tv Street Signs CNBC June 7, 2016 4:00am-5:01am EDT
♪ good morning, everybody. welcome, you're now watching "street signs." i'm louisa bojesen. your headlines, janet yellen downplaying the jobs friday while pushing rate hike expectations the s&p 500 closing at its highest level since november. shell shames up. squeezing it from the deal. >> it's taken 10% of our operating costs. this year, pretty much the same.
we'll drive it down. we'll drive it down much harder and much further the oil price goes from what we've seen it today. a car bomb hits a police bus in the center of the turkish capital killing 11 people and wounding 36 others. and state side, hillary clinton clinches the democratic bid. >> i've depugot to tell you, according to the news, we're on the brink of historic, historic unprecedented moment. good morning, everybody. and welcome to the show. ooh, i'm glad to see you today. beef got a lot to talk about today. we've got a packed show, fan it taskically exciting, jeffrey hew
is waiting in the wings get them there to use them at "street signs"/cnbc.com. wee saw a strong session in asia, strong session with janet yellen saying don't pay too much attention to just one one nonpayroll read. we'll get into the details in a second. we've got one market that's trading in slight is negative territory, that's the portuguese market. what you're looking at here, by and large the trend seen across europe. somewhere in the region of 1%, to 1.5% or so. but with regards to yellen, janet yellen did reinforce expectations that the fed will push out the rate hike time
line. a speech isn't san francisco, the federal reserve chair acknowledged friday's shock jobs report had influenced the outlook. >> the news from the labor market over the past year has been generally good with significant job gains, the unemployment rate declining below 5%. rising household incomes and tentative signs of faster wage growth. at the same time, recent science has slowed down and job creation bears close watching. inflation has been lower than our objective of 2%. but i expect it to move up over time. >> now, despite the, quote, concerning jobs report, yellen emphasized that she felt hikes, they were still appropriate. >> i continue to believe it it will be appropriate to gradually reduce the degree of monetary policy accommodation. provided that labor market conditions strengthen further.
and inflation continues to make progress towards our 2% objective. >> let's check in on our fx markets this morning. the euro dollar now at 1.14. 1.14. jeffrey is with us, ultra high investment strategist at ubs. pleasure to have you with us. 1.14 we were just looking at on the euro dollar. a couple days, 1.11, 1.13. how do you read what yellen's message was. >> i think you mentioned earlier, trying to balance things out a bit. she didn't place too much emphasis on one data point and does not make a trend. that's absolutely right. i thinks the justify of every central bank to stress that things are back on track. on the other hand, she's to be wary of the wider risks as well.
upcoming political events. emerging markets fx, and a taller climate in may that's on the agenda and will be for some time. it's all about balance. what interests me is 1.14, that's right where the ecb pron projections were. >> do you think they'll change their thinking based on this? >> well, there is some tolerance in the stock projections. you know, it's not like a golden rule, if it goes above where the projections are, we'll have to be dovish. on the other hand, 1.14 anchors a 1.6% forecast. the euro is slightly higher from the projection. but at the same time if you get an overshoot, for example, then, perhaps, we'll have to think twice on what gently on the
verge of that. >> what's your target for the euro dollar? well, back to 1.10 horizon is something to look out for, and over 12 months barks to 1.15, 1.16. we hold these ranges quite well. i think it's wider than a 1.10 to 1.15 that the markets would be happy with. >> i'm dying to talk to you about what we saw from the rba this morning. the aussie dollar jumping to a one-month high after they left rates on hold. the statement, they're not really giving us -- giving us much. but it does team that they're pulling away from their easing buyer. am i will reading it wrong? >> well here's the thing, the last meeting was actually, and they knocked it out of the park where markets are not looking for something so aggressive.
but they sort of dismissed any kind of recovery, any prospect of that. still focusing on domestically balancing and global trends. it's a clear signs that markets don't want to be bound bit dovish view. i think we have to look at the last three decisions sassas a collector. in that sense, i think the rba is well on track. it doesn't mean that they want to seat currency strengthen. but from the previous signal, it was that a stronger currency was not helpful. and they remain committed to it. and looking at the china data and the size of slowdown which is what we're seeing right now, then it it would have been shifted towards this meeting. i don't think it should come as a surprise. if you look at the last few as a collector, i still think they're on track.
