tv Street Signs CNBC May 24, 2016 4:00am-5:01am EDT
♪ hi, everybody. good morning. i'm louisa bojesen. >> and i'm nancy hulgrave. these are your headlines. europe stocks flat to slightly higher with some doubting a summer fed hike. ubs telling cnbc it is the right decision. >> in my view, it's likely going to happen reflect be a stronger u.s. economy. and in that case, i don't think it's a mistake. shares in seb met a record high by german rival wmf.
deutsche bank has been downgraded over its massive strategic overhaul. and oil refineries shut down across france as protesters protest overall labor reform sparking widespread fuel shortages. hi, good morning, everybody. welcome to "street signs." very glad that you're with us. we've got an hour together. packed show, jam-packed show this morning. >> that's right. >> we're trading a little bit higher on european equity markets as seen here. a little bit of a half a hump this morning. >> we did open in the red after the softness on the asia markets. about 30 minutes in, we got positive territory. >> asia, we'll have that report in a minute. here in europe, hanging on to that little bit of green.
let me just show you some of the european equity markets. cac 40 up by 0.7 percentage point. and the ftse mib and the ftse and dax a bit higher, too. a lot going on this week and a lot of stories making the rounds as well. >> that's right, louisa. we're taking a look at individual stock movers here. without a doubt, the outperformers is french equipment maker seb because they have bought their german rival from kkr for just over 1 billion euros. now, the firm expects to get regulatory approval for that deal in the second half of the year. investors cheering the stock up higher 11%. and kingfisher of dr "y" retailer saw sales up 3% in the first quarter.
the company did see weak innocence russia but it's keeping its overall financial targets on hold for the year. let's get another look at ftse 100 at old mutual. the group is confirming several assets in its stake in new york's am. >>. this is part of old mutual's broad restructure. we know they are intending to split the company in four units as well. let's give you a check of deutsche bank trading in higher about a0.8 percent. this as moody's has moved to downgrade it. the rating agency said the lender's outlook is stable, reflecting potential benefits of the five-year plan. yes, confidence coming from moodies. still concerns for the short term. however, investors pushing the stock higher. louisa. >> yeah, thank you, nancy.
people tweeting in already. fantastic to hear from you. i want to tell you what's happening with regards to the latest comments on japan because we have the japanese adviser to the prime minister shindo abe's adviser especially saying that japan should be pressing ahead with the plan's sales tax hike in 2017. unless there's a major economic shock, because, he says, the economy seems to be stabilizing after the market turbulence. those comments just hitting the wires. getting them via reuters. let's check in on the broader markets in asia and hear a little bit more from dan murphy joining us from singapore. these comments just hittings that you these sales should continue from the planned sales tax hike next year, dan. >> louisa, good morning to you. interesting development considering that news that helped to push that nikkei into
the section yesterday as well. clearly asia markets trading with some degree of caution. a real mixed picture, as you can see. clearly investors waiting more commentary from the u.s. federar on in the week. and that has clearly reduced some appetite for risk asset it's in region. i want to talk a deeper dive into what we saw in the nikkei 225. we lost 155 points. clearly that strength yen is looking to impact some of the export stocks in the session today as well. and the other major talking point for us in this region was also in china. mainland marketing, the shanghai and shenzhen down 0.1%. it has retraced those losses up 0011% to the minute. interestingly, we've had news
flow out of the australia as well. finishing the section down .44%. glenn stabens delivers his final address as governor today. and failed to give indication of where monetary policy is going. however, his comments that inflation is too low in australia actually crushed the aussie. clearly, a mixed picture right across asian trade. that's how we're setting up in europe. back over to you. ♪ there's a -- ubs chairman axel weber said a fed hike would not be a mistake. jeff, good to see you. why wouldn't it be a mistake? what's his line? >> well, ubs chairman feels that
if the feds are comfortable with the current level of growth in the u.s. economy, and feel it's appropriate to take the step of hiking rates there, then they should just go ahead and do it. i mean, you'll know that axel weber has been quite a staunch critic of ultra low interest rates when he was at the bundes bank. he was never a big fan of u.s. policy. and if the u.s. bank is recovering -- let's face it, it's never been back. 17 consecutive months of employment growth in the united states. an economy that's going to do 2, 2.5, perhaps 3% depending on how
the second half goes. axel weber talking about watt impact of those interest rate moves could be. he also talked about the challenge of trading in europe right now. current market conditions are difficult as we know. the first quarter was weak for the banks in terms of their capital market aoperatioperatio. right now, second quarter also looking tough. let's just hear what he had to say about current conditions. >> markets are still good. you could really see the support that equity markets in particular had through very extensive monetary policy. but that's going out. and global liquidity still in a difficult place. given the uncertainty in markets many of our clients are actually stepping away from trading their sort of low activity levels, not just on the trading side, even in management. the uncertain environment basically means that a lot of the clients sit on cash.
