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tv   Street Signs  CNBC  May 9, 2016 4:00am-5:01am EDT

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hi, everybody. good morning, you're watching "street signs." these are your headlines. the so-called oil ministry is gone. al-naimi is replaced ending more than two decades. and crude is climbing as wildfires threaten canadian supply with officials warning they could be fighting the blaze for months. europe shrugs off china
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trade as they are underperforming this morning. and david cameron is criticizing skeptics for washing their hands of the problem. i understand the respect and reviews of those who think they should leave. >> even if i believe they are wrong and they wouldn't admit real damage to our country, its economy and the power in the world. hi, everybody, good morning, how are you? >> very well. a sunny weekend, what's to complain about? >> i know. we have a lot of lobsters in london today. that's what happens, you get one ray of sun, the convertibles come out and you go nuts. here in europe we are going nuts this morning. we are higher by half a percent or so on the european equity markets. we were called flat to a couple points higher as seen here.
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still early trade has been open for an hour here in the european markets. the sector has been interesting because almost all sectors are in positive territory from the get-go. we have seen basic resources continuing to be sold off this morning with quite a big underperformance there. down by 3%. >> interesting to see oil and gas there despite the uptick in crude prices. we'll look at the equity response, more on that in just a bit. but first data out of china over the weekend. this as the shanghai composite closing deeply in the red following disappointing data. the chinese exports fell 1.8% in april while exports dropped 10.9% both missing expectations by quite a lot. the foreign exchange rose for the second time this year to 3.2 trillion dollars in april. let's go out to singapore with sri, the last focus was on
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nonforeign payrolls. now investors are tuning into the china data. tell us about the response there. >> reporter: let's start with the payrolls first because you can't ignore them. yes, it was a soggy number but it was not a disastrous number as well. the dollar against the yen here in asia seems to be relatively well behaved. so all in all, i think the payrolls and the reaction are fairly agnostic. the chinese data shook the tree today, especially in main equities. we are below the pivotal point of 3,000, up by 2.8% for the shanghai composite. this is a pretty bad number, whichever way you slice it. on the export front. on the import front as well it was well below expectations. so i think the focus is going to be on the pboc in terms of further stimulus measures. it does build a case for more accommodation. it will be very interesting to see where the currency goes as
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well. depreciation pressure remains. let's not forget the official front page article in "the daily" today saying they expect to recover meaning that beijing is managing expectations in terms of lower growth. elsewhere, commodities resources divergence there, metal prices are down sharply. editing was quite possible. consolidation let's call it. all in all, not the most inspiring of sessions to kick off the week. pack to you now. >> that's right, sri, the l-shape is not inspiring investors. thank you. investors are also keeping an eye to the oil price as we saw a drop in the weekly price. but today we are seeing a rebound in wti and brent. both the wti and brent up 1.14% driven by wildfires in canada.
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and saudi arabia announced a major reshuffle in the government. the kingdom is replacing the energy minister. that's al-naimi there who has been on the job since 1995 and long seen as the market kingpin. now the current chairman khalid al-falih will be the new head of energy ministry. he's expected to lead the sector as part of the post oil economic overhaul. he's already vowed to maintain stable petroleum prices, so in many ways this was a move some saw coming for quite some time as we talk about the reformation going on. >> we knew that al naimi wanted to take an exit. but i'm not surprised, we'll talk more about that in a second. in the space of oil, the wildfire in canada has knocked down over 1 million barrels of oil per day according to new estimates. this equates to over a third of the country's output.