if you stabilize and probably those inching up to do more. being vigilant to domestically balancing that policy. >> new zealand is next on the agenda. they've got the policy meeting on thursday. it's anticipated that leave rates steady at 2.25%. it's because of this soft inflationary environment that they're dealing with. could they surprise us this time? >> compared to sensitivity, you know to the global economy and what's going on with china as wul-r as well. to compare new zealand to australia. and in new zealand's point of view, probably a bit more so. going back to the point of inflation, we always worry, especially in australia and new zealand the impact of commodities on nontradeables and how that hits domestic demand. so there's always scope.
the downside surprises when it comes to the domestic situation and not spending. as long as that's in place, stick to a dovish buyer, and in that, probably stable conditions for now. >> what's your target on cable? on pound movements in general? and most people think we're going to see weakness heading towards the referendum. i'm looking at cable during the month of april. a lot of strength being seen. we've kind of leveled out. most of the polls now are indicating possibly a slight leave to the lead campaign. does that change anything? >> first, looking at cable price action, is that a strength or dollar weakness story. 1.14 to 1.15 level. i think the way clients are positioned right now in the
stock market, there doesn't seem to be a lot going on, we had a big wave of short covering right after. and polls suggested a gap. now, that's tightened. we've not seeing the same amount being put on, that's why we're not jumping aggressively. on the other hand, if you look at it, insurance plays are coming through as well. without specific buys in that direction, i think it's important to look at the stronger, six to 12-month view. as long as the they're on tractor tightening. if that's in place, then cable has scoped to recover. right now, the markets i think are just focusing on polls that people are talking about it a lot. but the options market, there's not too much positioning. it's clear if there an exit vote, we're going to see volatility. i would focus right now on the beauty market because there's a
dollar leg as well. keep an eye on sterling as well. clients are asking about the impact about the european union as a whole and how that affects the europe. >> geoffrey, i hear you, i'm just glancing at a comment that came from a regular tweeter. your guest just said that the central bank never talks it down. what do you make about carney? >> carney, just looking at everything put together, i think he's also trying to tread a fine line right now on focusing on the fundamentals of the uk which should be insensitive to political developments. i think that would be the sign of a mature developed completion you know, where the political process outside of fiscal measures should not have any bearing on economic performance at large. having said that, we still anticipate a pickup, a pickup in investment, has uncertainty and gradually dissipates over the
coming month or so after the vote. having said that, if we don't have enough momentum or too much momentum has already been lost, then he's well within his reason to look at the downside risks as well. as long as he folks on the military aspect of it, i think he's in a good spot. and it's his responsibility to look at all of the scenarios. so right now, it's an unique situation for the uk. it's kind of a binary vote as you mentioned. and how the political establishment interprets that, that's for the economy to decide. >> geoffrey yu, ultra high investment strategist. shell has earmarked $30 billion in asset sales by 2017. speaking on the bj takeover, the ceo ben van beurden said that
the integration was, quote, gathering pace. it's expected to hit $14 billion by 2018. steve, this is the first strategic update that we get since the actual merger happened? >> reporter: absolutely, louisa, the deal finally happening in february, ben van beurden saying we've got 100 days to integrate the company. we're really pleased. s synergy market is up. first to start off with the interview we had this morning with ben van beurden. i started talking what about we're updating today what we're getting and then we asked about free cash flow. listen in. >> with the strategy for the
company, how we're going to transform shell, it's very clear we want to be a world class investment opportunity for our investors so there's a lot of focus on improving our returns. but also improving our free cash flow per share. and b.j. is going to be, of course, a very important enabler. we've had them for about 100 days what we've seen, there's more value in it at the time that we saw at the time of the prospectus. and more value than what we paid for it. but also we're seeing more synergy opportunities and more synergies coming earlier than what we anticipated before. but also an opportunity to reoptimize the portfolio and an opportunity to have a much more predictable and stable investment. no more than $30 billion until the end of the day. >> i've got a feeling that is right at the top of the investor
