tv Worldwide Exchange CNBC August 15, 2016 5:00am-6:01am EDT
the sunny side♪ ♪always on the sunny side ♪keep on the sunny side of life♪ good morning. crude climbs. oil prices higher with saudi arabia on market stability. >> follow the money. the latest -- the likes of david teper and dan lobe are buying and selling right now. >> plus, going for gold. usain bolt comes frp behind to prove he's still the world's fastest man. it's monday, august 15th, 2016. worldwide exchange begins right now. good morning. welcome to worldwide exchange on cnbc.
i'm sara. >> i'm wilford frost. let's get to the market action. >> let's show what you futures are doing on a week where the trifecta of records happened. that was thursday. stocks pulled back from the record highs on friday and dow futures up 24.5 points. s&p futures up 2.5. and nasdaq futures up 9. we're coming off an up week just barely. quiet market action. it has been higher. the ten-year treasury note yield. housing data this week and numbers on inflation. 150 is your yield on your ten-year. there has been persistent buying of treasury that kept the yields super low. not as low as the uk. but low historically. >> you would say it's probably the uk yields pulling it down globally. first of all, japan's economy slowing down. gdp expanding by an annualized .2 of a percent in
the second quarter below market estimates, capital expenditure dropping more than expected. weak overseas demand took a bite out of gdp growth for the first time in four quarters. that meant the nikkei did drop, albeit only slightly. the yen not moving too much. the gdp data not having a big -- the rest of asia strong. closing sharply high up 2.5%. hong kong higher. traders are expecting more stimulus. some say from beijing and japan given the data on the gdp front under whelmed. asia was pretty strong as a whole last week. the nikkei was up 4%. the .3% in perspective. european markets also very strong last week, sara. they were up 3%. the dax up over 3% last week.
>> they're continuing to gain on this monday morning. the german dax up .4. a lot of the markets are closed in europe. this has been a global phenomenon of stocks rising. one measure, there was a one-year high. the ten-year, as we mentioned, hitting an all-time low of half a percent this morning. those low yields continue to be pulled each lower. check out the 30-year yield. that's lower than our ten-year yield. >> extraordinary. >> it has to do with the buying. quantitative easing. perhaps the chance that they buy each more debt to try to fight any negative impact of brexit. >> 0.5% on the ten-year as we just said. if we think the monetary policies going to have to keep being delivered because of brexit and everything else. we could have low yields. clearly the u.s. is anchored by what's happening in the rest of
the world right now. broader markets. oil prices were a big -- decent gains over the course of the week. oil was up 6.4%. wti last week. moving higher again today on a report suggesting russia is in talks with saudi arabia and others about achieving market stability. we've heard that before. the talk is working lapt last week and this week as we said. just shy of 45 bucks on wti. almost 1%. a quick look at the dollar. it's murted. any trade on that front the euro at -- oil prices, quick look at them. it's higher. but just slightly. 1344. >> i would say on the yen, it's at the 100 mark. many traders think the pain threshold of the ministry of
finance, always on the lookout for intervention. that would be a stronger japanese yen. the japanese authorities hate that. it hurt their exporters and stock market. the japanese gdp number is disappointing. the take away is, the economic data hasn't been all that great. retail sales on friday, japan gdp, lending data out of china. yet, the path of least resistance for the market is higher whether that's on the view that the data is good enough. that means we're not in recession. but not good enough for central banks to take the brakes off the gas. that's where we find ourselves. with the backdrop of higher oil prices. >> there's no alternative to stocks. look at what's happening with bonds. >> the only thing i would say, that's true in dry markets. the gains overall, despite some of the records, very very much muted. we saw a quarter percent gain over the weeks. the nasdaq, the others would
bang on flat. europe and asia very strong. we're making records but the relative performance last week was coming overseas. equities, bond yield are so unbelievably low. as long as they think easing is going to continue in the world and won't see a complete economic collapse -- >> low volumes, small moves. to your point. there's less than a 50% chance that the fed raises interest rates this year. that's because the data, while pretty much better hasn't been all better. we're going to see what we get from the likes of walmart when it comes to earnings. that's an economic monitor. better news after department store earnings last week. we'll try to get a better picture ou q3 and 4 are shaping up. tomorrow housing stocks, read on industrial production. wednesday, the minutes from the
fid's july meeting will be out. on thursday, the outlook survey. >> tomorrow, atlanta fed president dennis lockhart will speak. james bullard on wednesday and john williams on thursday will offer his economic outlook. sara mentioned, retail dominates. home dee pea, lowe's, target and gap among others. we're following a developing story out of jfk airport. multiple emergency agencies rushing there in response to reports that shots had been fired at the airport. after arriving on the scene, authorities say there was no gunfire. the nypd declaring on twitter that all terminals had been searched and cleared and no shots were actually fired. according to reports, officials believe the woman who initially reported the shooting misinterpreted clapping and banging from people watching the olympic games which were quite