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firefighters said the winds are moving in their favor but the blaze continues to rage on and the officials warned they could be fighting it for months. for more on that, let's bring in senior oil strategist joining us at the desk from pnb. and we have garrett here with us first, simply on the oil price we have seen today, what are your thoughts on the saudi shuffle? it's more than the canadian wildfires we are talking about driving the prices today. >> it's a supply issue. any constraint and supply is going to be supported by prices. and the wildfire is knocking out a significant amount of production. globally we are producing 1.5 million barrels more than we need to and stocks are building. this was before the fire. >> that's a supply equation on
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one hand, but you can't ignore the political shuffle this morning. a new oil minister in the position effectively. does it change opec's strategy going forward? because we've already heard comments out of saudi saying our position remains the same. >> yes, the policy is not changed. i think we have seen al-naimi started the policy in essence abandoning any production restraint forcing prices down to price out the high cost producers. and that's a policy i think is working and we'll see the results in a year or two's time. in essence, it's a continuation. but al-naimi was trying to get some degree of production restraint at the last meeting in doha. and his meeting to do that was compromised by in essence the crown prince basically saying no. >> how much less independent will the next minister be after
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al-naimi. we know khalid al-falih has a play with the prince, will that change how the strategy is moving forward? >> this is a suggestion that strategy is changing out of necessity. but the market is all i care about and is reflecting the share prices themselves. >> do you think the recovery in the price of oil will continue? >> i can't predict that. but what i do know is that around this $44 level we seem to have got a trend of consistency going in the market that seems to appreciate. while nobody is talking about 30 or below, people haven't gotten excited the other way. but it's the idea of consistency and dependability. >> how does that factor into the investment case for the oil firms? because today as we point out at the start of the show, we have
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seen oil prices move higher yet the oil and gas sector on the equity side is moving lower today? >> well, one thing we have seen within the sector is now the market is paying a reasonable price from what it knows. we have gone through this sort of panic session earlier in the year. we have gone to euphoria beyond that. now we come back to this idea and the realizizatiation is thay believe they know where the value is. now you're marginally trading around current levels. >> i want to get your thoughts on the banking sector because it was a terrible week considering the start of the year rough for european banks with the worst performers here in the continent. do you think the story turns around any time soon? >> i have to say i don't think it does. nothing that we see and that's looking at value trends currently and our 12-month forward growth rates in value trends. nothing suggests it will.
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so i don't see the share prices responding positively. i think that would be an opportunity to sell. last week we just had to prove again and again that the output has been negative for some time and we continue to be short. >> stay with us for just a moment because hadley gamble is in ryadh and reportedly announcing the three-way listing. hadley, what is that going to change? what is it going to mean, not just for the company but also for the industry? >> this is going to be very interesting to watch, isn't it? because essentially what we heard last week from the ceo of the saudi stock exchange at the dow is this is a company working very hard to list saudi aramco to do it in the right way. there was no mention until this report came out in the telegraph that there could be a three-way listing. it is hard to imagine they wouldn't list this on the saudi stock exchange as well and that
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speaks to the creative thinking that will be involved when talking about listing a company just this big. of course, obviously, the ceo and chairman of aramco for many years is now going to be the oil minister of saudi arabia. this is all in line with consolidating the power behind the royal court and certainly behind the deputy crown prince. >> and the reports for the ipo in the works, it was also said they are soliciting foreign investment from key oil firms here. what is their appetite considering a lot of the firms are still cutting back expenditures? >> well, it's interesting, i thought that was the best part about that story. and i'm quite interested to hear what the new oil minister has to say about that. the idea to give selective stakes to the oil majors like exxon and bp. that will be the more interesting story going forward than even the listing itself because of what that will mean, not only for saudi aramco but what the government does going forward. you have to remember that saudi
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aramco, the government acted as such for years now, and the idea that the government is going to take a backseat with the company listed, it will be really interesting to watch how that plays out. >> hadley, thank you very much. hadley gamble joining us from ryadh. get involved, e-mail the show nice and early to pose the e-mails to the guests in the studio. the address is on the screen right now, streetsignseurope@cnbc.com. we have loads more coming up. we'll talk about the strategy. >> more earnings on top today. an earning season that never ends it feels like. still to come, the former barclays ceo says the cheap oil could be weighing on african economies. but there are plenty of opportunities. we'll tell you where after this.