concerns about how much free cash flow you can generate at $48, $50 a barrel. rather than the hoped for 60 to $65 a barrel. is that to get that with a strong front so you can saturate those returns? >> the only way to mesh that is by shareholder return. that's a leading indicator so our focus is going to be on the things we can improve indeed it's free cash flow and returns. and by the end of the decade, we need to be a company that can comfortably produce about 20 to $25 billion of organic cash flow. and that will give us ample cover for what we need to do in terms of dividend and debt. >> reporter: so ben van beurden speaking first thirst morning, a lot of key issues here. the price they see as an average
for 2020 to generate that free cash flee of 20 to $25 billion. for everything else to work, they need that free cash flow. at the moment, it's not making the kind of money even at $48 a barrel which is a big rally. it's about the debt. the debt is huge. they do need to make to make the disposals to get the debt down to get the confidence of the city again. debt being $17 billion plus as well. digesting b.g. and more costs that gets it down as well. and the discount to pay is the other thing to pay. a trader discount to the likes of bp and exxon as well. sand fishing capital management and maybe getting buybacks as
well which would improve that financial market. the market, 2.5% on royal dutch shell seems vaguely reassuring. >> steve, thank you very much. steve joining us with the latest on shell. listen get involved e-mail the show. the address is alwa always @streetsigns. @louisabojesen. you've got burberry woes. tweeting some signs this morning. one of them being a new restaurant set to open in london. clothing option ago venue, a waiting list of 40,000 people. many of you are waiting on that. many of you asking how do you get there. i have absolutely no idea.
and how do you pay if have you no pockets. coming up hillary clinton takes an aim at the competition for the nation's highest office. we'll be back. >> donald trump is not qualified to be president of the united states. of america. but we can't -- we can't just say that and assume everybody understands it. we have to make the case and we have to organize and mobile ice. every year, the amount of data your enterprise uses goes up. 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.
carried out by remote control. in corporate institution, more job cuts at daimler. the move comes as the firm grapples with weak demand for commercial trucks. shares down by 27% in the last 12 months. french fred francois hollande says he's make sure that accor hotels maintains their shareholder. we were talking about this yesterday. accor hotels reportedly starting talks with others as well. glencore shares facing an antitrust lawsuit. a district judge decided, quote, plausible story of market control in driving up prices. and fintech companies in the
u.s., they're facing calls from tighter regulation from traditional smalltown banks. according to a report by the financial times, a u.s. trade group with 6,000 small banks wrote a letter raising issues over recent liquidity and compliance issues. karen is at the fund forum in berlin and joins us. hi, karen. >> reporter: hi, louisa. well, fintech has been disrupting the banks for traditional players but it's also making a foray into the fund's management industry. retail side there's been sort of a tiptoeing in by fintech. but, so, too, when it comes to the bigger funds. and our next guest says this is the year that groups embrace it. you're the industry body for fintech. why do you think this year, capital markets are slowly
opening up to the idea of fintech. >> in previous years, we've seen heavier investments in retail space like pier to pier and lending. and there are a lost opportunities in looking at fintech technologies. >> what are those opportunities? what is the starting point? is it about driving down cost as a bit of performance? what's the starting point for fintech? >> there's a bit of everything. one of the biggest trends we're seeing this year is in the behavior analytic space. that's making sure your active manager, trading effectively. using data and al gogorithalgor like peak sports stars. >> using it together, down the track, do you think it will reveal about the machine making its own decisions without
