Skip to main content

tv   Street Signs  CNBC  May 17, 2016 4:00am-5:01am EDT

4:00 am
♪headlines. and oil towards $50 a barrel with disruptions in nigeria and canada. warren buffett's apatite for apple, after they break a three-day losing streak. in london, vodafone shares dives a notch as the growth for the first time in eight years. and other olive branch for greece. the imf reportedly pushing to allow to skip loan payments until 2040. >> good morning, everybody.
4:01 am
welcome to the show. good morning, nancy. >> good morning. >> sleep very well, you? >> very good. >> with the brexit views on all sides here, some interesting views really when we talk about the countenance and the data from the imf and what actually happens on june 23rd. >> i'm going to talk to the chairman of j.d. witherspoon this afternoon. looking at the european marketing here this morning, we're a little higher at the moment. we're over a percentage point on the stock share of 600. so a bit of buying taking place. a whole bunch of markets were off on holiday yesterday. coming back on full trade today. dancing back on the europe mean markets, you'll see that all of yur europe is trading higher by
4:02 am
almost one percent. looking at the price of oil, ladies and gentlemen, we're back up there. brent closing for $50, same as well, goldman sachs showing the statements for the gold prices. and the outages that the oil sector has been dealing with, nigeria, venezuela, canada, for example, and declining u.s. production. declining u.s. oil production playing hard. >> and continuing to have a big equities trade but we're also watching individual corporate owners. vodafone, they're reporting revenue and core earnings and for the first time since 2008. this thanks to higher sales in europe along with a better performance in south africa, turkey and aegypt.
4:03 am
for more analysis, that's bring in dave millette joining us on the phone. the stock up 3.2%. i want to home in specifically on the revenue growth coming in above forecast. is that really one of the bright spots here? >> it is, but it say bis a bit mixed bag, you mentioned europe, it's the first time in six years they've posted growth. it's patchy. strong performances but the uk is definitely lagging behind everybody else. >> what else do they need to do to boost the performance in the uk? we know they're facing stuff competition. and vodafone saying today they intend to boost customer service right here in the uk? >> yeah, the number of surveys, by the consumer magazines which
4:04 am
have put vodafone towards the bottom of the lead, they've been boosted by the decision. eu to block the merger between 02 and 03. that would have made them the biggest operator with ge having bought ee. they've still got gaps. >> dave, good morning, it's louisa. i'm looking at your growth to growth, the first time in eight years. where is that momentum coming from this time around? >> the bulk of the growth has come from emerging markets, you mentioned south africa and egypt, turkey as well. but other parts of southern africa as a whole. southern america. i mean, those emerging markets have grown about 7% over the year, compared to perhaps overall growth at 2%. obviously if you're only averaging 2% and you've grown from 7, that means you've got grown as far and losing ground
4:05 am
in other areas. >> what's the deciding factor going to be on whether or not you maintain momentum for the foreseeable future for the rest of the year, for example? >> well i think the big opportunity for them, if they're coming towards the end of their project spring which say massive capital investment improvement in the 4g coverage, particularly across europe that will start to wind down and free up some cash. also the takeup of 4g with consumers is relatively low. only a small amount using it. the date dal usage actually goes up at the moment, they're only averaging one gig of usage per month per user. when you think some of the base of packages sold is relatively low. >> we know this incredible amount of investment is going into 4g. does this suggest we're going to see a dropoffs in vodafone going
4:06 am
forward? >> well, they have announced the next initiative is going to be around customer services which tends to be less capital intense. more people skills training, et cetera. that shows an aelement of system. but certainly, the major technical costs have gone through and that may be one of the reasons there may be light at the end of the tunnel which is they may be freeing up cash to increase yields and return to bigger dividends. >> dave, the blocking of the 023 merger as well. was this the best decision in hindsight, do we need more consolidation in europe? >> i think given the eu referendum, i think it was almost inevitable, given that the uk bodies were opposed to the merger that the eu was going to go against it. that would be have been dynamite for the brexit campaign.
