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tv   Worldwide Exchange  CNBC  May 16, 2016 5:00am-6:01am EDT

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good morning. a new call on crude. long-time bear goldman sachs is changing its tune on the commodities. the details straight ahead. new this morning, apple ceo tim cook arrives in china on which many are calling a charmed offensive. a live report from beijing coming up. your money, your vote. donald trump weighs into the brexit debate. we'll tell you what the presidential nominee means for the uk and u.s. relations with britain if he's elected. you're watching "worldwide exchange" on cnbc.
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good morning, welcome to "worldwide exchange" on a monday on cnbc. i'm sara eisen. >> i'm wilfred frost. we'll bring you up to speed on what the markets are doing right now. last week we ended half a percent to 1% down for the three major averages. those declines really coming on friday for the rest of the week looking pretty much flat. today we're looking at a slightly positive open but not too significant. the dow falls higher by 24 points. the s&p by 3.4. and the nasdaq by 7 points. the ten-year note as we know in and around 7.5% the last couple of weeks. and it's towards the 1.7 level right now. 1.714. as for the global market picture, traders shrugging off economic data out of china. we got chinese investment, factory output and retail sales. all of them grew slightly more than expected, slightly less than expected in april.
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but we managed to see gains. the shanghai composite up a tenth of a percent. in hong kong, similar gains. and in japan the nikkei was up sharply earlier in the session. the weaker japanese yen, some talk of fiscal stimulus there but it sort of sold off into the close and managed to close higher by a third of 1%. >> the point to add with china is that the steady firm data the last couple of weeks has been a little softer. something to keep it on. yes, shanghai is up. over the market the shanghai market is down 8%. something to keep an eye on today. but steadily get iting lower there. the german dax is down 1%. in france down three quarters a percent despite oil higher. >> the dax is closed with the spanish market down 1%. europe not following suit. thankfully, the u.s. futures are
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bucking the european trade. a mixed performance for the dollar today, nothing too significant. the euro is up about .10%. the yen is down .10%. and the pound is basically flat, 1.4353. we'll look at gold prices quickly, also gold currently in the green today up .80%. oil is the big story right now with prices rising. long-time bear goldman sachs now says the market has ended almost two years of oversupply and has flipped into a deficit earlier than they thought. the firm says this follows the slight disruptions from nigeria, venezue venezuela, the united states and china. they are now expecting $50 a barrel in the second half. earlier that number was at 45. so it's not exactly a super bullish call, but the goldman calls have been nuanceed in the last few months.
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they were expecting supply and demand to rebalance but that is happening sooner than expected. >> the demand side of the equation is something we continue to focus on for the big reason we just said, in china, data is a little softer. asia, we have not seen a big pickup in growth. so we really see the demand side holding through for the rest of the year? gdp growth, around the world, everyone apart from germany is slightly cutting the forecast. the uk included. >> in india and china, in particular, that could sort of carry us through. a lot depends on the u.s. economy as well. we're getting such mixed signals. better retail sales and sort of weaker gdp numbers. >> either way, i think the resilience in oil prices over the last month we should say, that lots of factors are moving from supply to demand to middle east to asia to the u.s. to the dollar factors, the financial factors, either way it's been resilient. another good week last week for oil. another good start to the day. we are closer to 50 now. >> and with the stronger dollar last week, too. >> let's talk more about the
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dollar. in that regard, san francisco fed president john williams says the u.s. economic outlook is in his words, quote, definitely looking good. they are suggesting two to three rate increases this year. and the next policy meeting is june 14 and june 15. so he doesn't represent everyone's views at the moment. the housing sector will see the national association of home builders put out their numbers today, housing starts and industrial production as well today. on up wednesday, minutes from the last fed meeting. of course, always parsed for any indications on how they view the risk facing the u.s. economy. thursday it's the philly fed survey and on friday look for existing home sales. as far as earnings, the retail theme continues after a painful week last week. here are the retailers this week including home depot, lowe's,
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target, walmart on thursday. we'll also get numbers from cisco and salesforce.com. interesting ones with target and walmart reporting this week after pain across the department stores. will they fall into that basket? or they are both implementing pretty aggressive turn-arounds led by their ceos. >> it's a debate between the discretionary consumer and the more staples area. on top of the retail sales themselves on friday, we're better. >> so is sentiment. >> does that play into the walmart stock like macy's? very confusing the retail sales on friday compared to earnings. >> the consumer is healthier than the department store earnings would suggest. and the consumers are spending their money on places outside of apparel and accessories, a big change from the last few years. consumers spend on electronics now and on cars and sports apparel. it is different. >> and you think a stock like walmart would benefit from that
