very much, in
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confrontation in that, in that part. so it's already taken a toll on the economy. this period of uncertainty has made the consumer confidence fall. also employment is a little bit, the improvement in employment is a little bit slower than expected. however, gdp continues to be strong. i think that as we get closer to the day of the elections, both of us will have more information about what type of coalition can come out of all of this and make a clearer decision. >> and what do you think, daniel, the most likely coalition could be? are we looking at the people's party and the socialists for example, given that we're also walking a very delicate balancing act if we want to keep
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miranda lahoya's reforms in placement one of the biggest problems is if a party unravels all the reforms that have been made. >> caller: absolutely. and i think a coalition between the moderate party, between the socialist party and the liberal democrats could be very possible to continue with that path of reform. however, there is a very strong lack of interest from the socialist party to reach an agreement with the conservative party as we have seen, for example, something like we've seen in ireland or in germany. so i think that we need to see change at leadership at the socialist party for example, to unblock that kind of situation. the other possible coalition would be something that would be quite, quite negative to the
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economy for the path of reforms, which would be an agreement between all of the left-wing parties, including the populists. so that at that implies r unraveling a whole new set of rules, changing the whole reform path and going the route of portugal and greece. so hopefully we'll see some development in the first possibility, a coalition throughout the next weeks. >> daniel, thank you very much for joining us this morning. daniel lacalle. oil prices have been sliding after a new rise in opec production outweighed a fall last month. and we have seen some pretty significant drops.
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however, also at the same time, hitting 2016 highs on friday, the price of oil, gaining around 20% for the month of april. the oil contracts, alan's still with us, alan miller from scm group. what do you think has been driving the rally we've seen in oil? are we look at investors with very speculative positions that are driving the 20% gains? >> i think it's more of a bounce back from the huge falls we saw earlier in the year and the overreaction. and like all markets, when everybody's given up on somebody, it tends to mark the bottom. and i think the current oil prices is probably a reasonable oil price going forward. so i think we've probably seen the sharp fall, the sharp recovery, and we'll probably move into a range bound for a number of months now. >> let me talk about the
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discussion, because at the bain says are the minors done? >> tdx is a goldminer's etf. when the gold price goes up, the manufactur manufacturer, the companies specializing in manufacturing gold, digging out gold tend to go up even more than the gold price. so if you're bullish at gold you tend to make more money by actually buying to cover the manufacturer digging out. so personally, i think the gold price, there are a lot of people who love gold and who will always love gold. i think long term it's an absolutely terrible investment. and i think you're better off buying things that pay you rather than paying for the investment. >> we're at a peak now, 1296 was the high from january 2015. inflation hedge? >> we've heard all this when
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gold was actually going down. the gold price hasn't been much different in 1250, plus or minus for a year or two now. and if you remember, kind of a few years ago when people got mad, mad gold disease, when the gold price was 1600, 1800. >> yes. >> and you had bad news every day, the gold price was actually falling. so i still think, on a long-term basis, it's not a great investment. >> how about negative bond yields, and the impact negative bond yields are going to have on numerous asset classes? >> you've seen now in lots of developed government markets around the world not the u.k., but a lot of european bonds, japanese bonds, other bonds, 50% to 60% of the bond market is now negative rates. and it seems amazing that people invest in something that you're guaranteed to get less than
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you've put in. but obviously a number of institutions have set rules and regulations. but for private investors, that's just simply not worth doing. you can still earn attractive yields outside government yields. we diversified across the world in different corporate bonds and high-yield bonds, and you can get yields of 4% plus. you don't need to have negative rates. >> it's interesting, also, why the u.s. treasury yields, for example, are at these historic lows, given that the feds hiked in december and still are to hike again. but we still are so low in bond yields. alan thank you for being with us. alan miller from scm group. enjoy the rest of your holiday. very quiet outside. president rouhani has made strong gains in iran's latest primary election.
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more female mps were elected than clerics. while the official tally has not been released, it's reported that the president's supporters fell short of an outright majority but did receive the most votes. up to 5,000 demonstrators in baghdad's green zone are beginning to leave after their leader issued an ultimatum. members of one movement filtered into the most secure part of the capital in the most forceful challenge yet to authorities. the group's leaders warned they would return if their demands for a new cabinet and series of reforms were not met. in other news, buses were set on fire and angry scenes outside saudi bin laden's offices. this after work was canceled.