artificial intelligence and machine learning? >> that personally i think is a long way off. it's about the man and the machine. >> we've seen hurting against markets, there's hurting by bases and defensive plays which has pushed up pricing and defensive assets. does having more impurity generated algorithms with mankind behind the scenes does that make a difference in all of this herding or taking place as well? >> well, i think hearding is very much a social or anthropological response. what data does is gives you a broader access to making decisions. what i've seen you're getting a much wider range interpretations on what markets portray, how to
focus on risks and how to construct portfolio. i think about diversity. >> we spoke to one guest who said robo investments are on the rise. how do you change that mentality? is it possible? >> well, i think it's too early to tell. there are great things happening in behavorial finance and in robo advice. i think the smart computer is the smartphone we have in our hands. but it's a regiment oriented play, in that millennials are much more able to using the technology, in fact, open to using the technology, than people in their 40s and 50s. i think we'll see that market develop. >> had a really good chat with a fintech operator who said much of the gains we've had from fintech companies in terms of generating is tackling the supply change with fintech. do you think that is the case or
where there's a best extraction of costs at this point? >> not surprisingly, block chain is probably the most important infrastructure here. the number of solutions with most of these institutions working here surprised me, everything from pier to pier trading systems. know your customer in anti-laundering. there's just a range of things going on. ultimately, i think bankers will look at distributed block change technology as a way of anchoring cost reductions out of the back office. from where we're signature today, over the next 30 years we need to expect 30 to 40%. >> former boss at barclays said block change in the banking system has an ability to cut out the banking system. traditionally, the banks are
take on the savers and the loans. in the industry, how does a block change have the ability to block it out perhaps the fund managers themselves? >> i'm not sure it's as much as cutting out the middle man. when it comes to settlements and post trade settlement, et cetera. it's really about making that process more effective. again, it's too difficult from my perspective to see who actually gets this entintermed e intermediated. >> and now how much people are investing in block chain? >> by the time we got to september, block chain was really going to save the infrastructure cost base. i don't think i've seen that in the 25 years i've been in london and the financial services.
so i think it's pretty big. estimates are in the institutional area. banks are probably spending upwards of millions in block change in programs. >> thank you so much. great having a conversation with you. lawrence winterhour at thorn. you can hear from the cost side trying to bring as much technology as possible to trim it. and but the future, what does it hold? and where does it leave the star managers if the machines are going to become more and more involved with the trading universe. louisa, let me toss it back to you. >> that's interesting. disruption now, it doesn't just happen once. it's a constant, right? how do these companies keep dealing with disruption over and over. karen, thank you very much. karen joining us live there from the fund forum. i just want to mention to you some flashes we're just getting through on turkey.
the turkish foreign minister is now speaking saying turkey would have to suspend its agreement with the eu if no travel deal is found for the turks directly. that's just hitting the wires that the foreign minister in turkey is talking about how the german government, they have to say that their official stance does not overlap with the german parliament's resolution. remember that a deal was struck with the turks between the turks and the eu with regards to refugees going back to turkey and then supposedly was with the refugees, a lot of them unfortunately being sent back to them, for example, syria. but now they're saying they would have to suspend the agreement unless there's vis-a-vis travel for the turks. we'll keep you up-to-date on that. we need to take a break. check out our world markets live blog. it runs throughout the entire
hi, everybody. welcome back. you're still watching "street signs." i'm louisa bojesen. your headlines this morning, treading a tight rope. the fed chair janet yellen downplays friday while at the same time the expectations, s&p 500 closing at its highest point since november. shell shapes up. from the bg deal. the ceo ben van beurden telling cnbc, he's responding to the new world order for the industry. >> we've taken up 10% of the operating costs this year, we'll do much the same.
