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tv   Street Signs  CNBC  June 2, 2016 4:00am-5:01am EDT

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good morning everybody welcome to "street signs." i'm louisa bojesen. these are your head lines. dilemma in vienna. a japan sees a stronger yen sees its biggest one day drop in the nikkei in a month. >> and as iran sees no benefit in a ceiling. >> and patience is a virtue for the ecb seen keeping rates on hold today while racing growth and inflation forecasts in a
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rare sign of positivity. >> and uber filling up the tank with a $3.5 billion cash injection from saudi arabia's public investment fund. that is the most money it's ever raised from a single investor. good morning everybody. and welcome to the show. we've got an hour together. we'll get out to the girls imminently. want to show you what europe is doing at the moment. we are very flat. stoxx europe 600 flat to a couple of points lower. not too many positions ahead of the ecb meeting. and some data as well as from which is been mix. the global manufacturing activity showing weakness of late although the u.s. ism manufacturing data was a little better than anticipated. the ftsi, the ftsi mib higher
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and the xetra dax and cac are pulling off a tad. so 50/50 split on positive versus negative this morning on equities. just want to get you some flashes with regards to apple. wear hearing via doujs that apple is considering bond issues in japan and singapore. looking to raise 3 to $4 billion in debt sales in the asia pacific region. nothing confirmed by apple to issue bonds in taiwan and australia as well. accordi according to dow jones news wires. >> the -- julia, having been looking at inflation forecasts
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coming down for some time, they are now going to be potentially hiking them higher? >> right louisa. all thanks to the oil price. if you look at the moves we've seen particularly in the last two months it is unwound virtually all the losses we saw in that december to march period. so if we rewind and go back to the inflation forecast that we had in december, that puts headline inflation at around 1.6% for 23017. -- 2017. i don't want to get overexcited but when talking about a qe program that is going to be potentially ending in march 2017. and won't be surprised if you get journalists asking what this could mean for qe going forward? we also got stronger growth in the first quarter so that is feeding into the numbers and then of course revised expectations for federal reserve rate hikes. meaning that we've seen the dollar picking up some speed as well. and therefore that's pulled the
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euro back. there are a number of elements here working for them. the question is how he balances that and calibrates draghi in the press conference to say we do stand ready to enact further stimulus if needed ultimately. let's get another voice on this. i'm joined by gertrude, former vice governor of the austrian national bank. thank you for joining us. do you see ecb stimulus at this moment as appropriate given the backdrop. >> i think what we can observe at the moment is the recoveries on drake and the ecb has certainly contributed to that. the low interest rates encourage lend big the banks. of course banks would like the see even more demand for loans. but also sentiment indicators which came out recently are pointing in the right direction, are more confident. and all of the challenges we have seen at the beginning of the year, i think this turbulence is on the equity
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markets, the challenge is for the emerging markets. i thigh these challenges have been overcome. a more positive mood at the moment and especially private consumption is picking up in the euro zone and this is an important element. >> the big kicker helping the ecb is the rally in oil prices. as excited as i get about the forecast t latest print is still in deflationary territory. how important is this? >> oil price is important in bringing back inflation rates to the desired rates but we don't see the oil price increase permanent yet. we don't know how long it is going to last. there are also opinions it might be more volatile in the future. so we have to wait. but for the moment it is helping the inflation rates coming back.
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>> so what we've we've heard particularly coming into the last ecb meeting with criticism from politicians suggesting that perhaps monetary policy is contributing to the pushing sentiment to the political extremes. is that just completely wrong? >> i think all -- a number of countries are facing very populist parties at the moment seeing their rise. and i of course one is asking why does this happen. but i think the ecb has a mandate. they are pursuing this mandate. they have a responsibility for the whole euro zone. they cannot do monetary policy for one country. and therefore i think they should be left alone doing their policies. >> diplomatically put there. what was interesting is yens weidman stepped in and said hang
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on a second, we are independent. do you see that as him doing his job or positioning himself? are we ready for a german ecb president in the future? >> i think for the moment it is important to defend central bank independence. was very important during the crisis, before the crisis and expectations for the future. long-term inflation expectations are on the right level. therefore it is important to have a strong institution. this is most important for the moment. >> do you think there is a possibility we could see a german president? >> of course, why not. >> because they are seen as the most stringent in terms of not wanting further policy. the germans were against further deposit rate cut so it would significantly shift policy, wouldn't it? >> yeah but the president doesn't make the policy alone, yeah?