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it's not just laying off a very large amount of people but also not having paid them for the better part of a year? >> that's right. this is a massive story. we're talking about a quarter of the workforce of saudi binladen. they couldn't pay these folks, and this is a big problem. the group that represents them has sent a letter to the government saying we need to get paid because we need to pay our workers. and what we have to kind of understand right now, we also know that saudi arabia's in the midst of a reshuffle. they're attempting to restructure their economy, make it an oil independent. and whether that's going to include massive construction projects is a big question, of course, but at the same time they still have to pay these folks, and for saudi binladen group, this is a major strain on their finances.
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but this is, at the end of the day, a bigger question about how this is impacting the saudi this big, i'm told they're basically too big to fail. whether that means at some point the government steps in and takes a piece of them or they encourage the banks to be helpful to them is another question. and they haven't been able to take on new contracts or new business after that disastrous accident that left over 100 people dead when one of their cranes crashed to the ground. this is a lot of trouble not just for this company but speaks to a bigger issue whether saudi arabia's in trouble itself. >> hadley, thank you very much. hadley gamill joining us with the latest out of dubai. a bust to find out why a merger fell apart. much more on "street signs." keep sending your e-mails.
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we're on twitter as well, join us with your questions. see new a second.
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hi, everybody. welcome back to "street signs ". the german pmi stops a slump. depressed demand.
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italian banks tumbling after the cash call, forcing the country's rescue fund to step in. serious and systemic. coach ba deutsch bank is in the spotlight after failings in the money laundering processes. and a merger is called off amid concern from regulators concerned about competition. hi, everybody. welcome back. are you indeed watching "street sig signs" on cnbc. we're not the only one with a holiday. asia, china with a holiday. because of golden week holidays, japan closed on friday, closed on tuesday, wednesday, and
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thursday of this week as well. we saw the yen, though, hitting fresh 18-month highs. we'll talk about that in a second, bringing the nikkei further down by an additional 3.5% in the overnight session. u.s. markets, slightly higher. dow jones up 30 points or so. and nasdaq, the european markets, glancing across the board, without the u.k., you've got the dax and the ibex up a bit. the earlier losses, the italian banks being traded quite a bit low are. just want to bring your attention back to what we were talking about with regards to deutsch bank. we have a statement from a deutsch bank spokesperson saying we're cooperating with our regulators to fundamentally remediate our anti-financial
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crime program. we understand the importance of the issue and are committed to and engaged in fixing it. this after deutsch bank has been thrown back into the spotlight with these controversial documents from the watchdog naming failures in the anti-money laundering processes. the fx markets, fresh moves. currently, we're looking at the dollar, flat against the dollar. but 106, pretty significant. the aussie dollar in focus of course as well. we've got a great decision due out a bit later. the head of currencies joins us from zurich. how much higher do you think the
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yen can rally before we potentially are going to see the japanese authorities stepping in once again, which might also be difficult given the international pressure they're getting not to step in? >> i was surprised that we didn't see any action from them. i wouldn't expect too much more. it's definitely difficult situation at the moment. bank of japan, i think, has only three options to do. either they say or tell us they're happy with the situation as it is now. they say the policy works. i think this is somehow naïve. i wouldn't think they will do so, because i mean, if they should suspect 0, that's not an
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option for me. second option is just come and tell us they give up. they surrender. they're not going to bring inflation up again. they're not going to do that either, so i think it's just a third option, a third possibilities. they do more, they have to do more. >> yeah. >> it's hard to imagine what exactly they can do, but it will be a surprise, and it will come soon. and i think that will keep people from further buying the japanese yen and from, will keep it from further appreciation. >> so what will the target be on the dollar yen? >> i mean, 105 is definitely important point. we're getting close to that. closer today, actually, but i think this will be more or less
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the limit for the moment. >> okay. let me switch gears and put the yen to one side and instead focus in on the euro dollar. some significant developments there. the euro dollar at a six-month high, give or take a bit. we come right back up again, despite the fact that there is speculation about the ecb's next move, the speculation about helicopter money, whether we're going to have to see more stimulus from europe, and at the same time we have the delicate dance from within the fed, of will they, won't they. >> yeah, definitely on the tricky land at the moment, close to 115. we have to remember, with dee'v in that range between 105 and 115 for more than a year now. and we've come to a certain end of policy divergence between the eurozone and the u.s.
