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tv   Worldwide Exchange  CNBC  August 12, 2016 5:00am-6:01am EDT

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♪always on the sunny side ♪keep on the sunny side of life♪ good morning. record run, the dow and s&p closing at historic highs. for the first time in 17 years. call of the consumer. the strength of the shopper getting market sentiment a boost. today's test, government retail sales and quarterly results from jason cast jcpenn jcpenney. plus going for gold in rio. it's friday, august 12, 2016 and "world wide exchange" begins right now. ♪ ♪
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>> hour favorite song on a friday. welcome to "world wide exchange." i'm sara eisen. >> i'm wilfred frost. very good morning to you from me as well. happy friday. >> let's check in on the markets this morning. triple record close yesterday. the dough the s&p 500 and the nasdaq all finishing at a record high. first time we've seen that happen on the same day since december 1999. >> i'm dplad you finished that because i wouldn't have gotten it right. >> looks like the gains are continuing on this friday morning extending those record highs just a little bit here. dow futures up 11.35. s&p up 1. nasdaq up a little more than 3. >> that includes for bonds as well into stocks and out of bonds. the ten-year yield up slightly yesterday and sort of backing off to flat this morning. 1.53. it is off the highs we saw around 1.57. still low yields dominate even
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with the jump in stocks. >> absolutely right. we'll talk more about the record highs. let's have a look around the rest of the world first. european equities have had a strong week. mixed performance as you can see german down 1%. they had gdp earlier. construction was a notable drag. over the course of the week, the german dax is up 3.3%. there up over 3% as well. all of the embassies looking over 1% close to 2% of gains for the week. let's have a look at the uk yield. that's been a big factor driving fak source globally over the last week or so. there you have it. ticking up a little bit. similar to the last 24 hours. still low levels. in asia economic data was in focus. fixed investment data all coming in sort of forecast. the trade is seemed to brush that aside as you can see
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shanghai closing up 1.6%. japan trading after being closed for mountain day yesterday up 1.4% and is up 4% for the week. strong performance in both europe and asia. >> on the back of the weaker japanese yen and wall street. this is all part of the big story. jump in oil prices. moved higher 4%. that was a decedent jump. energy sectors led the s&p. they're flat in morning, but as you can see up above $43 a barrel. brent just below $46 a barrel. 45.91. gnat gas continued to be under pressure. it didn't work in april, but it's giving the bulls some hope. that was the talk on the floor yesterday. as for the dollar, the dollar has been pretty much weaker overall for the week and for the past month or so. the euro a little bit stronger this morning at 1.11.
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the pound weaker and below that 1 pntd 30 level 1.29 it's a good sign for the japanese authorities at least and for global risk taking overall. quickly let's show you gold this morning when we're seeing a stronger u.s. dollar. weaker gold prices. >> i'd say looking at these record highs all three years you've said closing at record highs yesterday. what's driving this, yes, there are some factors out there. record low interest rates around the world. oil prizes stabilizing somewhat and earnings has been all right. it comes back to a relative attraction. better to buy. >> tina. >> what does tina stand for. >> there is no alternative. >> we hear it every single day and that's the excuse the traders are giving. >> it's a relative reason to buy something then you get a shake out and a bit of a fare factor
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that comes back. protection or china or oil prices. suddenly people think i'm only holding this for relative reasons and not attraction. i think it's not built on fundamentals this rally and i'm not quite sure why we're hitting the all-time highs. also a crucial difference between the low interest rates in the u.s. which is helping u.s. stocks higher and where we're seeing the rest of the world. the rest of the world is easing. the u.s. is down because of what's happening in the rest of the world. and the next move will be tightening. >> though there's less than a 50% chance if the fed tightens this year. on the fundamental story there is a case to be made that things are looking better from a corporate profits perspective. yes profits are set to decline this earnings period, but most strategists agree the backdrop as improved. the lower oil price has come off. the strong dollar has weakened and you're starting to see signs
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of strength even in beaten down sectors. yes sales are still declining at may sis and nordstroms and co kohl's, but did you see the gains yesterday. we're talking double digit percentage moves. when terry lundgren the ceo of macy's puts the world improvement in a press release, they're making moves all of these stores are starting to manage their inventories better. and therefore the profit margins. by no means are the problems over. we got the nordstroms report last night. we saw an 11% gain in the afterhours so potentially signs of progress in the really troubled industries and sectors. we'll see what retail shows for the month. also jcpenney out this morning. >> relative to where they are last quarter. it's not that enticing longer term.
