tv Street Signs CNBC June 3, 2016 4:00am-5:01am EDT
good morning, everybody. it is friday. welcome to "street signs." i'm louisa bojesen, your headlines. the governor of the bank of austria playing down the risk of the ecb missing its inflation target in an exclusive interview with cnbc. >> we really have still a very low inflation this year. but we think that in the next year we will have quite substantial pickup in inflation. >> european shares in the green this morning as brent crude climbs higher. the nonfarm payrolls report is in focus and investors eyeing the prospect of a summer fed
hike. and speaking of the fed, the chicago fed president charles evans tells cnbc there could be two rate hikes this year, but timing is not really that critical. >> two rate hikes in 2016, that's my own call for that, if the data continues to be in line with my outlook. that's a slow and gradual increase this year. >> and accor. good morning, everybody. i know you wanted the eurozone pmi data, may final composite 53.1, we're a little bit higher than the flash estimate. the april final figure, 53, so, again, the may final composite
pmi a little higher than both of those. output prices for pmi 49.3. that is also a bit higher than what we saw in april. the final services pmi 53.3, which is also a bit higher than april. and the services input prices, 55.6, slightly in line with what the flash figure was, 55.5. so the eurozone business growth remains modest during the month of may is the takeaway. the pmi, though, showing that we are seeing modest growth, though, across the board for the composite figures. the euro dollar pretty flat though, 111.53 on the back of the ecb's rate decision and the press conference and now positioning ourselves for the nonfarm payroll data from the states. we'll talk to our guests about what to anticipate there. let's check in on equity markets and the european stocks this morning. we're at slightly flat to a
little higher across the board. the stocks up by just shy of a percentage point at the moment, heading into the weekend. we're seeing all of our european indexes, though, trading in positive territory. seeing right here. in fact, all of them up by shy of half a percent. just glancing over the course of them all and this is what we're seeing. i'm not lying. i am. the ftse 100 is higher by .8%, just over half a percent to the upside. let's move on, though. and talk a little bit more about the ecb. inflation should turn a corner in 2017. julia is still in vienna, at the meeting yesterday. julia, we saw forecasts hiked for inflation, but only just and only for 2016. >> yeah, you're absolutely right, louisa. this is the key point. we have seen a pickup in oil prices over the last couple of months. we have the base effect kicker
of all prices in the second half of this year and then all the stimulus and the impact that's going to have that they announced in march and that is still to come. and yet despite that, no change to their inflation forecast in 2017, no change to the inflation forecast in 2018, and if you look at the inflation rate that they're anticipating in 2018, we're still some significant away from the target, at or just below 2%. when i spoke to the governor of the austrian central bank, i said, look, despite everything in the stimulus that you have significantly added since march, we're still not hitting the target. isn't that a concern for the bank? listen in. >> the forecast we have is that in 2017, we will have a forecast, we will have inflation about 1.7%. which is not that far away from the 2% line. so basically i think this is the important point. we will have still a very low
inflation this year, but we think that in the next year already we will have a quite substantial pickup in inflation, which, of course, changes a lot with regard to the general perspective we have. >> so you're saying if things pan out as expected, you've done enough. >> yes. we decided yesterday not to make any new movements. of course, with inflation we're aware the main mover are the oil prices. so this increase in inflation rate is mainly due that we expect no major decline in the oil price. so it is just all over the base effect, that means we would have high inflation. of course, the oil prices also are very political price, not so easy to predict, but this is our, i think, best guess. and so given this circumstances,