4:07 am
some short, though, i think it's definitely the right decision where the markets have had fewer supply. hutchinson would challenge the ruling would take place after the eu referendum. that potentially opens the way for a different decision. >> dave, good to have you with us. dave millett, director of equinox business consulting. moving on, and syngenta saying it still expects the chemchina deal to end. and at the request of lawmakers seeking photo clearance on requests of the deal on security. and taylor wimpey trading on
4:08 am
top. the home builder is now promising to pay out 1.3 billion pounds over the next three years this as taylor wimpey raises targets since 2013 following a boost in uk demand for property. premier foods says it plans to streamline operations after seeing it rise by 1% in the first quarter. the maker of gravy, i haven't made gravy for ages, the second shareholder, they've expressed disappointment that the group rejected several takeovers from u.s. spice maker mccormack. >> i made it myself. >> i used to make it. big cook. an imf proposal for greece would fix interest rates on the country's eurozone debt 1.5% for decades that's according to "wall street journal." and said the proposal would push
4:09 am
the maturing of debt to 2040. this leads the imf proposal on greek debt far past that. and meanwhile, confirmation from germany's constitutional court that it has received a complaint against ecb policy. this follows a newspaper report over the weekend which said a group of academics and business people are taking legal action over the central bank's bond buying program. joining us, barnaby norton from bank of america. we have the court in germany saying there has been an official complaint on the legality. i want to get your view. but you've take an in-depth look at what specifically the corporate bonds will mean for the market, what you have discovered? >> first of all, it's been great for the credit market. we needed in january, february.
4:10 am
suddenly it's renjuvenated issu. when you make debt costs so cheap, so tempt for company, the ultimate conclusion is companies exploit that and they level off. and ultimately, it leads to poor lending decisions and misallocation of capital. >> and it's a concern because presumably factored into the court's review of the program do you think it's unconstitutional? >> i don't think they can conjecture about the future and say this is a bad policy. they will just look at the legality in particular. what it does to the central bank's balance sheet. and there's no doubt it will grow the central bank's balance sheet. i think we take the u.s. example that we haven't a cycle already in the report that it's growing
4:11 am
and that's very rare. >> and we're talking about this on a day also when we noted that portugal and ireland, they benefited less as mentioned because buying less bonds there. but they're afraid of their own limit. what would determine the success or the failure of the ecb's buying of corporate loans? >> well, it has to be more than just backstopping credit and helping banks to finance. i think ecb want a virtual cycle here. they want companies to level out. it's been shown that european companies have been proven for too long. in a way, they're at risk, if they don't level out they'll be bought themselves. the ecb feels if they can motivate the leveraging in europe, we can get more bond supply. we can buy back and it becomes a virtual cycle. >> i think you've brought some charts as well. maybe just put up one of the charts. i'm not sure what the gallery is, you talk about the negative as the new norm.
4:12 am
>> yes. >> here we go. the new norm for the time being, the new norm for the future, a couple years, how long is that new norm? >> new norm until we can generate sustainable impressionable recession in countries. everybody wants currency weakness.dollar is weak, the euro is getting stronger. so increasingly, we're in a world of more and morme and mormon tear policy. >> as we get closer to the g-7, you can bet that's a topic of discussion. you made the point that ecb wants the corporates to level out and spend. in we get there how do you think it manifests itself? are we talking organic growth, m and a?
4:13 am
>> i think the greatest success has to be an m and a cycle in europe. in monsanto, it's a great test case for how this may play out. if that deal transpires from a german company potentially that debt will be eligible and buyable by the ecb. we could have the first ecb helping us and taking over the world. >> barnaby, you're staying with us. by all means get involved. it's fantastic to get more people on this table. e-mail us @streetsigns cnbc. that's the address. >> i'm directly @nancy at cnbc. now, i always thought i'd marry prince? >> did you? >> yes. i always thought -- there are so many of us massive prince fans.
4:14 am
the types, the jackets, the cds. >> did you ever write him a letter? >> i didn't. i always thought i'd meet him through this job, for example. it would be one of those things where you'd kind of glance at each other. he has his life which is a bit eccentric, maybe. i'm a bit boring. but then you're a bit older and you look at each other and i'd go to paisley park and live happily ever after. >> so sad that happened. he would have been flattered. >> his black and white blazer that he wore in the movie "purple rain" is expected to sell for as much as $100,000 when it goes up for auction next month. other items for sale include a white ruffled shirt from "purple rain." a pair of knee lent boots as well from the 1988 tour.
4:15 am
i've watched so much for theage of prince from last week. >> we could start a campaign if you really want the jacket. still coming up here on "street signs" -- it's all aboard the world's largest cruise ship. "harmony of the seas" drops anchor in southampton. we'll find out if passengers will be sliding down you its ultimate abyss. that sounds a bit confusing. we'll explain after this, short break.