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so that was definitely supportive for the euro lately. i can't see any trigger, to be honest, to push the euro above that 115 level we've stayed in for such a long time. in the u.s., now, the market doesn't even price one single rate cut. that seems to be a little bit too aggressive. and on the other side, we always have to expect something from eurozone, from the ecb, so i guess the euro, really, shouldn't go beyond the 115 rate. >> joe, thank you very much for being with us. the head of currencies and commodities at gam. one says if you want expensive, look no further than the euro. i think he tweeted a picture of the desert saying this is how the euro is going to look this
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summer. no visitors are going it arrive. >> sounds quite nice. we'll have the beach to ourselves, excellent. president obama had the last laugh at his final white house correspondents dinner over the weekend, poking fun at earn from hillary clinton to ted cruz. but he saved some of his sharpest jabs for republican front runner donald trump. >> i am hurt, though, bernie, that you've been distancing yourself a little from me. i mean, that's just not something that you do to your comrade. [ laughter ] look at the confusion over the invitations to tonight's dinner. guests were asked to check whether they wanted steak or fish, but instead, a whole bunch of you wrote in paul ryan. >> yesterday i had a beer at 11:30 in the morning. and you know mcdonald's now serves breakfast all day long. >> there's one area where
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donald's experience could be valuable, and that's closing guantanamo, because he knows a thing or two about running water front properties into the ground. >> look here. lookie here. yeah, you want one? [ applause ] >> if this material works well, i'm going to use it at goldman sachs next year. earn me some serious tubmans. obama out. >> meanwhile, trump declined to attend the white house event, shrugged off the president's jokes and declared himself the victor in the republican primary battle saying, quote, it's already over. tracy potts joins us from washington. this last dinner, hosted by president obama, i mean, what's the take away been or what's the reaction been so far to what
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we've just seen? >> well you know, twell, you know, the whole mic drop at the end was unexpected. what we expected and what we saw that president obama went after both sides, the democrats and republicans here. it's his last one. he doesn't have a lot to lose. and as we look forward to that indiana primary happening tomorrow, you can see how contentious this still is, especially for the candidates hoping to catch up. indiana is critical for ted cruz and bernie sanders. it's one of those states that's going to determine if they have a realistic chance of catching up. donald trump is going into this with a lot of momentum, a lot of confidence and with the numbers. our polling showing him up by 15%a 15%. four stops in indiana, warning people not to, as he put it,
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give in to the evil and save our country with their vote. on the other side, you've got hillary clinton who's not really in indiana today. she's campaigning in a couple other states, but she's in a tight race, our polling shows within four percentage points of bernie sanders. sanders hopes to pick up his 18th win, but even if he does, he's already acknowledged that it's going to be the super delegates and whether he can get them to switch sides that determines whether or not he gets the nomination. >> is it fair to say that indiana, the demographics there make it appealing to both trump and to cruz? you've got chicago, bordering one side, you've got a lot of manufacturing plants. >> yep. >> is there a history of who the people in indiana tend to go for? >> well, you brought up some interesting points. it's a manufacturing state. there are a lot of working class families. it's similar in demographics to
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ohio. those working class families who work in those factories, who've been hit hard by the economy, many have not caught up. we often talk about the economy improving, but for a lot of individual families, they still have not caught up. so they're looking for someone who's going to help pull them forward. and a lot of the rhetoric, even without specific detail, a lot of the rhetoric that we heard from donald trump tends to play very well with those populations. >> tracy, good to see you. tracy potts joining us via nbc news. lots of you writing in this morning. fantastic to hear from all of you. keep your e-mails coming. lester, i see your e-mail from south africa, wanting to hear more about the italian banks. i will pose the question to any guests i can. loads of you writing in. greetings on bank holiday
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weekend. gr glad that you're enjoying your bank holiday if you're in the u.k. what are you up to today? i heard it's supposed to rain. misery loves company, right? for those of us who are working. precious metals. lots of you writing in asking about precious metals. i will take these questions on to tomorrow if we don't have a chance to ask our guests today. people commenting on the glasses. love the look you're sporting. it's not on purpose. i just have to give my eyes a rest for a while and back to the old glasses. there you have it. puerto rico will default on a debt payment due to bondholdering of their development bank. the governor has signed a memorandum on the debt saturday in what's the largest debt default so far for the island. now an exciting day on a
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programming note, stay tuned to cnbc as we speak exclusively to the oracle of omaha, warren buffett at 6:00 a.m. eastern time or 12 cet. we'll be hearing from bill gates at 1400 cet, and we have bill ackman. plenty of guests. so do stay tuned on the channel. you're watching "street signs" this morn, we'll be right back.