i think that in the already in the second half of this year, we will have a clear upswing in inflation rate. >> so he also admitted to me they were being conservative on the oil price assumptions. we talked about risks to the upside. you heard him there saying this volatility, this geopolitical risk there. we also know that they forecast all the euro rate level they predicted or at least used in the forecast is stronger than the current market. and i know a number of us in the press conference were going, it is a political element here. are they being quite conservative on their inflation forecast, not only to justify the stimulus that they added in march, despite some criticism given the german quarter but to buy themselves room effectively should they need to do more. i posed that question whether or not there was a political element to the forecasts. listen in. >> we tried to do our best to
have a serious and reliable forecast. there are no political sides, alliances with that. of course, we have set a number of actions, some of them will kick in in the later dates so the most important is the new line of loans for investment. and we think that really might have substantial effect because it is a very favorable conditions. so there are a number of effects that still will need time to show. and this is exactly the basic idea behind the yesterday meeting that we will allow time to bring the results. >> so on the one hand, playing down that gap over the forecast horizon between where they see inflation coming in and also
versus their target, but at the same time, saying actually we have got room to add further stimulus if we need. i call that kind of having it both ways. but then isn't that the sweet spot for central bankers. data dependency is the word. >> it seems to be definitely still the word, julia, thank you very much. julia chatterley joining us there, still in vienna. now continuing on from what we learned yesterday, garreth eiser is with us. the takeaway is dependency, as julia indicated there. it is maybe also that the ecb wants to happens what the corporate buying program this month and how that rolls out. >> yeah, i think they released a number of measures over the last six to nine months. and i think that will take time to come to fruition. it is a quiet press conference yesterday, no fireworks, which
made a change after the last four or five meetings. i think they'll put those in place, begin the tros, begin the bond buying and corporate bonds and see what happens, give it a little bit of time to work. >> are they going to be buying the correct corporate bonds, do you think? i spoke to a couple of people yesterday who said if they buy germany, they have a problem. overweight germany. if they realize they need to be buying french, italian, spanish corporate bonds we might have a chance of seeing a positive recovery in europe. >> yeah, i think what specific bonds they buy isn't really that important. i think it is a message they're willing to do more. we started off with government bond qe, and now moved to corporate bond qe. it is a message there are still bullets there, still able to do more, especially at a time when people are viewing the central banks running out of ammunition. >> from the fixed income perspective, do you think we'll see any dramatic changes happening over the next course of the next couple of months based on ecb policy, or steady as she goes for the summer. >> i think that already happened. the market tends to front run
these things when they had an announcement there would be corporate bond buying, you saw significant tightening in credit spreads. financial conditions have eased quite a lot. i'm not sure it will have an impact on the larger economy. large cap companies that come toto the bull market, it is the slower and medium type enterprises that need to get the finance to be able to put it into the wider economy. i think the banks are important to do that. >> okay, you're staying with us. is it still freezing out? >> yeah, feels like november. >> i know. i know. i heard on the radio this morning they were saying it is colder than what it was over certain days -- >> sunday looks like the sun is arriving. >> really? okay. i'm glad, i'm wearing cashmere still, ridiculous. you're staying with us. get your e-mails and tweets through. we'll float it for you on screen. if you forget the e-mail address, like i tend to do or find us on twitter as well,
streetsignseurope -- twitter handle, @streetsignseurope. you'll figure it out. just put it into google, it will all come up. investors will be watching the nonfarm payrolls release. the jobs report is set it release new clues. the chicago fed president charles evans told cnbc he supports two interest rate hikes between now and the end of the year. mr. evans said he saw u.s. growth picking up to around 2% with inflation returning to target in 2016. but the fomc member warned it was reasonable to hold off on hiking rates until core inflation hits 2% on sustainable basis. speaking to jeff yesterday, mr. evans explained why the fed is taking a cautious approach to interest rate hikes.