avoid long-term decisions and really are not very active. and that's a difficult model to be in. be it if you're advisory-based. be it if you're transaction based. >> do you see any likelihood that that will change later this year, as get some political issues put to bed. i.e., as a result of brexit discussion we know what the fed is going to do in terms of interest rates. what difference will this make to client activity? >> very often people say the first couple of months are very decisive. this year, there's a huge uncertainty in global markets. major political decisions to be taken in the u.s., in the uk. a lot of people are waiting for some of that dust to settle. that gives you some word in the second half of the year, we'll see more action. the fed is once again back on the table. the june rate hike. they're talking about more than one rate hike this year. we're going to see different conditions in bond markets the rest of the year.
and that's going to have an impact on the equity markets and how people move. people need to adjust the portfolios to balance. i do think the second half of the year will see more activity but at the moment, markets are difficult. >> would fed rate hikes in the summer be in error? >> i think the fed is talking about this for a while. it's pretty clear the fed will not move unless they do see data. in my view, it's likely going to happen, reflecting the stronger u.s. economy. and in that case, i don't think it's a mistake. >> do you think that the ecb has come to a point where it needs to change the strategy it's pursuing? i know you've been consistently against the moving to negative ratings and some of the more adventurous monetary policy. but would you like to see actually the ecb starting to talk about typing or at least
some timing for typing? >> no, because it's in a totally different place. the economy is still weak. we don't really see a lot of growth on the horizon. and in that environment, i think it would be a mistake for the fed, for the ecb to type. but the fed is going to move so i think the ecb impact is going to be, i see them more firmly on hold. to see. some of the drastic measures they've taken are working out. they're going to have a look at the impact. which means they'll wait for the june predictions. take a good assessment of that. they'll look at price data when they come in, then they're going to decide to eventually do more. >> that is the conundrum, isn't it? that we have divergent monetary policies at the moment. the prospect that all of these fed governors keep discussing whether we will get a summer move in u.s. interest rates and consequently, what that means for fund flow globally, the
state of the dollar and its strength. and whether europe can get to a point where are narrative changes on very weak growth and ultra low policy for some time to come. and as you heard axel weber say, there is no reason to believe that the current situation changes, i.e., europe and the ecb are on hold, as far as these current ultra low rates are concerned. back to you, guys. >> good to see you. joining frugs the iif. listen get involved. e-mail the show. e-mail address on screen. "street signs" europe, @cnbc. >> and twitter as well. @nancycnbc. >> and i'm@louisa bojesen. a load of you writing in to say good morning. get your ps and qs in.
>> please and thank yous. >> ahh. >> i like that version. the "street signs" version, that is. >> anyway, get your questions through. we've got fx coming up. nigeria, u.s. strategy. loads to come. >> of course, we'll still taking your comments on the big blocker deal of the week. that of course coming the bid coming from bayer. and more criticism emerging over peck las vegas that bayer could have to increase that $62 billion offer for u.s. economy monsanto. but it's already the largest all-cash takeover ever on record. and germany's biggest outbound investment on record as well. joining us now for more analysis on the deal is christie wilson senior analyst at wilson markets and peter strike head of market strategy. christie, to you first, you've been looking at the m. & a more broadly for the transaction.
it's a bit of a funny one a lot of people said oh, my goodness, $62 billion. breaking all of these records. we're now hearing that they may have to sweeten the offer. is that your expectation? >> most likely. when they made the offer for syngenta. and since then, we were left with the key players. so they had to react. monsanto going from a beatup to a target it's definitely got room for the new one to try and squeeze as much as they dcan. >> there's some expectation that baf, can they afford to do the deal? >> there's a question can they afford it because this is the largest all-cash deal. but also, there might be a surprise bidder at the same time. >> china? >> potentially. >> really?