exciting last night. >> they were indeed. fair to say that story has died down. switching gears to politics. this morning's other top story. notable piece from the "wall street journal's" editorial board. his supporters face a moment of truth. assessing his chances, if the gop can't get mr. trump to change his act by labor day, the gop will have no choice but to write off the nominee as hopeless and focus on salvaging the senate and house other down ballot races. we'll have more on the race of the white house a bit later this hour. the other thing about this article, it's not just about the gop trying to get mr. trump to focus a little bit more. their words, not ours. but also says his family and various members of his campaign team are trying to do so as well and saying they're trying to get hillary clinton, the race to be a referendum on hillary clinton herself but trump keeps throwing too man incompetent things into the fire that take the focus off
that. >> it was an epic tweet storm each for him against the media for calling him out and not staying true to himself and staying on message. another week we kick off like this. what was most interesting about that op-ed piece in the journal, at the very end, they say they can't figure it out, he should let mike pence take the cade si and run with it. today is the deadline for hedge funds and major investors to file 13 fs. >> selling 11 million shares worth $383 million. dan loads sold young calls and trimmed positions. it exited 21st septemberry fox and added facebook, marathon oil and cce. appaloosa rub by david teper cut the calls and cut its stake in gm. it add will alphabet and
dissolved positions in facebook and -- sort of interesting. it's kind of old data because it's last quarter just to know what the big guys are doing. >> always a good indicator. some stocks to watch today. the kkr may bid to the television distributor. entertainment one. it's the creator of the character pepper pig. rejected from itv saying it undervalued the firm. that's according to reports. entertainment one up 6.10%. a seven-year keel to use ibm services. this would be a big win for ibm. it's a deal that would show its cloud business could compete with amazon's and microsoft's. the water technology zie lem is nearing a deal.
a global market check. disa pointing data out of japan to speculation about stimulus in china. everything you need to know about what's going on globally ahead of the wall street open. stay tuned. you're watching worldwide exchange on cnbc. ♪ we're drowning in information. where, in all of this, is the stuff that matters? the stakes are so high, your finances, your future. how do you solve this? you don't. you partner with a firm that advises governments
we only eeked out -- the other two indexes were basically flat. albeit only slightly this morning. only .2 of 1% of gains at the open, sara. >> among the top stories, japan's gdp growth coming in at zero. falling short of forecasts. we're joined from singapore with a look at the market reaction. good morning. we thought that asia, for the most part was starting to stabilize. >> i think the legal -- real thing is -- all it takes i think is that more bad data. your side state side and if the fed speakers are cautious in nair tone, that may very well take us further towards our intervention zone of 100. the strong japanese currency hurting export. external demands still sluggish in the japanese context and call
for japan is not firing on all cylinders. cap x spoke to that. they simply do not believe or confidence to deploy capital or reinvest in the business aggressively. outperformer today. the mainland china markets, seven months high at the close. it was the markets front running the idea of more stimulus after we saw fairly down beat numbers. also industrial -- expectations, policies report in an otherwise fairly mixed market. >> sri thank you for that. >> the big question on everyone's mind, when will will britain exit the eu. it could be pushed until 2019. the newspaper cites sources who say the uk government is too chaotic to start the two-year process early next year. of course, many perspectives remain on this. until article 50 is invoked, we don't know. my sources, i suggest it will
still be invoked early next year. >> the point is, it keeps getting pushed back and it will take a while. each once it is invoked, the worries are pushed out. >> 2019 is exactly brand new news. it just highlights that we don't know the answer. >> when we come back, thought this election was all about trump versus hillary? what about trump versus the media? weekend highlights from the campaign trail and social media, next. plus, the world's fastest man. highlights from last night's events, including some golds for britain over the weekend. >> yeah. >> you had a good weekend. >> heading to break, here's the national weather forecast from kelly cass. >> good morning, sara and wilfred. it's not just louisiana dealing with flooding problems. now that moisture is spreading out along a cold front stalled out the midwest. parts of missouri, up toward the ohio river valley where there could be significant flooding
with several inches in the forecast. of course, louisiana seeing anywhere from 1 to 2 feet of rain, each up to 3 feet of rain in some areas. the ground is saturated. we're keeping an eye on the parishes of louisiana. the story is you don't have the triple digits to deal with. but warm and humid from the northeast to the southeast. we still have heat advisories for so many in the northeast. a nice day for chicago. 80 degrees. hot in los angeles as well. near 90 degrees. we'll be right back. [child giggling] child: look, ma. no hands. children: "i", "j", "k"... [bicycle bell rings] [indistinct chatter] [telephone rings] man: hello? [boing] [laughter] man: you may kiss the bride.