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all right, everything, ca a captain america is set to smash box office records. some analysts are predicting civil war could wrestle jurassic park off its spot as the second biggest u.s. film opening of all time. looking at also the movie reviews. getting quite good reviews, actually. did you watch, when you are in the mood to watch a movie, do you tend to watch anything that's on? if there's nothing on at the theaters do you go in anyway? or do you go back home? i tend to watch stuff even if
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it's not my top pick. so "captain america civil war." very busy and seemingly quite popular. maris maris sa meyer could get the severance package. $55 million. this includes a cash amount of $3 million over $26,000 in continuation of her health benefits, $15,000 for outplacement and almost $52 million in stock. warren buffett has used his woodstock of capitalism to take aim at hedge funds. the sage of omaha hosted the meeting where he defended the stock picks and encouraged investors to ditch their money managers. buffett said there's been far more money made by people in wall street through salesmanship abilities rather than investment
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abilities. what do you make of mr. buffett's message there, boris? >> no disagreement there. you know, the statistic is pretty startling. top funds made $15 billion. the whole rest of the universe lost $99 billion. that's a pretty tough justification for the whole industry. >> he's got one more year to reach his initial target. >> yeah. he does. >> yeah. boris >> he's right. >> if you agree with him, you agree, right? >>. >> absolutely. >> talk to me about what you think are some of the bigger drivers at the moment. are we going to continue to see the traditional selling man go away type markets? or is it going to be a different market this year? >> i think the selling man go away could be a big threat this year.
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i think the biggest thing going on right now is the absolute limits of central banks. the boj, where literally, it looks like nothing they do at this point can be effective in terms of trying to keep the yen weak. and i wonder, and this is the critical thing right now, whether the people's bank of china and the fed could be facing the same paeril going forward, where the markets stop taking their authority seriously, and that is a very, very dangerous point for all capital markets. i think that's why selling man go away could be a great strategy this year. >> we've had big corrections over the last year, that we still remain relatively expensive or very expensive, actually, when compared to other equity markets out there, and you still see this hope for a rally continuing state side.
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when does this stop making sense when looking at valuations? >> it can always go much further beyond all sense of reason and sensibility and push us to extremes, but one of the reasons why u.s. equities continue to rally is because u.s. rates remain so low. it's the fact that the market was really anticipating this year that the fed was going to hike sometime at the beginning of this year or middle of this year, and it looks like now, fed funds futures are not anticipating until the end of the year. so with money staying easy, it's easy to price stocks at much higher multiples than they should be, and that's what's keeping the whole thing going. china still looks to me the biggest threat to all the capital markets. if that starts to unravel as we go into the summer, nothing the central banks do is really going to help it. >> you mentioned anticipations. just glancing at the diary and what's due here within the week.