>> china has invested heavily in europe right now. particularly germany. and that's going to continue. we're seeing a lot of regulations being lax in china so more people can do that at the same time. >> does there come a point where the price becomes too audacious. it's an all-cash deal so far. and does there come a time when the bidders are going to walk away? do they want to see it go through, is it important enough for them to hold on whoever is interested? >> with the deals, they've relaxed compared to last year. when if comes to companies from china, they're going all in and not holding back on another offering. >> kirsty, we've heard from analysts say be the ecb making it much more desirable to inspire the m & a, is that your view? >> we're also seeing that now
more than last year. this year, it's over 70% down. >> peter, you're an fx guy, how do you view m & a and how does this fact interior area right now? >> right now, we're looking at whether the deal is actually going to go through. we think it's quite different than the german traditional dna. our view is whether that transfer of assets is actually going to happen. at this point, i think we're discounting it and acquiring something in the u.s. is really going to hurt the overall share value and such. >> when you look at the ecb measures making debt more favorable in credit terms, of course, is this what they want to do, inspire m & a and look for more to invest more? >> i think the m & a market is looking to get cash in the market play and stimulate low
level growth. not the top line. the top line is going to take care of itself in terms of strategic assets and purchases. it's really the other side of the coin that the ecb wants to stimulate. >> how is the m & a market in general looking for companies looking for bids outside of europe? >> it's a little higher than last year. it was quite flat last year. and as we saw, a lot of takeovers, particularly from the u.s. and it's been a little bit more active. so germany choosing this year now for the acquisition makes sense. >> and are they right for consolidation and if i'm investing, i'm thinking i want to put some bets on different companies? >> industrials and chemicals overall. >> industrials and chemicals? >> yes, industrial manufacturing. that's why we're seeing a lot of that focused on germany.
>> they have an enormous amount of cash on the balance sheet. they have low interest rates. at the same time, valuations are extremely high. so there's really not good assets to purchase. i think one of the problems with the purchase right now, it's very high valuations at this point. it's a question of really, is it worth it. >> peter, i want to go back to something specifically you said on the buyer deal you mentioned it's not the typical dna of the german deal. one thing that has raised eyebrows is the gmo here. >> it will be a concern, but i think if it does anything it stops the deal from going ahead, it will be antitrust issues. and the what we're seeing. >> all right. kirsty, thank you for being with us, kirsty wilson, senior analyst at mergermarket. peter, you're saying with us and
we're going to talk about fx players. >> ticktock. stay with us, unilever, henkel and l'oreal, the company could be valued at 2.5 to $3 billion. that's according to reuters. carlyle group owns 40% of it. i've been trying all of these natural shampoos. they're so sticky. >> sometimes, you just need chemicals, don't you? >> i'm not going to say they don't work, but maybe i was having problems. on a very different topic, we have been watching shares of unicredit for quite a while now. and now they're trying higher to seal the fate.
claudia joins. there's been speculation over what exactly will happen to the ceo position. tell us what you know? >> well, there has been a lot of speculation. it's looking, though, that the market is betting on a change to actually go through. be made official early today. the stock is up. down 50% since the beginning of the year, that's compared to italy's largest bank down 29%. so certainly underperformed its biggest competitor. but the market again is betting that something will change, something will happen. it looks as though maybe that could bring back confidence if there were a change at the realm. remember, it's been the ceo for the last six years. its mandate actually goes to 2017. and has put through changes and worked on strengthening the bank.
it looks as though for the capital hike that's is needed. cet 1 ratio, to boost it 12%, it needs to go forward with a 5 to 7 billion euro hike. but it could be a stake in the internet banking that unicredit owns. as well as assets in poland. and probably looks as if a new ceo in fact could make all of these things happen. sort of a change -- you know, turn the page for unicredit to benefit. the market is betting on that they will get that news after that board meeting. for the time being, unicredit seems to be bringing up all of the banks in italia. back to you for now. >> thank you, claudia. we'll certainly bring you the outcome of that meeting as soon as comes.
good morning and welcome back to "street signs." we want to bring you up to speed on a developing situation in france surrounding these labor and now 2,000 petrol stations are running dry in the country with an intensified oil strike causing widespread fuel shortages. workers who have been protesting against labor reform halted operations at some refineries and blockade the petrol depots. french oil shut down. and in the south of france.