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yet walmart included with all the retail stocks suffered last week. so perhaps this could be a catalyst to see a bounce-back in certain stocks. >> maybe we'll see differentiation on the retailers. quicken loans found that dan gilbert is building the yahoo! internet assets. berkshire hathaway could provide financing up 1.7% this morning, yahoo!. digital retail will replace time warner cable in the s&p 500 after the close of trading tomorrow. this comes as charter communications acquires time warner in a deal that is expected to be completed around the same time. digital realty is up 3.4%. verizon and union officials represent 40,000 striking verizon workers to return to the bargaining table. the development comes after labor secretary thomas perez met with both sides in washington yesterday. and more news for you this morning, the telegraph is reporting that google could face a record antitrust fine of $3.4 billion from the european commission in the coming weeks. google as you know has been
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accused by the eu of breaking the laws by unfairly dominating the search market. so far no fines have been leveed so this could be a big deal. some are looking for as much as $6 billion. the $3.4 billion may not seem that big but it will be a record. amazon will launch a new line of private labeled brands in the next few weeks of household brands and foods to include happy belly and mama bear according to the wall street journal. amazon is diving deeper into apparel. and shell is looking into a spinoff of the noncore assets according to reports. this as the oil giant deals with the huge debt pile following their merger. and toyota plans to take legal action -- volkswagen is
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looking to be sued from norway east wealth fund. >> this triggered the recall of 11 million cars. there are several cases against vw brought by the u.s., germany and the netherlands. the most recent case stems from vw saying the devices that helped these vehicles cheat were of rogue employees. and the chief investment officer says that management should have known. as an investor, it is their responsibility to safeguard the fund's holding. the lawsuit is expected to be file maryland the coming week. back over to you. >> landon dowdy, thank you. in other news, south korea is fining nissan for manipulating emissions tests. they will continue to work with the south korean authority. still to come, apple's ceo tim cook arrives in china.
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he's already visited one of his company's stores there and taken in a ride on a didi car. a live report from that is coming up. first on this day in history, 1951, the first regularly scheduled transatlantic flights between new york and heathrow in london began. today there are 45 airports in north america with routes to europe and more than 40 million seats were offered in transatlantic flights this year. thank goodness, so wilfred can go home like last weekend. >> absolutely. we're back in a couple minutes. don't go anywhere.
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good morning to you. welcome back to "worldwide exchange." we have asia up, europe down. thankfully u.s. futures are up. we were down half a percent last week, depending which of the three indices you look at. all of them are pointing higher, but only by about .20%. the dow is higher by 15 points at this hour. oil is having an impact on markets once again. another strong week last week for oil prices. and we opened strongly today. goldman sachs put out a slightly more bullish tone this morning to help sentiment. wti, 47 on the nose, up 1.8%. apple's ceo tim cook is in china today. eunice yu is live with a look at the visit. this comes after the big bill-dollar investment in the
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ride sharing company. good morning. >> reporter: yes, definitely. tim cook was in downtown beijing at the biggest apple store there and accompanied by the president of didi who is the ride hailing app company in which apple just invested a billion dollars. and to underscore the importance of this new relationship, tim cook as well as the president were both in a didi taxi and he was posting pictures of the event on his account. he was holding a roundtable with app developers, one was the founder of another important company here, china's version of groupon, and tim cook was just talking a lot about how important the app economy is to apple. and he was also discussing the
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government's role in how important it's been in developing the internet. now tim cook's visit was widely expected because of the fact that apple has been facing a lot of challenges as of late. the slowing economy, also the slowing handset market and the competition in the smartphone industry. the company is also facing a crackdown on some of its services, itunes from the regulators, and there's an expectation tim cook can work out some of the problems it's facing with government officials. in fact, the chinese media have been reporting that he is expected on this trip to meet with several high-level government officials as well as internet companies. guys? >> eunice, listening to "squawk box's" debate on this earlier today in europe, one analyst said apple will have long-term success in china if they partner with various local players as opposed to something else, can we expect more investments like
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the one they made late last week? >> well, that's what the speculation has been. and that is just that it's so important for apple to have several local partners. and to be able to really show the government that they are contributing to what is very important to the chinese government, and that is called internet plus where china becomes a technology leader. and so they have invested now $1 billion into didi chuxing, as we talked about last week, is not a government-owned company. but it is state-backed. and the chinese sovereign wealth fund does invest in this company. so it is seen as a local competitor. it is not necessarily in apple's interest to invest in, say, uber over here. so that is the image that apple might want to be presenting in order to try to smooth things over and continue to expand here and to continue to show the government that it is playing ball. >> it really seems like tim cook is chartering a new course when