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so as always he or she, they have to find the consensus. so you would see jens shift more to the center ground. he'd have to as the president. >> these are issues for the future. issues which have to be taken in a few years from now. >> i spoke to crow of erst bank and he said we don't have a model yet in europe for dealing with zombie banks and i said what about banking union? isn't this what we were meant to solve and he said too slow. would you agree with that? >> i think banking union was an important step. i think this is very important and of course we have to continue restructuring the banking sector. and the ecb has recently i think issued also an opinion that we
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need more cross-border consultation. and i think mr. draghi is right in this respect. we need more restructuring and reduction of capacity of the banking sector. >> yeah you talked about both sides. both demand and supply here. and it is difficult if we need further consolidation to get that loan growth going that we need. thank you so much for speaking with us. louisa back to you. >> thank you very much. we'll be hearing more from julia throughout the day. i want to bring you up to speed with some flashes via the saudi energy minister. talking how everyone with one voice is sulfide with tsatisfie the market. this says the opec ministers meet today and talking about how the prices are rebalancing and market will respond according to rebalancing and say they would
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not call it a market share strategy that they are embarking on. the role of opec is to lead the market to what it has to do. now they are going to be listening to what iran brings to the table today as well. of course there is a lot of speculation about members supporting the potential of a production ceiling and we're very much looking towards both saudi and iran to see what they have to say. saudi there have been indications they possibly could back a ceiling. you don't know that as of yet. and iran are not keen on backing a ceiling right now. now do tune in later on today because on a programming note we've got decision time coming up. 1330 and some more. justin joins us here. good morning.
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what do you think about the potential of them hiking growth and inflation forecasts? >> we think certainly it will look pretty positive today. but the challenge will be on mr. draghi not o appear too hawkish when he's delivering these forecasts. of course that will feed into inflation expectations which are already pretty low. >> so how is he going to balance it? for ages all they did was pretty much cut inflation targets at every single quarterly meeting. >> i think it is just a question of making sure that this is being played down in terms of policy. that it will remain a kmintive for quite some time. what we're not expecting yet is any indication what will happen after march 17. i think that decision will be taken later in the year. >> do you think it will be pushed out?
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prolonged to the end of 2017? >> we certainly think there will be some tapering. we're not going to be looking at just a sunday cliff of zero qe purchases from march. but a lot will depend of course from the forecast in september and december. >> what do you think about growth at the moment? >> because if i'm pessimistic i'll say well unemployment is still heading up a. wage uninflation remains soft. we're not seeing proper investment out there. that happened to be the line yesterday i was in paris and she was saying we're in this low growth trap where it is very hard to get out of it and you have to see more being done especially when it comes to fiscal measures at the moment. >> i think there are a number of angles here. first of all growth is low but there is growth. and this is the important thing. the way the market is pricing is europe has no growth and no inflation kind of forever
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almost. but, you know, the way we're seeing it is that a lot of the leading indicators are still positive. the pmis are holding up. the credits, the ecb's own credit survey is doing well at the moment and m3 a little disappointing but it is holding up still. and we think that is guiding growth. and surprisingly given what happened earlier in the year that we're seeing it in the confidence indicators still. still reasonably positive on this. >> how about core inflation? in complete contrast to them potentially hiking forecast for inflation there are some arguing that core inflation is going to have to be revised lower. >> well, core inflation has held up pretty well. we've been in this 0.7 to 1% for a number of months. we think there is wage pressures taking place in germany. that will help to keep them up. exports are still holding up as well. and that goes back to the growth
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point. and actually even where it looks like there is a bit of unemployment or quite a lot of unemployment finding the fragmentation in the labor market is also causing -- is causing wage inflation, at least pressures that wasmt so we're expecting core inflation really to hold up. and we're looking at an inflation rate running around 1% by the end of this year. if we're just looking at base effects in oil, assuming oil prices don't go up, that would only take us to .7, .8. so we're expecting a little kick up in core inflation as well. >> if you think that you have got a quiet june coming, think again. june is going to be phenomenally busy. we'll get to some of the important calendar events that you should be taking note of that potentially could move the market. e-mail the show. get your news through so we can use them nice and early. the address is "street signs"
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europe @cnbc.com. and we're all on there. @louisabojes @louisabojesen. and tomorrow at 8:45 check it out. you will be able to hear what he has to say. many or the come on "street signs." we'll see you in just around two minutes time.