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welcome back, everybody. you're still watching "street signs." we have been talking about the saudi reshuffle taking place with the oil minister al-naimi who has been at the helm of the oil industry for a very long time, since '95. so he's now leaving that post and instead the man taking over is khalid al-falih. he's going to be the new oil minister. some people say his links to the government are very close. and especially to the new man in town, right? to the crown prince. is this going to change anything with regards to opec's relationship to the saudis do we think? >> well, for many years now, saudi arabia has been the power in opec, whatever they say becomes opec's policy on the basis of other countries of less oil and less room for maneuver. saudi aramco's how cost is to
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increase the market share. but the saudi economy has to involve to become less dependent on oil. and i think this is part of the process that the deputy crown prince is doing to reengineer the economy to subsidy, for example, so the price of oil goes out to the consumer. it's all part of a wider process. and i think -- a new person at the helm will help in the process. >> what are your views with relations and iran going forward? it's no secret saudi is trying to prevent iran from increasing the market share coming on production line here, now there are readings saying the royal family is taking a greater role in the oil post. do you expect that to increase with iran? >> i think it is more of a political gain than it was before. i doubt whether saudi arabia can really stop iran increasing its oil production.
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i think what it can try and do is create enough room for iranian oil. the lower price environment will start to see it fall rapidly and hopefully there are room for both sides of oil and iranian barrels. >> you were talking about how this filters into the oil sector and oil companies. we also mentioned the banks that had a dire week last week. how do these moves translate through now into the wider asset class allocations that are taking place? and especially bearing in mind the fed may not be looking to hike in june as a lot of people thought given the nonweak data. >> yeah, it's interesting how they respond to energy prices on a day-to-day basis. i don't remember that happening for a very, very long time. we have had the extremes but day-to-day we are fixated on the oil price and the stocks are moving.
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the market is just a trance regarding commodity and energy prices in general. so perhaps news like this at some point is going to sort of have us snap out of this and look beyond. as far as the movement for the fed is concerned, again, that is another issue that is just dominating on a daily basis the market's attention. >> china data is why we are seeing base resources off this morning, 3% off. everything else is higher. >> from your previous guest on the show, it has been a how r horrendous year. things like this don't help. to have the macro effects to make investing on a short-term basis almost impossible, it's just about being involved in current trends and current momentum. so i still feel that looking at other asset classes at the
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moment, we focus on equities more than anything else. it still seems that equities, we think the equities remain very reasonably valued as we see them. >> just here in europe or globally? because europe when you look at the key markets in correction, they have a long way to go to catch up to the u.s. >> i think the u.s. has in its favor, with or without rate hikes, is the idea of growth, albeit sort of slow growth or continued growth, sustainable growth. as we see it, the market isn't paying too much for that. you're right, in europe there's growth too, but the market is trading at a discount to fair value at the moment. so there's still an opportunity. >> gareth? >> on the global economy side of things, the effects of the oil market in terms of global command, there's concerns that a slowing economy will lead to slower oil demand growth. and that means it will take longer to erode all of this
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overhang of crudementries building up. and the data over the weekend again will raise the fear that oil demand might disappoint. we at bnp pariba believe that we have seen strong economies developing in india and the united states. so we think the global economy will grow sufficiently in order for oil demand to increase on trend. >> gareth, thank you very much. senior strategist at bnp paribas and rob mccreery. g4s shares are top of the stoxx 600 after positive quarter earnings. the security firm posted a rise in first quarter revenue and also outlined new contracts worth $450 million pounds per
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year. let's also give you a view of easy jet shares among the top performers here in london. rbc raised the stock to outperform coming from the underperformance previously. they lifted the target by 50 pence citing the airline will move to tackle the cost inflation problems. now the report comes ahead of the first half results due tomorrow. banco popolare shares are trading lower after a $1 billion cash call. popolare's ceo said he expects to see the lower cash call take place by june. and shell evacuates niger delta's facility due to militants. there was also a recent bomb in there and the ceo says we