>> the imf says that the eu should off greece, quote, up front and unconditional debt relief in a sustainability report. the fund warned that much lower budget surplus targets were necessary to avoid a deterioration of the done's finances. this comes as the eu finance ministers, they meet today, to discuss the greek bailout package and potential debt restructuring. peter rosenspeicth is still with us. the imf saying that that could hit 300% of gdp without any restructuring measures. they have 180% debt burden now in greece. i mean, this restructuring is phenomenally important that it continues. they've got a couple payment this need to reach over the summer? >> yeah, well, i think greece is in this downward cycle. and without absolute debt
forgiveness, even as a portion of debt, eventually, they'll get to a critical point where they can no longer sustain it. you know, they just passed alternative measures where they have, you know, supplementary mechanisms for what they missed. the austerity measures. how to deal with nonperformance loans. the austerity is getting tighter and tighter. and that's only going to drive down growth and create a place where they cannot pay down debt. it has to come with debt's forgiveness. >> the imf want a moratorium on payments for 20 years. germany is not happy. >> more or less, it's sort of a default, if you invest at a certain level for a certain duration at a certain level of interest, and start pulling it out indefinitely, it changes why you entered the debt agreement to begin with. so, i can so why places like germany and private holders
would resist this structure. >> peter, we are getting into the summer season where the micro crisis is expected to pick up again. perhaps reach a peak. that is quite tough on greece's financial burden as well? >> it's another piece that tells us a story that greece is not able to get on a growth track. and if additional pressures by, you know, tighten austerity is just going to weigh on it more. so it could just be the situation with the mikcros. it could also be additional taxes on tourists. they're sending their big tourist business elsewhere. they don't have the austerity measures. it's constantly handicapping the greek economy. >> i want to get your view on how ecb, the new measures which we're still waiting for them to kick in in june here, is that going to move your view on the euro at all, or is this already
priced in? >> i think the euro view is primarily on sort of the events that we're expecting. primarily, the brexit. it's hard for us to forecast anything past this particular mass of events. i don't think the ecb is watching the incoming data as much as they're watching the polls from the uk. the second piece is what's happening with the u.s. and the fed and that's really driving where expectation for the euro is much less than the stimulus coming down the line. we're seeing the pmi numbers coming out of the eurozone. slightly lower than expected. >> but still up? >> still decent numbers. no emergency for the ecb to jump in. clearly this concern of negative interest rates hurting interest income into small savers is something that warns the ecb.
>> you're staying with us. get your fx questions through. if you want to know where the dollar is going, the aussie dollar. >> there's just too much option with the fed. >> that, too. get them. we're at twitter. >> @nancy cnbc. >> @louisabojesen. if you're thinking of studying, this is a course that might be interesting. angelina jolie has been appointed visiting professor at the london school of economics. the hollywood actress will be teaching a masters course on the impact of war on women at the university center for women, peace and security. that's a department that she co-founded with the former british secretary william haig. jolie was also special enjoy for the u.n.'s refugee agency says she's lacking forward to sharing experiences with students. women and children are the most vulnerable and some would argue
the greatest victims of war. abuse to no end. and forced with the daunting task of having to keep families together after the war ends. >> and she's been a leader for quite some time. i was a member of the alumni there. lse. >> ah. >> i think it's fantastic. i think it is. we'll have to get her on set here. it's just down the street. >> yeah, exactly. exactly. in the meantime, you can keep an eye on market reaction here. check out the latest trades on our world markets live blog which runs throughout the european trading day. we'll see you after this short break.
back to s"street signs." i'm nancy hulgrave. >> hi, everybody, i'm louisa bojesen. your headlines. >> european stocks slightly higher. some doubting a summer hike. axel weber telling cnbc it would be the right decision. >> reflecting a stronger u.s. economy in that case, i don't think it's a mistake. cooking up a deal, shares in group seb up after word to buy german rival mas. deutsche bank downgrade. >> and oil refineries shutting down across france as protesters protest labor reforms, sparking widespread fuel shortages. well, good morning.