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hi good morning. welcome back. you are watching "street signs." i'm louisa bojesen. vest alpine shares beat expectations. this after higher quality products made the tech firm less vulnerable to price swings and
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competition from commodity steel imimportants. johnson mathy has posted a drop. sounded an upbeat note on the coming year saying profits should be picking up on the stuff. and fiat chrysler driving higher on rise in italian sales for may. reporting a 1% rise in monthly u.s. sales bucking the negative trend otherwise set out by rivals gm and ford. and inves tech shares down by almost 2%. announced plans to raise up to $209 million through a share placing. saying cash used to fund a
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tender offer will be taking place. the opec meeting is one of many events with the potential to upset markets in june. major factors including meetings of the ecb, the fed, the bank of japan. new ecb policy implementation and the referendum to name a couple of the items. justin knight is with us from ubs. justin, the tltr rrktltros. we've got more movement with that coming up in june. >> yes we do. we have the tltro 2 take up. not easy to say but it is happening on the 24th of june. that will be the announcement how much banks will taking up at this new --. i think more importantly it will be the repayments of the first tltro. the first voluntary repayment
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date has been brought forward by the ecb to the 29th of june and we'll get an announcement on the 10th of june as to how much they are repaying. i remember the first tltro took place before qe. so before the ecb started injecting huge deposits into the system. and therefore what it means is banks are awash with cash we think and they will be wanting to repay that. because they can't lend that cash at positive rates. at least on a risk-free basis. but they still have to pay zero percent on deposits. so we think the net effect will be a repayment, in other words a involuntary drain of funds, reduction of the ecb's balance sheet. >> is it too toerl say whether or not the tltro experiment, is it too early to say whether or not it's been successful? >> it is better to have it than not. i think it is a bit too early. it will take us a very long time
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to work out exactly what kind of cascade effect it might have had been the economy. but, you know, we can see the numbers of lending on the books which determine in the new case the interest rate. but it has been relatively light and part of the problem has been of course that interest rate went negative just before the first tltro was announced and of course we've had qe since then. >> how about some other elements. 21st of june. the court ruling on omt. we're still hanging on to that. >> part of draghi's whatever it takes speech and marked the peek of the sovereign debt crisis. the constitutional court in 2014 said -- took a dim view of it. and said it probably wasn't legal. at least in germany. passed it onto the ecj and ecj
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said in europe it is legal. but the constitutional court has reserved the right to give final judgment on it which is what they are announcing on the 21st of june. the question is how much will this impact the market? we don't think very much. the peripheral markets are much stronger than in 2012, both technically and fundamentally. investors are back in the market and i think would not be that fazed were to be ruled legal by the court. but of course does create a contingent risk of volatility rearing its head for other reasons more in the markets and -- >> and three days after that the result of the uk referendum eu membership. how do you play the volatility?