much higher than much further than what seen today. a car bomb hits a police bus at the center of the turkish capital killing 11 people and wounding 36 others. and in politics, hillary clinton clinches the delegate count needed for the democratic nomination. urging her supporters to mobilize against donald trump. >> i've got to tell you, according to the news, we are on the brink of a historic, historic, unprecedented moment. >> hi, everybody. welcome back. glad that you're with us. here in europe, we're hanging on to some gains, we're higher by approximately 1% to 1.5% or so on the european equity markets and a lot of people looking towards the fed and what the message was from janet yellen. speaking of the fed, soul gains
for stocks in the u.s. yesterday. we saw the highest close from the s&p 500 since november. nasdaq rising for the ninth time in eight sessions. energy, and implied open a couple hours away from the u.s. market open is slightly to the upside. we're probably a little bit higher across the board are for the u.s. now, hillary clinton has become the presumptive nominee for the democratic party after clinching a majority of delegates that's according to nbc news projections. this would make her the first female in u.s. history to win the nomination for a major political party. nbc's tracie potts joins us from washington. this is a big deal, tracie. it's not all done yet. it's not over yet. and sanders, he isn't giving up? >> reporter: no, he's not. and he disputes the fact that she's the presumptive nominee because that number that put her
over the top includes superdelegates who could still change their minds. they don't officially vote until july. this is his game plan. sanders thinks if he can do well in the six states voting today, including a big haul in california, that he can convince in of the superdelegates to come to his side and possibly get the nomination. he admits and admitted all along it's an uphill battle. clinton did a couple of events last night. she didn't specifically refer to being the presumptive nominee, she did tweet about it saying she's flattered but we still have primaries to win today. north dakota, south dakota, montana, new jersey, new mexico and of course, california. also, there's pushback, more push back on donald trump on the comments about the judge.
ted cruz, marco rubio talking about that. rubio saying he was very disturbed. clinton calls it a racism attack. just to bring you up to date, he said the judge can't be fair because he's of mexican heritage, talking about building that wall with mexico. >> is trump able to use that as ammunition? they are able to gain any voters basically from this? >> well, it's a good question because what you're seeing people just a week ago aligning themselves with donald trump stepping back. clearly, hillary clinton is already out there trying to use this against him. trying to alienate republicans from their own party's nominee. >> tracie, thank you very much. tracie potts joining us live from washington. now, istanbul's governor has told reporters that a car bomb near the city's tourism district has killed 11 people, seven of
people were policemen. olympic people were left injured in the blast which reportedly was carried out by remote control. let's got to our turkey correspondent for the financial times. thank you very much for being with us. just give us the latest from what you know. >> reporter: so, so far, the death toll is still at about 11 or so for the number of civilians, quite sadly. and nobody has taken any responsibility for the attack. but it completely matches the series of attacks that have been seen in istanbul and around the country where security officials, while in official transport, you know, on a bus or something else like that, have been targeted by kurdish separatists called pkk. >> and this happened during rush hour today? >> reporter: it was relatively early in the morning.
it happened from a kilometer or two from the explosion where it killed about ten germans that one was isis because of foreign civilians targeted. this one, they haven't taken responsibility for yet but i think you'll see later in the day that the government blames this on the pkk. >> there are reports that gunshots were heard after the explosion. is that the official line that's now being published as well? >> reporter: no, this is something that we've not been able to confirm from the police or hear. there is always a lot of confusion art attacks, especially after rush hour. it's unclear whether that took place. we're still waiting to see details on that. >> again, with regards to nobody claiming responsibility for this, there is speculation, again, as you've also hinted that it could be extremist groups. that it could be kurdish rebel fighters who are upset with
their treatment, via the turkish government, but no line yet. no official line? >> reporter: no official line yet. but keep in mind this is a violent year for turkey. there's a peace process that fell apart in july last year. since then, the uptick in violence both in urban centers in the southeast along the border with syria, with the kurdish separatist movement where a lot of young people have taken up weapons that's claimed almost 5,000 people. and in ankara, which is the capital, you had far greater number of people killed in pretty much exactly the same style where you either have an ied or a car bomb that goes after security officials while on official transports. rather than trying to attack them at work which are far more secure, far more guarded. >> has there been any type of response from erdogan yet?
