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tv   Worldwide Exchange  CNBC  May 18, 2016 5:00am-6:01am EDT

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good morning, breaking overnight, japan gdp growth surprises the markets. new this market, goldman sachs threw up a caution flag. we'll tell you why. and decision 2016, hillary clinton moves closer to her party's presidential nomination. it's wednesday, may the 18th, 2016. "worldwide exchange" begins now. ♪ good morning and welcome to "worldwide exchange," on cnbc. i'm sara eisen. >> and i'm wilfred frost. a very good morning from us as well. >> they're killing us with the
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music today. >> i don't like that one. it's weird that song. do you know that song? >> no. political news overnight. let's catch you up on the numbers here and the results from the primaries, bernie sanders winning the oregon democratic primary contest but nbc is calls hillary clinton the winner in kentucky. now, she's within 100 of the delegates kneed to clinch the democratic nomination. much more on politics. what it it means going forward this hour. that get us up to speed on the markets. around 1% for the main indices here in the states. we just flipped into the green on the futures market. about an hour or half an hour, only slightly, the dow pulled higher by three points. let's look at the bond market as well because we did see movement there yesterday when the cpi data and other areas of data
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surprised us. closer to 1.7, 1.8, on the top side of the yield this morning. the big news overnight, japan avoiding a recession in the first quarter. gdp by an annualized 1.7%. that was much more than the 0.2 increase that economist has predicted. remember, gdp had contracted 1.4% in the fourth quarter. among the increases in question 1, consumption boost but it was a mart of spending and analysts thing prime minister shinzo abe may still delay that until tax hike. and the question, of course, for japan, is it strong enough to put off any more stimulus and to keep that tax hike in play for next year. the dollar/yen has been vast overnight. can't decide how to react. for now the dollar is stronger, the yen is weaker but the nikkei
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closed pretty much flat because the yen was stronger. >> yes, i think this is a positive surprise. and the question is can it last longer? the annualized data and the numbers suggest that headline beat is exaggerated. >> some economists saying it was also because of a leap year, an extra day. >> well, yeah, that was factored into people's estimates certainly a beat but we don't want to overplay it. the rest of the asia overnight, basically in the red large bay because of declines on wall street yesterday. hong kong, shanghai both down 1%. early european trade continuing in the red there. the dax the big laggard earlier in the trade. it was be down by 0.5%. and now 0.25%. >> as for the broader market picture, let's show you currency, dollar, big mover, it
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was stronger, versus the yen on yesterday's session as fears heated up over a fed interest rate increeks. the dollar is stronger this morning against the yen and the euro as well. the pound under a little selling pressure but it still been around a 2 1/2 month high -- >> 2 1/2 week high right now on recent polls. still, a little bit of overconfidence in termless of whether the polls are going to be accurate. so many moving factors to come on that. >> show you quickly gold. what gold has been doing. we want to watch that when we see inflation, consumer prices tick up. the biggest increase in the month of april. gold had a strong day yesterday. as far as oil closing above $48 a barrel on wtix rate. there's selling pressure, about 0.5%. we'll keep an eye on that. it's dictating the stock.