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>> rally in sterling. peripheral spreads to germany as a result of probably opinion poll readings by the market and that is quite a big recovery in the value of sterling that's taken place. so there is a risk of course that if opinion polls move the other way or if the result comes out the opposite way that sterling falls once more. >> the notion that the uk is better off staying in. is that something that you think the citi thinks in general? are we still questioning what new trade deals potentially could look like if we were to leave? and whether, you know, big large multi nationals would potentially move their headquarters to ireland for example. how set is the city in their way of thinking at this stage. >> difficult to tell but certainly as though sterling
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falls when the risk looks increase as the exit. >> 134 on cable now. and also elections taking place in spain. two days after the brexit -- >> the risk here is much more about whether spain can meet deficit targets in the future. it missed pretty badry on its 2015 target and will miss again this year. what kind of government is formed after the election is the
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question. >> loads of you writing in and saying you are going to be noting down those dates. keep e-mails and tweets coming throu through@louisabojesen. justin knight from ubs joining us. saudi arabia's oil minister says he is not focused on individual interests. hadley joins us from vienna. and we're focused on what the saudis are saying and what's coming from iras well. >> absolutely. and what we heard just now is the oil minister thinks we're on the way up. we don't want another shock in the market. very concerned with ramping up investment in our own oil sector and he also understands what the company can do and he says that ipo is going to be global. we also caught up with the uae
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oil minister. i wanted to ask him -- but i asked him when you talk about the possibility of a production freeze is that something on the table today and do you think we're going to see progress? and said actual options are on the table. i got a chance to catch up with the current secretary of opec. and he tended his term in january for six months. i asked if he is pleased with the tone of the meeting today. >> maybe for so many months the first time we see a very positive atmosphere among the ministers and i'm sure it will be a very friendly meeting and i hope there will be good results. >> do you see your term being extended or are you hoping to settle the question of the next secretary? >> this is up to the conference to decide, you know. >> but ush willing to stay on?
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>> i -- not long. not very long. i will stay very short period but not long. >> in terms of the oil markets today are you pleased how the prices are going un? >> i am comparing the market in january and today so i am very pleased with the market today of course. it is close to $50. so we are happy. i hope that the market will balance itself. >> and now that we have a new saudi oil minister do you hope the dialogue -- >> very positive sieps. he wants to cooperate with all the mbs >> -- production caps. >> i have no idea. up to the conference to decide. >> saying i'm willing to stay on but not that long. certainly signaling he's willing
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to stay on for a little while. >> hadley, good stuff. thank you very much. we've got to take a break. check out world markets live. our blog which runs throughout the european trading day. loads more online. we'll be back just after the break.
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hi everybody. welcome back. you are still watching "street signs." i'm louisa bojesen. head lines this morning. mixed messages from opec, keep crude prices in check. secretary general abadry says he's keeping an eye on the price moves. >> very pleased with the market today of course. it is close to $50 so we are happy. i hope that the market will
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balance itself. >> patience is a virtue for the ecb. seen keeping rates on hold but raising growth and inflation forecasts and a rare sign of positivity. and uber fills up the tank with a cash injection from saudi arabia's public investment fund t most money its ever raised from a single investor. >> rory mcilroy joking about the irony as donald trump loses a big golf tournament to mexico. after the pga ends a fifty year relationship with his during course in miami. hi everybody. well here in europe we're flat as the pancake. the implied being a little lower there.
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called off by a couple of points. we've had a pretty weak session in asia overnight. some large losses by the nikkei. hit by a very strong yen. again here in europe that is not feeding through. we're seeing mixed markets. the ftsi mib and ftsi 100 both calling higher by about a half percent or so. the xetra dax and cac off a touch. and april's reading of 52, the lowest seen since june of 2013. the reuters poll was for a reading of 52. the actually uk instruction pmi coming in weaker than expected. new orders, 48.1 in may. down from april. where it stood at 50.1 and the lowest since march of 2013.
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the reuters people there, they are stating that the eu referendum fears have been triggering the first decline in this since 2013 to. the eu referendum on the uk moving in on investors out there. let's check this on markets in asia though. sri jegarajah. >> doesn't by 2.3 at the settlement. this is the market punishing abe for this deferral on the sales tax hikes. the market is blowing a raspberry at this u turn or whatever you want to call it. essentially because fiscal consolidation is taking a backseat and the market equates that as being bad news when you look at the debt profile. when you look at the debt profile of japan at 200% of gdp.
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flow the other factor here is that the markets in japan have to deal with an appreciating japanese yen. dollar yen 108.87. monetary policy now that fiscal policy has taken a backseat and the tax hike isn't going through as planned. is that something o a windfall for consumers. in 200919 abe said he's going rekplit to that sales tax hike. if that is going to provide a degree of shot in the arm for mr. and mr. watanabe. where does that leave the bank of japan? does that take the pressure off? that is the talking point. elsewhere not a great deal of excitement. i think a lot of people are waiting for the dust to settle on the ecb and opec and also on payrolls.