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it comes to relations with china. clearly every u.s. company wants to be there and it is very important. eunice, is there a model or formula for appeasing the chinese government enough to work freely to sell their products? >> well, i think it's really difficult because i think the whole model is being reinvented constantly. because in the past foreign companies would tell you that they felt very welcomed here. and that foreign technology and foreign companies generally were welcomed here. but now they are feeling less welcome. and if you talk to people from the american chamber of commerce, they will tell you this. that one of the problems they face is there is all this regulatory uncertainty. so they are not feeling as welcome. so a company like apple now as well as a lot of other consumer-oriented companies are hoping to be able to expand in china because china is such an important market. for apple it's the second biggest market for them. and they want to expand but they
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also have to really walk a very fine line where they want to make sure that the government is welcoming the type of business that they are bringing and that they are not necessarily doing anything that would be seen by the beijing government as reaching some sort of national security or doing anything else that wouldn't be within the government's interest. >> very tricky when it comes to electronic companies. thank you. eunice yoon reporting live in beijing for us. when we come back, donald trump weighs into the brexit debate. we'll tell you what he says next. heading into break, here's the national forecast from the weather channel's jen carfagno. >> sara and wilfred, the chill continues today, really across the country. there's a lot of below average temperatures. blustery conditions in the northeast. still running a few degrees below average, though, but not as bad as over the weekend. today we'll have thunderstorms returning to texas across portions of oklahoma. could see severe weather with big hail, damaging winds,
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tornado risk as well. across western oklahoma, up here in the panhandle, plus heavy rain will be a concern all week. we are starting this monday with rescues in cars in corpus christie, texas. inches of rain that is still yet to come here across the lone star state for the week ahead. plus, there will be a lot of rainy spots this week with rain in the forecast today right here from kansas into missouri. that will keep spreading. that will also keep temperatures down with the clouds and the rain sticking around. that's your coast-to-coast forecast. i'm meteorologist jen carfagno for the weather channel. "worldwide exchange" continues after this.
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welcome back. in political news donald trump is weighing into the u.k.'s brexit debate and slamming them as a disaster for immigration. in an interview with piers morgan, he calls the eu democratic and difficult for business. so will it impact trade between the u.s. and the uk in a trump administration? here's what the candidate had to say. >> i don't think they will be hurt at all. they have to make their own deal. britain's been a great allie. >> would they be in front of the q? >> britain has been such a great allie they went into things like they shouldn't have, for example, going into iraq, okay. with me, they will always be treated fantastically well. >> would we be front of the q? >> i don't want to say front. i want to treat everybody fairly. but it wouldn't make a difference to me whether they were in the eu or not. >> and trump also attacked
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london's mayor who warned trump's ignorant viewing on religion would be less safe if he becomes relimb. trump challenged sadiq khan. i wonder if this is a sign of frictions to come if you had a trump presidency. would we see him clashing with various world leaders? on the other side, we have talked about how hillary clinton would want to distance herself from, for example, certain endorsements. i think we would rather go with them backing trump. >> do you think it makes a difference? >> i don't think know. but you will see them celebrating with a trump endorsement. it is a clear opposing view to obama. bank of england's governor
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mark carney is denying he overstepped his bounds in the bank's independence by warning of the short-term costs of leaving the eu. last week the bank of england said that britain risks lower growth, higher inflation and recession if voters do back a brexit in next month's referendum. this prompted all sorts of criticism the bank is biassed and is destabilizing markets. in an interview he shot back saying it would be failing the public if he didn't raise red flags in advance. >> what we're doing is we're identifying risks around leave and we're taking steps as an institution to mitigate the risks. >> now this is interesting as well because one person who i do think does have an influence and there was a recent poll that suggested of independent people, mark carney is high up on the list, so whatever your view is to whether he's slightly opinionated or not, people do listen to his opinion. >> it's not like he's weighing
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in on a presidential election. this is a fundamental election with costs. therefore, for him not to raise a risk as he does all other global risks that would affect the uk economy would not be doing his job. >> he's definitely pushing the boundaries. but either way, the other person on a similar poll who people will voice their opinion on, we would like to hear from her majesty, but she will stay out. president obama took a couple swipes at donald trump during a commencement speech yesterday without mentioning the presidential hopeful by name. >> suggesting we can build an endless wall along our borders and blame our challenges on immigrants, that doesn't just run counter to our history as the world's melting pot, it contradicts the evidence that our growth and our innovation
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and our dynamism has been spurred by our ability to attract from every corner of the globe. that's how we became america. why would we want to stop it now? in politics and in life, ignorance is not a virtue. [ applause ] it's not cool to not know what you're talking about. that's not keeping it real or telling it like it is. that's not challenging political correctness. that's just not knowing what you're talking about. >> i found it hard to listen to what he was saying. what on earth is he wearing there? >> he was wearing the graduation robe for rutgers. >> there you go. that looks odd. >> just a bright red color.
