Skip to main content

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

4:00 am
♪ good morning, everybody. good morning. >> good morning. >> good morning. welcome to "street signs." >> i'm louisa bojesen. >> and these are your headlines. >> miners keep gains in check in europe plus the dollar weighs in commodities and another lapse in brazil. shipping company beating the bottom line thanks to rising costs and lower volumes. socgen cuts costs.
4:01 am
shares in ab inbev fall to a six-week low in what it calls the largest challenging quarter in many years. and the likely nominee, donald trump taking home the hoosier state, pushing te ted cruz out of the race as he suspended his campaign. ♪ good morning, everybody. >> good morning. >> welcome back. >> thank you, good to be back. >> yeah, good to have you back. >> we've got in data hitting the wires. pmi data, march composite, 53.1 that coming via news wires. composite pmi 53.1.
4:02 am
the pmi forecast was forecast was 53. coming in slight above forecast, not by much. the eurozone april composite pmi 53. again, i'd say these numbers are pretty much in line with what was to be expected. >> services pmi topped soft 53.1, 53.2. the benefit of world prices feeding into these number here's. >> the forecast, precisely. the pmi very much weaker than anticipated. >> absolutely, yeah. >> we've seen that in here in a couple sessions from europe, as well as out of asia. with a look what's going on here. we're caught bit flattish. stoxx at 600. main european markets indicating precisely that trend here this morning. we're just treading water just a little bit. we had some significant moves,
4:03 am
once again, in our asian markets overnight which we'll get to in a second but here in europe, ftse just hanging on to a little bit of a red picture, 61.71, the miners under pressure given the data out of asia. in talking with the miners, just glancing at the movers here. we continue to see significant pressure there. ranggold resources off by 0.5%. and the rest, about 5.5% or so. >> you mentioned the $43 billion potential. should we skip to earnings? >> i think so. >> near the top of the stoxx, net profits hit $224 million. much higher than expected, thanks to cost cutting and increased volumes. $1 million in profits compared with a projected loss of $121
4:04 am
million. danish shipping giant kept its outlook unchanged. >> society gentle atop aside from caught custs this year to offset weakness in its investment banking division. a surprise rise in network of 6.5% in the first three months of a year, cutting expectations to an almost 8% decline. they were asked about reaching the profitability target for the full year. >> we didn't reach a target for the full year. the point we have, we are convinced and committed to our business model, in a normalized environment is 10%. i don't say it's due to this environment, but really, this was diversified and well advanced into this type of return. >> what will it take to get to a
4:05 am
normal environment to reach 10%? do you need see a normalization of the growth environment with growth, what is the recipe? >> yes. it's stabilizing today. the gdp gross will be stabilizing and a better outlook to '17. and specifically in the eurozone is and in europe countries. with respect to today, so in europe, it's probably better than anywhere, in term of trends, we see that in france, for example. very good news in france the demand from investment and we saw our outstanding increase also with good margin. >> now, ab inbev, they've been under pressure after reporting lower than expected first quarter earnings.
4:06 am
the company citing an unusually challenging year in brazil with volumes at 10%. this comes after the brewing giant cautioned back in february, they did see strength in the mexican market where it managed to sell 13% more beer. good morning. we knew we were to anticipate first quarter being very weak, they told us that already. but these numbers are they weaker than what we anticipated? >> yeah, very much so. i think they're really struggling and more at producing big brands and their model in traditional isn't working like it used to. that's why they're getting desperate. >> how serious is the brazilian market for them? two-thirds of all beer sales are ab inbev in brazil, on top of that, we've got a political crisis as well?
