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tv   Worldwide Exchange  CNBC  August 16, 2016 5:00am-6:01am EDT

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. >> good morning. breaking economic news. uk inflation sees biggest rise since november 2014. the global market reaction including a move in the pound straight ahead. dropping story. shares of hai initiation plunging. >> your money, your vote. mark cuban taking to twitter to talk about.
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>> good morning and welcome to "world wide exchange" on cnbc. i'm sara eisen. >> i'm wilfred frost. good morning to you from me as well. >> let's check on global markets this morning. a pause in the buying after we saw another little trifecta yesterday. record closes for the dow, s&p, and nasdaq pulling back just a bit here. continuing the pattern of up one day down the next. we've seen that for the dow for the last several weeks. s&p futures down 4 .5. nasdaq futures down almost 8 points. check out the british pound slumping to the lowest level against the euro in over three years. giving a little bit of relief this morning. we just got word that cpi consumer price inflation reported down .1%. up .6 for the year on year was expected to be unchanged. important because it's the first hard data post-brexit for the month of july. all we've gotten so far are surveys. we're going to start getting a
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picture on how the brexit is impacting the economy. >> underplaying the rebound off the back of the data a little bit. up 10 basis points on the day. against the euro we were down earlier. against the dollar, the pound today is up 0.6%. a decedent rebound off the back of the inflation. >> still below 1.30. >> absolutely and this morning it was lower and rebounded about a half a percent in the last couple of minutes following that data. let's have a look at european equities. we were looking at close to a three-month high at european stocks at the start of the week. yesterday we are broadly flat. yesterday as you can see down 0 .6%. france down a similar amount. asian trade, let's have a look at that. disappointing because we have a strong yen. it's hurt the nikkei and infected the rest of asia as it often does. nikkei down 6.1%. hong kong just below flat.
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as for the broader market picture, the price of oil is pulling back after another big gain yesterday. there it goes. it actually flipped over positive just in the last few moments here. wti marching towards $46 a barrel. up a quarter of a percent. brent firmly above $48 a barrel. 48.39. even gattis lesoline is higher morning. best performing sector on this sharp bounce that we are getting in the price of oil. ahead of an opec meeting where saudi arabia is making signals it might play ball, cut production, adjust production, compromise with fellow opec members to try to stabilize the price of oil. as for the ten-year treasury note yield, saw a bump up in yield yesterday. get some data this morning. get industrial production, cpi
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in the u.s. 1.52 is your yield. there is buying on the back of selling of stocks pushing yields below 1.53. dollar has been weaker and continues to be so. the euro stronger at 1.12. that's the weaker dollar. even the pound is stronger getting a little bit of relief off the inflation headline that just crossed. weaker japanese yen. we are right around that critical 100 level. that's a stronger yen and weaker dollar. we managed to get above that hump yesterday. if we drop below that today and if the yen starts picking up some steam into the u.s. session, it's one to watch. quickly, gold, getting a nice boost at a two-week high off the back of that weaker dollar which is attributed to the federal reserve just being on hold and not being able to raise interest rates because a, the data habsnt been all that stellar.
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it's decedent. and the fact that everybody is easing all over the globe, just going to tie the feds hand and make it very difficult. >> absolutely right. when we look at the direction the currencies are moving, look at the relative spreads in the bond markets and where they are a month or so ago. the fact we see the u.s. yield pull down by what's happening in the europe. it's just in the spread between u.s. and japanese bonds move slightly apart. close to 100. that's what hurt asian trade today. >> the only other action i would point out is the emerging markets and the relief we're seeing in stocks there and currencies there. a big part of that is the weaker u.s. dollar and the idea that the fed is going to give the world some breathing room before it raises interest rates. so this whole trade is sort of predicated right now on the fed again, on this idea that the u.s. data is coming in okay, but
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not great. this goldy lock scenario. >> and the other point i make on u.s. equities. volumes very low still as they've been over the last couple of weeks. lots on the agenda today. con 12:30 atlanta fed president will talk. ahead of the fed minutes tomorrow. on the corporate front, home depot will report before the bell along with dick sporting goods. the parents of home goods. >> thanks to the new 13-f filings we know what big hedge funds were buying and selling last quarter. moved into gold and other bearish bets failing to predict the current stock market rally reaching record heights. here's some notable moves to tell you about.