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and it closed higher and stock sold off. brents down 0.6%. >> and robert kaplan on the declines kaplan says he expects more bankruptcies for oil and gas burns this year. and he thinks companies will continue to fold but by next year, kaplan seeing the oil market evening out. i want to mention a couple of decouples we've seen in may so far. traditionally, weak dollar, strong oil. that's the relationship. though, in may, we've seen both move up. we've got the dollar up about 2%. crude is up about 4.6%. so both of those performing well over the last 2 1/2 weeks does that suggest that one of them is there for june to break down and can that relationship be maintained? the other decoupling we've also seen during may is the performance relative to comphod eyes it. crude up about 5%. copper is down 10% so just
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highlights again how remarkable the resilience in oil prices has been over the last couple of weeks, given the more traditional macro industrial factors which influence the likes of iron or and copper has been much weaker. >> is it about the fed? i mean, that's what seems to be dominating the trade. yesterday was one of those days where it was positive data after positive data. even industrial production which a lot of people say has been stuck in recession recently showed better results. consumer prices are finally moving up maybe box of rising commodity prices but analysts are starting to see signs of inflation. the upbeat data was taken as bad news. here we are in this perverse world where good news is bad news because there's more news of a fed hike. >> but that can explain why this month we've seen a better performance in the u.s. dollar but is it a surprise that we see
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oil continues to do well once other commodities have been soft suggesting what is the reason driving this. i'm not saying it can't continue, you got to get your head around why these things are happening. >> or who is in charge of stockings. i was watching the opening of "amad money" yesterday, cramer was saying there's two masters of stock, oil and they're both colliding. both of those things are negative for u.s. stockings. >> three, really. >> we could get more choose on the fed's thinking it is say big day because the central bank will be releasing its minutes from last month's policy meeting at 2:00 p.m. eastern time. remember, that's when the fomc decided to leave it unchanged. despite job market gains, household spending had, quote, mod rated. that's lowered expectations, will of, the on thing i'd
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mention, they took out the statement. whether they did better globally would be interesting as well. >> after the last meeting i thought the set of minutes would be pretty much nondescript. as we had all of this fed speak and moving around i actually think is important again. june surely isn't on the table. >> i looked at fed fund futures for the month we were in. 15% chance for june. but a few days ago, 4% chance. so the data is moving with expectation. there's earnings to watch out today, look out for lowe's after a strong quarter from home depot but a weak stock price. sisco, l brands come after the close. >> goldman sachs has downgrade its equities to neutral over the last 12 months while upgrade to get same neutral rating. overall, goldman saying it prefers credit to equities
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valuation and not a stretch to the note citing the fed's aggressive turn for the u.s. the bank offering more upbeat comphod eye it its saying the fed as well as data despite it's disruptions should support all data over the next three months. >> i'm not sure that's a huge turn in terms of the goldman position, though, if you read it it shows 24rr a lot of reasons to be cautious in globe stock. it's not just in the u.s. sort of globally, the overweight cash. >> it's also neutral, neutral, neutral, in the three regions showing how it's hard to determine how the market is going to go. >> right, a bumpy ride to nowhere. a few individual stocks. check out shares, anderson hg 2 holdings offering to buy the u.s. grain handlers for $37 per share in cash for about $1 billion. that's a 2% increase in premium. burbury's four-year profit
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dropping 10%. the british luxury fashion group expecting the market to remain challenging this year. it does plan to overhaul its retail operations and simplify its assets for that stock. goldman sachs management reportedly considering the sale of australian equities business. more stocks to focus on today. sab miller is expecting to place foreign exchange volatility. it's up 2% today. jpmorgan increasing its quarterly dividend, the parent rising to 44 cents. it's basically flat in free market. northrop grumman uping to 90 cent percent share. that's the third consecutive
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increase. another big retailer to watch will be target as mentioned shares have been higher on the ton around ahead of the first quarter results leased before the opening bell, though they come under pressure as a result of some of the disappointing earnings that we got from department stores last week. landon dowdy joins us now with three things to watch in the target report. good morning. the street is looking for, of $1.19 a share on revenue of $16 billion. that's down from $17 billion last year reflecting the sale of its pharmacy to cvs. same-store sales, analysts estimating costs will come in at the lower end of the retail estimates due to elevated inventory levels. we've seen broader indications of softer consumer spending in april. since apparent accessories 20% of target's business keep an eye on those sales. second, e-commerce. the retailer's investment in its digital operation failed in the
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previous quarter by 30%. we'll see if that trend continues. is it enough to compete with amazon. and the third thing to watch, the food. target has revamped food. fresher products and exclusive items. it represents about $18 billion in annual sales. wilfred, i have to ask, how do you pronounce target do you say target? >> no, it's a heart "t." we all agree on that. amazon is another one. >> amazon, right. landon, thank you for that. still to come, a live report from asian 0 the market's reaction to japan's surprising gdp figures. and the twitter and facebook question today, should the fed raise interest rates this summer? get in touch with us on that. there's a june meeting and a july meeting. but first, this day in history. it was four years ago that facebook began trading on the nasdaq. ipo trading at $38 a share
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giving facebook a market cap of $104 billion. the largest valuation to david a newly listed company. but the first day of trading as you may remember was marred by all sorts of technical glitches, a disaster. since thenner the stock has grown tremendously in the last four years. up more than 200%. "worldwide exchange" will be right back.