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add to where valuations are looking at earnings growth. and valuations aren't cheap. we're late cycle. look at the loan growth figures we saw. of course all segments particularly autos super high. it can't get better from here. we've had a long run of low growth. a long run of it. to see record highs. i don't know. >> it's the most hated rally and a lot of strategists are not on board and a lot of bearish sentiment. a lot of high profile names that have come out and said they're bearish and guess what, the market has run up to markets high. >> it's a good discussion. >> we've enjoyed it. >> also notable comments the tell you about from san francisco. >> williams makes the case for why the central bank should vaz interesting rates this year. as the economy gets closer to the goals, fed's goals, quote we
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can pull our foot off the gas a bit and hopefully execute a nice soft landing. as for the timing, williams believes the gradual hike should include another increase this year. williams we should not is not a voting member. most of the fed presidents still sticking with 1-2 hikes this year. a lot different than the forecast showed in september. they thought four hikes this year. some stocks to watch today. karl icon is reportedly making an offer to buy dele can recollect. cahn currently owns and sits on the board. nordstroms shares slightly higher. also raising the profit forecast. up 10%. other stocks to watch this morning.
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dillard's the chain reporting same store drop. that was a bigger decline than expected so bucking the trend of better results there. planet fitness posting better than expected results. raising full year guidance. shares hitting all-time high on that news. toshiba reporting first profit in six quarters. the japanese company benefitting from a major restructuring following an accounting scandal. >> when we come back, follow the money. new data on where investors are putting their money to work right now. here's a hint, think risk, think records. >> but first, facebook and twitter question today, what's driving record equity market highs? is it global low interest rates, decedent earnings, or inspiration gnat olympic pempss. let us know. we have much more to come on "world wide exchange." ♪
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welcome back to "world wide exchange." let get you up to speed. asia closing higher. the nikkei finishing up nearly 4%. also a strong week in europe. not seeing it today, but the germany is up 3% and banks have been strong performers. it's not just u.s. equities that have been doing well recently. let's have a look at the futures market. called higher all be it very slightly. just above flat of course. all three embassies hitting record closes.
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oil prices were key yesterday. gained about 4%. energy was one of the top performers settling down today. we are a little higher for wti. 43.5. sara. >> wilfred, it turns out investors are taking more risks in bond funds. lipper reports that money poured into the riskiest bonds. at $1.7 billion. this comes after two straight weeks of outflows. stocks are at record levels leading investors to look for better returns in corporate debt. overall sales posted 3.8 billion in outflows. that tells you the story about the rally and the fact people are not on board with it. still seeing outflows in stock funds, but better risk appetite in bond fund. >> absolutely right. lots of assets moving around given the debate. >> still to come on "world wide exchange." an historic night in rio.
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michael phelps wins a record four straight gold. we'll bring you the olympic highlights, but first here's today's national forecast. from the weather channel jen carfagno. >> good morning. we have more storms today with big rain fall potential. that's going to be the story into the weekend actually. in the southwest shifts more to louisiana and new orleans and areas near by. flash flooding is going to be a concern here. plus rain is going to continue to move into parts of illinois, indiana, chicago that's you. detroit could see severe weather today. lightning straights that caused house fires into the northeast. so today the heat is also going to be a huge story. much of the country running above average. dallas going to triple digits again. yesterday third day this week we set an energy usage record here because of the heat in texas. it continues again today. and the heat and the humidity continues in the east.
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that's your coast to coast forecast. meteorologist general carfagno. "world wide exchange" continues after this. would you help me make art? ♪ each one of our journeys ♪ keeps us young hey, i have an idea! ♪ we'll never get older... arty: go be amazing! amazing! announcer: give your cardboard box another life.
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>> welcome back and good morning. let's get you up to speed on the market action. looks like stockings are building on record closes yesterday. futures indicating a higher open for wall street. futures up 1.5. we're talking minor gains here. dow futures up 15 .5.