>> i think there are risks management reasons for being very slow and gradual in the pace of increasing the funds rate. that's the view the committee expressed most recently. i think there are good reasons to think, well, wouldn't we be better off if we could confidently get inflation back up to 2%. as long as it is lower than that, we still need accommodation in order to improve the economic situation. once we get to 2, we're in a better situation. if we imposed, you know, premature tightening, then that would be -- we would struggle to undo that because it is very difficult to lower rates right now. very low and hard to provide even more accommodation. that's why i think it is very valuable to continue our accommodation to improve employment, allow people who are employed to gain more experience, to improve their income earning abilities. we have seen reduced capital
deepening, which also had longer term effects on lowering growth. the longer we can keep this going in a robust fashion, more people benefit. and it is worth pushing a little bit more in order to ensure that. having said that, we have a lot of accommodation in place, we're in a better situation and i think one or two moves this year we would still not be getting ahead of ourselves, we would have time to monitor the economic situation. and if after doing that at the end of the year we decided things still weren't strong enough, we could reduce the pace of increases even more. >> garreth is still with us. charles evans supports two hikes by the end of the year. is he justified in thinking this? >> well, if you look at the trajectory of inflation, then probably is. but i think that would cause a little bit of panic in the markets. saw what happened following the december rate hike, looked fine. markets seemed calm immediately afterwards and came into january, and the reaction, well, the fed hike was one of the
reasons we had such a weak beginning of the year. two, i think it would be a surprise not priced into the market. so i suspect that there are other members on the fomc who would like it see one at most. >> i spoke to the chilean finance minister at the oecd week in paris. he said one hike we can deal with. two hikes will get a little messy for us. do you think the fed should be looking towards some of the emerging markets or upcoming economies and think twice about doing this? >> we heard that from janet yellen and many of her speeches over recent months, discussing the global outlook. i do think that the impact of the stronger dollar if the fed do hike does have many repercussions for emerging markets in terms of currencies and commodities. i do think with global growth pretty weak, and manufacturing pretty weak in the u.s. as well,
that they will look to the wider global economy when looking ahead at domestic interest rate policy. >> what is a fair level of the u.s. ten-year treasury yield throughout the rest of the -- what should i anticipate. i look at what is taking place in the bond markets and don't feel the yield is reflecting genuine expectations of hikes at the moment. i feel there is still a discrepancy between what we think is going to happen and what the bond market is telling us. >> i think there is a number of reasons to that. look at the fed dots higher than the market and have been for some time and the markets seem to be right. they haven't raised as much as the fed were hoping to do. i think with u.s. yields, it is not just about interest rates, you have 10 trillion of negative yield in bonds around the world. that money is looking for somewhere. and in the u.s., getting 1.5, 1.75 for u.s. treasury, which is relatively safe, one of the safe havens of the world and appreciating currency, that looks good value.
i think what we need to look at is spreads between countries. german ten-year bonds, i think it is difficult to see a large rise in yields in the us us. >> we have come down again on some other german -- the german two-year as well. >> we have negative rates, negative 40 basis points in europe, we also have negative rates in japan. so the idea behind negative interest rates is that it forces investors out into different assets and we're starting to see that. big flows into the u.s. market, big flows into the u.s. corporate bond market, which isn't surprising, because many people around the world need an income. if you have negative yields on your fixed income, you go somewhere else for it and the u.s. is a good candidate for that. >> garreth, lovely friday. enjoy the winter here in london. fixed income fund manager at schrod schroders. we need to take a break. after the break, we cross live to eppson, not the place for achy muscles and things like
hi, herb. welcome back. it is friday, we have got a lot going on, china is reportedly seeking to increase the stake in aqua hotels to 29%. according to french media, the government and company management want to prevent jin jiang from taking over. bayer added more banks to the financing team for its $62 billion bid for u.s. company
monsanto. they are said to now count hsbc, goldman sachs and jpmorgan in the syndicate. ab inbev teaming up with starbucks for teavana. they said the brewer would produce the ready to drink starbucks tea at one of its u.s. breweries to sell around 300,000 convenience stores and supermarkets. we need to wrap up what has been going on our asian market. almost weekend, but what do we need to take away before we go? >> good morning. first stop, a pretty ropey week for the nikkei 225 with fiscal consolidation on the back burner. but it has been a reasonably
positive week for mainland chinese equities on the prospect of msci inclusion for the asian markets. mixed fortunes in the north asia. but broadly what it comes down to is this. not a great deal of conviction. we are all waiting and marking time until we get the nonfarm payrolls and until we hear what tone janet yellen strikes when she talks on monday, what that means for the rates environment out here. we're still very susceptible to high yields, to a stronger dollar environment, normalization. we're watching and waiting for the nonfarm payrolls. the big mama of data, she'll get you. she will get you. >> i'm sitting tight. i'm sitting tight. have to go run and hide now, the big mama of data is couming. thank you very much. we're used to referring to it as the big daddy.
mr. cameron took on a birth of angry questions from question s and here are some of the highlights. >> it is moronic to control freedom of movement. you can't control freedom of movement. why did you make that pledge? >> as i say, there have been many years where movements, people out of britain into europe, out of europe into britain, have been broadly in balance. we have a single market. >> you knew this a year ago when -- you made the promise again and it is a promise that cannot be fulfilled while we remain in the european union. >> you said that city cam wasn't to be trusted and a couple of weeks later you appear on a platform with him. isn't that an example of your hypocrisy and fearmongering.