4:16 am
4:17 am
welcome back to "street signs." well a leaked letter to the daily mail reveals that uk prime minister david cameron called on businesses to make their case remaining in europe before his negotiation with the eu. this when the prime minister has been telling the house of commons, he quoted rule nothing out on brexit.
4:18 am
the strategy was discussed. meanwhile, former london mayor boris johnson took another swipe at the prime minister and chancellor george osborne accusing them both of produce, quote, hostage videos to md lead the public. johnson maintained that those people, quote, did not speak for the majority of business. i had a chance to catch up with the former uk chancellor lord lamont and asked him how trade would actually look like with the eu if the event of brexit actually takes place. >> trade taking place between eu as exactly most places in the world trade with eu, australia, united states, japan, china, they all trade with the eu. and all sell successfully into the single market without being a mart of the single market.
4:19 am
there's this myth created that somehow the eu is incredibly difficult to sell into. it isn't difficult to sell into. united states, maybe miles away, maybe a larger economy, but actually it tells more to the eu to the single market than britain does. switzerland which is a tiny country sells per capita five times as much without being a new member. it's not some fortress with very high walls. >> in order to have that access, presuming you will still have to pay to contribute to the eu? >> i don't see why that would happen at all. united states doesn't contribute. china doesn't contribute. australia doesn't contribute. why should we contradict? >> you might say that your europe mean ally, however, might not be so willing after this harsh debate that's gone back and forth. are you confident that they're cable to come to the table and make this a quick negotiation
4:20 am
process? >> look, you don't need to have a trade agreement. the countries i mentioned haven't got a trade agreement. they just sell. it's individuals who buy. it's product which are sold to people who want to buy them. if britain attempted to negotiate some special trade agreement, if we didn't like it, we could reject it. britain after all runs a large deficit with the eu. the biggest market for the most important country in the eu, germany, is britain. germany is most important industry is the car industry. who is the biggest customer for german cars? the uk. are they really going to impose some restrictions and damage their own market? i don't believe it for one second. >> there you have lord lamont making his case for writing britain should get out of the european union. you can tell there, he's saying, look, you don't need a formal agreement. we will still be able to trade as norm with the eu.
4:21 am
discrediting some of the with norway. as when i pushed him for data that's come from various organizations with specific costs, risks for unemployment and growth, he even referred to the treasury data as somewhat propaganda. coming from a former chancellor. an incredibly heated debate. i did ask him what happened with the debate itself. he said we do have to be careful not to divide the party. >> it's already divided. >> with boris johnson. >> he did stand by boris johnson with his reference to hitler and eu having objectives. with different means. you have to wonder when you start talking about hitler on one side and war on the other. >> these are very far-out linking of events, right? but you also have this mad rush to secure business leaders it and to have them on your side. and as we're hearing, obviously, apparently as early as possible taking place. you also have the telegraph
4:22 am
publishing a letter from 300 business leaders. they were saying they back a brexit. and quote/unquote the competitiveness of britain is being undermined from the membership. this coming on the back of imf and other large organizations warning against the brexit. >> it seems to be more than anything, it's the uncertainty. so, yes, it's a great unknown. you can debate the various data projecting economic costs. >> look, nobody knows. nobody knows. by all means get involved. love to hear from you and get your thoughts as well. the referendum date is coming. 23rd of june. let us know what you think. "street signs," the e-mail address, @nancycnbc. @louisabojesen. and adeco ceo expected trade
4:23 am
negotiations to drag out for several years. >> if the uk decides to stay in europe, i think after investment it can be decided. if it is not the case, then you will see some negotiation starting, and it will last two or three years before the uk will have new agreements with trade partners. and that's when you will see our customers delaying their decision, or just decide to invest somewhere else. because we need to act quickly. >> barnaby is still with us, barnaby martin. looking at the credit side of equation, what do you think the outcome could be from credit from a potential brex jit? >> let's say we voted to get out, the first reaction would be
4:24 am
a knee jerk reaction. remember, you need to think about a central bank response. he was very vocal to support the brexit. and with the bank of england has actually got a history of aggressive stimulus. cuts. and if they reignite those policies actually you could have a perverse effect where the credit market remains in the direct scenario. >> do you think there could be a different response to the brexit, to post to things like that? >> the central bank's mandate is i've got to protect the uk. the central bank would have to at least think about intervening to make sure that it didn't become a greater economic problem. >> blah does the ecb do on this situation, we have heard from the governor play on the topic of the effect of the eurozone?