4:07 am
>> it's definitely very serious. they made a big bet on brazil. unfortunately, the economy is not as strong as predicted. again, to draw it back, that's one of the chief reasons they want it to go through. sab miller has got a fantastic market. >> just looking at the coverage here, ab's got 8% of the market there, in ukraine, 15%. but we're talking poland and romania, what we hear as far as the logic, it doesn't exist. >> yeah, it shows how they have to go through it and they're trying to get rid of any potential hurdles. and what they're trying to do is reposition themselves. not so much in europe, but reposition themselves in asia and in africa, where there was
4:08 am
real sort of growth potential for the next ten years is going to be. >> who's a potential buyer for that? >> it could be anyone. a lot of interest in the japanese brews. the japanese have seen a decline in beer. it wouldn't be at all a surprise if they look to make a further move into the european market. >> mexico, a standout, the real standout, 13% more beer sold in mexico. how did that happen? >> just a very, very good time to be in the mexican market. you know, it's a really big market. there's an increasing interest in premierization. it's always been a bit of a sleeping giant, really. >> do you think they're going to focus more on emerging markets and also again with the expected tieups right? is that going to be their way forward? >> yeah, definitely. they're going to try to
4:09 am
counterbalance their business in a world like north america. it's insurance that they manage to shore up their brands, unfortunately, they haven't been able to do that with bud light. that's still about a fifth of the revenue that they have in the u.s. >> how do you see this in terms of the outlook for the brand? >> i see bud light really -- they're doing more marketing. they're trying to make the brand more authentic to reconnect with consumers. they're trying to push their heritage because that's a big selling point for them. miller, miller lite, they're doing well, they've managed to stem the decline. >> it's like that in the u.s. in terms of value, it's growing in double digits every year in terms of the market. what you're eing with ab inbev now they're signing up --
4:10 am
>> acquiring -- >> acquiring a lot of different, and they realize it's a threat that they led go under the radar too long. >> johnny thank you so much. now, dialogue shares having been at the bottom of the stoxx 600 after having cut their outlook. they announced a 58% slump in the first quarter ebit. the apple chip maker is now facing pressure from demands. siemens after posting better than normal returns in the quarter. siemens confirmed its guidance for the year. air france klm has confirmed its guidance after confirming a loss of 550 uros. the french dutch carrier has
4:11 am
attributed it to fuel costs. on the line is jonathan wober. he's a chief financial analyst at cap. what do you make of the announcements this morning of the numbers? >> well, they were certainly better than expected in the sense that the loss is narrower than expected for the first quarter. the first quarter is always a weak quarter because it's a winter quarter for the airline industry. and on the revenue side, the unit revenue, unit per revenue capacity. if you look at aig and lufthansa group, the other two big group, they're airline revenues are
4:12 am
much weaker. it's probably because of its capacity growth was tighter. so they'll equate the supply and demand. if you limit your supply, then your pricing does a little better. in terms of the outlook, you mentioned they haven't changed their outlook. they're the only one of those three big ones in europe that actually hasn't got a target. they're uncertain about the outlook. and they're saying the benefit of lower fuel prices which all airlines are benefitting from this year will largely be eased out by lower pricing. they're cautious about pricing for the rest of the year. >> how much overcapacity do you think that they and in general in the industry is dealing with? >> that's difficult to give you a precise answer. but there's certainly been an increase in capacity growth into this summer, compared to last summer. if you look at capacity data,
4:13 am
there's probably growth about 8% across all european markets, both long haul and short haul, in the current summer. and that compares with growth of about 6% last year. so growth is accelerating, partly stimulated by lower fuel prices. more airlines find it more attractive to keep plying with lower fuel prices than previously and that flows through to weaker pricing. >> jonathan, as you pointed out, they don't have a target. and they still need to convince that their earningses are sustainable. they need to reduce debt and tackle the structural cost issues which is tough with the french state of employees and that's an ongoing struggle for them. how do they convince investors this is the way forward and they can cut costs quicker? >> very good question. we talk about the air france klm group, there are differences between air france and klm, air
4:14 am
france has been conduct capacity. air france klm management has made it clear that future growth in air france will depend on productivity. and talks with pilots in particular have yet to reach conclusion. have been stalled, led to big strikes last year. they're back on track. the new chief executive for next year may give fresh emphasis. the group as a whole has been lagging with its peers in europe for many years. so investors are, you know, still going to be very cops for time to come. >> yeah, tentative. let's see what if you management can do. jonathan, great to chat with you, from cappa. this come after the german tire maker posted a loss to 734 million euros. shell has record a 63%
4:15 am
annual decline in current costs of supply eps. they also warned of, quote, substantial redundancy and structural charges next 84. adjusted earnings fell to $1.6 billion but they just exceeded expectations. get in touch with us by e-mail, the address is on the screen. you can find us on twitter, the 38 piece @streetsigns cnbc. >> or -- donald trump rolls to victory in indiana. the concession for his biggest rival all be seals. >> i would continue on as long as there is a viable path to victory.