>> i don't think that's double standards. i think that's saying some of the issues are bigger than the politicians. this is such a big issue for us. it is about the jobs of people in this room and the jobs of people at home, how are we going to secure a strong economy for the future. what is the best we can do when it comes to opportunities for our children. how do we keep our country safe in a dangerous world? >> let me finish now, because i've seen you interrupt many many people beforehand. let me finish now. that is not answering the question. i'm an english literature student. i know waffling when i see it. i'm sorry. >> that's no prospect of turkey joining the eu in decades. they applied, one chapter has been completed a this rate they'll join in the year 3,000. >> the uk wasn't in the eu, would you apply to join now and why? >> 500 million people, vital for our business and jobs, but we're
not in the euro. we kept our own currency and we can keep it for as long as we want. >> what will come first? >> the words world war iii never uttered -- >> peace and stability in our continent, the european union doesn't just stop existing because we left. the channel doesn't get any wider if we decide to leave. a group of people will be sitting around a table making decisions about our biggest market, about the future of our continent, about things that affect us and we will have our nose pressed to the window trying to figure out which decision they're making. >> china and india and all the growing markets and be able to do so -- >> wow. fantastic. fantastic debate. magnificent. the richest eppson derby will go
to post when 18 horses battle it out for the prize of 1.5 million pounds. today is ladies day at eppson with fashionable punters taking to the track. i'm not sure i call her a punter, but tana is very fashionable, at the turf at eppson downs racecourse. if viewers are watching and don't know what the races are about, what are we looking at today. >> gosh, louisa, the epsom derby is the most famous flat race in the world. it also has got the most expensive prize money. 1.545 million is up for grabs tomorrow at 4:30. and really everyone here is getting so excited. today is ladies day. and i'm here just in front of the course, you can see behind me, louisa, and it is incredible because in a few hours, everyone is going to be watching. there is a famous race called
the oaks race, over 450,000 pounds prize money to be won for that. and only the fillies, the female horses, enter. the colts, male horses tomorrow. but today it is all about the ladies. the fashion stakes, there are dress codes, not as strict as ascot, but ladies will be told to say dress up in suits like this, hats, fascinators, and to be looking smart. but already the trainers, the owners, the jockeys, are out there, and the atmosphere is heating up. even though it is freezing. >> i was just looking, i was just looking, tana, on racing post, a site i read every day. and they were saying that they have -- >> yes, i'm sure. >> 14 millimeters of rain fell on the track through the morning, a day ago. it is a problem if the weather is bad for the horses and the
riders, right? >> yes. that's right. it does affect them. i've seen people walking around on the turf all morning checking it. and if it is soft or what the quality is like. and, of course, what they say about the epsom derby is it is incredibly undulating, the course. it goes up, it goes in, it goes around. there is so much to it. and you have to be a really adaptable jockey to be able to win something like this. last year, frankie detoury won it. this year it is an open field. her majesty the queen will be attending tomorrow. she's never had a horse that has actually won. in 1953, one of hers came second. but because it is her 90th year, she's going to be presenting the trophy to the winner for the first time tomorrow. so she'll be here. and everyone else out in force. >> the favorite is named win ed
of desire. sounds like a romance novel. >> absolutely. i had a tip on idaho, that was the tip i was given. >> excellent. tana, thank you very much. wrap up, stay warm and we'll see you very soon. tana brier joining us there from the epsom races. as we head to break, check out world markets live, our blog, runs throughout the entire european trading day. more online as well, cnbc.com. and we'll see you in a minute. find us on twitter as well or on e-mail. ur enterprise uses goes . smart devices are up. cloud is up. analytics is up. seems like everything is up except your budget. introducing comcast business enterprise solutions. with a different kind of network that delivers the bandwidth you need without the high cost. because you can't build the business of tomorrow on the network of yesterday.