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>> sri. thank you very much. talking there about the japanese market. the dollar yen. we did indeed see the yen rallying after we heard the news that the sales tax hike was being delayed out of tokyo. what do you make of the moves? >> surprised after the announcement given that even's within talking about this happening for a while. some of the sequencing is odd. no doubt look i think the bank of japan bought a large hunk of the bond market and then consumption tax increase and more fiscal easing that i think puts the boj on hold for a while. negative rates are super unpopular and cannot accelerate the pace of asset purchases from
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here. the test for the currency at least is what does the nikkei do. in the sense that if the nikkei keeps on going down just because dollar-yen is at 109 then japan is going find itself in a bind again. if the equity market were to start shrugging off yen strength. then you have more chance to come. but the yen needs a stronger economy to have sustainable strength here. if japan is just going to get stuck in recession and the equity market in a funk we're not going make much progress. >> do you think they are look at the equity market to see whether or not they should embark on further stimulus? >> not quite. although central banks watch markets watch central banks is sort of written on my head now. so -- no yeah i think there is a clear, clear shift in abenomics from abenomics one to two. we're back with easier fiscal policy and to that degree the focus isn't on monetary policy. maybe the right way to say is
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monetary policy is now on hold and reactive rather than proactive. >> the dollar though has also risen way too much on expectations ahead of time. are we going to remain range bound? are we going to break out of the range? we have had a run up? >> we're not going break out of a range today ahead of tomorrow's numbers at least. but, you know, the dollars still comfortably 3% below january's level in real terms. so we've taken back parts of the fall between the end of january and the start of may. i think if you get solid data today tomorrow. >> the -- private sector report. [inaudible] >> exactly. then i think people will get more convinced by a rate hike in either june or july and we see will the dollar push higher. >> level for euro dollar? where is the fair level.
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>> i think it is moving out of 107 to 115 more months. >> thank you very much. republican presidential candidate donald trump has new foe in the pga tour. yesterday the tour announced plans to move his doral tournament from the course in miami to a course in mexico. trump rallied against the choice saying the move was akin to decisions by u.s. companies to move jobs to mexico. chiming in on the debate pga golfer rory mcilroy joked about trump's remarks. >> it's not as if we've gone to mexico before. quite ironic that we're going after -- we just jump over the wall. >> meanwhile barack obama criticized trump's proposal to weaken wall street reform.
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obama didn't mention trump by name but had this to say about the republican nominee. >> i'll be honest with you. sometimes i just don't get it. how it is that somebody could propose that we weaken regulations on wall street. have we really forgotten whether just happened eight years ago? it hasn't been that long ago. and because of their reckless behavior you got hurt. and the notion that you would vote for anybody who would now allow them to go back to doing the same stuff that almost broke our economy's back makes no sense. i don't care whether you are a republican or a democrat on an independent.
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why would you do that? >> well nbc's tracie potts joins us from washington. tracie, give us a wrap up. what is the takeaway from what we just heard? and clinton is now also set to speak in san diego today? >> yes. she's actually got three events but the hallmark of today is that foreign policy speech in san diego. a preview from aides say she's really going to go after donald trump as unqualified to be president of the united states. and you heard president obama there not naming donald trump, as he hasn't done in a number of events but really targeting the other side so to speak. republicans. he characterized them as taking us back to the days when we were in financial crisis. we may hear some of that from clinton as well. she's out in california because her numbers out there really slipped. our latest nbc wall street journal poll now has her up by only 2 points. that as statistical dead heat
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with bernie sanders. he has spent a lot of time in that state. in fact we've been adding up the numbers. 12 days, 28 rallies and reached more than 168,000 people. so many that his campaign is now upping their expectations of how many people they are going to reach in these rallies between now and tuesday's primary. so it is going to be quite a horse race for the democrats in california on tuesday. in the meantime donald trump still fighting these allegations and new information that's coming out about trump university. and also reacting early to clinton's speech today about him and foreign policy, saying as he put it. give me a break. that a lot of what she's saying is simply not true. >> tracie, good to see you. thank you very much tracie potts. nbc news live from washington. coming up here on "street signs," stay tuned to find out the surprise source of uber's latest multi million dollar injection. and as usual you can find us on
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twitt twitter@louisabojesen. and also emil "street signs" europe