very much in the lime light and under some heat as well from international pressure on how he's handling the crisis in the middle east that is spilling over the borders as well. >> reporter: in the past, he's been adamant that this is entirely the work of kurdish separates under the pkk. in syria, an offshoot it implicates the kind of relationship with the rest of the world. it seems that terrorism with its borders is ignored by western partners in pursuant of gains inside of syria. it's difficult for the turkish citizens because the government has shown they're unable to thwart attacks like this. about 5,000 people killed in
turkey in various raids and attacks and it doesn't seem like it's get anything better. >> mehul, thank you very much. our turkey correspondent for the financial times. speaking to eu lawmakers monday, the economic affairs manager said that greek authorities have made 95% of changes but also warned there's still work to be done. the keep global strategic at jeffries which has turned bullish on equities returning from hong kong. why are you turning modestly bullish on equities at this point in greece? >> well, it wasn't the degree of acro-mobou
acro-moni or processes that we've seen. similar to the circumstances in spain in 2011 and 12, and brazil at the beginning of this year, when economic conditions are very depressed you do find stock valuations and the behavior of stocks at those level. and the underlying micro environment in greece. a lot of companies have gone through a degree of survivalship. i think that speaks volumes for the type of rebound we might see in greece as we start to go through a much better period for the greek economy and greece overall within the eu. >> wasn't this still a pretty big defeat for tsipras, given that he would have liked to have seen a lot more leniency on debt? >> well, i don't disagree with that remark. i think indeed, the imf would probably go along with those comments as well, ultimately, and debt forgiveness has to be
part of the whole package for greece. and i suspect that once the german elections are finished in 2018, that will once again come to the forefront. but maybe in the interim, we see some form of good news, whereby the ecb accepts greek government bonds as collateral for greek banks. and that would be a significant turning point in allowing the ecb to buy greek government debt. and again, becoming part of this huge convergence of eurozone debt that we've seen, eurozone debt yields we've seen. to put it in context we have to remember in ireland in 2011 and 2012, the government bond yields were north of 20%. and they've recently done 100-year bond yields just above. 2. you know, there's quite significant turning points for
financial marks if indeed things go right. >> so, sean, so, out of the basket, we're talking about some optimism that might be in store for greek equities. what are some of the names you'd pick out. i'm looking at your research. you mention a couple. >> well companies -- there's quite a few companies that have international operations like titan cement with operations in north america. you've got coca-cola, which is quite extensive operations in emerging markets. the stock exchange itself is trading on very depressed valuations, given the very poor sentiment. all of these have gotten very good franchises. and again, companies like motor oil, they're all producing very good free cash flow at a terrible cycle. so we tend to sort of err
towards buying companies, for that survivalship that ought to hold you well going into possibly better periods of economic growth. >> sean, thank you very much for being with us. sean darby, chief global equity strategist at jeffries. good morning, gary, hi, duncan, bob. thank you very much for your mail and messages. you can find us on e-mail, "street signs" @c nbc.com. you can find us here, @louisabojesen. as a major second storm of the season soaks florida's gulf coast. updating you on the path that's taken. also talk about an etf. a public sentiment-weighted etf.
welcome back, everybody. tropical storm colin rolled on to florida's gulf coast bringing with it several inches of rain and threat of serious flooding. governor rick scott has declared a state of emergency. nbc's kerry sanders has the latest. >> reporter: tonight, more than half of florida under a state of emergency, as tropical storm colin heralds the coastline and
floods low lying areas. waiting for the storm to create havoc. >> this is pretty much the entire state. we have the risk of tornadoes. lightning, hail. >> reporter: all right water spouts have popped up along the coastline. winds as strong as 60 miles per hour have pushed the rising tide. even closed down the sunshine bridge for most of the day. this police officer fought the elements to control a boat. with heavy rains flooding in places like kreedzer key could be a problem for days. >> isolated tornadoes up to four inches of rain possible through tomorrow. this cold front will trigger more storms by tuesday evening. >> reporter: after alex in january and bonnie last month, colin marks the earliest of three tropical storms that have formed in the atlantic basin in 129 years. >> it's been a while, but this could be the sean we're going to
have more impacts than we've had in the past. >> reporter: with schools closing and local governments retreating early today, those fear the latest storm will cost them. >> sometimes, it comes from the beach over the streets. when it does that, then we're in really big trouble. now, the bidding for yahoo!'s internet business is heating up. with us to explain more, wilfred explains us from the cnbc headquarters. >> verizon submitting a second round of bids for yahoo!'s web access. saying they're not interested in acquiring yahoo!'s assets such as real estate. verizon bought aol last year for $4.4 billion. our suitors have participated in earlier rounds.