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continue to monitor the security situation in our operating areas in the niger delta and are taking all possible steps to ensure the safety of staff and contractors. we do not wish to go into details. our operations are continuing. now the lower crude prices have stung economies across africa. bob diamond is telling cnbc that cheep oil isn't the challenge facing the continent. >> clearly there are headwinds. the commodity cycle, more volatility, big change in prices, for those countries relying on industries and the impact, i think a perceived pull-back of china in terms of investments really across the piece impacts africa as well. one that isn't talked a lot about is the impact of the financial crisis in 2008 and 2009 in investments in places like africa. and if you look at things like
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trade finance, almost 50% of the trade finance in africa prior to the financial crisis was supplied by european banks. today it's almost zero. so one of the things that gets us excited in building a bank across africa in atlas is driving african businesses. because we do believe in africa rises. if we do believe in africa rising, there has to be invest in the a robust and well-funded financial services industry. >> the commodity headwinds, what are your thoughts on how this is going to pan out? >> so medium to long-term, this is pretty positive for africa in many ways. if you look at president nusi in
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mozambique, it is looking to diversify the economies away from the extracktive industries. that can be positive. if you look at the potential for the agricultural section in nigeria, it's the largest sector of the economy. today it's already larger than the oil industry. in the short-term, there are real challenges in terms of slower economic growth, in terms of currency evaluations. we see that with a medium to long-term bullish look at africa and the opportunities in africa because of demographics, because of urbanization, because of technology, all the things we talked about were very positive. this is a great time to be investing because the prices of businesses in our case of banks is lower. and the currency levels versus the dollar or other major currencies are also at a good level. so we see this as a time to invest. >> now diamond's merchant capital is working with carlyle
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group to bid for a stake in barclays africa. diamond declined to comment to cnbc on the possible offer. now teva pharmaceuticals is hoping to secure anti-trust clearance in a $40 billion acquisition of allergen's drug portfolio. the companies are set to report first quarter earnings this week. we have john here with us, good to see you. we have antitrust as a $4 billion acquisition. are they going to get the go-ahead? >> that's a tough question. i always think when things take a long time something's going on. and this one has taken longer than people have expected. it is expected some folks say for june, some say earlier. but i would imagine that something needs to be worked on whether it's an anti trust issue or synergy issue. >> we already saw the u.s.
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government block pfizer's takeover. how would that deal differ from this deal? are there huge differences apart from the price? >> i think the price is one thing. the pfizer allergan supposed deal was a lot about tax inversion and getting the island. this is more of a spinout of the gener generics business. they are different. the pfizer was one more about scale. >> ever since the blow to pfizer, we have seen the stock price of allergan tick down more than 10% now. what does the chief executive have to do to prove it can survive and be profitable for shareholders going forward. >> he needs to show there's going to be profitability in the business long-term.
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this has been a story of forest acquire i acquiring this, and what he to show is that this has growth potential without potentially as much rnd as some of the big former investing. >> interesting you mentioned valiant. they would say they are very different, but to what extent would they like to say they are in the same class as phrma? >> you can see the way the share prices have performed. some of that valiant effect has had an effect on the allergan price. the similarities are not all the same but there are similarities that have affected the stock. >> i do find the sector fascinating when you look at their drugs portfolio and how many drugs are company should have in their portfolio and how many they are working on at the same time.
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you point out as an industry they take on 12 products at a billion each to take to market. what is the portfolio like now? howdy verse is it? >> it's a diverse portfolio but what is not diverse is the depth of the rnd mid-stage and late-stage of rnd. it does take a long time to take a drug to market. they go way back to rnd and do early-stage discovery. the allergan model is more of a buy and acquire at the later stage. essentially that's what you're buying with allergan, the ability to bring in new drugs from outside rather than grow them themselves. >> and finally, john, looking at the sector as a whole here, health care includes bigger names over in the u.s., pharma, do you think the sector is oversold at this stage? >> the big pharmas have a difficult time for them. they all have to show growth and
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how they are dealing with patent expires, so the sector is valued at a level where the investors say what is going on for this sector? >> thank you so much for joining us. that is john rountree. partner at novasecta. going rogue for donald trump as he breaks the republican leadership saying he would raise taxes on the wealthy. we'll have the full story after this short break.