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let's get to sports news. officials in manchester are calling for a full inquiry after a fake bomb used in a security exercise cost the premier league to be canceled. the device was found in a bathroom prior to kickoff on saturday. 75,000 people were evacuateded with the match rescheduled for tuesday. they will refund all tickets and let both fans watch the game for free. still to come in this morning's top stories including gold man's new call on oil. stay tuned with us on "worldwide exchange." we have that and much more to come.
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market alert. goldman sachs changing its tune on oil. the crude call coming up. and new this morning, apple's ceo tim cook arrives in china on a charm offensive. and mark cuban for president. we'll tell you who is calling for the businessman to run as a third-party candidate. it is monday, may 16, 2016. "worldwide exchange" is coming up. good morning. welcome back to "worldwide exchang exchange." i'm sara eisen.
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>> and i'm wilfred frost. >> we are looking for a higher start for wall street. dow futures up 24 points. s&p 500 up 3.6. nasdaq futures up 5.5. the economic data continues. with that, the ten-year treasury note as we get you started for the week ahead, 1.71 is the yield, slightly higher. minutes from the last fed meeting will be interesting on wednesday as we get more on the discussion of the federal reserve in terms of the risk. we'll also get consumer price inflation which is one of their mandates as everyone tries to figure out when the next rate hike is going to be. let's have a look at global markets in european trade. we are in the red at the moment. germany's change today -- excuse me, gemrmany is closed down. traders in asia are shrugging off economic data.
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the investment factory output and retail sales grew more slowly than expected in april. as you can see, the shanghai comp up .80%. the data has been getting softer out of china. japan and hong kong are both up. sri is joining us live with more. >> good morning. yeah, the data over the weekend from china, we did see expansion in all the metrics, fdi, retail sales and industrial output. but at a slower pace than previous numbers. do they add stimulus to keep the growth or do they dial it back? remember, if they do overstimulate then that could fuel speculation. we have seen a lot of investment in the commodities complex and
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the speculation could add to onerous debt levels. the markets are showing the shanghai composite focusing on the regulatory policy. there was media speculation. we could see a crack down on mma and fund-raising that crushed that. that helped the market. elsewhere, the nikkei and japanese equities continue to be subject for the whims and the fancies. we did see a firmer dollar, that was good news for the japanese equity session because a weaker yen is good gains for the exporters. we did see the turnaround. maybe there's an element of profit taking in the dollar/yen cross. but the market's also very concerned about the earnings numbers. and the down beat guidance we have been seeing from corporate japan. this is associated with the china trade numbers. back to you now. >> sri jegarajah, thank you.