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nasdaq up 4. we are higher for the week. if the gains continue, we're looking at a seven weekly gain in a row for if nasdaq. big part of the story has been the beaten down department stores. earnings out of may sis and kohl's sent them to the top of s&p tooif yesterday. certainly that better profit surprise out of kohl's and the stocks are continuing to gain in morning. nordstroms reporting after the bell strength into the report and a pop after as well. better results fueling nordstroms. j krrkcpenney going to be the o watch. it reports later. also get the gort report on monthly retail sales. dollar is a bit weaker against the euro. the pound weakening below the 1.30 level and the dollar dronger against the japanese yen. a 1 3% higher in the japanese
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stock market. quickly also part of the story is price of oil. surged yesterday and has flipped positive again in the early action. wti crude. 43.59. up a quarter of a%. brent international benchmark just went over $49 a barrel. a lot of talk of an upcoming meeting. informal meeting between opec and non-opec. either way, we are seeing a higher price of oil. >> thank you for that. let's switch focus in sports news today. mega deal in cleveland. lebron james is resigning with the cavaliers. a deal worth $100 million. good for him. all right. to the olympics. if you went to sleep early last night, you missed some great moments in rio. nbc's gay gray joins us live from brazil with all the highlights. jay. >> reporter: good morning to this point the rest of the world
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no real answer for the american athletes here. they are on fire and yesterday the performances so dominant it brought them to tears it was a magic and emotional night in rio. finishing 1-2 in the women's all of a sudden finals and simone manuel overcome for gold. first female african-american swimmer ever to win a medal. inspired performances continued in the pool. ryan murphy with gold in the 200 mens backstroke and michael phelps winning the 22 gold of his career. >> i'm living a dream come true. >> while kayla harrison was a nightmare for points winning her second consecutive gold in judo. confirming she's the best in history. >> it's a huge honor. >> looking to add more gold to their olympic willing sis michael phelps and katie ledecky
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will be back in the pool later today. >> another high profile summer game. track and field running here in rio as well. >> i stayed up late past my night. way to late to watch simone biles. what a performance. i'm sure everyone is talking about her in rio. >> it's overwhelming and to see her so route with emotion after it happened. i heard one of the commentators saying they had never seen her cry in any type of meet so she understood the gravity of this. she left no doubt she is by far the best women's gym nest in the world. >> she was wearing so much sparkly stuff around her eyes. >> that's what you were focused on. >> jay, what are you wearing? is this official team america, team usa outfit? >> it's more of the team usa golf. this is one of the shirts the men team will be wearing as they
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continue their tournament today and try and get into the wait a second here. the golf course beautiful here. players saying it's a real challenge. >> if you can steal any team gb stash, i would be very grateful. slip it in your bag and bring it back for me. >> i'm working on it. >> i'm really looking forward to the track and field getting started. that's the 4 by 100 is the most exciting. >> that gymnastics though, the floor routine, the vault. it was so exciting. here's the medal count so far. the united states clearly topping the list with 16 golds and 38 total medals. china number 2 followed by japan. russia and try to get it right today. great britain in fifth place. >> we're making it into the top five. u.s. versus uk. >> we're doing pretty good now. >> not bad. >> not bad at all. saturday night i'll be watching
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the 10,000 meters. >> you've been excited for that for a while. >> looking forward to that. hillary clinton is taking a break from the campaign trail today while donald trump plans to stump in pennsylvania. nbc tracie potts joins us from washington on what was a big week for us here because a lot of talk about economic policy. >> reporter: exactly, but the big talked to is going to be about whether or not donald trump and the republican party are on the same page. while he's stopping in pennsylvania today, the team is going be in florida sitting down with the republican party. some are callen an energy meeting. trump is doubling down what he had so say about the president and isis. >> barack obama is the founder of isis. >> donald trump is not backing down. claiming the president is responsible for isis. >> i tell the truth. i tell the truth. actually a lot of people like that i said it. >> as trump's campaign in pennsylvania today, his staff is meeting with the republican party in florida.
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despite reports the party is frustrated with the nominee, trump's team calls today's meeting routine. what's not routine, more than 70 party insiders going public urging the gop to give up on trump and redirect the money to struggling lawmakers up for re-election. >> because he refuses to do what every other presidential candidate in decades has done and release his tax returns. >> hillary clinton released eight years worth and says last year's is coming soon. her campaign is responding to a report that one of her top aides at the state department did double duty for the clinton foundation. >> the american people are tired of the pay to play politics in washington, d.c. >> in a statement the clinton campaign says aide sheryl mills volunteered for the foundation on her own time. >> reporter: and the campaign is saying that she actually went up to new york to conduct some interviews for the foundation that she did it not only on her own time, but own dime.