substantial pickup in inflation. >> european shares this morning in the green. brent crude climbing higher as well. the nonfarm payroll report is in focus. you're looking at the estimate right there as investors they eye the prospect of a summer fed hike. speaking of the fed, the chicago fed president charles evans telling cnbc that there could be two rate hikes this year. but the timing is not really that critical. >> two rate hikes in 2016, that's my own call for that. if the data continues to be in line with my outlook. that's a slow and gradual increase this year. >> and accor declines to comment about the hotel group. hi, everybody. welcome back. you are still watching "street signs" here on cnbc. the services pmi data for the uk just hitting our wires, 53.5 in
may versus 52.3 in april. so that's quite a bit higher than what we saw in april. it is also quite a bit higher than the poll put out by reuters of 52.5. the uk, all sector pmi rising to 52.8 in may versus 51.9 in april. the survey suggesting that economic growth has been slowing to 0.2% in the second quarter versus 0.4% seen during q-1. market is saying it is the weakest measure of new business since late 2012. hiring, they point out, listen to this, at a 33-month low. they're saying expectations in the service sector improved, but that a lot does still hinge on an eu referendum, which, is coming up here in three weeks time. three weeks time, exactly three weeks. so that data just hitting right now. let's check in on our u.s. market as well. here in europe, hanging on to
green. keeping in mind, that we're probably all looking towards that nonfarm payroll data, due out at 1:30 cet if you're waiting for that here, here from europe. shares in airbus have been trading lower after emirates airline president tim clark says talks with the planemaker over its a-380 new aircraft had lapsed. this is the airline announced it was to retire the first a-380 in 2021. pilot unions urged air france members to strike during the first week of the euro 2016 football tournament. this is in protest over pilot pay. have a lot of moaning in my ears from football fans in the gallery, but the airlines ceo said the strike would not paralyze travel to the championships in france. he's saying people would end up taking other means of transport like cars and trains instead.
better news for total. it will restart one of its largest refineries are france after a majority of the workforce voted to resume work after the lengthy strikes. bp agreed to pay $175 million to shareholders who bought a class action motion against the oil major. the lawsuit alleged that the british company had misled investors in understating the severity of the 2010 gulf of mexico oil spill. and speaking of oil, yesterday the opec members, they failed to agree on output targets in vienna. we have seen the price of oil back up above 50. just looking when i got in this morning, still hanging on to 50 for brent. so snapping this four day losing streak, first time in seven months that brent went above 50 and settled above 50 yesterday, closing out the session. but investors and analysts, they say that the outcome is market supportive as saudi production
restraint increasing demand and supply disruptions, all positive for the price of crude. garreth davies, welcome, nice to see you here. nice to have you with us in the studio. what is the main takeaway from the opec meeting? how should i be wrapping up what took place? >> well, the outcome, which is no change to lack of production constraint, was assumed by the consensus. i think both key parties, saudi arabia and iran, got what they wanted from the meeting. saudi arabia in essence is allowing price to drive the rebalancing of the market. so in essence having lower prices for longer, which will drive out nonopec supply. and iran, that has not agreed to any production constraint, it clearly wants to rebuild its production post sanctions and get back to levels that it saw
many years ago. the industry has been damaged by lack of investment over many decades. >> is that okay to let the markets at the price to continue to produce and see what happens? >> i'm surprised to some extent the price moved up today. it is only a couple of hours changes in the oil price. in essence, i think the saudi arabia wants this -- it is a long game in essence to drive investment down on supply. the positive spin that one could put on the outcome of the opec meeting was that saudi arabia at least attended the meeting, attended early, tried to get a deal with iran to have some production sealing at current levels. that shows us a degree of willingness to at least have a conversation. and after the meeting it became clear that saudi arabia says that they want not flood the market, would not use their spare capacity, and in essence they want to keep that back, which means in essence that