welcome back. good morning. let's get you up to speed on the market action. looks like the trading week is set to start on a high note. s&p futures up. dow up 23.5. nasdaq up 9. part of reap for the strength and we saw this last week as well. oil prices are on the rise. that's helping energy shares around the globe. wti pushes to $45 a barrel. up .6 of a percent. brent above $47 a barrel. this comes off of oil's best week since back in april. nat gas is under -- department store earnings and better oil last weeng. we'll see how the target and walmart do this week on earnings. now to the lip pickolympics. you missed great moments in rio if you went to bed early.
jay gray joins us with all the highlight. good morning, jay. >> good morning to you, sara. plenty to wave the flag about for americans as they get a fast start in rio. it continues moving into week two. when you talk about speed, there's one person who knows it better than anyone. the fastest man of the world. in a class of his own on top of medal stand. >> here he is. still invincible. >> with his familiar stride and striking bravado, u an bolt streaked to a third consecutive gold in the 100-meter dash. .8 of a second ahead of gatlin. >> may the best man win. today usain has been the best man. >> simone biles left little doubt that she's the best gymnast in the world vaulting to another gold in rio. the first u.s. gymnast to win three golds in a single olympic golds. she'll go again tonight in the
balance beam. >> the battle continued in tennis. they finished 1, 2 in -- track and field continues with several u.s. athletes in the mix for medals. men's volleyball takes on world champion brazil on the beach in copacabana. >> really should be a rocking event on the sand there with the home team playing. also a lot of opportunity for the u.s. to grab some medals in track and field. want to show you. we've been trying to show you behind the scenes. the cycling suit. usa cycling doing great here. winning silver in the team pursuit for the women. they're one. best teams in the world. these things are unbelievable. >> jay, why rpt you wearing that? >> they study each athlete. >> yeah. i think we all know wilfred why i'm not wearing this. >> i love the shirt, it's outstanding. >> but tomorrowf we could have the cycling lycra that would be much appreciated. >> one of those gymnast uniforms with swarovski crystals, that
would be great too. >> nobody wants to see me in the cycling suit. wilfred, again, i have to give you props. team gb with a surge this weekend. second place in gold. >> he didn't do anything. >> i was very much training all of these athletes. >> he's been a dedicated fan. i want to give him his due. >> jay, thank you so much. great shirt. we don't really mean the lycra. we would applaud it if it came later in the week. jay gray, outstanding weekend on all fronts. mo farah, he came through to win. >> he's incredible. >> some of the greats continued. usain bolt. simone biles on the vault. >> amazing stuff. here is the medal count. just to sum it up. the united states topping the list with 26 golds. 69 medals in total. china is second. in third, great britain.