4:16 am
tonight, i'm sorry to say, it appears that path has been foreclosed.
4:17 am
4:18 am
welcome back to "street signs." weaker markets in europe this morning taking a cue from what we saw in the asian session overnight with japanese investors out for the holidays as well. let's get a check on the marks from sri jegarajah in singapore. sharie, good morning. yeah, the recall continues to widen, now involves 100 million vehicles potentially. i can't tell what you the stoxx is doing because of the japanese
4:19 am
markets out because of the golden week holiday over there. nonetheless, this is now another question mark against takata's longer term viability as a broader concern. anyway, it's one that's negative, not great to their conviction. we're not really seeing the volumes. and it's probably because we're biding our time ahead of payrolls at the end of the week. what does that do to yields, what does is that do to u.s. dollars? the implication is for u.s. dollars as well. we're watching that closely. we want talk about the aussie market, no surprises there, gimp what commodities have been doing, given pressure on indexes like billington now struggling after the disaster in brazil. that's a big drag on the broader index but there are elements of profit taking as well after we closed at six-month highs yesterday on the back of that 25 basis point cut by the rba. it is somewhat in a holding
4:20 am
pattern broadly in terms of market sentiment. i would add that sentiment remains quite fragile and the rally we have seen in emerging markets isn't backed up by the understructure structurally, given the bad situation in china. >> sri, good to see you. thank you very much. here in europe, shares of sanbury, shares off by 4%. the supermarket posts its second big profit declines. despite this the uk supermarket showed some resilience with underlying pretext profits of 570 million pounds coming in ahead of forecasts. and the next shares will deteriorate any further. the stock has fallen more than
4:21 am
25% in the last two months. the managing director of global retailer william blair joins us now. it's like walking up the down escalator, and the shifting spending habits. they've got a tough time, haven't they here? >> sure. next -- good morning, thank you for having me on the show again. next has been a visionary leader on the uk sector over the last decade. when we see results like this, and we hear comments we all have to ask, what's next for next. he mentions walking up a down escalator. i referred to in a press release where they cited weather as a primary concern. it's a hot button for me because it's a harbinger of issues that may underlie their business model. for example, there's two reasons
4:22 am
for this. weather used to be associated with sales. and sales as so much of the consumption has shifted online. too, fundamentally, they cited in particular, colder q1 could mean more cold weather sales. what does that mean? as he said with the down escalator, omni channel is the only thing that has happened in the consumer sector. next has been a fire starter. next got 45% penetration online. that's approaching as what we would see in the industry as shangri-la. 50/50, that should be the perfect mix. most industry leaders can't get there yet so why is it failing them? well, omni channel creates lower barriers to entry. and that means that next is
4:23 am
suffering from many more international competitors. the free movement of international goods and international consumers they can shop anywhere they have choices to search from indaglo. japan, h & m. >> you mentioned the strategy, they need to do what bizarros are doing now. where is it they're going wrong? >> well, they have capacity coming out of the market. but capacity coming out of the market doesn't mean there's anything wrong with the market and it might not mean there's anything wrong with next. it mean we're at a skinny edge. >> do you shop at next? >> that's a great question. >> do you? >> no, but i'm not sure -- their demographic might be slightly younger.
4:24 am
>> really. who are they targeting. >> we're having a two-way conversation right now, that's something that next isn't having with their customers. >> right. i agree. >> they need to create hash tag and get in conversation with their customers. it may be decliner collaborations. it may be alternate sourcing. it may be further meaning in the product they're having. next needs to ask themselves, where are we in the conversation. >> how do they compare to their competitors, showy primark is different also. >> these are not different animals. these are all same animals. we have to look to a different section of the zoo to see what's eating their lunch. >> do you have a top pick in the sector? >> let's look at what's happening in the having lower
4:25 am
barriers to entry. we do know that they're doing pretty well. h & m doing pretty well, euna clip doing fine. you mentioned single market indigenous names. we know that international is a problem. we know that startups are taking capacity out of the market. brands born on the internet. those would be my picks. and real machines are taking capacity out. >> yes. beth, managing director of global retailer. and tender has announced forecast dating revenues sending the stocks sharply high after hours. they surpassed the members. >> i think i was seeing people using tinder at restaurants. they started swiping.