and back to "street signs." with the fed still in focus, we want to give you a view of how u.s. markets are set to open. today, we're looking at green arrows but very modest gains predicted with futures at this stage. it was a very they're low low volume trading day. and a built of a pare back. we saw the asia session now about an ahour and a half into trade, we are seeing momentum building with green arrows. the ftse higher by 0.5%. the dax up 0.1%. and the ftse mib performing by 1.1 to 1. higher. >> a tweeter said mind your ps and qs. mind your manners, right? so it originated on your side of the pond. it's an old pub saying to mind your pints and quarts during bar
fights. >> that would certainly come as a surprise. >> sure. we've also got more questions coming through, peter is still with us from swissquote bank. yesterday, he writes in and said a back 20 for the year. what's your forecast? >> we do think it's go to be a stronger euro. we are forecasting one fed hike in 2016. we do fought believe we'll see a june/july rate hike. in that case, we'd allow it to trade higher. we don't see the fed moving aggressively. therefore this dollar rally is going to start petering out pretty quickly. >> you're in the camp saying what, june, july? >> no, we think november, december. we're still in the one rate hike. we still believe that the
external environment is still significantly weak. it's transmitting into weaker manufacturing. we saw the labor markets slow down. mfp at 150. a little concerned about brexit. all of those issues are still going to play into the fed's rate decision. i think yellen will articulate this on june 6th. >> so, if the fed wants to get ahead of the election in november for any sort of political -- >> i think they probably do want to get ahead of it but i don't think is necessarily supports them to do that. i think all the other pieces by moving forward, at this point, we haven't seen a strong reaction in markets for a potential rate hike. we haven't seen a strong dollar. we haven't really seen yield spiesh spike. we haven't seen the smp move back. that will play into the political hand very aggressively. i think by trying to get ahead of it, they're actually going to
influence it significantly. and that's really what the fed does not want to do. >> and the fed hinted so much up to the minute saying we do want the mark more closely aligned. what is your view on how that has played out in the commodities phase? it's interesting that stronger dollar has weighed on the metals but not so much with crude? >> well, crude has diverged recently. trading in their own way. the correlation between the two have basically separated out. there is two different stories, one is the oil story and the other is dollar and commodity stories. the commodity story, it plays clearly into the fed expectation. >> a regular viewer writes in -- thanks for your lovely picture from the hotel in beirut. she writes in today, basically saying the rate should start in the eu. the world needs a weaker dollar.
>> that's one way. you know, i think the u.s. would argue they need a weaker dollar. i don't think the rest of the world would say they need a weaker dollar. i think whe're seeing coming ou of the g7 is every nation in itself. in position for the currency exchange. i don't think the world needs a weaker dollar in order for the stimulation of growth and the comeback engine of growth for the u.s. consumer necessarily the weaker dollar. i'm not sure exactly if that would play out well for everybody else. >> what's the trade at the moment? >> we'll still be fading the rate hike. we don't believe the fed is going to raise rates. shorting the dollar is up. the other play might be to say euro/yen where you have a significant policy divergence coming up.
we don't expect it to be doing anything. and we do believe that the boj will start heading towards fiscal and monetary stimulus. we think the euro/yen trade might be interesting to take a look at. >> so much. we'll have to bring you back for the yen discussion. peter, thank you. meanwhile, sony has announced this year's earnings forecast just weeks after the factory suffered serious damage from an earthquake. joining us now live from tokyo. >> hi, yes. a series of major earthquakes hit southwestern japan last month where many manufacturers including sony have production sites. sony has a plant that makes camera which had to be shut down due to the earthquake. sony postponed the forecast saying it needs more time to assess the damage.