38 medals in total. 15 golds. briefly, they were second over the weekend after mo farah's victory. outstanding from both nations i would say. >> yes, indeed. >> agree to applaud each other. >> tough, tough, tough for us to do. but well done. >> we'll get there. we'll see how the final tally ends up. now to politics, donald trump is no longer only targeting his opponent hillary clinton. this weekend, he was out attacking what he calls the crooked media. saying it's to blame for his recent troubles. nbc's tracie potts joins us from washington with that story. nothing new from him. but he really piled on the media in a much bigger way this weekend, tracie. >> he did, sara. he's blaming the low numbers, the trump slump on reporters who aren't covering him fairly. one of the major newspapers here is suggesting that trump may only are have a few weeks to turn a around. >> it urges the republican party to dump donald trump if he can't
turn things around by labor day. the party says it's too soon for that. south carolina, republican mark sanford is urging him to release his tax returns. >> each richard nixon released his tax returns. >> a speech on national security. >> he's going to lay out his vision and strategy for defeating radical islamic terrorism. >> his strike thatly to win the election, blame the media. >> i'm not running against crooked hillary clinton. i'm running against the crooked media. >> he's calling out news outlets as disgusting, dishonest, each suggested pulling press credentials from "the new york times" like he did the "washington post." running mate mike pence says it's an ongoing discussion. he's argued in favor of a pre press. >> biden is expected to tell his working class hometown that she's the candidate focused on jobs and education and that
trump would make the country less safe. now the interesting thing about them being in scranton today, it's typically a democratic stronghold. you might wonder why hillary clinton is spending time there. they always vote democratic. of course, it's in the middle of pennsylvania which is a big swing state that trump is going after. >> tracie, thank you. tracie potts in washington. when we come back, today's top stories and check on global markets. plus the great tax debate. see what tim cook says has to happen before they bring back money from abroad. this is a big issue for companies an on the campaign as well. you're watching cnbc, first in business worldwide.
crude climbs. on a report that russia is working with saudi arabia. >> the great tax debate. find out what tim cook says needs to happen before his company brings money from abroad. snubbed by adele. why the superstar is saying no to one of the biggest music events. it's monday, august 15, 2016. you're watching worldwide exchange on cnbc. good morning. welcome back to worldwide exchange on cnbc. i'm sara eisen. >> i'm wilfred frost. good morning from me as wechlt let's check in on the global
market picture. this morning, we're higher in the u.s. albeit only slightly by .2 or .3 of a percent. the dow expected to open higher. after market highs last week. the week as a whole was pretty much floot. the nasdaq was up one quarter of 1%. europe closing around 2 or 3% higher. the dax for the week was up 3.34%. it's up another .3 of a percent. france and the ftse just above flat. asia was also strong. the nikkei up 4% as a whole. gdp data did disappoint. 0.2%. expected for 0.5%. the shanghai -- hong kong up. >> that's a nine month high for the hang seng. better economic data fueled the
gains imt oil has been a big part of this story behind the strength in stocks. coming off the best week for oil since april. a 6% plus pop last week. that sent brent up. it's up .3 of a percent. lots of chatter about an upcoming opec meeting. will they or won't they do anything to production the stabilize the market. there are hopes for something to happen this time around. ten-year treasury note yield hovers. strong demand along with global debt everywhere in the world. if you're a safe-haven, pushing -- we're at the 150 level. see what happens after data later this week. as for the u.s. dollar, it's been weaker. that has been the story on lowered expectations that the fed will raise interest rates. the dollar is weaker against the euro. 111.69. it is stronger against the pound which is the currency that's
been the exception. continuing to go lower. check out dollar yen. that would be the one to watch going into the u.s. session today. because we're hovering above the 100 level on dollar yen. that is what is considered a breaking point for the boj. will we see intervention? we'll see. it depends how strong yen gets. the weaker dollar and diminished prospect of fed hiking, that has been positive for the price of gold. >> the pound might find support given that it's backed by more gold now this weekend after a strong performance in the open than it was beforehand. >> i was would wondering about >> it's because the gold is in rio. once it comes back the end of next week might get a -- >> it's a relative bet though. wouldn't the dollar be getting more because the u.s. has gotten more gold. >> that's true. >> it's spread out over a much bigger population. that would have the same effect.