no word at this point if they made bids before yesterday's closing deadline. the expecting price is lower than the 4 to $8 billion estimates. yahoo! expected to hold at least one more round of bidding. of share price performance as you can see not too pronounced. yesterday, broader markets. up about 0.5% for the s&p and another third of a percent from yesterday morning. on that note, i'll send it back to you, louisa. staying in the u.s. u.s. inverstors are looking at whether goldman sachs violated the fund. according to "the wall street journal," the probe surrounds $3 billion goldman raise forced 1
mdb. t-mobile is offering free stocks to millions of subscribers. the mobile carrier will give one share to each of its pay monthly customers. and friends who accumulate up to 100 shares a year. and also offering weekly gifts like movie tickets. sha shareholders seem unimpressed. general motors holding its annual meeting today, two years from mary buyer held her report. the former farmer exec martin shkreli has pleaded not
guilty. the charge brought against him alleges securities fraud. chiarelli -- the phone tracking the bullish and stock opinions through an mobile app. and rebalances monthly. and the chairman and founder at crowdinvest. martin, glad to have you with us. it's a public centerment-weighted etf? >> right, the theory that we're going with is crowd theory. we believe that independent investors can make better stock decisions than a few portfolio
manager analysts who are influenced by group and herding. >> how do you do that though if it's a bunch of 13 year olds sitting on a beach knowing nothing? >> well, actually, we want a diverse set of opinions. right now, we're using our app, crowd invest, that you can download. but in general, the theory states that an average you want and a distribution, you're going to have people that know nothing. and people that know a lot. over time, you hope you harness the actual information that these individuals have collectively versus, again, like i said a few individual analysts or portfolio managers sitting in a room. >> sure. but some argue that people who don't know very much at least by
the book that they can actually make a lot of money on the market. that a lot has to do with luck or gut instinct or thing like that, right? >> that may be a conversation for another day. >> martin, what's the crowd bullish on and what's the crowd bearish on? >> well, it's interesting. if you look at last year, the crowd got bearish even on oil in the mid-60s. and they stayed bearish on oil through 2015. then what we saw at the end of 2015 and into this year, health care one of the largest weights on the portfolio or the fund or the index became one of the alleged underweights in health care. because what we saw, i don't know whether people believed whether we have hillary
presidentancy. and we've seen that since november of last year, it's recently has underperformed. we'll see here with the crowd if that's what they're thinking. if that's an underweighted important sector, health care. >> people like soconsumer reciprocals and defense? >> since 2015, we've seen them by nike. nike, starbucks, darden restaurants. so, and mcdonald's. it's kind of interesting, because they're playing a barbell approach. usually it's consumer discretionary or cyclicals versus defensive. here you've season like crowd
overrating both of those. we've seen consumer and i don't know if it's because, regardless of what we saw on friday with jobs number, prior to that, we've seen a stronger employment profile. >> martin, thank you very much for being with us. i know you already had your very early morning run. you were just telling us during the break, in central park. you're ready for the day. how long do you say you run for? >> about 48 minutes. >> impressive. very impressive. go take a nap now. >> thank you. >> that's it for today's show. very glad that you're with us. thank you again for all of your e-mails and tweets. nice to hear from you. we'll be back tomorrow. stocks pointing upwards. for now, "worldwide exchange" is up next.
good morning, markets on the move. s&p jumping to its highest level for the year. just a percent from all-time day high. new this morning, verizon reportedly planning on submitting a bid of $3 billion to yahoo!'s. and overnight, hillary clinton hits the magic number to clink the democratic nomination. but rival bernie sanders isn't backing down just yet. it's tuesday, june 7th, 2016, "worldwide exchange" begins right now. ♪ a very