sony said it amounted to $1 billion. but it will serve to get a net worth of $146 million which is down from last year. and the latest play station iv and related items are selling well. it interestingly has managed to become profitable even with a young yen. sony shares were down half a percentage point today. a lot of focus was on the firm as it became the fourth most trade stock of the day. back to you. switching gears a little bit here, the fbi is investigating whether virginia governor terry mcauliffe's campaign accepted contributions including $120,000 from a chinese businessman violated the law. a lawyer for the governor's
campaign said neither the governor nor the campaign were aware of the investigation. the head of security for the u.s. transportation security administration, better known as the tsa has been removed from his position. nbc's tracie potts is in washington. what's happening, tracie? >> removed, not fired, as far as we know, louisa and nancy. this is coming from a memory from the tsa administrator saying that kelly hogan who is in charge of security for the transportation security administration has been removed, or reassigned, at this point. and reassigned with a new acting security person in charge, a person who has been a leadership in a leadership position above l.a.x. and jfk, two of the largest airports. in that memo, we're also talking about new leadership in chicago's o'hare airport where we've had so many long liones ad
a lot of focus there recently. and they will open a new command center here at the tsa headquarters when they have incidents like this. back to hogan for a moment, the chief of security, he's been reassigned. according to documents, hogan made $90,000 in one year in bonuses. while the tsa was under scrutiny. the latest inspector general's report showed not only the long lines we've been dealing with now, but mismanagement within the tsa. apparently, they missed a lot of explosives and firearms that were sent through as a test at several airports. so the tsa has been under a lot of scrutiny. this new administrator was brought in to change things. and now it looks like those changes include reassigning. where that is, we don't know this morning. >> tracie, good to see you as usual. thank you very much. tracie potts bringing us the latest via nbc news. now, security is taking
center stage in nigeria following a slew of attacks by the delta avengers on the country's oil-producing regions. the group which has sabotaged operations of companies like chevron and shell claim to be impacted with environmental grievances. good to see you again. who are the nyjah delta avengers and what do they want? >> previous dominant group in nigeria. there's no evidence to substantiate that. people believe it's functioned by the key leaders of ment. >> they're definitely causing disruption. i mean, it seems that their
mission is to prevent oil from flowing. do they have other missions? or is that kind of the main thing that they're after? >> so far, they haven't been very clear on their grievances. all they've said, they're clearly angry at the government in abuja. and that they're trying to bring the government to economic promises. i suspect what they want to do they want to make the government get to the negotiating table but i don't think we're there yet. >> what kind of strains specifically are we talking about for the government? we know they've already put through quite an ambitious budget but there are questions how they're going to finance these measures? >> absolutely. in nigeria, producing 2.2 million barrels per day. obviously, the economic assumptions weigh. so the government might have to increase its plans. it was already planning $1
billion to finance the budget. >> what does it mean for the foreign companies that are operating in areas that are now under target, and we talked about shell among them in the story. how are they responding is the burden falling on them when it comes to responding? do we think we could see a pullback? >> well, the burden has always been on those companies, unfortunately. i think for the companies, they're now having to get their own private firms. so effectively, the cost of production, there's a security premium increase and that. >> as you were saying, just entered into office last year. do you think we're in a situation where he's forced to negotiate with them essentially? we have an expert telling cnbc online, that until until the issues of the economy, the environmental grievances that they claim, until they're addressed, the delta will remain
in a cycle of sabotage. i'm sure he doesn't want that. he's dealing with boko haram and other factions as well. >> to be honest, we've seen gdp figures come back at negative and 0.6%. i think the government doesn't have a choice but i suspect they'll be talking tough for the end of the year and i suspect we may be at the negotiating table. >> let's talk about the central bank. we're just hours away from the nigeria central bank. what do you think? >> the central bank, on the basis that they put fx restrictions in place on the basis they don't have reserves to continue with their economy and nothing has changed. for me, i don't see why the market is expecting this. i suspect is has to do with the
comments. but quite frankly they're meeting next week and i don't expect they'll make a decision before that. >> do you expect any news for them to tackle inflation? >> possibly. i think that's as ambitious as the central bank might want to go at this point. >> just very briefly, again, when looking at the avengers, their website, should would argue say bit funny. and there an argument that potentially it's an individual or group behind this to try to get all money basically? should we be taking them as a stand-alone independent, group? >> if you look at the targets. these are strategic expert targets. this is not just a group of rogue teenagers in the dealt lt. is this clearly a sophisticated group.
it's quite clear that the delta group as wants to send a message to the government to force them to the negotiating table. >> thank you very much. senior vice president at teneo intelligence. still to come here on "street signs" -- u.s. consumers are enjoying the benefit of cheaper energy prices. but where exactly are the savings going? we will discuss, right after this short break.
good morning and welcome back to "street signs." some of the top stories moving this morning. iraqi forces supported by u.s. air strike has retain two districts on the outskirts of fallujah. this according to an iraqi military official. the result marks the beginning to oust forces from one of the strongholds in irrook.