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soros fund management cutting shares in gold when the kwhod rose to two years highs. gorge soros. rose to fame by shorting the british pound in 1992 increasing bearish bet against the s&p 500. berkshire hathaway increased stake in apple. shed their positions in apple: berkshire cutting its stake in walmart. paulson company held its stake in gold. sold off shares in arkansas began, pfizer, but did increase stake in other drug makers. valeant. it added fedex to its holdings. another interesting disclosure, value act capital $1.1 million stake in morgan stanley. indicates may be hoping to turn things around for the bank investors who have seen disappointing returns as financials have suffered.
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watch that activist stake and see what kind of moves they make. >> indeed. ie can is calling in a letter saying a number of refiners could go bankrupt if the playing field is not levelled to stop disfavoring. specifically, he's worried about the market for renewable identification number credits designed to reduce reliance on imported oil. ie can says the credits exemplify market. hain celestial sharing fall on accounting. saying it doesn't expect to reach anticipated sales and
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profit levels for the year. firm put out a statement saying it identified concessions granted to certain u.s. distributors during the fourth quarter and it's evaluating whether the revenue was correctly accounted for in the current period. hain also evaluating internal control over financial reports. you never want to see this as an invest investor, especially on hain which was a high flying stock that got a boost lately. up more 30% this year on the whitewave deal that was announced last month. whitewave in the same genera of organic, healthy and faster growing food. it was speculated after whitewave was taken out, hain would be next. shares had run ut. huge blow and huge disappointment. founder and ceo has been on the program on cnbc quite often because this has been a growing exciting story. where he's been adding brands.
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he's soups, sericereal, it was sweet spot in terms of growth this obviously coming as a big shock to its customers. >> almost wiped out in the course of one day. >> a major health insurer is quizzing the obamacare health exchanges. aetna says policyholders turned out to be sicker and costlier than expected. aetna will remain on exchange in four states starting next year. it's the first major health insurer to make a decision like this. aetna will still offer individual policies outside of obamacare. shares just below flat in the premarket. >> that's a big deal. ai ig announcing it will sell the stake in united guarantee. that move is an effort to ensure streamline organization after coming under intense scrutiny by
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activist investor, karl ie can. linda ag this according to "the wall street journal." shares up 4%. bhp reporting a record $4.6 billion annual loss. hu the company did say it expects free cash flow to more than double this year, which is allowed shares to rally almost 4%. con choe expands basen. that is off a little bit in the premarket. williams is expanding the board. this comes after two months of six directors quick after following a takeover from energy transfer equity. >> when we come back, tim cook the ceo of apple is back in china today. tell you what he's up to in his
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second visit in the last three months. a live report from beijing next.
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welcome back to "world wide exchange." if you're just getting up, let's get yo up to speed on the market action. basically flat in the premarket again today. all be it a little bit of red on the streen t. dow expected to opener lower around 16 points. lets have a look at oil because in this light volume trading
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we've seen through august, oil has been one of the key factors to watch. it was stronger yesterday. that helped the energy sector once again. it was softer in earlier trade, in fact in asian trade, we were down about 1% for the international benchmark, but as you can see, we found some imptous in the last hour or so. we are seeing green. other headlines this morning t u.s. treasury department reporting foreigners sold u.s. government debt for third consecutive month in june. china remains the largest holder. apple ceo tim cook making another visit to china today. eunice yoon looks at what the going on today. becoming a familiar face there in beijing. >> reporter: he definitely is a familiar face. tim cook showed up unannounced here in beijing and the company wasn't very forth coming with the details of his schedule,
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however he has been very active on the chinese social media account. we can get a little bit of a sense of what he's up to. yesterday met with a local fashion designer drew all the sketches on the ipad pro. today he went to a fitness gym saw a sports enthusiast incorporating the apple watch into the exercise regimen and later in the day he went to a model home to what the creating apps for what they say is the p home of the future. so by these photos, we can get a sense that tim cook is trying to create buzz around apple's latest products and also today he met with some chinese app developers and was talking up the importance and the excitement of the ios 10 software system. encouraging them to create apping fapp is for the system. that could be critical for the position in china. as you know, there have been a lot of questions about apples
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relationship with the chinese governme government. what's interesting is this tactic is seen as entrenching china, apple's position in china through the popularity of products and through the apps. that could be a key no matter what the relationship apple has with the government. now, also today, he took some questions from local journalists who were asking about the sagging sales of the iphone as well as the competition here and he acknowledged the more competitive environment here, but at the same time, he said he's looking forward to the fall, and, of course, as you know, that is when everybody is expecting the iphone 7 to be released and over here it is eagerly await. >> dewayne: as it is here. thank you very much. eunice yoon in beijing. still to come, a diving finish to the women's 400 meters. it's the race everyone will be
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talking about this morning. that must have hurt. if you get gold. >> first as we head to break, national whether forecast from weather channel. >> good morning. we have a business day ahead. storms will fire. bringing in the risk of damaging winds. tornado threat today. extend through new york and even parts of new england. the boston area, all cities in that risk today. a low chance of tornados, but not zero. i want to make sure folks are aware of that. heavy rain possibility in the northeast extending back again to the midwest. into parts of texas, houston, baton rouge, two city haves a lot of rain recently unfortunately have the risk for more thunder storms today. our streak continues a very warm days here and looking at temperatures in the east, warm and muggy yet again today. that's your coast to coast
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forecast, i'm meteorologist jen carfagno for the weather channel. "world wide exchange" continues after this.