4:26 am
i think people in their vicinity were basically on tinder because they got very excited about other people. >> i thought youment like a group project. >> no. mark zuckerberg has asked brazilians to take part in a rally outside of congress in favor of legislation that would stop what's app. saying you and your friends can help make sure this never happens again and i hope you get involved. fighting crime say tough one, isn't it? airbnb will rent out their entire home instead of just rooms. this came into effect at the beginning of may to protect affordable housing to tenants. rule breakers could face fines of 100,000 euros.
4:27 am
they've come from backlash from websites in the german capital. let's take a look at how key markets are trading as we head to break here. the banks, all the cyclicals driving lower. the oil and gas. stay with us. time for a quick cup of tea, louisa. >> i'm all over it.
4:28 am
4:29 am
signs." i'm julia chatterley. >> and i'm louisa bojesen. your headlines -- >> the dollar weighs on commodities and bhp gets slapped with another suit in brazil. smooth sailing for maersk, the bottom line beating because of lower costs and rises volumes. societe generale, impressed
4:30 am
with its balance sheets sending it higher in paris. >> in a normal environment, due to this environment, but really, this was diversified and well balanced. and in a position to be a stock holder. shares in ab imbev falling to a six-week low as sales in brazil fizzle out in what the world's largest brewer calls its most challenging quarter in many years. the likely nominee donald trump takes home the hoosier state, pushing ted cruz out of the race, as he suspends his campaign. >> so, we've got uk april construction pmi data this morning. coming in at 52 in april. that was versus 54.2 in march. so significantly weak, the reuters out is 54. it's the lowest since june of
4:31 am
2013. off the back of that weaker manufacturing data yesterday, that's a significant blow, i think in the construction sector. >> some might say we're losing a bit of steam ahead of this important referendum coming up on the 23rd of june, right? yeah. and that people will be looking a lot more at the uk and uncertainties in the uk not just from a political perspective but it could be that the economy is going down, too, right? >> yes, double whammy there. uncertainty, just delayed spending. with the losses yesterday, three straight sessions of losses actually for the dow and s&p indicating lower this morning. the dow lower by 16 points. i'll show you the year to date chart on the dow jones it's been a volatile period. the start to may, who knows, but you can see given the extent of the rally that we've seen since the lows back in february, i think the pause here makes sense, doesn't it?
4:32 am
>> yeah, i mean, the u.s. market does look expensive compared to its peers. definitely on valuation grounds. and we've seen a mixed expected earnings, with the tech sector, really under performing. >> we'll take a look at the nasdaq. it just feels like the techs leading this. and taking steam out of the market. but sentiment hasn't been positive all the way up. and yesterday, even with the rallies that we're seeing in february, his clients aren't saying that's giving us a greater sense of confidence. >> well, we're taking a breather, the european market lower, the ftse, the dax down by a bit. yesterday, with many of the italian banks having been under pressure this week, basic resources continue to be sold off. and word from payrolls on friday as well, right? >> that could be reason to take chips off the table here. let's look at the foreign exchange marks as well.
4:33 am
interesting news. as we were talking earlier in the show about the rebound we saw in the dollar in the last 24 hours. well, the dollar continues to show strength. we've got the euro dollar up slightly. we did hit 116, didn't we? significantly up there. and higher in dollar/yen, a gain, touching that 11.05 level. has this dollar got some legs is the question. >> in the meantime, let's talk about the brazilian group lawsuit. they filed a claim against iron miners and the owners demanding damages over the deadly collapse of the dam last november. while they settled a separate suit in march this is the result of a claim into the disaster which led to the pollution of major rivers.