we should move on. on the agenda this week. on the data front, consumer price index tomorrow and housing stocks. wednesday, the minute from the fed's july meeting will be out. on thursday, the philadelphia business outlook survey. speaking of the fed, three important speeches to look out for. atlanta fed dennis lockhart, on wednesday, st. louis fed president james bullard. on thursday, john williams will offer his update. >> target and the gap and walmart amongst others. in corporate news, google parental -- according to the "wall street journal," they need to rethink its delivery after initial rollout in areas like los angeles, chicago and dallas proved more time consuming and expensive than originally anticipated. delta is trying to win back
customers after a system outage canceled and delayed flights last week. they're pending an op-ed in the usa today newspaper writing this event will not define us. our focus is ensuring that it never happens again. delta spent more than $150 million to upgrade infrastructure over the past two years. that investment will continue. those are the words of ceo. of course, the stock didn't really react to that. >> that was a tough one for the airlines. >> it doesn't help long-term image of airlines. apple and other major corporations have come under fire for avoiding u.s. taxes. tim cook says the tech giant will not bring back that money from abroad unless there is a fair rate. he made the comment in an interview with the post. the tax rate of 35% among the highest in the developed world. cook told the paper, "it is the current tax law, it's not a matter of being patriotic or unpatriot
unpatriotic. it doesn't go the more you pay, the more patriotic you are." what's interesting about this, this is one of the features of the trump tax plan to lower the corporate tax rate from 35 to 15% across the board. and also to have especially lower tax rate for corporations to bring back work from overseas. he is the one talking about that. >> it's the topic of focus of my must read. more about that in a minute. hei hotels and resorts reporting the problem is affecting 20 of its u.s. properties. marriott, hyatt and intercontinental hotels. it may have stolen payment card data during tens of thousands of food, drink and other transactions. it follows similar ones in recent months. there's word mid-america apartment communities is close to agreeing to merge with post properties. the $4 billion deal in the space
is expected to be announced today. it would be the largest publicly traded multifamily real estate investment trust by number of units. a second deal in the works this morning. this time in cable space. the "wall street journal" reporting tbg will buy rcn and grande communications for $2.2 at that billion. including debt, google capital. the growth investment firm planning to take a minority stake in the company. it serves the east coast and chicago, while grande's business associated in texas. >> i used to have rcn. time for top trending stories of the morning. bernie sanders latest purchase. did you see this. blowing up twitter verse. sanders closing on a $575,000 lakeside home in vermont. the house complete with a pebble beach and views of the green mountains, sanders third home, i believe. social media users took to
twitter with allegations about how he got the funds to buy the house. he has one in d.c. and vermont and now a lake house. that does not exactly jibe with his image of socialist economics. his vision for the country. >> it doesn't. >> the americans can afford three homes. >> it's fair that he gets a bit -- unfounded accusations but generally why he has three homes. >> [ overlapping talking ]. >> i do feel for politicians generally. no politician can do anything with their private life without it being talked about. >> donald trump can. not seeing his tax returns. anyway, we'll move on from that debate. tesla is now removing the word autopilot from the china website. this coming after a driver in beijing crashed. complained that the company overplayed the autopilot function. tesla also removing a chinese term for self-driving from the chinese website. pokemon go players beware.
the developers are getting serious about cheaters. the company imposing permanent bans on players who violate the game's terms of social security service. like tricking their gps system to make them think they're in other countries to get super rare pokemon. >> it shows the obsession that people are going to on the game. trending, bad news for adele fans the singer says she was asked to perform at the 2017 super bowl. but declined the offer in los angeles. she explained and said that show is not about music and i don't dance about that. >> fans are upset. maybe next time for my next album i'm going to do a dance album. fair enough. her kind of music is not really that kind of halftime show vibe, is it? >> i think it is. because it appeals to so many
people. you don't have to dance. you can make it what it is. the fact that they asked her. >> kudos to her. >> i'll take beyonce every year. first as we head to break, check out the equity situation. lots of green on the board. some markets are closed on this monday. but those that are open continue their gains. global stocks at a one-year high. stay tuned. you're watching cnbc, first in business worldwide. amazing is getting this close. real is an animal rescue. amazing is over twenty-seven thousand of them. there's only one place where real and amazing live. book a seaworld vacation package and eat free.