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now to the olympics. if you went to sleep early last night, you missed great moments in rio, as you would have done every night. this awesome set of olympics. nbc, jay gray joins us from brazil with the highlights and another outstanding top, jay. >> reporter: good morning,
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wilfred. good morning sara. team canada nice enough to share some olympic wear. the maple leaf on the side. the canadians having a decedent olympics here, but nowhere near what usa and team gb for that matter is doing in rio. no golds for the americans yesterday. several of the athletes grabb bg medals to add to the team's overall lead. >> reporter: a flip and a slip for simone biles leaves her holding on for bronze on the balance beam. teammate fernandez won silver. alislyson felix is now the most decorated took a dive at the finish line. >> i didn't know i won until i heard my mom streaming. made history the first american woman to medal in the steeple chase. track continues with usain bolt
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back in the 200. trying to add a fourth gold to her collection in the floor exercise. she's the raining world champion in the event. and also today the highly an tis baited match, kerry walsh jennings and april taking on the team trying to get to the gold medal round of beach volley ball. that venue has to really define what these rio olympics are all about. it's ruckus. it's rolling. it's right on the beach with the ocean. that should be one heck of a match. >> i'm sure it will be. great outfit. >> here's the medal count so far. the united states on top with 26 golds and 75 total medals. china is number two and there you are. >> i think we're number two. our gold count is higher. you have 41 total.
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>> we have more gold and more silver. i'm pretty sure that's wrong t. latest ones i checked, we were second. >> either way you're behind the u.s. >> a nice statistic this morning was france plus germany together plus through still behind team gb and doing very nicely. both britain and the united states. >> congratulations for now. now to today's top political stories. donald trump calling for extreme vetting for people wants to come to the united states. meantime, on the democratic side, hillary clinton adding vice president joe biden to the campaign stage. nbc tracie potts joins us life from washington with all of the reaction to the latest on the campaign trail. good morning tracie. >> good morning. a lot of new numbers rolling in over the last few weeks t. bottom line, both of these candidates still have high unfavorable numbers on both sides and that's one reason we're seeing them concentrate on
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swing states today. >> reporter: hillary clinton is back in battleground pennsylvania today. signing up new voters. has an 11 point lead there, but donald trump is gaining among white uneducated voters. in joe biden's hometown, she mocked trump's national security plan. >> sometimes he says he won't tell anyone what he'll do because he wants to keep his plan, quote, secret. then it turns out the secret is he has no plan. >> reporter: biden saying terrorists are repeating the claim that president obama founded isis. >> if my son were still in iraq and i say to all those who are there, the threat to their life has gone up a couple clicks. >> reporter: trump the pushing what he calls extreme vetting. >> we must also screen out any of hostile attitudes toward or
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country or its principles. >> reporter: he would stop immigration where terrorists operate. >> if we don't control the numbers, we can't perform adequate screening. >> reporter: trump rallies in wisconsin today. and clinton in pennsylvania, allstates that could go either way. and mike pence is in new mexico today. not a battleground state. it's expected to go democratic. >> thank you for that. tracie potts in washington. also in political news, mark cuban and carl icahn butting heads on social media over trump yesterday. cuban calling for icahn to invest in companies despite regulations which icahn has described as strangulating. how do you unleash the power of corporation ifs you do nothing about the strangulations of regulation which she meaning hillary said zero about. cuban says, sure, hasn't stopped
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you from investing in companies, karl, has it. regulars can improve no doubt, but trump's plan is a disaster. those two clashing on the economic side. >> and cuban says you wouldn't hire donald trump to run one of your companies. then cuban trying to tie it to icahn's investments. >> i wonder how much traction it actually gets. still to come this morning top stories plus three things to watch from home depot. about an hour from now. then today's top trending stories including why one couple is suing pokemon go. still to come on "world wide exchange." to be taken care of. home, car, life insurance obviously, ohhh... but with added touches you can't get everywhere else,
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good morning. breaking economic news. tell you ideal inflation looks to be a market driver today. plus developing story. hain celestial plunging. plus pokemon go, why one couple is suing the popular gaming app. it's tuesday, august 16, 2016. ♪