4:34 am
bhp billiton up by 0.5% today. glencore is looking for a way to reduce its debt burden. the mine based in kazakhstan reportedly worth $2 billion. gold prices retreat for a second straight day after hitting 15-month highs earlier this week, this as hawkish comments and the dollar, the coordinator at fx precious metal strategy joins us from amsterdam. good morning, georgette. great to have you on the show. speaking of a rally that is looking like it's running out of steam. what are your thoughts on gold here? >> yes, quite big move so far. the only thing is, we have -- yeah, we have that coming up on
4:35 am
friday. that's also giving a bit of a setback on gold prices especially with gold but the dollar re. kaing somewhat ahead of these numbers. i would expect some range trading ahead of the numbers. the numbers come in weaker, we expect gold prices to continue to rallying. overall, cautious for gold price and other precious metal prices. the main reason is the lower dollar. a major positive for gold other places as well. the ultra low interest rate which is is good support for gold, but also silver and platinum. >> georgette, how much more could we rally in gold? what is your target end price for gold? what are the positions telling us, the long positions, versus the short positions on whether or not it's sustainable? >> well, currently, yeah, the position, if you look on the
4:36 am
futures market, investors are very long, long on gold, but also silver. and that could be a sign that there may be some slowing of momentum. but if you look at the overall drives, momentum is pretty strong. and we still expect there maybe consultation further throughout the year but next year, we expect gold prices higher. our target for the end of the year is 13.70, for the end of next year, we have 1400, 15. >> with gold, it rallied with risk aversion. but it started outperformance. i guess the industrial kick it gets here. but what are your thoughts on silver? >> yeah, you're correct on that, silver has a higher part on the investment side. also if you look over the last four year, silver has dropped tremendously. and if you look at such a big
4:37 am
move, if you look at the absolute and also the relative levels compared to gold, you know, even the move we've seen so far this year is relatively small if you compare it to where it's coming from. so when you have the kind of improvement in the overall outlook on the global economy, and as well with gold still going up, we think that silver has more room to go up. so relative to our performance. also if you look at the gold/silver ratio, it just started to drop from very high levels earlier this year. if you look at the long-term average, it could go to 60. so there's still quite some room to go on the gold ratio to go down. >> what do you think of india here as well, they just applied this 1% on gold to increase the supply. certainly, that favors the silver versus gold ratio as well here? >> yeah, that's true. that's true.
4:38 am
you see that there dob a bit more demand from silver to replace gold. at the same time, if you're looking at what is driving the rally in gold, silver, platinum and palladium, it's mainly on the investor side. but gold is popular in a jewelry demand in china and india. but if is remains restrictive on the outlook, compared to other assets out there, okay, they're not paying income. other assets are either negative or zero. so, overall, we think that silver and gold have upside potential. there may be lower demand on the jewelry side. but still, we think that it could go higher. >> georgette, great to chat with you. at abn amro.
4:39 am
ted cruz has suspended his campaign after he was defeated by donald trump in the indiana primary making trump the likely nominee. the billionaire took steps to unite his party saying, quote, the united states is going to become one beautiful, loving country. bernie sanders upset hillary clinton in the democratic primary but the result did little to improve his nomination. edward lawrence, a lot of surprises overnight, edward, yet, maybe not? >> some big surprises but historically both donald trump and senator bernie sanders did well in open primary state which is mean independent voters could also vote which is what indiana was. now, we have just two republican presidential candidates left. when we started this process at the end of last year there were 17. indiana overwhelmingly chose donald trump on the republican side. he won with 53% of the vote, 17 percentage points above senator
4:40 am
ted cruz. in the win there, donald trump was very humble in his acceptance speech saying that ted cruz was a good competitor. he says he doesn't know if he likes him or not. but he was a very tough competitor for him. in defeat, senator ted cruz suspended his campaign ending his bid to become president. he said that he gave it his all but the voters chose a different path on the democratic side the choice is not quite as simple. senator bernie sanders eked out a win over hillary clinton getting here by five percentage points however his win actually eliminates him from actually getting enough delegates to win the nomination unless the super delegate who are unbound decided they're going to change their votes from hillary clinton to bernie sanders. now, clinton didn't mention sanders in her statement that she put out. she actually did not speak after her loss in the hoosier state. she insaid tweeted out saying
4:41 am
she needs donations in order to try and beat donald trump coming up in it the election, louisa. >> edward, what's the thinking in the states with regards to how difficult it's going to be to unite the gop at this stage? >> yeah, and is this a very fractured party at this point. you have some folks who are very upset about what's happening. the people that were in the room when cruz made his speech saying that he was bowing out of the race were very upset about that. donald trump is going to have a lot of work ahead of him. reince priebus, the head of the rnc, the head of the republican national committee did say they would start to unify the party behind donald trump. so that process begins now but it will be an uphill battle because you have governor john kasich who says he's not going to get out of the race, and he's not going to give up, calling himself the alternative to donald trump so it's a very fractured party at that point. >> it is. the conversations continue. thank you very much, edward lawrence from nbc news.