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she paid for that trip and any allegation it was a conflict with the state department job, they're calling it absurd. >> very quiet from paul ryan's office this week. what do you hear about the house leadership, the house establishment as the controversy continues to pile up and as he lays out more details of the economic plan. >> reporter: that's been a rocky relationship between paul ryan and donald trump. keep in mind he won a primary where trump was congratulating the guy on the other side and pushing him and saying nice things about him, although he ended up endorsing ryan. in terms of where they're going to land on donald trump and the candidacy, they're between a rock and a hard place. he's the party's nominee. they can't say too much about him negative. >> this week meant to be economic week. so many other factors seem to be grabbing the headlines. do you think that's a path we
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can expect to continue throughout the campaign. it's not going to be about policy. >> reporter: exactly. a lot of people have been saying since the primaries when there's so much going on with the 17 republican candidates. let's talk about the issues. so now we are talking about some of the issues in terms of taxes and jobs and the economy, but they continue to be overshadowed, but some of these outside issues about the candidates in the campaigns the. >> what is interest accident they have some overlap. they want to spend massively on infrastructure. there are certainly differences, but more similarities than you might think. >> well, more so than we normally see because you have donald trump who is not your traditional republican party candidate and he's crossing other. he's trying to cross over. and get a lot of democrats and clearly hillary clinton now because there's so many republicans who are saying no to donald trump is also trying to cross over and get republicans so you're right.
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it's a campaign unlike what we've seen in terms of the candidates, but also the issues. issues are being drabbed into the crossover on both sides. >> it is difficult to follow. thank you for being here with us this morning. tracie potts in washington. when we come back this morning. top stories including stocks at record levels. >> as we head to break, our twitter question, what's driving record equity market highs. global low interest rates. stable iedsing earnings, decedent earnings, or inspirational olympic performances. get in touch with us. "world wide exchange."
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call today and ask how to get these savings plus a $250 prepaid card. comcast business. built for business. >> good morning. stocks widely climbing. wti nearing $44 a barrel. plus taking twinkies to a who knew levnew level. it's friday, august 12, 2016. you're watching "world wide exchange" on cnbc. sgoo good morning and welcome back to "world wide exchange" on cnbc. i'm sara eisen. happy friday. >> i'm wilfred frost. good morning to you from me as well. let's check in on the global markets. three record closes yesterday across the major embassies here
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in the u.s. and we're pulling higher once again. all be it slightly. the dow by about 121. nasdaq by two or throw points. it's been a strong week around the rest of the world also europe, mixed today. as you can see german, a little softer after gdp numbers did beat estimates, but underlying areas in weakness like construction. pretty much flat across the board. the dax is up over 3% for the week as a whole. also been a strong week in asia. the nikkei closing up a percent today after being closinged yesterday. that takes gains to 4%. shanghai also up today as was hong kong. as for the broader market picture strength in oil. it looks to continue oil prices picking up steam in the last half hour or so. wti crude inching towards $44 a
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barrel. brent is higher above $46 a barrel. 46.35. gnat gas continues to be under pressure and talk continues to swirl. countries like swenz are really hurting vuls of the low oil price is. countries like saudi arabia are ramping up production. >> that's why we got the big jump yesterday. talk we might once get an opec decision to freeze out. we heard that talk before. >> we saw the meeting before in april and nothing happened. ten-year treasury note wield slightly higher. money going out of stocks and into bonds. stocks for a change leave tlg charge here in the bond market. 1.54 is the-year-old on the ten-year treasury. that's the economic data point of the day. as for the dollar, it's a bit weaker against the euro. stronger against the japanese yen. that has been a big focus. that level above 102 importantly
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for japan. saw 1% pop in equities overnight. back below 1 pnts 30 against the dollar. gold is stronger right now. >> weaker. my bad. .5%. it's holding near recent highs. it's been an opposite dollar story with gold. >> it has indeed. lots of data on the agenda today. two key reports at 8:30 a.m. eastern. 10:00 a.m. eastern be on the lookout for month by business inventories and data. just one earnings report to keep an eye on today. jcpenney will release the quarterly results before the open. wall street banks are asking the fed to grant them an additional five-year grace period to apply with the vol ker rule. more time to exit fund investments that are difficult