zufrjt my pick in "the new york times" from a republican congressman who says i support you, donald trump. now release your tax returns. from the representative mark sanford, writing "i have no stomach for his personal style and penchant for demeaning others, but he does intend to support his party's nominee because of the importance of filling the existing vacancy on the supreme court." however, he says my ability to continue to do so will be driven whether trump keeps his word that he will release his tax records. for all of those trump supporters wondering why is this so important, this is a good read. he explanation why, how he's been involved in debates in congress about president's pay and judge's pay. he also gives a good reason why
republicans are supporting him even if they don't like his style. that is the vacancy on the supreme court, which is important. this is a good one >> it's a good summary of that debate in many republican's minds. it shows how thin the ice is that mr. trump is on before he loses more support from various republicans. my pick today is in the "wall street journal" titled the cure for wage stagnation. outlines various studies object what a cut in corporate tax would mean for regular americans. differentiating with various research to back it up that sales tax hikes tend to lead to wage incompetent creases. -- sorry wage cuts. it does feed through to regular workers. if you cut corporate tax, you're likely to see wage hikes. the regular criticism is just a benefit big business isn't in
fact fair. wage growth will continue to be disappointing as long as the u.s. has the world's highest corporate tax rate, denying the need for low corporate tax rate may be effective populism. but it's causing real harm to america's workers. it's really applauding donald trump's view to cut corporate tax. i wonder whether he can get more traction on this. if it can feed through to many fra digs al republican voters, the business owners of the united states, it could help him. but at the moment, last week the focus was not on this policy. >> because of himself. if he starts bashing the media and starts talking about economic policy proposal, a lot of informal advisers like larry kudlow have said, maybe he can get that high ground on that issue. we'll see. but not yet. certainly not this weekend. we're in the middle of week two of the rio olympic games. that's where we find our own andrew who made it down to rio.
>> it's pretty amazing. we've had an a amazing weekend. got down here saturday morning. hung out the and saw the 1,000th gold medal get won late into the night. as you heard earlier, the big news overnight for those not staying up light, usain bolt really crushing it. 9.81 seconds. he was basically beating his chest before the 9.81 seconds were almost each more. you'll see it right there. it was quite an extraordinary thing to behold. beating justin gatlin. justin taking silver. he won in 2004 but was suspended for doping. but pretty extraordinary all around. want to talk about basketball for a second. u.s. basketball, which should be dominating. did win yesterday against france. the 100-97. that's sort of the problem. only winning by three points.
kevin durant saying he thought he was going to have an easier time of it. they struggled pretty much across the board. they've won every time, not nearly dominating the way you might have thought. your friend justin rose from the uk, winning his first gold. first gold in golf by the way since 1904. beating henrik stenson. that's extraordinary. some people saying there may be an asterisk involved with this one because some of the best players have not come down to the olympics. rory mcilroy and jordan spieth saying they weren't coming down in part because of zika. i should say now having been here, i think the zika thing might be overdone and i say a couple of folks on the committee here saying it wasn't zika that kept them from coming. it was money. that's a continuing discussion down here. then finally, the women's u.s. swimming team just completely and utterly dominating.
i talked to katie did ledecky. i talked to simone manuel. so many different things that have happened. pretty cool weekend all around. we're also, by the way, going to be talking about what happened with ryan lochte later this hour. as you know, held at gunpoint. there's a whole security concern down here as well. >> andrew, thank you very much. we look forward to "squawk box." i'll be keeping your seat in the studio warm while you're away. "squawk box" up in 12 minutes time. >> looking good out there, andrew. thank you. still to come, the nasdaq on a winning streak. the longest run since 2002. we'll talk about what's next with kristina hooper. u.s. investments strategist at allianz global investor. stay tuned. cnbc first in business worldwide.
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me get you up to speed. a trifecta of record highs on thursday. all three at the same time. but the overall gains for the week were muted. in fact, they were flat for the s&p and the dow. the nasdaq eeked out around a quarter of a percent of gains. muted gains around about 10 to 20 points. oil was a big driver. wti closed up just over 4%. sorry. close to 6% for the week. it's up again today. but fractionally, 44.53 for wti. there's talk that russia and saudi arabia might freeze -- confidence in that has eeked out. we're positive. 44.5 for wti. sara? >> here's what's on the agenda this week, wilfred. on the data front, consumer price index, cpi, housing starts and industrial production.