4:42 am
former executive martin sorelle was back in court. >> reporter: a quick court appearance tuesday morning. u.s. prosecutors say they may add additional charges to martin shrek r shrekeli. in a brief appearance, just after the court appearance, he came out with his boyer ben brackman, they spoke with reporters. here's what they said. >> today was a good day for martin shrelly. with aup that understands the complexity of preparing this case, and we are leased that the judge was willing to work reasonably about scheduling. substantively, we do not believe that this indictment will change in any way.
4:43 am
that affects mr. shkreli in a negative fashion and we still think that the charges very very defensible. >> reporter: he wouldn't comment but he did call the charges highly defensible. and he said they plan to continue on to trial. back to you. now, staying with pharma, drugmaker is shrugging off one suitor. you can find us on e-mail and twitter. "street signs" @cnbc on e-mail and twitter as well. we'll see you in just a minute.
4:44 am
4:45 am
american pharmaceutical company pfizer has reportedly approached medivation about to take over according to reuters. this comes after the cancer struggle specialist rejected the
4:46 am
multibillion dollar offer last week. this is pfizer trying to get into the patent drugs following the tax deal in the u.s. we'll have to wait and see -- >> i'm open to talking to anybody who will talk to us as long as it makes sense, right? >> yeah. >> it is an important market for them, the oncology market is massive. especially there's one drug that's critical for prostate karnes. but you can ask what does pfizer get out of it in the longer term. and does it matter who they team up with this at this stage or are they trying to build scale? is it more about the scale building with them? you can ask whether they've been engaged with pfizer. >> they said it was too low. they basically said, look, we've
4:47 am
got no funds wait until medivation decides to auction it off. and then to overcome resistance from these contingent values based on cash to shareholders. the problem here they've got a lack of performance in cancer drugs. and structure to get by with medivation here. taking this into david sullivan, co-head of investment banking the goldman sachs, he told us what has driven atma activity. >> the biggest root is that growth is sluggish and if you're you're a ceo you're trying to pull all the levers you can do.
4:48 am
buying growth is one of those levers. ceos would like to do that. shareholders would like them do that. so if the market environment stays reasonably balanced, i do think we will see a pickup continue as we go through the year. cbs shares rose enough after the media company reported better than expected earnings. julia boorstin has the report. cbs shares higher results on both the top and bottom line. revenue grew 8% to $3.5 billion. earnings per share increased to a record $1.02. ceo les moonves saying he believes they can see double-digit price increases. he also said cbs expects to set a report for political ad aref knew in the coming year. cbs also saying that digital ads will be increasingly more important but you'll get more
4:49 am
bang for your buck with broadcast ads. >> clearly, there's a shift in dollars coming back to network television. part of this is because there are questions now arising because of the effectiveness of certain digital advertising platforms. and as a recent study by standard media index showed there say direct correlation between tv advertising and sales results. >> as for the rise of skinny tv options and bundles, moonves saying it's a huge positive but higher from what cbs gets from its other partners. when asked about reports that cbs is looking to collapse its two classes of shares, he said cbs is a strong independent board and says they're evaluating all of the options out there. plus, he said, they won't comment on rumors as for the spinoff of cbs' radio business, moonves them creating a stand alone company makes the most
4:50 am
sense but also considering outside parties. and with the rising costs, wilfred is the cnbc hq to give the details. google and fiat chrysler joining forces. a fleet of minivans, engineers at both will work together in a facility in southeast michigan. google says it's the first time they've worked together including the consensus and software. they will not share proprietary self-driving software. and it would not be offered to the public but somewhat off. but exciting developments on that. adp payrolls and in june, in terms of earnings reports, time
4:51 am
warner, 21st century fox, tesla and kraft heinz reporting after the bell. those are the ones to watch. at the moment, falling about a percent of a decline yesterday as oil prices slid in the dollar rally. we're looking at 0.2% for declines in each of the three main indices. 36 points as you can see for the dow jones. guys, back to you. >> wilfred, good to see you. have a good wednesday. dennis lockhart said britain's referendum whether or not to, quote, leave the eu, looms large. brexit could be a source of heightened uncertainty. he added that he's worried that disappointing first quarter gdp growth could turn out to be persistent. lindsey thank you for your time