4:25 am
>> we also have the new tltros for the banks. he can support the bank's through liquidity. support the bond markets by buying. he's shown is us he's got more debt and from his point of view, he's ready to protect the eurozone. >> just on it that we're still waiting for, what are you expecting from the markets to make sure it gets going, the program? >> well we expect some of the ltlros to get rolled into the new. in terms of favorable, you'd want mario draghi from of the ecb finally be saying, look, he's an olive branch. we're not going to punish you if you don't lend. but the 40 basis point rate is about as favorable as you can get. he's basically saying we'll pay
4:26 am
you and just die little lending to the economy. >> to participate is the question here. >> while we have you with us before we say good-bye, a brief glance at another chart as well. this is the euro high grade market size. that's just going to continue to grow, increase? >> if our view of animal spirits being unleashed on the corporate side is correct because as their program ends we're looking at a doubling, i think, of the credit market in five years. >> that much? >> yeah. >> what does that amount to each year? >> 2.5 trillion growth. about 500. but the u.s. market told us that these things happen. i mean, this isn't a dream. is this say reality. >> and u.s. corporate spending, that pulse, is higher than europe? >> the u.s. has picked it up and done what they should have done understand a policy world. our corporates in europe have been a bit too prudent, and now they have no excuse because they
4:27 am
can effectively have ecb bonds at zero rate, if not negative in the future. >> it's a matter of time, it's uncertainty that's weighing on it? >> the number one thing that we have to conquer is the threat of inflation. if we can't conquer that, nobody wants to level off. but if it works -- >> that's the big if. >> we've got to go, we've got a break to go to, barnaby, thank you very much. check out the world markets live. bringing you news as it breaks. check that out during the break come back and join us on the other side in about two minutes' time. we'll see you then.
4:28 am
4:29 am
good morning and welcome back to "street signs." we're waiting for uk inflation data. this, of course, coming after the data forecast last week.
4:30 am
we're keeping an by on sterling. sterling has made a bit of a bounce against the dollar as the latest poll shows more momentum for the uk. here we go, getting the uk data out for april. inflation up 0.14%. and higher by 1.3% on the reuters forecast for 1.5%. animal inflation there, rpi, excuse me when you look at the cpi, we got the monthly up 0.1% on the monthly basis and 0.3% on the yearly basis. that goes 0.5% year over year. on that yearly basis coming in just shy of the reuters forecast. and we should also note here it's the first fall in the yearly rate since september. >> yeah. >> so the april inflation marking the first fall on the annual rate since september. >> they do say as well the unwind of march's seasonal boost of airfares, the main driver on
4:31 am
cpi. as you've said, it's the first drop since september. >> also interesting to note the house prices affected as well. house prices affected the move before april's rise. a lot of people were looking to get into the property market so that playing a role as well. >> plus 9% year on year, since 7.6% seen in march. the high of the year basically. london, plus 13% year on year. did you buy a place? >> sadly, i missed out. i keep trying to time it. >> and since 2014, they're saying the boosting house prices reflecting a rise. if you're more than one place. >> exactly. we are seeing a pare back with sterling. sterling higher by 0.7 of a percent against the greenback. again, a lot of the brexit debate continuing to have a role on that as well.
4:32 am
oil, of course, as well. when you look at the inflation forecast you can't ignore what's going on in the energy markets because commodity stocks have been climbing as oil now gushes above $50 a barrel. and in nigeria and canada. warren buffett's appetite for apple has been lifting it in europe. breaking a three-day losing streak. here in london, vodafone shares dial it up a notch as they return to growth for the first time in eight years. and another olive branch for greece. imf reportedly pushing for athens to be able to skip loan payments until 2040. as usual, we like to get you ready for the day ahead, if you're joining us in the states. indeed, if you trade u.s. markets and we're implied the open is for a high open in the states. >> that's right, quite a strong day states side as well.