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hi everybody. welcome back. i'm louisa bojesen. uber has secured $3.5 billion from saudi arabia's public investment fund. biggest cash injection from a single investor. the financing will contribute to the ride shares company's middle eastern expansion plans. a day after softbank announced it would sell 7.9 billion dollars in alibaba stock, singapore something something. they each purchased 500 million dollars in the e-commerce giant
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shares at $74 a piece. alibaba also buying $2 billion of its own stock at the same price. and meanwhile facebook is calling technology that not just reads but also understands content almost like a human. as transformational tech and artificial intelligence take center stage as the annual code tech conference in los angeles. julia boorstin has more. >> cutting edge technologies driving opportunities in next generation of tech. sheryl sandberg weighing in. >> facebook remains the best place in the world to get the largest audience of teens and we're proud of that. but we also know we need to execute. we need to continue to work hard, invest. build products over a three, five and ten year time frame. >> artificial intelligence is a huge topic among all of the executives here. talking about the big role ai
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will play in the future. and google's ceo saying they are just at the beginning of building out the transformative power of artificial intelligence. >> we want this to be user centric. and i think part of building a smarter system over time is to be able to understand users and be that assistant for them. be that friend for them and i think it is going to take us time to figure this out. >> amazon ceo jeff bezos also talking about his investment in artificial intelligence with more than 1,000 employees working on the echo and alexa software. which he says is just the tip of the iceberg and says is just the beginning off how amazon will invest in content as part of a bigger retail strategy. >> from a business point of view we get top monetize that content in a very unusual way. when we in a golden globe it
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helps us sell more shoes. >> and amazon is also using artificial intelligence to sell more shoes with recommendations based on users buying history. as technoloztes technology play larger role in people's lives. >> we're setting ourselves up for a market open in the states, which is flat to a couple of poin points lower. you got the u.s. adp payroll data and more today. also we've got the ecb's decision later today too. the manufacturing data though globally has been pretty weak. a little bit of a different reading in the u.s. with the u.s. ism manufacturing data
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being stronger but the head lines being a bit weaker and you could ask what happens if we're looking at soft manufacturing data is that going to be impacting the way the fed things if soft manufacturing data continues to come out o states? and the european equity markets we kicked off initially flat on the open. we saw mixed markets in the first hour of trade. and then we've turbid around a little bit. and we're a little higher now. the ftsi bucking the trend. when it comes to the sectors out there. i can tell you we're looking talent sector story where we're seeing quite bit of positivity from the banks and autos this morning. travel and les. food and beverage.
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good morning. how is that going to change our way of thinking? >> well i think with a new administration we may get a change in tax policy. and certainly if we get a more competitive tax policy in the thaus really drives our companies to focus on how to grow sales and profits as opposed to where to relocate to get a lower tax rate. we think that is the biggest risk of the bear case for the u.s. stock market today. so we think that is one change for a new administration that we're looking out towards. >> more expansionary fiscal policy which has been greatly needed for a while? >> yes i think so. moptry policy has been doing most of the heavy lifting
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science the financial crisis. certainly keeping interest rates at zero and now just above zero for seven years. so certainly the power for monetary policy to have an impact on economic growth in the united states is we think limited going forward. and certainly i think the federal reserve views that as well. we expect an interest rate increase in either the june or july meeting for the fomc. they want to have more ammunition to have an impact on economic growth by raising interest rates so if the economy does turn south they are going have some dry powder there. >> when looking at the u.s. from the outside many of us might think that the u.s. political scene is so divided at the moment. do you think that that division and that stalemate in d.c. is going to come to an end? >> i think it is likely to come toen end. certainly there's been a lot of obstructionist behavior on both sides of the aisle during the
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obama administration. certainly we think new blood in the white house, whether it's clinton or trump or maybe even a potential newcomer into the race, we think that we've got to see a more cooperative environment in d.c. with somebody new leading the country. >> how should i invest? what are some of the sectors that you are looking at and some of the sectors that --? >> we think interest rate sensitive sectors in both the equity markets and fixed income markets look fully valued. the market is anticipating interest rates are going stay lower longer. so the risk of rising rates really is not priced into the fixed income or the equity markets for valuations today. so certainly we like tips. treasury inflation, protected securities on the relative value basis versus nominal inflation bonds we think the inflation protection could pay dividends. we think some factors are changing we may see some higher