4:52 am
this morning. do you think that the first quarter weakness we're seeing state side is persistent? do you think it's going to push into the first and second quarters as well? >> that really is the concern. when we look at the first quarter growth report it's incredibly disappointing the weakest that we've seen in two years. and this is a longstanding trend of declining moment it up. the third consecutive quarter of waning momentum since last year. the report of the first quarter is really widespread weakness. so the fed officials remain optimistic that the prospects for the economy will improve near term. but looking at that report, the catalyst remains uncertain. you have these concerns that earlier weakness could persist into the second quarter or beyond. >> lindsey, do you think that the dollar weakness could potentially throw the fed off course? >> i think the weaker dollar
4:53 am
actually reaffirmed the fed stance that we could see a second rate increase in the near term. long term, we do want a strong dollar viable greenback. in the short term as the u.s. competes to be competitive on a global stage. a relatively weaker dollar does alleviate some of the pressure that we've seen as of late on u.s. producers and manufacturers, as well as data of potentially a more favorable picture for u.s. exports. so when we're talking about the u.s. economy struggling to get back to more moderate footing from the current assessment, a weaker dollar could help propel the u.s. economy forward. >> i just want to ask you about lockhart's comments i know he's a nonvoter but he basically suggested the risk of a brexit and that vote which, of course, come ace week after the fed's meeting. just in emergency room its of communication i found him
4:54 am
incredible a confusing. >> well welcome to fed speak. it is very confusing as of late. looking at the april statement, it is very clear that the fed has redirected their focus away from the environmental environment back to the domestic u.s. economy. but as you mentioned, whether or not specifically referenced in the statement, we do still face a number of lingers risks from the international environment, including the brexit, the ongoing debt and migrant crisis in europe. we still face geopolitical risks. risks of additional paris events. all or any of which could continue to keep the fed on the sideline. so we've really seen a lot of double-speak from the fed as of late. but as you mentioned most recent comments keeping concerns of international risk, specifically surrounding the brexit at the forefront. >> what do your clients say to
4:55 am
you? is it the growth in the u.s. or is it that the fed makes a misstep? >> i think it's a combination. i think certainly a lot of clients are anxious for the fed to continue to remove accommodation and continue to raise rates. but the expectation was when we initiated liftoff at the end of the last year it was against the back drop a much more solid u.s. economy. now, we see the economy continuing to essentially threaten additional rate hikes. but the u.s. economy has lost significant momentum as of late. and that really paints the exact opposite picture that you'd like to see. again, removal of accommodation or higher rates against the backdrop of a weaker backdrop. clients are anxious to see the race move higher but the backdrop needs to be stronger growth. >> lindsey, great to talk to you. back here in europe, where we start off the session with slighter weaker notes, we're
4:56 am
still seeing softness on the european markets. most of them trading lower. down by 0.5%. we're seeing the ftse trading lower from the pressure from the miners. >> ongoing pressure from basic resources. we'll give you a look at how they're performing now, accelerate to get downside, you've got the likes of angela merkel with a big move here. the big move, billiton. the brazilians have filed a $43 billion lawsuit against the company for the spill. and broad-based selling and consolidation. >> and companies like mohler maersk, a huge heavyweight, after profits hit $224 million that was a lot higher than expected. and that was thanks to caught
4:57 am
cutting. they reduced volumes as well. a projected loss of 1 is $21 million. this being the danish shipping giant. they kept their outlook unchanged. they recently said it's going to be softer but they've kept it unchanged now. now banks continuing in the red, after 220 million euros of caug cut costs. the french giant posting a surprising income in the first three months of the year. >> that's it for today's show. thank you very much for your company. i'm louisa bojesen. >> i'm julia chatterley. "worldwide exchange" is on after the break. stay with us.
4:58 am
4:59 am
5:00 am
good morning breaking overnight, ted cruz drops out of the race. pharma fight. pfizer making a play for drugmaker medivation. and life in the fast lane, google and fiat chrysler teaming up on self-driving minivans. it's wednesday, may the 4th, 2016. and "worldwide exchange" begins right now. ♪ my house we control now good morning, welcome to

30 Views

info Stream Only

Uploaded by TV Archive on