president barack obama has been laying out his plan to strengthen relations between the u.s. and vietnam. speaking in hanoi, the comments come after the u.s. announced it is fully lifting its embargo on sales of ill lethal weapons to vietnam. austria's presidential election has been won by the green party who just eked out the narrowest of victory over his opponent. the environmentalist brought home 53% of the vote that compared to 49.7% for the far right freedom parties. and police have begun clearing the migrant camp according to multiple points. it had been the primary crossing point into macedonia before the country shut its borders, stranding thousands. now, turkey has started announcing members of its cabinet with newly appointed
prime minister naming mehmet simsek as its deputy. and it was the worst kept secret in football, but manchester united, they've made a leadership change just days after a major victory. you've got a little joke going. >> well, wilfred and i have a bit of a football rivalry going on, i hate to admit he won one up on me recently. we'll let it go. >> wilfred is at c nbc headquarters. >> wilfred, you missed your chance. i could have been singing your songs, wearing your jersey. >> i know, we were having a bet. my team did come second. it was a disappointing seen for arsenal and tottenham. and for man united, despite the fact that they won the fa cup on saturday. and louis van gaal was fired. their manager.
this comes just two days earlier, as i say, he won the first trophy of the fa. now all of the speculations suggesting that jose mourinho will take over that. man united shares traded higher during yesterday's session on wall street. listed on the new york stock exchange. jose mourinho the factor moving that. shares about 1.43%. so a bit of a move. i was surprised there was a move at all, quite frankly. but highlighting the power, man u has their best move a couple weeks ago when they reported results in april. they rose over 20% over the course of one week. those numbers doing much better than expected. it's fun to talk about football here. i call it football during this hour. i'll have to change to soccer in half an hour. they're listed on the new york stock exchange, one of the few uk clubs to be listed at all and freely traded. not hugely liquid.
i suppose i should focus on to the markets more generally. yesterday, we were just below flat. but not too much movement at the moment. 0.2%. wee got housing data out. earnings from best buy and hp. and the key focus of the day. one other speaker patrick harker is another to suggest. and its effect more on the dollar than equity markets. >> thanks for that wi, wilfred. let's bring in tim courtney who is cio at senior wealth adviserers joining from us oklahoma city. tim, good to have you with us. as wilfred was pointing out a bit of a quiet day yesterday. is this the way it is as we get more clues coming from the fed? >> yeah, i think so. the earnings have been weak.
this first quarter was very low. the market expected that to be low. but we're at an earnings level in the s&p 500 that is about the same level that we saw in 2012. so earnings have been weak, especially coming from the energy sector but that was expected. so, i think until we have more information from the fed which we would guess, probably they're not going to be as aggressive as maybe -- as maybe it's been made out to be. but that will definitely give some clarity. but the earnings are certainly not moving the markets higher at this point. >> so the earnings already not very inspiring. you're talking about the fed, if we get a surprise to the stronger dollar could be for the next quarter, is that right? >> that's right. the dollar is having some effect, especially on the overseas earnings. those companies that have more of their earnings located here in the u.s. have done a little better than those who have had
to translate their earnings back into more expensive dollars. that's hurt those. so, yes, the dollar is still having an effect. and obviously the energy markets are still moving. markets as well. as the last several weeks, as oil has gone, the markets have gone. >> tim, hi, it's louisa. what are some of the names that you're looking at at the moment? >> yeah. so, these oil savings, energy savings are going into consumers' pockets. i think it's been estimated globally that there's $3 trillion annually in savings. and those dollars haven't disappeared. so the consumers are spending it in certain areas. it's been interesting this last quarter. consumers cyclicals like restaurants have done very well. panera bread, texas roadhouse. very good earnings, top line and bottom line. so restaurants have done well. also home improvement like home depot and lowe's have done very, very well. so these dollars, these oil
dollars, are making their way into the economy and certain retailers but other retailers haven't done as well. and on the technology side, hardware companies haven't done as well. companies like facebook beat handily on the top side and bottom line. so it's been kind of two different stories for several sectors. >> tim, great seeing you. have a good day. you're awake now. very early. tim courtney, cio at exencial visors. >> i'm louisa bojesen. >> and i'm nancy hulgrave. "worldwide exchange" is coming up next.
good morning. the fed in focus. the markets try to make sense of june rate hike speculation. new this morning, snapchat is raising more money. and this financing round valued the company at $22 billion. facebook, new policies on trending politics. following advice from conservatives. it's tuesday, may 24th, 2016, and "worldwide exchange" begins right now. ♪ good morning, welcome to "worldwide exchange." on cnbc.