4:33 am
a big portion of that due to apple. 23 points on the dow gained all due to apple. pretty significant there. let's get a look at how european markets are trading there. the gain side ftse 100 higher by 1%. the xetra dax higher by 1%. and ftse mib higher by $1.25. let's get you a check on oil prices, wti closer to $49 a barrel. now at 48.9 and brent crude at 49.05. that report coming out of goldman sachs that it has flipped. canada sands as the winds shift. workers have been evacuated from
4:34 am
the facilities near fort mcmurray. they have gone offline in the area as a precautionary measure due to pipeline disruption as well. we thought that things looked kind of -- things were moving toward an end to the wildfires but it's turned. >> exactly. meanwhile, over in nigeria, oil production has been cut by almost 40% due to militant attacks according to the country's oil minister. the delta avengers have carried out a growing number of attacks in the region, continuing to claim independence and calling for a larger slice of oil income. louisa, as we were pointing out earlier, definitely part of this bounce is due to supply disruption, some raising if they are temporary, what kind of effect does this have going forward but with goldman sachs yesterday, they're seeing a movement. >> we've come back up towards $50. very swiftly, right?
4:35 am
this happened quickly. a lot of oil analysts are saying pay more attention to what's going on in nigeria. the output is at a more than 20-year low. i was talking about that the other day. so we are seeing huge changes to output especially from large countries that we're used to getting oil, such as nigeria. >> that's right. dynamics changing all the time as you mentioned. let's also look at how the oil prices impacted the asian markets. you can see the emarching largely ahead of the dollar trade. and the shanghai composite, off by 0.25%. we did get the disappointing data yesterday out of china but the shanghai has continued to underperform when you look at the gains of late. sigh the composite there. and sauce trailia's main market up by 0.7% this after it came in
4:36 am
more dovish than expected. let's take a look at air bag manufacturer takata they are recalling an additional 14 million in the u.s. the total recalls now about to reach 120 million units. hi, mikiko. >> hi. all air bags that use ammonium nitrate that don't comprise a dry agent. it causes the air bag to explode which sends shrapnel flying which in some cases can kill the driver or passenger in the car. and now the japanese authorities have also instructed the carmakers to recall all takata made air bags that have no dry agent added which is seen to affect an additional 7 million
4:37 am
cars. honda awhich has the largest number of cars using takata air bags so far has called 30 million units and another 20 million use passenger side air bags. honda has shed 25% of its revenue for the year end of march, even though sales have grown significantly. toyota and other other japanese carmakers are following suit and are planning to send the bill to takata. takata for the second year in a row for 2015 looking a $120 million loss. automakers will have to likely bear the costs as well. >> thank you very much for that. swiftly on to the aussie. we've seen pretty sizable moves of late. the dollar getting a little boost. the aussie dollar, surprising
4:38 am
some investors because the toll was a bit dovish. >> the key word was persuaded. call comes down to one word. patience of the fed now persuaded in the rbi signalling to many to cut by a quarter point. several analysts saying that this could mean the bank won't be as quick to cut in the future. but also you've got to pay attention to the dollar here when it comes to commodities. the australian dollar being highly lynch linked there. >> michel temer has named maria sylvia marquez as head of the bank. miss marquez was previously steel skwexecutive. the dollar is just slightly lower against the real. the real has been one of the best performers as people got excited about a political
4:39 am
transition in the count. joining us now is louis costa, head of effects and rates at citi. louis, let's start with your views on the brazilian real. is there still risk when it comes to other transition under way? >> i think it's we still have further lags of rally to go. but you have to take into account, a couple of thinks, first, the positioning, knowing it's been a very successful trade in positioning some of the assets in the brazilian array of capital markets is now densely pop late populated. the second point if the markets traded we are probably already there. now, the question is what is next in terms of development
4:40 am
within the brazilian economy. we noknow in terms of growth assets there is huge challenge. the brazilian market is getting worse rather than improving. if you look at the forecast, they tend to reject the v shape which may actually not materialize. we can actually see, depending on how we go in terms of china dynamics, in terms of commodities markets in terms of domestic politics, it could be the case that we'll be seeing a very compressed growth dynamics in brazil. and stocks overperformed by a large margin. >> and the commodities picture just one of the crucial factors there, when you consider brazil's growth outlook. but how are you playing the recent commodity moves in terms of other oil links currencies? >> well with the oil links
4:41 am
currencies will still perform reasonably well. if you look, for example, the russian ruble, it's been a very interesting way to play oil upside with a huge carry, we're talking about double-digit carry in this case. and i do think that this is positive play, at least in the short term. but as you mentioned before the dynamics in oil now has a lot more to do with the disruption if supply, rather than outward corrections in demands. so is the supply, the disruption supply fades which is probably the case of canada, not the case of nigeria yet we could see some correction. we continue to be positive here, yes. as we go into the top of remining region, the refining season in august, july to august, that will be further demand. and that can actually be good for all of the dynamics, at least in the immediate term.