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good morning. welcome back to "street signs." here are your headlines this morning, the so-called oil maestro is gone. al-naimi is replace in a major shakeup ending a career spanning two decades. and officials are warning
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that they could be fighting the wildfires for months. europe shrugs off an ugly session in china on disappointing trade data. but the miners are underperforming. and a tax u-turn. donald trump says he would raise taxes on the rich in a major break with party ranks. >> i'm going to fight very hard for business. for the wealthy, i think frankly it's going to go up. you know what? it really should go up. good morning and welcome back to "street signs" here. we are picking up momentum on the european market. this after investors were awaiting the nonpayrolls on friday. we got a number short of expectations at 160,000 when you look at goldman going up to 240,000. >> initially we saw the dow dropping and saw the recovery. now the fed may not be hiking in june. >> on the equity side, the bad news translated to good news. we got a modest uptick but
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here's a view of where the u.s. stocks are headed today. here's a look at the futures, green arrows across the board. a modest call for the s&p 500 higher by 3 points. the dow jones higher by 22. and the nasdaq which was really hurting on a weekly basis called higher now by just about 9 points. let's give you a closer look at where we are in europe. we have green arrows across the board with the exception of the italian market here just behind me. but overall we're seeing some strength at the ftse 100 up .70%. investors continue to keep an eye on the disappointing data out of china weighing on basic resources. without a doubt the underperformer here in europe this morning. also surprisingly some weakness in oil and gas despite the uptick in crude prices we have seen. the german-made market here up 1.4%. and the french made market holding its own higher by a solid 1%. the italian market as mentioned the only underperforming off .20%. louisa? thank you very much.
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separately to what is taking place on the markets, the greek parliament has now passed a number of pension and tax reforms ahead of a meeting with eurozone finance ministers taking place later today. violent protests broke out across athens prior to the vote with anti-austerity demonstrators throwing molatav cocktails at police who reacted with stun grenades. julia, you have been covering greece for a long time. we have the finance ministers meeting today and the greek parliament passing the latest round of reforms, why are people demonstrating now? >> what we had passed in parliament yesterday was further tax cuts, reforms to the pension system to the equivalent of 3% of gdp. so just over 5 billion euros. i mean, they were protesting that anyway, but the problem is and why we still have the ongoing negotiations for the finance ministers is this is all in an effort to get to a primary budget surface of 3.5% by 2018.
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this is a random thing to get pulled out that means that greece's debt is miraculously sustainable and that the imf can stay on board. the imf doesn't think the 3% is enough. they want a further 2% measure equivalent to gdp pass through parliament so that if they go off track on the budget, then these fiscal measure stabilizers kick in. why? ultimately because they don't meet the sustainability and want the european leaders to do something about the debt. so it is back to the head-butting where the imf can move down and politically europe doesn't want to do that. >> the foreign agreement out of brussels today is overly optimistic. will they demand more straight away? >> it's difficult, isn't it. i don't think we'll get to some kind of agreement but we already hope going into the meetings that the greeks have done enough. so it's a bigger battle between european leaders and the imf rather than what greece is doing. they are hoping for positive
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noises out of this meeting up and the debt situation will be discussed. >> you have disagreements over whether or not the actual agreement goes far enough in terms of pensions. but there's questions on implementations, aren't there? >> always. that's also going to be an issue. this is also why the imf says we want the measures to pass in parliament so we don't trickle back in gains. >> but they are still negotiating old money as it were, new old money. this is a plan that was agreed upon quite a while ago, right? >> exactly. this is the latest bailout agreed on last summer. i was there and obviously we had the referendum there disregarded. so this is an ongoing issue and will continue to be so. the economy intelligence unit was on "squawk" talking about this and they don't believe they will see progress until after the german federal elections so it's going to keep going. >> and how about the greek vote? i mean, support for cyprus, for example. >> this is a great vote because