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inflation readings going forward. >> duke that the non pharm payrolls reading tomorrow is going to make a difference to fed thinking and add on the -- report we get out today? >> i think unless the employment numbers really surprise to the downside we think the fed is more likely to raise interest rates in jub or july. the message coming out of the fed has changed dramatically since the beginning of may. it was certainly more dovish in the first quarter of this year. but it's been unusual. we've seen a consistent message come from fed officials since the beginning of may conveying that a rate increase is in store and that was confirmed by janet yellen last week. we think given questions about fed credibility and really the language that points towards a tightening we think it is likely to occur in june or july. >> mark, thank you very much for
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being with us. it is super early where you are. so get a cup of tea. settle in. stay awake. and we'll chat later. over the course of the last half hour we've heard mixed messages on a ceiling. iran is saying a cap without a quota means nothing. libya is saying no deal. qatar is -- and. hadley we're scratching our heads wondering what to think of this now. >> well at least from the gulf delegations it seems that there is at least a positive vibe heading into this meeting here in vienna. they said they were going to be investing more in production 2 country. i caught up with the uae's oil minister in that scrum and asked if the production caps are on
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the table. take a listen. >> anything is on the table when we meet in that closed room because anyone can bring that notion. we did not meet officially to discuss it. question hear the rumors that you hear. but we are -- we are ready to discuss any proposal provided that everyone is participating. that is the fair statement i think coming from do ha who is interested. and whether we achieve it or not i think subject for discussion within when we meet in the closed session. i don't know if i am targeting a price. i'm targeting a balance. and i see the market is balancing. we had a bigger problem which was the oversupply. now than mountain is melting. and we are the supply and demand are catching up with each other. we have the refineries coming back in the third quarter. and i think all of those are
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good sign to -- for us to be optimistic. >> the uae minister of oil. of course prices very important for the gulf states. we understand they have instituted economic authority for all the gcc countries. basically what you have to remember of course is that all of these mega construction projects which fueled growth in the gcc countries have really dried up after oil prices sank and the question is of course how high those oil prices are going to need to go not just to get growth restarted but also for saudi arabia in particular trying to revitalize and revamp the economy. so big questions about what the price is that saudis are actually going to need to get to. >> nothing's changed from iran's viewpoint. they are saying it is of no benefit to us to have a ceiling. and we don't want to head down that direction at all. right?
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>> right. nothing seems to have changed. when it comes to iran you have to remember at the end of the day these are folks trying to revamp their own economy and it is going to require billions in investment. and they have to get it from their economy and oil sector and they have many other areas they need to fund so for iran in particular it doesn't seem as if production caps are a good idea. >> and we're seeing more live pictures of various ministers arriving. so while hadley is there in vienna we just again to seeing the ministers arriving there. we'll have much more for you throughout the day. much more coverage with regards to opec and with regards to any decisions are made and also with regard to the ecb rate decision not. change expected as said. but we'll be giving you live show, one hour live show on that rate decision. and some of the issues that the ecb members are debating this time around. no change anticipated. it is anticipated they might be
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looking to raise both growth and inflation forecasts which would be a big change from what they have been doing over the last long time. every single cycle seemingly they have been kputing forecasts for inflation so far. there are some that argue they should be cutting core inflation forecasts this time as well as some underlying themes are still pointing to the downside. we'll be talking to guests about the risks or if ecb heading forward and also how they balance a delicate growth environment in europe with green chutes of recovery. that's 1330. that's it for today's show. "worldwide exchange" up next. see you soon. . smart devices are up. cloud is up. analytics is up. seems like everything is up except your budget. introducing comcast business enterprise solutions.
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good morning. happenings now opec ministers are meeting in vienna and the oil markets are on high alert. a live report from the cartel's gathering straight ahead. >> and it's decision day at the ecb. central bank widely expected to hold steady but what will draghi say about growth and inflation. >> and the world according to elon musk. the business visionary speaks on apple, a.i. and bring people to mars. thursday 2nd of june, 2016 and "worldwide exchange" begins right now. ♪ ♪ between these walls ♪ a

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