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to sell, but no longer allowed by law. in order to grant more leeway, asked to provide more detail on specific investments to prove they are, quote, ill liquid. interesting story to watch. stocks to watch today for you, acay sha communication shares sore. this is the best performing ipo of the year. the ceo will be joining "squawk box" at 640 i'm eastern time. n videoia beating demand. nvidia. >> south koreanfgtd i investigating google. this comes after the korea fair trade commission recently decided to clear google of anti-competition charges involving the preloading of google appings on the android
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phones. this is isn't the only regulatory issue. yesterday the company ruz fined $6.8 million in rauussia and fas charges. >> so beyond tthe consumer fronr this week with data and retail companies set to report. our landon dowdy joinings us with a prove. >> reporter: get a better ride on the son r consumer. sales are expected to rise, but not quite as much as in june. stronger vehicle sales should boost, but a drop in oil prices could prove to be a negative. jcpenney results also important to watch. july was weaker thannen tis pated for overall retail sales, but jc's q2 could be better than expected. we saw that with macy's yesterday. investors are positive on
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jcpenney with shares up 32% over the past three months. also next week offer even more. you want to watch to see if target sales can bounce back and if walmart can post another solid quarter. >> thank you very much for that. it was certainly the retailers, energy and retailers. >> the department stores importantly because those are some of the hardest hit stocks, even with the 17% gain yesterday for may sis the stock is down more than 40% over the last 12 months. a lot of catchup they have to do, but there were glimmers of hope in the two reports. would put may sis and coals at the top of the list. macy's sighted improvement. terry lundgren was on "squawk box" talking about it's our turn for the consumer to start spending on apparel.
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they spent or cars, spent on improvements. that's why the retail sales report we get will be key. >> i completely agree. it's interesting saying it's our turn now. i just wonder though whether that is sustainable because is very much funded by credit. we've seen such high consumer loan growth all through the year, in fact, but particularly in q2 and i wonder how sustainable it is. is it based off skbres rates. >> and how much is baked in and whether the department stores do start to take the right moves. may have sis announcing 100 store closures. nordstroms been investing in online retail and growth nichetives are investors going to start rewarding the beaten down sector. >> 100 store closures was just the start. he pointed out an amazing fact. here in the u.s. there are five times the square footage of storefronts compared to other
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developed countries. >> we're overstored. >> massively. structurally knees guys are still challenged. the pop in the share price yesterday massive as it was was a bounce back from a terrible first quarter. not a structural bounce. >> that raises the question after the department stores we'll get jcpenney this morning. what's going to be the next catalyst for this market. after we saw that triple record close yesterday on the back of higher oil prices, energy shares and consumer discretionary with retail, is it going be a better backdrop on earnings. did we get that signal enough to propel stocks higher. is it going to be the economic data? is it going be hopes that the fed doesn't raise rates. these are all factors that play here as we look at another record close. >> absolutely right. >> time for top trending stories. ryan lochtes hair is the talk of the olympics. dieing to a platinum broaden as you noticed after debuting the new look on twitter, fans
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quickly noticed his due is changing color and that was thanks to the chlorine. now has a prominent green color sending social media into a frenzy. when you bleach your hair. >> i don't know, but i do know. dint know. >> well, bleach in a pool turns a certain color green. >> it's a classic mistake you thought someone would have been aware of that. >> or at least the hair stylist. >> although the pools in rio have been green which has been talk on social media. >> but they've been fast. super fast. >> right. another olympics related trending story. figi making history. scoring first ever medal, a gold after defeating great britain in the rugby sevens. in celebrations tweeting by royal decree i declare today a national hug of fijian day. kreez him. do it. do it now. kind of really embracing the
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positivity off the back of their first ever medal even though they beat great britain to get it, congratulations. >> speaking of celebration, today marking the end of an era for alex rodriguez. playing his final game as a new york yankee tonight against the rays. team is planning to honor him. after a controversial arod saying it's kind of all surreal right now. the synopsis of it is a happy moment and i think the fans probably agree. >> i'm sure they do. and congratulations to him. tbs picking up cordens drop the mic. this coming up after apple music picked up cbs's spin off car pool car oweky.