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we have seen his parliament slip draw mattingly. he's got 153 and he's got the possible 300. he has to get literally everybody in his party in support for the government. you have your far right party as well to support these measures. so each time he burns political capital it gets increasingly difficult. they don't have the the political capital to burn on the further 2% of gdp measures without getting some kind of positive movement noises on the debt write holy spirdowns. >> so what happens then? if the imf demands more and they can't pass it, where do we go from there? >> is that the sound of the can being kicked? we get them some leeway and cash. the big issue is they have the ecb bond payment to make in july. that will increase and most people think the whole charade continues until we get close to that. >> we'll continue to watch in
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greece. it never left our radar, as it were. thank you very much for that run-through. david cameron drawing upon the u.k.'s shared history with europe arguing that peace on the continent was at risk if britain leaves the eu. speaking in london, the prime minister took aim at the leave campaign saying the group had no concrete answers to the u.k.'s place in the single market following the possible brexit. >> some say we keep full access to the eu single market. if so we'd have to accept freedom movement, a contribution to eu budget and accept all eu rules while surrendering any say over them. in which case we would give up sovereignty rather than take it back. others say we would definitely leave the single market, including the vote leave campaign despite the critical importance of the single market, the jobs and the investment in our country. i can only describe this as a
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reckless and irresponsible course. these are people's jobs and livelihoods that are being toyed with. and the leave campaign has no answers to the most basic questions. >> meanwhile, george osborne also warned of a threat to the u.k.'s housing market should a brexit go ahead. the chancellor warned that homeowners would be hit by falling prices while those hoping to buy could suffer from higher mortgages. now likely republican presidential nominee donald trump struck back at gop leaders for their lack of support. speaking on nbc's "meet the press" trump was blindsided by house speaker paul ryan's refusal to endorse him. trump also broke with republican leadership on raising taxes for the highest earners. >> i think nobody knows more about taxes than i do. and income than i do. but i'll explain how it all works. i don't come up with it, i come up with the biggest tax cut of any candidate, anybody. and i put it in. but that doesn't mean that's what we're going to get. we have to negotiate.
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the thing i'm going to do is make sure the middle class gets good tax breaks. because they have been absolutely shunned. the other thing i'm going to fight very hard for business. for the wealthy, i think frankly it's going to go up. and you know what? it really should go up. i have seen what's going on. and i don't know how people make it on $7.25 an hour. with that being said, i would like to see an increase of some magnitude but rather leave it to the states. let the states decide. because don't forget, the states have to compete with each other. >> well, nbc's tracie potts is in washington following this latest, as always. tracie is trump breaking more with republican leadership at this point? >> reporter: well, we were expecting this, because there was trump the fighter during the primaries, and there was a lot of talk about how and when he would begin to transition more into trump the candidate as he got closer into the general election. now that he's the presumptive nominee, we're hear things that quite frankly sound like
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democrats. he's moving more to the middle, talking there about the minimum wage and how it's not livable for so many people. but then walking a fine line saying, well, the federal government shouldn't be raising the minimum wage, that's up to the states. and then talking about raising taxes on the wealthy, for years republicans have said you can't raise taxes on the job creators, that will mess up the whole economy. you deal with the middle class but don't raise taxes on the wealthy. the job creators. now we have donald trump sounding a little bit more to the middle saying, yeah, i'm going to focus on working families but the wealthy, they're going to end up having to pay more. so it will be interesting to see what those ideas yield when he goes into this meeting with paul ryan later this week, trying to get the most powerful republican out there, trying to get his endorsement before this convention this summer. >> what are we going to hear next from the democratic run? i mean, what's coming from their
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side of town? >> reporter: well, we're already seeing hillary clinton really honing in on trump when it comes to inconsistencies, issues that she thinks -- particularly foreign policy, some of the things he said she describes as off the cuff that could be dangerous for the united states. and she's starting to hone in on some of those things very specifically. it will be interesting to see a debate between these two this fall. >> tracie, you mentioned the meeting coming up between trump and paul ryan here, to what extent will they discuss trump's vice presidential candidate, whether or not trump can offer an olive branch there, someone the candidate and party will be happy with. >> reporter: that's something he seems to care most about. but if he's going to pull in the party leaders for their support, a vice presidential candidate of