on wednesday, the minutes from the last fed meeting will be out. on thursday, the philadelphia fed business outlook survey. speaking of the fed, a few important 1350e67s things to lo for. dennis lockhart tomorrow. wednesday james bullard and thursday john williams will get a chance to offer his economic outlook. it is a big week for earnings. big companies will be reportingment rumt from home depot, lowe's, target, and gap among others. joining us now with her strategy for the week ahead is kristina hooper. at allianz global investors. >> good morning. >> thank you for having me. >> peter shack now calls it a modest melt-up in stock. is there any reason to think it can't continue? >> i think there's certainly a hot of question marks around it right now. certainly, stocks are the most attractive asset class among a sea of relatively unattractive
asset classes. but it looks like this rally is starting to peter out. it's losing momentum. it certainly is vulnerable just because it's not being driven by fundamentals. >> if strox bought for relative reasons as opposed to absolute reason, does that play into that word you just used. if we get external shock, is there a bigger correction downwards than there might be rally upwards across the rest of the year? >> i think it does. our expectation for the rest of the year is more volatility. there are certainly more potential for external events and shocks to impact the market, both positively and negatively. right now, i would say this is something of a post brexit halo. there's this view that the fed is unlikely and other central banks are likely to be more accommodating. that has created i think some of the positive fervor that we've
seen in the past several weeks. but that can only take you so far. while it seems unlikely that the fed raises rates in september, it's certainly on the table. we also have other events that could wreak havoc on the stock market, including a very unpredictable presidential election. >> we've been wondering that election uncertainty is affecting the market and if not, when it will start to do so. >> well, it seems to affect markets in small ways. i mean, it certainly has throughout the primary season i would argue. but i think now that we're coming into the homestretch, it will have a bigger impact. >> this week in terms of short stuff, last week we hit the relative all-time highs. but data and earnings wasn't moving too much over the course of the week as a whole. >> we want to get inside the fed's head. so much of what is happening
today and so much of the confusion is created because there are so many talking fed heads. there's interpretation, misinterpretation. differences in opinions. that's all aired out in the public. i'd like to say fear the talking fed. the minutes give us greater insight into what the fed is thinking holistically. >> i'm interested what you're tell your clients to do. on one hand the stock market doesn't match up with the fundamentals. on the other, you say there's not an alternative to stock. when someone asks you, where do i put my money, what do you tell them? >> there's no alternative to taking risk. so we have to be selective. this is a time to make calls on sectors. this is a time to make calls on market capitalizations. regions in terms of overweights and under weights zie. >> i want to come back to brexit, the pound, uk, various
uk bapgs for example. what about the rest of the world? have they shrugged off things too quickly. is there a potential tore blowback? >> absolutely. there's the potential for blowback. i think it's less likely to occur soon. because this plays out in a long-term way, there's a potential for shocks over multiple years. >> 2019 is the current on the latest shock. kristina which sector are you recommending? >> we're excited about technology for several different reasons. relative to historical valuations, it doesn't look -- also relative to other sectors when you consider that we think and expectations are that earnings, not just earnings but revenues improve by the end of the year in technology. likely to see it centered around technology. >> biggest underweight is probably what?
>> probably energy. >> does that mean you like financials, consumer discreti discretionarie discretionaries. those are rotating into leadership positions and tepd to track a better economic environment. >> there's opportunities with them. second to technology would be health care. >> so that sort of follows the lagging. what about defensives like staples, utilities and those type of thing? >> we need those in the port foe foal yoe. thanks for joining us this morning. kristina hooper from allianz global investment tors. ohm about a minute left. want to highlight a few things to watch today. i'll be watching the performance of the big box retailers. target, walmart all reporting this week after the department stores posted better results but falling failed. what do they say about the consumer? >> also keep an eye on oil prices. strong gains in oil overnight.
good morning. crude is climbing. oil prices moving higher on a report that russia is working with saudi arabia on market stability. >> the "wall street journal" out with a new opinion piece. editorial on donald trump. they say trump needs to change his act by labor day. and andrew ross sorkin is in rio. he joins us with the latest olympic action and details about that armed robbery of four u.s. swimmers. it's monday, august 15th, 2016. "squawk box" begins right now. >
. >> announcer: live from new york where business never sleeps. good morning, welcome to "squawk box" here on c nx. i'm michelle caruso-cabrera. andrew will join us from the rio olympics in a few minutes. first, a check on the u.s. markets. futures are suggesting slightly positive open. dow opens higher by 23 points. the s&p by 3 and the nasdaq higher by 10. after that trifecta hit we talked about last week, all the major averages at new highs. shanghai sharply higher. traders pointed to expectations for what else? more stimulus from beijing. meantime, japan's economy slowing down. despite 20 years of stimulus, gdp expanding by an annualized .2 of a percent in the second quarter. that's below market estimates. weak overseas demand taking a bite out of demand. european equits