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japan avoiding a recession, at least for now. that's what the data show
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overnight. our sri jegarajah joins us live from singapore with a look at the latest gdp figures, sri, always a question what it means for pose both monetarily and fiscally in japan. >> absolutely. 34rr implications here. i would read into it, it did tell us there was a rebound in the first quarter. at the end, the price action there, the currency was really nondmilg noncommittal. we were seesawing the dollar/yen. most importantly, we need to flag capital spending. simply was thought there. if you look at the don't, it decelerated at its fastest pace since 2015. we need to see capital spending coming back to japan if it is to unleash this virtual cycle to get us 2% cycle over to you
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mr. kuroda and mr. abe to move forward with political and fiscal policy as well. it's a tough setup at the moment especially when you have to consider that a sales tax hike is really going to increase the burden on the japanese taxpayer and consumer right now. the economy is a very fragile state. one of the flags very quickly to you embroiled in the fuel emission scandal. the stock down. you can debate whether it was egregious or not. the company saying it did use improper fuel economy tests it 2.1 million models affected. only in japan. 15 models -- 16 models. i should clarify. that's where we stand. over to you now. >> sri, thank you for that. let's stick with asian news and focus to tech. apple ceo tim cook is isn't india on the first visit to the
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economy. he willed me prime minister modi and others later in the week. it will set up a software lab to help developers working on the ios class form. and as plans to open the first retail store in the country. apple up a third%. 93.8. and jack ma cancelling his speech at an anti-counterfeiting coalition. several members including michael kors and tiffany quit in april. the e commerce giant has pledged to fight fake goods. the company says president michael evans will be speaking at the conference instead. some picks of jack ma meeting with president obama at the white house, though it wasn't publicly on the schedule. when we come back, hillary
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clinton gets closer to the party's nomination. meanwhile, donald trump and the gop finalize a fund-raising deal. all today top political stories, straight ahead. oney. find out if you're dealing with a registered investment professional at investor.gov. before you invest, investor.gov. what aremaking a cake!ht now? ayla reminds me of like a master chef and emiana reminds me of like a monster chef. uh oh.
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welcome back to "worldwide exchange." nbc news is declaring hillary clinton the winner of the primary race in kentucky. tracie potts joins us live from washington this morning with all the details, tracie. >> hey, wilfred, good morning. the apparent winner, it was a narrow win by 1%.
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still count something of the votes this morning. we knew that kentucky was going to be a lot harder for bernie sanders than oregon. he won oregon by eight percentage points over clinton. but in kentucky she really fought for it and that is shown in the results this morning. in the numbers that we continue to see. for sanders, he was hoping to make it a west coast sweep, having previously won washington state. now oregon and now he says he's going to go on to win california. he's got two events there. it's certainly the big prize left of all the primaries. as for kentucky, sanders' team say they may ask for a recount as they await the 100% final results of that. meanwhile, we're watching the republicans, the big news on that side is that donald trump sat down with the republican party and worked out a joint fund-raising plan.