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the dollar is coming off a few strong weeks here kind of directionless in trading. stronger against the japanese yen that has helped sentiment overall. weaker against the euro, 1.1315. the pound is under pressure, but nothing extreme. early this morning, for the flip side of the dollar, trade is gold hurt by the reassertive dollar over the last few weeks. gold is strong today up .80 about $10. it's interesting to see the dollar move on friday after the back of the retail sales better than expected. it was a strong move straight after the numbers. as the day went on, people said, this is going to change the likelihood of the rate hike in june. we won't get one and that eased off toward the end of friday's session. >> it's all about the fed and getting the expectations right. if it's going to be june, july, september, the market's not pricing in june right now but a lot of fed officials have been speaking and saying june is on
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the table. and if we continue to get strong numbers like we did in retail sales, which suggests that the economy is really rebounding from no growth in the first quarter, will that change the fed's mind? consumer prices are coming out this week. cpi, that will be key. >> that will be key but june 1 is ahead of brexit, i just cannot see that happening. the question really is, how many more do we get by the end of the year? >> to july there's no news conference, so september may be the next one. but a lot can happen between now and then. >> but if the next one is in september, the chance of two more is very close together. >> that would be november and december, end of the year. that's it. this is what is going on now. >> we talk it through so much. but it is so key. the u.s. dollar has been a key factor in influencing oil prices. they have been rising this morning though not because of the u.s. dollar. because long-time bear goldman sachs now says the market has ended almost two years of over supply into a deficit. this follows disruptions from
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venezuela and the united states. wti is up 1.8%. brent is up 1.78%. >> goldman sachs always gets a lot of attention. the idea that we are now in a deficit earlier than expected is a big headline on that one. in corporate news, quicken loans founder dan gilbert is reportedly bidding for yahoo!'s assets. and berkshire hathaway could be providing financing there. neither will comment. and tim cook is in beijing and he used a didi chuxing car to get there. and the new york post is
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reporting that facebook is testing music videos in an attempt to keep viewers from turning to youtube. the social network said they started talks with music labels about licensing songs that users can upload to their own videos such as vacation or birthday videos. >> i'm going back to using facebook, only rejoined a month or so ago. >> i need to get back into it. >> if you do watch a video, what is so clever how quickly the next video of a similar theme comes up irrelevant of if it was on your personal feed. you click on a video, there are probably three things to watch from us and immediately what comes up is from a similar provider, whether directly from cnbc or just like that. but it works very well. >> my cousin this weekend said he gets all his news from three things to watch on facebook. >> you watch one and then you're drawn in and watch five back-to-back. facebook has your attention. >> and the ads don't bother. >> you -- the ads drive me mad.
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particularly for twitter, it is more news than social media, they don't have to enforce it to everyone but i would pay and see if it works. doesn't matter. they have both options going, free for those that want it. to the top trending stories, drake proves he has a sense of humor. the rap star promoted his new album "views" on "snl." drake's best bit came from his inability to let a good beef with other rappers go. he started feuds with all his fellow "snl" cast members becoming easily offended by the smallest things. >> he always gets high marks. he can do the comedy thing, too. he was good. >> you saw it? >> yeah, he was excellent. mark cuban says a group of
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anti-trump republicans approached him to run for president as a third-party candidate. he told "the washington post" the republicans liked his loud personna and his ability to connect with the voters. the billionaire businessman said he could beat trump in an election. of course, this comes after he sort of supported trump but then called him a "seinfeld" candidate saying he stands for nothing. cuban would be an interesting choice and an interesting election. >> it's not going to happen. >> i guess not. maybe next time around. it's been seen that a businessman can do well. rightly, four seasons restaurant is shutting down in new york. and everything must go. the owners of the famed manhattan restaurant are auctioning off everything from bar stools to silverware in an onsite auction on july 26. will you be buying anything there? >> i won't be buying but it is a beautiful space. >> very nice space. >> end of an era. this is a restaurant that has been in power since the '60s. >> my father used to love it.
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if you ever wanted to walk from governor's island to brooklyn, you may be in luck. there's a kick starter campaign for a floating pedestrian bridge to link the two. it's gaining attraction with more than 400 backers. the campaign for the citizens bridge seventh prototype is nearing a $25,000 goal with just a few days left to go. >> i like that. >> who knew? you could kick start a citizens campaign to build a bridge. a mario kart movie could be coming near you. they could expand to developing movies. while the japanese maker is not saying when the future products will be announced, they will debut within the next five years. if you grew up with super mario like me, that could be appealing. i used to play super mario -- >> i can't imagine that you are good to compete against? >> no, i am very good. >> we'll have to take each other
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on. i can't picture that. i just can't. >> because i'm so girly, right? thousands of people turned out sunday in france to watch the maiden voyage of the world's largest ship. royal caribbean's harmony of the seas has 16 decks. it is longer than the height of the eiffel tower and can hold 6,300 passengers and 2,100 crew members. the floating town, which is basically what it is, cost close to a billion dollars to build. headed for the uk, it will embark on the official voyage this weekend to the new home court in barcelona. >> you said 6,100 passengers and 2,100 crew. one crew for every three passengers. that's not a good margin. one member of staff for three guests. >> they keep getting bigger and better, though. >> sounds like a nightmare to me. >> you don't want to travel with 6,300 people? >> i think it would be -- having one member of staff per three passengers for service is good. still to come, today's must
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reads including one from "usa today" calling for donald trump to release his tax returns. and we're wishing happy birthday to the youngest of the jackson family, janet jackson. one of the best selling artists in history with more than 160 million in record sales. she holds the record for female artists for the most consecutive top ten hits on the billboard top 100. a very happy birthday to janet jackson. we are back in a couple of minutes.