increases in saudi arabian production from current levels will be limited, which is seen positive by the market. >> the new saudi energy minister quoted as saying that they'll be gentle in their approach, and make sure we don't shock the markets in any way. market, though, not seeming anticipating any shocks by the looks of positioning. we have been pretty range bound. >> i think the key issue is the point at which the market rebalances, when supply and demand balances. we think that will happen toward the end of this year, or the start of 2017. and it is only then that stocks will start to come down. and what we have is an overhang of stocks that have built up over the last two years. will take a while for the stocks to erode. what we're anticipating is scope for gradual improvement in prices over the next 18 months or so. the hope that opec has in saudi arabia is that in two or three years time, the absence of new nonopec developments combined
with increases in demand, because of low prices, will open up a gap for opec to increase production, increase market share without destroying the prices. >> gradual improvement to 55, 60? >> we have brent approaching $60. averaging around 53 in 2017. >> a bit of upside. thank you very much. go get a cup of coffee and wake up properly for the rest of the day. garreth lewis davies at bnp paribas. i know it is almost 10:00, but the man needs to get to work. people talking to me in my ear. thank you. after weeks of holding out, house speaker paul ryan endorsed donald trump's bid for the u.s. presidency. he said while he and the presumptive gop nominee may have differences, they share common ground when it comes to the key issues. nbc's tracy potts is in washington. so paul ryan, the speaker of the
house, now endorsing donald trump. do they really have that much in common? >> well, they may not have that much in common, but they certainly have a lot more in common than the other side. and that seems to be where paul ryan came down on this. he says that he wanted to be sure that donald trump would support the republican agenda. their goals, their principles, and their policies. and it took some time, phone conversations, in person meetings, meetings between their staffs, to work out the details to make sure that trump, as president, if he wins, would be on their side. so now he's said he would support trump and that he will vote for donald trump. meantime, trump is out in california as are the other candidates today, trying to prepare for the primary that is happening there on tuesday. we saw more protests overnight where people were attacked, even an officer was attacked at a trump rally. trump says he is focusing on one of the things he's focusing on, hillary clinton and her e-mails. he says that she's guilty.
meantime, clinton says she can't wait to debate trump on foreign policy. she's coming off a big speech on foreign policy, spent more time last night talking about what she says is his dangerous position on foreign policy. and bernie sanders, who has been pounding the pavement out there, to get votes, now publicly acknowledges that of the six states voting on tuesday, we talked about california, but there are six states voting on tuesday, new jersey may be one that he might lose. >> thank you very much. have a nice weekend then. we look forward to hearing more from you next week. now, on the back of what she was just saying, donald trump has also taken to the twitter sphere to announce he'll visit the uk before britain's vote on eu membership in june. he will be touching down in scotland a day ahead of the referendum. and prince, the phenomenally talented musician, who was found dead at his home in minnesota in late april, died of an
accidental self-administered overdose of an opioid painkiller according to a report from the medical examiner. the 57-year-old pop star overdose on prescription drug fentanyl, a highly addictive opiate. the investigation into prince's death over the past month has centered on pain killers after reports that he had been struggling with addiction. and on another note, patrick, thank you very much, a viewer sent some fantastic prince memorabilia to the show. thank you so much for that. greatly appreciated. coming up, walmart hails a ride. we explain how the world's largest retailer is getting in the ride hailing game. we'll tell you more after the break. keep your e-mails and tweets coming through. lovely hearing from you, especially on a friday on twitter.