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a more mainstream pick for the republican party could certainly help with that, whether that's on the agenda this thursday, we don't know. but certainly it's something that could help him pull in support from people like paul ryan who right now are on the fence. >> tracie, thank you very much. tracie potts joining us from nbc news. do you play the lotto? >> no. >> i played it once and won a clay snail, a massive clay snail to put in the garden. a snail made out of clay. >> like a garden gnome. >> yes, but a snail. >> i only play if it gets above $100 million. but then your odds are so slim. >> i'm super lucky. >> maybe you have something in common with this winner in the next story. because of a 7-eleven store in new jersey, they sold the winning powerball ticket worth guess how much? $430 million after saturday's draw. it was the largest powerball jackpot since the $1.6 billion
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payout in january. and the seventh highest in the draw's history. the winner has not yet stepped forward to claim the prize. but the 7-eleven employee who sold the ticket on tuesday said that based on the timing of the purchase, he believes the lucky customer could be a woman in her 40s or early 50s. the truth is, stay anonymous. you don't have to do the photo ops. >> you read about those who go out and buy 50 flat-screen tvs, a couple cars and a year later they have nothing. >> get yourself a good financial growth adviser. >> and don't tell your friends and family. >> that's true. if only we had that problem, right? >> i know. coming up on the show, uber and lift decide to quick austin amid a battle over background checks. is it just a bluff in the intense game of texas hold' em? stay tuned to find out.
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hello and welcome back to "street signs." we want to give you a view of oil prices as we have seen crude pick up momentum today. this largely to do with the ongoing wildfires we have been watching near the alberta oil fields in canada. wti crude up 2.2%. brent higher by 1.8% as well. of course, investors continuing to watch the developments out of saudi arabia which has announced a major government reshuffle. the kingdom is replacing the energy minister ali al-naimi in the market since 1995. now ckhalid al-falih will be th new energy minister. he's expected to lead the sector as part of the country's post economic overhaul. he's already vowed to, quote,
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maintain stable petroleum prices. >> you talk about the move in the price of oil. it's also due to the wildfires taking place, the alberta wildfires continuing to put canadian oil crude supplies under threat. wilfred is at cnbc headquarters, and they are continuing, they are still blazing now. >> absolutely right, louisa. the massive wildfires in alberta have consumed 400,000 acres. they are looking a little more optimistic to get control of the oil sands region. more than 80,000 people have been evacuated from the canadian boomtown. the fire destroyed 1600 homes and buildings in the region so far. officials say there's no timeline to return residents to the city. oil prices as you just said have been moving higher on this news and that change in the saudi
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leadership in terms of the oil sector as the wildfire continues to knock out over a million barrels of daily production capacity. 11 production firms have curbed activities taking precautionary steps. bp and other major oil firms won't be able to deliver on some contracts. as we said, oil is moving higher on the news. do bear in mind that wti last week had the first negative week in five. so some reaction to that as well. as for broader markets, we have slight declines for the dow and the s&p last week. the nasdaq a little more pronounced here at the open. we are called higher by .30% or .40% depending on what you're looking at. thank you, wilfred. here in europe we'll look at the markets one by one because equity investors continue to keep an eye to the oil prices. we have seen the oil and gas sector move into positive territory in line with the
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uptick in crude despite negative moves early on. now the ftse 100 is up by .74% despite basic resources largely driven by the disappointing data out of china earlier. the xetra dax higher by 1.65%. and the cac 40 is higher by 1.28%. and the ftse is in positive territory. we'll look at the other movers today, twitter is barring u.s. intelligence services from accessing software allowing them to search tweets. this comes according to dow jones. the service provided by data miner was used to analyze social media posting on terror attacks but twitter has a policy to halt third parties from selling the data to government agencies for surveillance purposes. they clarified, quote, the data is largely public and the u.s. government may review publiced
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cans on its own like any other user. facebook has won a trademark case against the chinese potato chips producer. yep, potato chips, registered under the brand name facebook. this highlights beijing's involving attitude toward the social media site. this happening as the owner mark zuckerberg is stepping up attempts to take chinese lessons, he's married to a chinese woman as well, right? i mean, he's fluent as far as i understand, but he's been entertaining a lot of top political figures and jogging through tianenmen square. he's holding full conversations in mandarin, he's fluent. not like he's not a busy guy. >> never short of time, is he? he's got ambitious running goals as well. apple is not quite as fortunate