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>> another big success. >> the drop the mic stuff, not quite as good as car pool. the cara dell la vein was in excellent. walmart and hostess teaming up. package deep fried twinkies will be exclusively available at walmart. unlike regular twinkies, have you ever had this? >> no. you need to. you live here now. must be kept in the freezer and baked before eating them. >> they look a bit gross. >> all the politicians go to iowa, b you know, in the beginning of the psycycle and t go. it's a thing. >> okay. >> still to come, today's must reads a little fun fact on this day in 1981, ibm introduced first personal computer, the
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model 51-50. the invention of the pc took the world by storm. saelts continue to decline falling more than 5% in the second quarter of the year. we're back in just a couple of minutes. welcome to opportunity's knocking, where self-proclaimed financial superstars pitch you investment opportunities. i've got a fantastic deal for you- gold! with the right pool of investors, there's a lot of money to be made. but first, investors must ask the right questions and use the smartcheck challenge to make the right decisions. you're not even registered; i'm done with you! i can...i can... savvy investors check their financial pro's background by visiting smartcheck.gov
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welcome back to "world wide exchange."
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now to today's must read stories catching our attention. my pick from "the washington post." it's titled don't buy it will hype. the u.s. is not experiencing a terrible new crime wave. the reason i picked it is because who it's from. coke industries, mark holden, a prominent conservative writing from the law enforcement community writing half of 2015 murder increase occurred in baltimore, chicago, and the district. the very cities that those pushing the crime panic repeatedly use as examples while we must work to address the issues, driving this unacceptable localized violence, it is not the norm. it goes through the facts and figures and it just shows you need to have the facts in order for america to have the debate. this is something americans are fearful of. rightfully sew. it's in the headlines. we need to see where it's coming from and provide a more targeted approach. it's something donald trump
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talks about the law and order candidate as we wants to frame himself so interesting to have two prominent conservatives come out and say let's get the facts clear. >> my pick is in the wall street journal . it relates to hillary clinton's economic plan. a big part of our plan will be unleashing the power of t private sector to create more jobs at higher pay and that means for us creating an infrastructure bank to get private funds off the sidelines and compliment or private investments. $25 billion in government seed funding could unlock more than $250 billion and really get our country moving on our infrastructure plans. >> it's titled the clinton plans growth deficit. really focusing in particular on
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what she just outlined. the infrastructure part of it. writing sure america's roads and bridges could use patching, but how does this fix the growth problem. the economic argument behind mrs. clinton's proposal is the drum beat of fiscal stimulus. the multipliers will increase demand. he's a little bit critical of the level of which both candidates focus on infrastructure. of course donald trump promises twice the amount that clinton is. it's a very good point because he goes through the issues of actually delivering the infrastructure projects. obama intended to, but there's so much red tape to get over and often they don't have that multipliers effect that says lower taxes puts money in the consumers pocket. it's a one-time spend sometimes. >> i do think it's a fair criticism. i do think the narrative on economic growth, you don't hear clearly enough from either
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candidate. the infrastructure spend is one thing. dthd talks about deregulation, talks about lower taxes. i think that's psychologically equals lower growth in american's minds. be eager to hear more from hillary clinton how she plans to stimulate growth. with that in mind, we're approaching the top of the hour. andrew sorkin joins us. >> we're talking markets markets markets. the dow with a record. the s&p with a record. the nasdaq with a record. all for the first time since 1999 happening at the same time. we're going talk about it with a big number of market participates and guests. we have an wind glad joining us this morning. richard stein berg. we're all going to talk markets there: we had a little jcpenny talk too. given what happened with macy's trying to understand what's going on with the retail world. kevin is going to be joining us in a bit.
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toss around the trump economic plan and hillary's economic plan and kevin o leery coming up in the show. >> busy man. thank you we'll see you at the top of the hour. when we come back, though, city group's chief economist. see gradual shift towards helicopter money. stay tuned. you're watching "world wide exchange." across new york state, from long island to buffalo, from rochester to the hudson valley, from albany to utica, creative business incentives, infrastructure investment, university partnerships,
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and the lowest taxes in decades are creating a stronger economy and the right environment in new york state for business to thrive. let us help grow your company's tomorrow- today at business.ny.gov you know what, guys? there's a lot of tree branches and dry brush over here. we should probably move the bonfire over there. [smokey whistling a tune] i'm guessing smokey liked that idea.
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winblad. >> welcome back to "world wide exchange." we have a special guest. chief global economist at citigroup. you and your team have been decidedly more bearish and pessimistic than the average wall street economist. >> we've been more pessimistic about the global economy, not specifically about the u.s.