welcome back to "street signs." i'm louisa bojesen. happy friday. walmart is getting on board the ride hailing bandwagon. the announcement comes as walmart looks to speed up its shipment times and better compete with amazon, which already delivers groceries in a number of cities across the u.s. united continental and delta airlines could be possible bidders for columbia's avianca holdings. they distributed a document to potential bidders seeking a capital injection. it is one of the largest airlines in latin america, roughly $600 million. and spending on cancer medicines totaled $107 billion worldwide in 2015. that's according to a report from the ims institute for
health care. that total is expected to surpass the $150 billion mark by 2020 in part because of the rising price of treatments. the cost of drugs is now expected to be a major theme at the american society of clinical oncology meeting. it begins today in chicago. brad is the ceo, and joins us from chicago. good to see you. the talking point being the price of drugs among other things. how do you think that the discussions are going to fare and do you think we'll see a shift to how the pricing is done? >> well, the important thing, i think, what you're seeing at these conferences, a big theme this year is what is called cancer immunotherapy or harnessing the immune system to treat cancer. and you're seeing results and value delivered to patients unlike we have seen before, for example, merck released some late stage melanoma data that
showed 40% three year survival rate, which is over double what you with normally see with traditional treatments. and so these new innovative medicines are delivering a lot of value to patients and the system. and so i think the important thing when we have the cost discussion, you've seen a lot of negative headlines in the news lately about companies rising the prices of old medicines and i think there is something to be done about that. but it is important we also foster innovation and make sure that there is a good robust market for these new drugs, so that we can continue the r & d process. >> the health estimates i'm looking at, global spending on cancer medicines that could increase from $100 billion in 2014 to $147 billion in 2018, that's based primarily on the old medicines or on a mix between the old and new. >> so, a lot of that growth is from the new. these are innovative, new
medicines that are delivering, unseen of value to the system, and that's driving a lot of that growth. and another thing you have that is a big factor is just global demographics. you have aging societies in developing countries. but you also have a lot of emerging markets, starting to play in innovative health care unlike they have before. so i think those factors are good. you have good innovation driving good value to patients and you have more people coming into the system. and that's a big chunk of that growth you're seeing in that ims report. >> you managed the long car investments immunotherapy, the etf, the only etf you point out to invest in cancer immunotherapy. how do you make the decisions on which companies to include in this? >> that's right. i design the index that that etf tracks and essentially we want the 30 leaders in this
immunotherapy space and the way we determine that is we look at the companies that have a strategic focus in this area and we try to choose the 30 largest. we believe that's the market's way of saying those are the 30 most credible companies based on their market cap. whenever you have a hot area like immunotherapy like we do now, it is very common for a lot of companies to rush in there. it is very important to only look at the leaders because a lot of people can say they're in immunotherapy, but there is a big difference between that and actually doing it in a credible fashion. >> brad, let me ask you about some of the zwroukz think astoce interesting at the moment. you mention a couple of names. highlight some of your picks. >> yeah, so gen lab is interesting. they have multiple myeloma drug that they're partnered with the
yansen unit on. and they have important data not only here, but there is another important medical meeting in copenhagen next week, they have a two for one of important data coming up. it is very interesting because they bought a unicorn a few weeks ago, a private company in san francisco called stem centrics that we haven't seen a lot of public data from. and they paid $5.8 billion up front and potentially $10 billion for this company stem centrics and this will -- this conference will be the first time that we really see important overall survival data from that private company. and so all of us investors and the physicians and researchers at this conference i think are looking forward to better understanding what they saw that we don't know yet. that should be an interesting data release. >> brad, good it see you. thank you very much. the ceo of loncar investments
live with us from chicago. it is early there. whoo, it's early. now the governor of the bank of austria has played down the risk of the ecb missing the inflation target in an exclusive interview with cnbc. they're celebrating their 200th anniversary. he explained most important lessons from the last two centuries. >> the first big lesson is nothing is as horrible both on the human side and the economic side as war. war, we had the first world war, second world war, all this extremely negative effects. the second point is that both in good times and in bad times, it is important to have an independent central bank because the whole monetary system has to
be built on trust. and so to have this independence is a very important element of trust in the system. and i think the third aspect is that, of course, even given this independence of central banks, central banks cannot act in totally isolated way. so we have to have cooperation. we have to see the relationship with the other economic players, so as we say now, we can't be the only game in town. and this is also something that is of relevance today. >> now, investors are going to be watching very closely today as u.s. nonfarm payrolls release. the jobs report set to release new includes on whether the economy is strong enough for the fed to pull the trigger on rate hike as soon as june. the chicago fed president charles evans told cnbc he
supports two rate hikes between now and the end of the year. he also said he saw u.s. growth picking up to around 2% with inflation returning to target in 2016. the fomc member warned it was reasonable to hold off on hiking rates until core inflation hits 2% on a, quote, sustainable basis. speaking to jeff yesterday, mr. evans highlighted the importance of britain's upcoming eu referendum. >> i think that it is a very critical decision, obviously. and it is going to have important ramifications for the country. so, you know, i think everybody is attuned to this and looking to see how that plays out. i think in terms of the u.s., it is difficult to judge the influence. i think that, you know, markets must have been expecting coming up to this decision time and, you know, we'll have to see how it plays out. i'm not sure it plays an important role in our policy making beyond us just monitoring the u.s. data.