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it's something that hillary clinton has had on the other side. because he's self-campaigned. and done very little fund-raising, they haven't sat down and done this year. what this means the down-ballot candidates will be getting some money when donald trump does his fund-raising. >> you can explain to us why is bernie sanders still in the fray. >> because bernie sanders wants to have an impact. he plans to stay in the to d.c. primary, the last one and then plans to take the fight to the convention. that doesn't mean that he still thinks that he has a realistic chance of getting the nomination. but he wants to have an impact on what's important to the democratic party, and frankly, at the hill has millions of followers who aren't too keen on hillary clinton so he could have some influence here. >> i wonder whether it ends up hurting clinton and the democratic party in the long run. and whether it helps donald trump who is the presumptive
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nominee and campaigning against clinton? >> right, it's possible. certainly could. it's no question that hillary clinton has an uphill battle on getting some of those sanders supporters. clinton supporters were much more likely to support sanders than sanders supporters were to back clinton so, yes, she's going to have some work to do if he didn't come out hartley endorsing her some time before or at least that convention. meantime, donald trump making headlines in a reuters interview saying he's willing to talk to north korea leader kim jong-un to try to stop pyongyang's nuclear program. and other news, trump plans to dismantle much of the gulf regulations if he's elected president. this is well worth a read. interesting more specific comments. usually, he's broad and open. but he actually makes specific points. dodd-frank point, saying i'm
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going to be making a specific statement about this in approximately two weeks. is he going to suggest he's going to outright appeal that. that would be big news. given how front and center financials and banks have been during this campaign. is he going to get something more supportive towards the industry. >> good question. he also made comments about the market, likening this period to the tech bubble or housing market of 2007 saying companies that don't make profits have valuation. which blot up a lot of buzz on twitter. but he brought up janet yellen i do like her low interest policy. and supports auditing the federal reserve. a lot of good stuff in there in tellers of remarks. let's get to sports news. lebron james and the cleveland cavaliers are perfect in the nba playoffs sweeping the first two rounds. now, they pace the toronto raptors. lebron driving for the whhoop f
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the dunk. the foul in the second quarter, cleveland up 17. he finished with 24 points and the cavs rout the raptors 117-94. his salary could top $400 million by 2022. the nba would likely rake in a lot more cash off the court. an interview with "gq" magazine with james' business manager suggested his deal with nike may top $1 billion. nike is reportedly in advance talks to sign a ten-year sponsorship elsewhere with chelsea, the soccer club in london. last year, the premier league club announced it would part ways with adidas after next season, ending their contract six years early. >> i thought you were going to say soccer or something that would be radical.
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>> i did say soccer, adidas, nike. >> and now we just are to get rid of "knot." that would be great. airlines predicting 221 million passengers will fly between june and august. and that is up. the group is calling on the tsa to hire staffers to eliminate the screening delays that started creeping up. it recently launched a website called i hate to wait.com. where travelers can tweet locations and complaints to the tsa and share photos. >> you know my feeling on this, i don't mind waiting in a security line as long as they're doing their job. >> takes too long. still to come, this morning's top stories including speculation about the fed's next move. >> plus, the first on a cnbc interview for the president
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didichuxing. and you'll hear from the president. straight here on "worldwide exchange." huh. the good news is my hypertension is gone. so why would you invest without checking brokercheck? check your broker with brokercheck. plumping surface cells for a dramatic transformation without the need for fillers. your concert tee might show your age... your skin never will. olay regenerist, olay. ageless. and try the micro-sculpting cream you love now with lightweight spf 30. looktry align probiotic.our digestive system? for a non-stop, sweet treat goodness, hold on to your tiara kind of day. live 24/7. with 24/7 digestive support. try align, the #1 ge recommended probiotic.
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♪ no, you're not ♪ yogonna watch it! ♪tch it! ♪ ♪ we can't let you download on the goooooo! ♪ ♪ you'll just have to miss it! ♪ yeah, you'll just have to miss it! ♪ ♪ we can't let you download... uh, no thanks. i have x1 from xfinity so... don't fall for directv. xfinity lets you download your shows from anywhere. i used to like that song. good morning, central banks on center stage will today's fed minutes be more hawkish than expects. the debate and globe market coming up. and hillary clinton moving closer to the party's nomination winning the kentucky primary. and we'll you why first lady
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claire underwood says it's time to show her the money. it's may 18th, 2016, and you're watching "worldwide exchange" on cnbc. ♪ good morning and welcome back to "worldwide exchange" on cnbc. i'm sara eisen. >> and i'm wilfred frost. on the agenda today, the fed front and center. the central bank will announce minutes from the meeting at 2:00 p.m. eastern time. it's fomc noted that economic activity had slowed despite household gains and spending some moderated. that's lower than expectations on the hike. look for hormel, staples, target and cisco and l brands after the close. >> let's bring you up to to the market. a 1% decline pretty much across
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the board in yesterday's session, though, those are listed as negative. they were positive, now negative. dow futures minus 8, s&p futures down 1 point, nasdaq futures down 0.5%. and the note yield, big move higher in the short end. two-year treasury note yield yesterday as expectations rose for fed interest rate hikes on better economic data. we're seeing interest rates on the ten-year yield up a bit. we're keeping an eye on that, 178. >> in asia, japan, gp expanding by annualized 1.7% for the period. much more than 00.2 forecast. analysts thing prime minister shinzo abe will now delay a scheduled sales tax hike.