4:42 am
>> you mentioned demand there. obviously, we continue to look at the data coming out of china when we try to predict the recent oil demand. the recent number coming out of china how is that projected in the asian currencies? >> well, it is a disappointment. probably if you move the data and consider the data on more of a cumulative basis rather than the stock data that's being released you get to see it's not a disaster. it's definitely what we expected. i think there are a few important conclusions here. first, the china big impulse, lending impulse we saw in march is highly inefficient. this is going to replenish the effort for the state enterprise which dominate some sectors of the chinese economy. so we're not necessarily going to see the impulse we saw back in 2000 when china went through a massive stimulus slide. and second is the issue of the commodities, how real commodities are we have.
4:43 am
and we have seen a huge spike, for example, and we've since then come down from the peak. more than 20% from the peak. we believe now than actually started helping them that might be a little problem for the currencies especially ones more correlated with base matters. >> luis, great to sigh. luis costa head of cea effects and rate strategy at citi. meanwhile, hillary clinton a and bernie sanders face off today. let's get to tracie potts. >> hi, hillary clinton is trying to avoid a new symbolic loss. she's still the clear front-runner to get this naum in addition. symbolically, she does not want to lose kentucky. it's very to west virginia. it's coal country.
4:44 am
it's an easy that she easily won eight years ago but is now having some trouble with because coal miners are concerned she may be after their jobs. that the clean energy initiative she's been pushing could simply put them out of business. she's been on tour trying to assure them that's not the case. polling in kentucky showing her five points ahead. is that latest poll is about two months ago. we'll see what happens there. in oregon, bernie sanders is concentrating there and expected to win that state but won't necessarily get him closer to the nomination. the big prize for the democrats is going to be kentucky. the real battle shaping up is between hillary clinton and donald trump. now talking about how they'll go after each other in debates coming this fall. >> thanks for that, tracie. that's tracie potts from nbc news in washington. let's bring you up to news with other news. according to reports by the
4:45 am
european commission, the report following a deal to allow turkish citizens to travel across the continent without visas. >> u.s. treasury department revealed monday that saudi arabia held over $116 billion in american debt at the end of march. the first time the saudi hold g holdings have been made public. it faces the biggest holder of u.s. debt. and the world's largest cruise ship "harmony of the seas" is expected to arrive in the united kingdom today to undergo preparations for its first trip with passengers. the ship is worth over 800 million pounds. it can carry 6,296 passengers. that's terrifying. and boasts the tallest at sea. >> if it's not quite rough enough on the seas, you're not going to feel anything when
4:46 am
you're on a cruise ship that size. and you can take a slide down. >> ultimate abyss. >> on the stern of the ship, and that's the abyss then. >> also moving this morning as we head to break, we'll leave you with pictures of celebrations from the premier league champions parade in leicester city. congratulations.
4:47 am
4:48 am
hi, everybody. welcome back. you're still watching "street signs." u.s. stocks varied into monday's trade erasing most or even all of last week's losses for some stocks out there. wilfred frost has a look ahead from the headquarters in the states. hi, wilfred. >> good morning, louisa, yes,
4:49 am
indeed, a busy day ahead on wall street today. dominated by economic data and retail earnings. let's start with the economy, the april consumer price index is out at 8:30 a.m. eastern. the headlines epi is expected to tick up slightly. in april, we get april housing start which is is forecast reed bounded after a big decline in march. at 9:00 a.m., look for treel production. meanwhile, john williams, and dallas fed president, dennis lock hart and rob caplan all three speaking today. in earnings news, home depot and tjx report earnings before the opening bell. retail was in the eye of the storm last week. department stores in particular leading the sector. although retail sales as a whole, of course, on friday, they came out in surprise. so retail continues to be a focus this week, with those names today.