in general, global financial conditions. and having confidence that things are still on good track. >> what international issues then do you think are big enough to perhaps persuade other fed governors that it shouldn't be a june move, perhaps, it should be july or later in the year? >> well, like i say, it is tough to know timing and what the arguments ought to be there. i tend to think that it is going to depend on how restrictive financial conditions are. earlier this year, when there was volatility in chinese financial markets, and the rest of the world has been weaker in terms of growth, i think there was more financial restrictiveness imparted to everywhere around the globe, certainly the u.s. as well. the question, should the fomc increase the funds rate to apply more financial restrictiveness, well, if it is already in place by virtue of the markets doing that, then the urgency is not there.
same set of conditions i think would play out here except i believe that volatility is lower. the economic data have been better. certainly continue to improve since our last meeting, and so i'm looking for us to be much closer as chair yellen said if the data continues to improve in this way it would not be surprising if we had, you know, continued increases along our slow and gradual path. >> well, lindsey is chief economist and joins us from minneapolis. good to see you. so we have on one hand we have got charles evans saying he supports two hikes by the end of the year. you're saying they might not be justified to hike twice. >> i think it is going to be very difficult when we take a step back and look at the shape of the u.s. economy. it is still very fragile. so it is going to be very difficult for the fed to justify a number of rate increases this year. but we also have to put ourselves in the fed's shoes.
and the fed has been very clear that they're not looking for the usual type of growth that would justify a rate increase. that strong or solid or robust economy. many fed officials have said they're looking for just moderate. so come june, with the continued improvement, relative improvement, in the latest data points, that may be enough to justify that rate increase near term. >> inflation is going to return to target by the course of the year? >> i don't think so. i think we're going to continue to see very sluggishly low levels of prices for quite some time. but, remember, the fed is also willing to raise rates in anticipation of further price pressures. the one problem that i have with basing monetary policy on the fed's own expectations is that they have been consistently inaccurate. for more than half a decade now. the fed consistently targeting and expecting to reach that 2% objective. but inflation continuing to move
further and further away from that top line goal. so the fed is still looking targeting that 2% objective, but i think it will be at least another year before we can talk about a sustainable 2% level of price pressures. >> which leads the crescendo nicely to the nonfarm payroll data and your anticipation for today. 158,000 or thereabouts, the dow jones forecast. what are you looking for? >> i think we might see a slightly stronger number. we're looking for about 175,000. so certainly a step in the right direction from the outsized weakness we saw in april. but still well below that bar of 200,000, which we really look for in terms of signaling a strong labor market. of course, again, against the backdrop of continued improvement in manufacturing here in the u.s., as well as more strength in the housing market. we saw a nice upward tick in personal consumption. relatively strong payroll report, again, might in this
larger sense of the data meet that threshold of just moderate being enough to justify a rate increase, maybe in june, maybe as early as july. >> lindsey, thank you very much. have a lovely weekend. >> thank you very much. >> thank you for all of your e-mails and tweets. you're sending some e-mails through to squawk, which is great. my colleagues can get the e-mails that were meant for this show on monday morning. figure your e-mails out. we love hearing from you. you can also find us on twitter @louisa bojesen. data sexless, means unisex but not -- absolutely not. not talking about reproduction of data. have a lovely weekend. that's it for today's show.
good morning. it is jobs friday. will the u.s. employment picture be what pushes the fed over the top on a rate hike decision? the arguments straight ahead. >> should they stay or should they go? uk prime minister david cameron fields questions from a fiery live tv audience, including being accused of scare amongering. his comments coming up. the warriors win game one of the nba finals. it goes to golden state. if you went to bed early, we'll bring you the highlights shortly. it is friday, june 3rd, 2016. "worldwide exchange" begins right now.