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the yen struggling in direction on how to respond to this. it is down .2%. just below the positive mark down five bases points. >> that half a percentage point rise in consumption within that number, better, good, but we'll see, because if japan does go through with its sales hike plan, that could tip the economy back into recession as it happened last time they did that. the rest of asia overnight, also a down picture after wall street's top session in hong kong, stock lower by 0.5%. and the shanghai down 1.3%. as for early european trade, what we're seeing, declines, the german dax down 0.3%. france down 0.3 as well. italy a bright spot bust just
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barely. having a look at the markets, the euro having that down. around a 0.4% move against the dollar. the pound moving higher against the yen and against the euro. the euro standing at 1.1271. gold prices this morning, a quick look at them, we're seeing them move down by 3.5%. and oil prices remain resilient. we're off been one-third of 1%. the big take away for markets in may, as i mentioned earlier is that decoupling of software which is the traditional relationship. may, both are up strongly. the broader index up 2%. crude is up 4.6%. does that mean that one of those two factors is going to break
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down quite soon, will it be oil? >> and the answer might be we're in this strange world where better economic data is considered a bad thing for stocks because the market is more worried about the federal reserve raising interest rates than celebrating a better economic picture. the economy barely grew in the first quarter. and it looks like second quarter is a lot better. housing starts are up. construction is coming back. even core consumer prices are starting to rise. something that has been nipping throughout this recovery. instead of cheering that, you saw groups like consumer staples get hammered. utilities, the best performing sectors get absolutely hammered. why? because they're rising that's what the fed racises rates. they're sensitive and may be dumped pretty hard right now if expectations kopgts s continue. >> june rate hike comes one week
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before brexit, potentitentiallyg concern on the markets. the bets are we'll see them later in the year. december, 71% in the bond market. two days ago it was in the 50s. so it's moved up. meantime, uber's rival didi chuxi chuxing. and joining us with the highlights from that visit with tim cook. good morning. >> reporter: good morning, sara, i'm outside of headquarters of didichu zing. she was playing host to tim cook. they've seen countless possibilities for future
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collaboration. this is what she had to say. >> joking with my team, it feels like a speed date. we got to know the apple team. they got to know us not too long ago but we clicked very quickly because the two companies share the similar philosophy. we both care about community. we both want a clabive culture. that gives a lot of common ground. in the same time, in china, we actually share a huge overlap in customer base. our driver base, our passengers they use apple and iphone a lot, ipads. so they're intuitive. >> reporter: and just like with so many other chinese companies, didi has 300 million users. 14 independent drivers. 11 million trips a day. but the company from their perspective is just getting
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started. this is what she said. >> right now, we have coverage in 400 cities in china already. as we mentioned we have completed 11 million rides on a daily basis. in beijing, the rides number we complete every day is five or six times what the whole new york ride sharing might do. so the numbers sound so big already, it's only 1% penetration. in china's whole ride share market. the daily commute for china's a1.1 billion. you see what i'm saying, only 1% penetration gets us 11 million. you talk ago a market potential. it's huge. so all we're focused on is number one, on technology. how we can match the supply and demand. the drivers, the vehicles answer t answer the passengers. >> reporter: she said flat out
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that right now, they do not have any plans. however, she as did stress, guys, that she's very confident in the company's position in this market against all of its competitors including uber. >> eunice, thank you for that, the honk in the background. indeed, a lot of focus on the apple investment into didi in china. i wonder more important where apple is now, in india, and the consumers are coming into that apple area of consumer products over the next cub ouple of year. >> we saw it in results where china sales were down, they're up now. cisco systems reports after the results of the bell, the bellwether will give investors a glimpse of technology spending.