4:50 am
walmart reporting later in the week on thursday. of course, as you said, yesterday a strong day for wall street, led par, particularly by apple and oil prices as well. and those oil price gains which continue boosting european and asia trade. boston futures right now, dow up by 175 points. >> thanks for that, wilfred. we had an analyst yesterday who quite likes home depot and tjx. we'll see if the results turn out today. the big focus was following the beg money. that was driving the moves on yesterday's session. what did investors buy into for the first quarter? well, let's go whale watching, louisa. george soros is now going after the s&p 500. it finally reveals that he placed a post on the etf which
4:51 am
tracks the index. and also with options phone a gold etf. over to bill ackman at pershing square, they made bigger bets by foods. operator of kfc and nomad foods. he did, however, loose his sweet tooth by reducing his stake in mondelez, the maker of cadbury. and now the filing confirms he cut his apple stake in the first quarter. >> i wonder how many people are following in their footsteps. >> yesterday, you can see the news in the stock price. >> yes, in the longer term. >> apple also got the biggest boost that shows an investment of more than $100 million. warren buffett's berkshire
4:52 am
hathaway disclosed a deal. >> when it comes to the oracle of omaha, a lot place their stock bets. our own becky quick confirms it was one or both of his top stock picking lieutenants todd combs and/or tom wrestler that made the trade. both made it clear that portfolio managers have full discretion over the respective parts of the overall berkshire portfolio which mean they don't need buffett's permission to buy a stock. buffett himself has side away from making investment in technology companies. notable exception was that very massive bet on ibm stock that was definitely a personal pick from buffett. but even then, he said he's considered more of a services company, and not as much of a
4:53 am
pure technology company. now, the question becomes whether the apple stake becomes more of a trade to manage around. or it becomes a core long-term holding. we know ibm hasn't been performing all that well since his investment. and apple stock took a big hit after their earnings report. only time will tell, so to check that out if you want to know more. back to you guys. >> well apple's ceo tim cook will be meeting with the indian prime minister when he equivalents the company later this week. and it follows the trip to china after apple announced a $1.4 billion investment in the company. good morning, welcome. what do you make of apple's interest in dd economics? >> there's a couple things going on there, apple is trying to grow its share in china. investing in a china company helps them build pr as well as
4:54 am
getting a relationship in the chinese market. they're also clearly trying to grow what they're doing in maps negotiation and maybe over time. and didi fits into that strategy as well. >> what's the time frame for this happening. it doesn't happen overnight. and yuber is also present in china, but didy is much bigger than u verse. >> they did that wither siri, with the chip company that helped them design their own processor, they did that with an app recommendation engine. this is an investment in a company acquisition. mostly because china say big market. >> what about extending an olive
4:55 am
branch, if you will to regulators or win them over as an act of goodwill? >> i think when you look at the chinese companies they all cross-invest in each other. it's a kind of ownership structure that we have in the west where competitors are generally competitors. and it helps them with relationships with chinese companies. it helps them with chinese government relationships. it helps with pr for chinese friendly companies with consumers by making investments in chinese companies. >> let's talk about berkshire hathaway investing in apple. that gave a boost. lifting the dow as well. a lot of people said, look, he made this investment before the results came out before they say they had the first quarterly loss in record time, i should say. all of that is driven by the sales of iphone and demand going
4:56 am
forward w forward. where do you see demand? >> it was still an incredibly profitable company. they sold 51 million ioffense. ten million units down on the year before quarter which was massively high because of a shift to the largest screen iphone. it's a massively profitable company. by far the most profitable. >> on the demand going forward there's a concern that you see from suppliers in asia. that seems to be what led the stock going down in price. where do you see it? >> i think with apple, when you look at them, they have heir hybrid design but they have their own software. apple interestingly, though, is trying to position itself from away from being a hardware company. they're talking about 31 billion stored base-recommended revenue they in 2015. when you think of what we heard about berkshire hathaway's
4:57 am
thinking about companies if apple is positioned there that might make it more attractive and fit into that philosophy. >> thank you for joining us. that's it for today's show. i'm nancy hulgrave. >> i'm louisa bojesen. looking forward to having your company tomorrow. "worldwide exchange" is up next. have a fantastic day. we'll see you very soon.
4:58 am
4:59 am
5:00 am
good morning. global market alert. oil prices extended gains with u.s. crude trading at six-month highs. follow the money. the world's most powerful investors releasing details on their latest bets. the napes, common themes and what they tell us straight ahead. and decision 2016, two states holding primaries today as the race for the white house heats up again. it's tuesday, may 17th. "worldwide exchange" begins right now. ♪ >> good morning, welcome to "worldwide exchange." on cnbc i'm sara eisen. >> and i'm


info Stream Only

Uploaded by TV Archive on