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economy. we've seen growth this year at slightly below 2%. that's where we're likely to end up. i am, however, concerned both about the global economy and about the u.s. economy in the slightly longer rise. after the election, either president trump of president clinton, if president trump certain of trade wars and president clint high risk of trade wars and neither would be good for the u.s. or for the global economy. >> how damaging would that be? are they both being very foolish with this slightly is anti-free trade rhetoric? >> in my view, yes. i think it is -- it's common. it's part of the new pop list ant anti-globalization stance. i think it's dangerous and indeed irresponsible, yes. >> how do you determine how much
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campaign bluster and appeal and what is going to be policy and have to factor into your forecast. >> we shall see. indeed president obama first run for office found it a lot more anti-trade than he turned out to be so there's always hope that once the bluster and the nonsense of the campaign is behind us that we end up with something less destructive, but it is in the air. it's not just the case in the u.s. it's true in europe. it's true in china. that anti-globalization including anti-trade, anti-immigration sentiment is strengthening to everybody's cost. >> with that in mind, markets hitting in highs, they've really stl shrugged off the issue.
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>> brexit itself, if that's all it is, if it doesn't lead to further breakup of the uk, which is still my central scenario, and if it doesn't lead to a further unraveling of the eu. there is a material risk of the further exits from testimony eu starting with the italian referendum as a source of concern. so, yes, i think markets not for the first time are getting it wrong in my view. they are under pricing the risk and overpricing future earnings growth. >> what is the possible chance of the rest of europe breaking up, elections in your own country, holland, france, german, is there a 20% chance. >> it's hard to quantify. i would say it must be something like that: the main risk is italy. you couldn't have the referendum on nexit so to speak. you could only have laws that
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have been passed. in france we would have to win the first round. italy is me the main source of concern because of the referendum stuff. >> do you predict the next move from the fed will be higher interest rates, lower interest rates. something else? >> we shall see. our current expectations is we still have bond rate increase this year. i would make to contingent in who wins the election myself thachlt is my personal view that the only necessary condition is that mrs. clinton is the next president. if my view if mr. trump is the next president, the next move will be a rate cut. >> because they'll be reacting to the conditions he brings or because mr. trump will force it. >> both because of the risk, high risk and possible reality of trade conflict. the massive adverse supply shock in the labor market that mr.
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trump migration poms policies and exportion policies and the uncertainty about it. the fact also is we journalize uncertainty is bad. the option valuation goes up. cap business on the head. >> and very quickly explain to us what helicopter money is. what it means for the markets. what it means for economies and why you're expecting to see more or it. >> it's monetized fiscal stimulus which is not completely reversed in terms of balance sheet expansion. central bank balance sheet is profitable. the owner of the bank can use that money to spend more or tax less. that's the only way i think you have any realistic chance of getting out of very weak low real interest rate that you're in. expect that in the end people will blunder into it. >> thank you for that.
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we're going have to leave it there. that's it for "world wide exchange." have a lovely morning. have a lovely weekend. "squawk box" is next. . with unique features, like claim free rewards... ohh! customized home protection extra features all at an affordable price! i'm going to live in this. in means getting more from your home insurance with an expert allstate agent. it's good to be in, good hands.
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good morning t. markets rallying like it's 1999: that's the last time the dow, s&p 500 and nasdaq hit high records on the same day. rally in retail nordstroms shares soring in premarket trade. got one report on the schedule. going for gold in rio, a thrilling dual in the pool plus an unforgettable night of gymnastics. we're going to bring you the highlights. it's friday august 12, 2016. "squawk box" begins right now. ♪ ♪
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>> good morning everybody. happy friday. a little jack johnson to get you started easing into the weekend. this is "squawk box" right here on cnbc. i'm becky quick along with andrew sorkin. andrew, welcome back. >> thank you. >> i missed the big day yesterday with donald. i want to talk about donald. >> we'll get caught up. >> i watched it, but i wasn't here. >> i know. we missed you. we're glad you're back. >> thank you. it was nice. nice to be back. >> joe has been out. >> he's coming back next week. >> we're all going different -- >> i'm going to rio tonight. >> so i'll see you on monday. >> i'm leaving. en route to go out west to jackson hole. >> he's been looking at google maps to show me where he's going be. >> anyway, in the meantime

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