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in china. they lost their trademark case on the iphone used on other goods there. the tech firms are trying to expand in china. nevertheless that will be welcomed news for facebook. meanwhile, we are look at uber and lift steering away from austin. this after the public vote in favor of finger print background checks for the drivers. the ride-sharing apps tried to contest the city's ruling by putting the decision in the hands of the electorate. but on saturday they lost the vote by 56-44. this comes according to the tech tribune. >> that's the focus, the safety of the uber drivers. but i find it fascinating in terms of the use of technology. the actual uber technology which is being used so many areas. they have completely revolutionized the entire city or tech sector you could argue with a lot of people copying
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their model. and we have voters in the philippines jumping to the front of the polls by challenging the political elite. martin song filed this report from manila. >> reporter: what a difference 118 years makes. it's taken that long for the philippines to start shaking off the shackles, not off colonialism but what is called a democracy run by a handful of political dynasties almost uninterrupted. by an outsider could be the game changer. he's the front-runner for president, the trash-talking tough guy mayor once notorious for crimes and drugs now probably one of the safer cities in the philippines. duterte cleaned things up controversially including with death squads and extrajudicial killings of drug lords. but it's worked and he's not apologizing for it.
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duterte is polarizing making some people feel safe and nervous at the same time. a risk because he reminds many people of strong ly candidates who also plurted his country of millions. >> this strong man candidate rhetoric is appealing to a lot of people including here in the philippines. >> reporter: duterte's rival appealed filipinos at first on reforms and continuity, what many people wanted to hear. but she lost her lead when the former president joseph estrada endorsed her. a close family friend but also a political kiss of death because estrada is not clean. in fact, he's the only sitting president to be footed from office for corruption. a no-no for the middle class that swung to duterte.
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>> duterte talks about drugs, federalism and agriculture, whatever, but the nuts and bolts we have not seen yet. >> reporter: and there's the problem, nobody knows what he wants to do with the economy or about one in four in poverty that could hold back the strong growth. for whoever becomes the new president of the philippines, lifting more people out of poverty, getting them out of places like this is going to be a crucial challenge, not just because it's a drag on growth but because it's almost an insult to humanity. martin song, cnbc, manila. we are a couple hours away from the u.s. market open. but what we're looking at is slightly higher on the implied open. incidentally, you may have noted the russell 2,000 small index turning in a second consecutive week of losses. that's for the first time since
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early february. small caps were more in the region of 14% to 15% with the intraday high hit in the summer of last year. at the same time, when looking at some of the sector players last week, we talked about how we have not seen the massive recovery as some anticipated, you are looking at 6 out of 10 sectors lower led by energy around 3% last week. 7 out of 10 sectors are positive led by utilities. >> to me the real story last week was the nasdaq. almost coming within a hair of correction territory again. that's quiten usual the moves in the nasdaq. and the dip intraday, they managed to close slightly higher up .40%. but it was the third consecutive week of loss and that was the first time since the three-week losing streak we saw mid-january. not a good week for tech, but it was tech earn pharma we talked
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about earlier performing on the year. >> we are done with the jobs number, slightly softer than anticipated. although wage growth still seeing relatively solid wage growth. >> we get that off our shoulders and the china data comes to sweep us again. it will be interesting to see that. we have quite a week up ahead of us. we'll continue our coverage with lots of earnings. we also have rate decisions taking place again. live coverage of that. you can always find us on e-mail and twitter as well. love to have you with us for this morning. that's it for this show. "worldwide exchange" is up next.
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good morning. crude climbs. prices rising on a raging wildfire from canada's oil sands and a cabinet reshuffle in saudi arabia. market alert. chinese stocks dropping on weaker than expected trade data. should investors be worried about the economy all over again there? and the race for the white house, why donald trump says he's open to raising taxes on the rich. it's monday, may 9, 2016. "wor "worldwide exchange" begins right now. ♪ good morning. happy mo

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