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now to today's must-read stories. this is from "usa today." mr. trump, release your tax returns. this is not going away. here's their argument, american does have the right to know whether someone who wants to lead the nation pays what he owes. it's free of financial conflicts of interest and gives generously to worthy causes. at first trump said it's not the public's business and he said americans don't care, it's not an issue, get passed it. there's nothing to see here. >> i do slightly agree that it is none of the public's interest. or traditionally i would say that. but in the last six months, it is almost like all politicians around the world have to or it seems like they have something
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to hide. >> it's a public business. every u.s. candidate does so. that is what happens in politics. if he's asking -- the whole thing is build on trust and popularity, which is what he's campaigned on, not to mention he's calling out companies for evading taxes. at least he should prove that he is a stand-up guy when it comes to his own finances and taxes. >> the other thing is that his tax returns would reveal exactly how much he's worth as well. which is something he wants to hide. >> that is something he wants to hide. my pick is in "the financial times." another brick in trump's wall. at first they, meaning the republican party, did not believe that mr. trump could maintain his lead. then they denied he could win the nomination. now they conclude it's safer for mr. trump to take full representation than to risk taking the blame for having
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facilitated it. the republican strategists are starting to come around, referencing the meeting last week with paul ryan. even if they don't fundamentally believe he's the right republican candidate, now they think, gosh, if we try to fight him on this, it will be our fault and the establishment's fault not his fault if he doesn't come through. >> this is the correct calculation given how many supporters are out there to support him. that convention will be one of the most exciting conventions. >> it could be quite calm by then. maybe they have come together and it will be quite simple, but it certainly would have been. >> but there are people who said they will not come to the convention -- romney -- >> maybe just his supporters. let's get to andrew ross sorkin joining us from new york. the team for "squawk box" coming up. >> i want to go back to the must reads, am i allowed? i want to have a serious conversation about the "times" story on trump and women. and i want to understand, i
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thought -- it was a very mixed story, oddly enough, in that he was promoting all the women but then saying all the bad things, but then in the context of them in a pageant, i was confused. i wanted to talk to sara about it. >> this is something people were talking about all weekend long. i think the overtone, though, andrew, was negative. that he cared a lot about what they looked like. that was the sort of bottom line, there was this infatuation with their looks. the implication is that marginalized women and trump tweeted all weekend about a hit-job on him. >> we'll be talking be about that and also be talking about yahoo! and the latest in that soap opera now involving potentially warren buffett. becky over here to my left has a little bit of information on that. she's waving to say hello. i don't think everybody should get too excited but we'll get to more on that in a little bit.
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and then we'll get you through some of the other morning reads and a lot more on china. and apple, we have a conversation in the 7:00 hour on that. so that is what we have lined up. >> when does billion come back? >> you have to wait. 2017. >> andrew, it's not like you're super busy, can't you just pen another quick series for us? >> there are a whole army of other people doing that right now. >> we look forward to that. and we look forward to "squawk box" as well coming up in 11 minutes' time. and coming up are fed minutes out on wednesday. anthony chan will tell us what he'll be watching in wall street's week ahead. you're watching cnbc, first in business worldwide. from bank of america to buy a new gym bag. before earning 1% cash back everywhere, every time and 2% back at the grocery store. even before he got 3% back on gas.
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welcome back to "worldwide exchange." another down week for stocks, we are joined by anthony chan from
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jpmorgan chase. we ended the week with a bright note on retail sales after an ugly slew of reports from america's largest retailers. anthony, did that do anything to sort of cheer up the mood about the consumer? >> oh, absolutely. what you're going to see is that the first quarter numbers are going to be revised higher because of consumer spending. but also it's telling you that consumer spending is getting away from the dangerous area where it is below 2%. now we are looking at a number closer to 3% for consumer spending growth. >> we did see a decent reaction from the u.s. dollar to the retail numbers, which was somewhat of a surprise because a june rate hike surely is totally off the table. >> i think everybody knows a june rate hike is off the table but it doesn't mean there are no rate hikes later in the year. as you know, the market was moving away from any rate hikes during the year. i think this puts it right back on the table. we know the constraints. in june you have the brexit vote. in july you don't have a press conference, we know all that.