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we've got the non-farm payroll due out on friday. a whole bunch of fomc speakers that are going to be taking the stage. the aussie central bank decision. what are you looking for this week and how important do you think the non-farm data is going to be given that the fed is focussed on data? >> unless we have a shocking surprise to the upside, and that seems so remote right now, because when you look at all the near-term data, the trend is toward deceleration, in jobs and growth, unless we have a shocking number of 350,000 jobs or something like that that jars the possibility that the fed could come back into the hiking mode, i think it pushes the dollar lower as the week progresses because it pushes the chances of a fed hike completely
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off the table at the end of the year. to me, the risks this week are skewed to the down side for the dollar. >> how much lower? we're down almost 115. >> the thing about currency markets is they always go to absolute extremes. everybody th 115 is the imaginary line. 105 is the absolute bottom of the yen and the euro. we could run right through those numbers into extreme territory. we could go to 103 possibly on dollar yen, 117 on euro dollar before the markets find any kind of equilibrium. i would not be counting on these things being resistance levels. they could fall to the wayside by the end of the week. >> i know you love a good bit of japan as well. and we're discussing at the moment whether or not the authorities in japan, they will step in to stem the rise of the yen. it's going to be awfully difficult for them. i was just looking at the latest reports to congress.
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from the u.s. treasury department. they're basically creating this new monitoring list. you've probably seen it already, including china, taiwan, and germany and to watch and assess foreign policy exchanges in these economies. so they're basically kind of poking at japan and saying don't intervene. >> you know, all bark no bite. i don't think, i think the japanese are completely not taking this seriously, because they know there are far, far more important geopolitical factors that would prevent the treasury doing anything serious. if the japanese want to intervene, they're going to intervene. they're going to completely disregard this treasury directive because they have far greater trade relations and relations that matter to us, and we're not going to go after japan. in many ways it was a political statement, not an economic one. u.s. policymakers have done a huge amount of manipulation to the down side to the dollar.
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this is why the japanese find themselves in such a terrible shape right now. they expected the fed to hike and they pulled back. for the treasury to come out and say we're going to watch everybody else's exchange rate policies is really hypocritical. >> what's trade for the summer. i'm watching spot gold at a peak since january 2015. you've got oil hitting 2016 highs, up something like 20% for the month of april when looking at some of the contracts. the euro dollars we were talking about having a life of its own. equity markets remaining interesting when looking at what's taking place in the states. where do you position yourself for the summer? >> i think commodity rally pretty much done, and i think, i don't think this is a high probability, but i definitely think it's a very reasonable chance that we could have a major selloff in equity markets. in other words, i think risk aversion could be the trade for the summer.
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i wouldn't be counting on it, but it would be great to buy some insurance just in case we get a huge downdraft. this seems seasonally right, and there are a lot of pit falls facing us as we go into the summer months. so risk aversion could be the theme that we're talking about come august. >> boris, it's 5:00 a.m. in new york. not even. go get yourself a cup of day. >> and it's monday! >> it's monday! the favorite day of the week. >> yeah. >> boris, thank you very much. managing director of pk management assets. how fantastic is that. a proposed merge irbetween two of the world's largest oil services companies has fallen through. we are joined nice and early from the cnbc headquarters. why has it fallen through? >> as we know, there's been lots of pressure on the anti-trust side of this merger, and as you said, halliburton and baker hughes are scrapping their $28
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billion merger. they're announcing the deal following opposition from u.s. regulators. it would have combined the second and third largest oil service companies and it raises concerns it would result in higher prices in the sector. last month, the justice department filed a lawsuit to stop the deal. halliburton will pay baker hughes a $3.5 billion breakup fee. this is just another example of a deal failing because of anti-trust hurdles. there was another deal earlier in the year between ge and electrolux. attorney general lynch said it made it a unique moment in anti-trust enforcement. so that deal fallen through. both stocks falling a bit in premarket trade. however, the wider futures index are up, up only slightly, following the worst week we've
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seen since february. the dow called high by about 30 points. we've got the nfps coming on friday. the highlights aig, time-warner, cbs, al alibaba. >> chelsea and tottenham, they play. are you going to be watching? >> yes. and the foxes, 5,000-1. tonight, if tottenham fail to beat chelsea, the crown will be theirs. >> if you don't understand what's going on in football, go online. there's lots going on online explaining how little old llie
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chester could run off with the title.
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good morning. global market alert. the yen hits a new 18-month high against the dollar overnight, and japanese stocks plunge. halliburton and baker hughes calling off their planned merger, following regulatory hurdles. and payday. yahoo discloses how much ceo marissa meyer will take home if she leaves the company. ♪ good morning, and welcome to "worldwide

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