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landon dowdy joins us with three things to watch. >> the street is looking at revenue of $11.97 billion on earnings. 55 cents a share on cisco's result. beyond the numbers, three things to watch, first, guidance. investors will wait to see how company will close out the year. the president says his team expects them to modestly dive down the quarter. and about the networking sector and demand and technology in general on the heels of expert, like the juniper networks and the third thing to watch, the cloud. investors want to see the core business showing signs of improvement. >> we'll be watching landon, thank you. for the top trending stories
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of the morning, google unveiling a highly anticipated voice activated device today. google home much like amazon echo will be able to answer questions and take voice commands. it won't ship until this fall. this is the whole new battleground on agents powered by artificial intelligence. apple has siri. amazon has echo. >> with the new tv, they talked up how the voice activation would work. it hasn't really worked. i haven't tried amazon or google, maybe they're better. >> i've never really tried it. >> i feel like a bit of a bat saying please play -- >> maybe they don't understand your accent. >> maybe that's it. i'm looking forward to our week in london all american pronunciations are going to get picked up on. donald trump warned that a
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tech bubble isn't silicon valley isn't staying silent. marc tweeting finally someone calls it out from now on when you say there's a tech bubble, you're agreeing with donald trump. and one has yuge bubbles. and one tweeting make bubbles great again. taco bell is getting a makeover. the mexican fast food chain is preparing to test four new restaurant designs as part of a way to test each restaurant to reflect the community it's located in. the new styles include exposed brick and faux fireplaces is he to debut this summer. everything we talk about goes viral because people are into it. >> i've never been to taco bell. and lady claire underwood is laying down the law.
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robin wright demanded that she be paid the same amount as kevin spacey. capitalizing on the character saying you better pay me or i'm going to go public. and they did. >> she deserves it. she has an important role. when we come back, today's "must reads" bernie sanders, ralph nader, how that could spell trouble. "worldwide exchange" will be right back.
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welcome back to "worldwide exchange." now to this morning's "must reads" the stories catching our attention. i went to "the washington post." my pick is titled "does bernie sanders want to be the ralph nader of 2016?" quote, bernie's attacks on the party have released something just as damaging to the causes he professes to represent. milbank also credits nader in his similar protests for helping to elect george bush. won oregon, lost kentucky, people wonder why is he still in the race, only with 100 votes to go for hillary clinton. clearly, he wants to support his cause and back his supporters.
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>> and that idea of a fed can be the force because you can have it on both sides with strong talks like cuba and others. surely, it will go down to two. >> it's just so unusual to have two leading candidates with high disapproval ratings. switching the gears, my pick is in "financial times." it's titled "amazon: control freak." this relating to the amount of ownership in tech companies, jeff bezos, 17.6%. a lot in terms of absolute holding but that is also what he has of the voting rights. it refers to the fact that facebook, mark zuckerberg is down to 4.5% but has a good portion of the voting rights. but with amazon, that hasn't happened and yet bezos still
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controls the company but can he continue to do so? the article saying the key to the debate of control is not percentage but value of his stake. $58 billion. that presents a tough obstacle of any investor wanting to influence amazon let alone anyone wanting to take over the company without his blefrssing. it shows the influence that zuckerberg and others don't have in holding down their percentage holding and amaintaining their voting percentage. >> in bezos, look at the valuation of that stock and it is a bet on him, his vision and his future. we're approaching the top of the hour, that means the team is ready for "squawk box" in new york city. andrew ross sorkin is with a preview. >> i'm adding to the "must reads." this is a trump story about
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putting your money where your mouth is, tom freeman, a great columnist and golfer by the way, in "the new york times." has a clolumn, a letter to donad trump about climate change. we saw that other report that came out yesterday where donald trump said he wanted to undo that. he said, look, donald, you own all of these golf courses all over the world. and all of those are the most exposed of everything you own. you actually have to figure this out, too. it's a fun read just in terms of how it's almost structured as this memo to donald trump. i offer that to you. but we do have a couple of other things on tap today. here's what we have. we have former senator bob kerry is going to join us. he will be our guest this morning to caulk about politics, and talk about donald trump and of course, this whole hillary clinton and bernie sanders thing
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stands. and the ceo of johnson & johnson. in the 8:00 hour, we have the head of the chamber of commerce which is going to be interesting, historically, they have voted been supportive of republican candidates, donald trump is more difficult for them given the position he's taken on free tray ade and the like. >> andrew, you mentioned golf, who wins between joe and you around the golf course? >> oh, it's not a contest. it's not a contest. i drive the golf cart. >> that's where the real fun is with the beer driving the golf cart. >> exactly. >> don't drink and drive. andrew, we look forward to "squawk box" in nine minutes' time. a reminder of the twitter question -- should the fed raise the rates this summer? it's a close call. 51% say yes. 49%, no. we'll pose that question to
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michael purves joins us next from weeden & company. ding, fl febreze air effects heavy duty has up to... ...two times the odor-eliminating power to... ...remove odors you've done noseblind to [inhales] mmm. use febreze air effects, till it's fresh and try febreze small spaces... ...to continuously eliminate up to two times the odors... ...for 30 days febreze small spaces and air effects, two more ways... [inhale + exhale mnemonic] to breathe happy.