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as you get closer to the election, things are off. but there's still possibilities that they can sort of wiggle in between all those constraints. >> and on that note, we'll be watching the minutes from the fed meeting, what sort of information are you looking for? >> i think the consumer price index clearly you'll see the headline number being bumped up by higher energy prices. in fact, when you look at brent crude from the lows this year, brent crude is up close to 75%. you're definitely going to see some of that in the headline in this month. and on the fed meetings, i think what they will tell you is they are looking at the data and if the data continues to improve, the federal reserve is back in the game. i know you have been hearing a lot of fed speakers and hear more this week suggesting like john williams that the federate hikes are on the table. i think what they are doing is prepping the market. because one thing they don't want is for the market to underestimate what the fed does. it's better for the market to anticipate more and be surprised rather than do less. >> should the market listen to them, though? hasn't this fed proven that it
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wants to prevent a slide in the s&p 500. >> i think the fed wants to make sure the markets and the economy are stable but they want to raise rates. it is just that sometimes the market and the economies globally get in the way, but they truly want to raise rates but haven't been able to do it. and they want to prep the market for that possibility. >> what is your latest view on china? the data from the last few weeks is softer again and the shanghai composite is down 8% over the last month. is there more concern in the chinese market again? >> i'm not too concerned because the total finance and the locally bond finance bonds they do to finance state and local governments, that was up a whopping 60%. that's clearly unsustainable. when you look at total finance in itself in the first four months of this year, it is still compared to first four months of last year, they are still up 30%. so credit growth is very strong and they will continue to stimulate the economy. they are going to be focused on keeping growth in the 6.5% to 7%
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range. what they don't want is to have so much credit growth you exceed that and start to worry about too much debt in the economy. >> if we went back to 2012 and 2013, we would have said similar things. they can't keep the growth going forever, the credit growth is not sustainable and lasted for three years. they have shown to turn the taps on again. the paper over the cracks. so the question is how much longer can they taper over the cracks with the credit ease? >> i think if you look at, for the last five to six years, economic growth in china is slowing down. they are stimulating the economy but stimulating less and less and less. and when you look at recent numbers that they were going to really push credit growth, still compared to 2008 when they did $4 trillion, now they are talking about a number bigger than that. because the economy is so much bigger it's a smaller percent annual. don't get too excited. >> you started off the interview talking about the better consumer on the retail note, the better economy in the second quarter, is all of it enough to
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help corporate earning rebounds? because a lot of the numbers were overwhelming. >> i think right now over the next three, four, five, six months there are problems with corporate profits. but the dollar has weakeneded a little bit. even though in recent days it's coming back but still lower than in the beginning of the year. and energy prices are much higher. so those two big negative headwinds are sort of dissipating. by the way, consumers are coming back to add to the -- >> the second half rebounds. >> the second half rebounds. >> we have 20 seconds left, goldman is bullish this morning, do you agree with that? >> i think the oil prices are heading higher over the next six to eighth months. consumer prices -- no recession means economic growth is higher. >> thank you so much, anthony chan from jpmorgan chase.
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keep an eye on "squawk box" coming up next. have a very lucky morning.
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good morning. a new call on crude oil. a long-time bear goldman sachs is changing its tune on the commodity. the details straight ahead. i wonder if they would miss this. new this morning, apple ceo tim cook arrives in china on what many are calling a charm offensive. a live report from beijing is coming up. and reports that dan gilbert and warren buffett are teaming up to buy yahoo! may be a bit exaggerated. we have the real story straight ahead from the oracle of omaha himself. it's monday, may 16, 2016. "squawk box" begins right now.
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♪ live from new york where business never sleeps, this is "squawk box." >> good morning, everybody. welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernan and andrew ross sore wynwyn sorkin. the s&p is up by 3 points, the dow jones is up by 25 points and the nasdaq is up 4 points. the nikkei closed up .30%. hang seng was up by .80%. and a similar gain in shanghai. european equities are down across the board. the ibex in spain is down by 1.1%. the ftse is down

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