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welcome back to "worldwide exchange," futures have flipped positive, they've been all over the map this morning but really action. dow futures up -- >> that's too strong a word. edged. >> edged. they were negative a few moments ago. nasdaq futures up 1%. this after 1% declines from major averages. joining us now to discuss where we go from here, michael purves, chief global strategist, there's this fear that the fed may raise interest rates sooner than expected. is that warranted? >> well, the fear is always warranted. i don't think they will in june. they may in september. i think what's important to step back and think about the data that the fed is dependent on is
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increasing foreign data and that's generally not that great right now. what i mean by that -- >> foreign data you mean from overseas? >> exactly, yes. >> what about the rise in consumer prices they were waiting and waiting to see the effect of energy wearing off. now we're seeing that, do you think they can get to that? >> that's a great point, sara. expectations are still way below the levels that i think most of the officials would like to see them at. so, you know, those are really heavily governed by these foreign economic developments that's why i'm saying, the fed, some of the lot of data that the fed is focused on is overseas. >> dollar index is up 2% this month. will that continue or produced in a hike that's now coming? >> that's a very important and great question. i think the dollar right now i think is going to be range-bound against most developed market currencies. what we're seeing right now, i
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think this is a really ov overarching theme, when you talk about the dollar and the euro, you have to look at the differentials in the treasury spread which have been blown out multidecade wide. i don't think see we see the dollar getting broader. >> in may as well, we've seen crude up so that relationship of weak dollar and strong oil has broken down. can that relationship remain broken down or will that see one of the two flip the other way? >> well, crude has been very interesting. i think this $48 level is actually a technically significant level. and i think it caught a lot of people off guard this week when you woke up monday morning and it was surging and so forth. i think there's a strong case where crude, we may even see it on crude as early as next week. >> and yesterday was interesting
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because some of the favored sectors, all year long, the utility, telecom, and consumer staples sold off the hardest. those are the yield payers. the alternative. was that a sign that that is the end of that trade? >> no i think that's more of a temporary pause. i think when you step back and see where is the ten-year-year-old, at 1.75%. balanced to what i think is in place for dwight some time, against a lot of sectors, we've seen a lot of dynamic and rapid sector rotation. so peopler coming in taking profits very quickly. i think that may be the end of the short term trade. >> 2016 is the way to watch? >> right. one day you're up and down 20 points. the macros are constructive,
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yellen with the dovish stance. the earnings are weak. >> michael, that is it. for "worldwide exchange." "squawk box" is next. you get use to pet odors in your car. you think it smells fine, but your passengers smell this. {ding} eliminate odors you've gone nose blind too, for up to 30 days with the febreze car vent clip. wow, it smells good in here. so you and your passengean breathe happy.
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good morning, earnings alert. home improvement retailer lowe's is set to report. as always, just one day after rival home depot beat expectations but ended up down 2.5%. new this morning, goldman sachs throwing up a caution flag saying it prefers credit over equities. we'll tell you why. and hillary clinton moving one step closer to securing her party's nomination. this close again. in kentucky. results straight ahead. it's wednesday, may 18th, it was by a nose, everyone is saying, the kentucky derby.
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and "squawk box" begins right now. ♪ >> announcer: live from new york where business never sleeps, this is "squawk box." good morning, everybody. is this a new song? >> am i right in the control room? yes? you guys think i know no music. >> this is the new one i was expecting. >> thank you. >> good morning, everybody. welcome to "squawk box," this is cnbc. i'm becky quick along with joe kernin and andrew ross sorkin. take a look at u.s. equity futures right now. you see that things are flat. dow futures up by four points, s&p up by one point. nasdaq up by 1.5. did comes after a down day in the markets it's been a whip saw of a week. overnight

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