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celestial. good morning. let's check in on the markets this morning. futures just below flat so far today, but expecting another muted set of performances. volumes yesterday very low. we did hit all-time highs, but, again, very small gains overall. about a third of a percent really for the s&p and dow. the nasdaq did eke out a little bit more. seeing all sectors in the positive territory for the year. tell come reading the way up. financials up just a half a percent there. let's have a look at european trade right now. we have had a soft session. don't forget we were looking at a three-month high. just coming off those. in fact we've improved over the last hour or so. we're now basically just below flat having been down like half a percent. the ftse 100 as you can see just in negative territory. let's have a look at the uk pound as well because that had been pushing a three-year low
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against the euro. a deeper low against the dollar earlier in the trade. we were just below 1.29. were now close to 1.30. the pound rallying significantly in the last hour or so. it's up 0.7% on the day. the overall inflation figure for july was a surprise. still quite low. if we dive into the numbers, interesting to see producer import prices for manufacturer jumped 6.5% highlighting what the fall in the pound can do for inflation, and, of course, at the moment, we expect more easing from the bank of england. that's why the pound has fallen and yields have fallen so significantly. if inflation starts to pick up because of the fall in the pound, they might be stuck between a rock and a hard place. further expectations might unwind. >> that was the big fear with brexit, you with could an environment of very slow growth. with high inflation.
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result of the weaker currency. so if it falls too much and causes inflation sdpantly overall not a big number. 0.6%. that could unwind quickly for the uk. let's have a look at asian trade as well. nikkei down 6%. they affected the rest of the market. >> and hang saction by major pr led by top exporter saudi arabia has helped crude climb. august 3, wti was below $40 a barrel. we've come significantly above that. we just crossed over $46 a barrel. climbing higher as we get through the morning here. brent solidly above 48. it is up umtd half a percent.
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as for the ten-year treasury note yield. we are seeing yielding back down this morning. some buying. 1. 1.53. just below that. we'll get inflation numbers out. the fed is watching that carefully. the theme in the currency market has been a weaker dollar. countries like the euro, 1.12. stronger pound on some relief data and a weaker dollar against the japanese yen. that's the one serve watching. we're looking at a 1% move here thchlt is a pretty sharp move. could be a cautionary sign. they've worked so hard to get the yen to move in the opposite direction. now it's moving against them. will they have to step into the currency market. they've been does counselored to -- gold goes the other way. it's stronger because the dollar is weaker.
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it's at a two-week high. expectations the federal reserve will not be raising interest rates. it's an underlying theme. less than 50 percent hoodds the feds raise rate this year. >> 8:30 a.m. look out for the consumer price index. 9:15 industrial production. 1230 p.m. dennis lockhart speaks. dick sporting goods and home depot reporting before the bell. now we should get more insight into the consumer when home depot reports second quarter results before the bell. landon dowdy joins us with three things to watch. >> the street looking for home depot to build up earnings of 1.97 a share. on revenue $26 billion that's more than 6% higher.
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beyond the numbers. analysts are expecting positive results. here's why. first home depot benefits from strong housing and construction and thanks to summer home improvement projects dow is expecting an increase in sales. when people people confident about the jobs they're likely to upgrade bathrooms, kitchens, as we've seen the economic picture improve over the last year. shares have risen. little extra cash in people's wall lets allowing for more consumer spending which could benefit home depot too. another reason could please the street. loan demands. typically stocks rise, bonds rise and housing loans increase. since home depot is an immediate ben fisry, it's outlook could to. >> underperforming say walmart, fellow dow component this year which reports on thursday.
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haines sles yell. saying is it doesn't expect to reach anticipated sales and profit levels for the year. check out that market reaction in the premarket losing a quarter of its value. we're talking about more than a billion dollars worth of market value for the stock. in a statement the firm saying it identified concessions granted to certain u.s. distributors during the fourth quarter and it's evaluating whether the revenue was properly accounted for. also evaluating internal control overall financial reports. the ceo and founder of this company has appeared on cnbc many times to talk about what was very fast growing products in the package food world because of all of that i recaei
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and organic. >> yes, we're going to have to spend more money on markets. the thing is we're able to take cost out of infrastructure supply and simplify business and those dollars are going to go back into the brand. >> there he was addressing one of the concerns investors had lately over increased cost. the fact the sales growth has slowed down from last year during this current year clearly. they also get hit because they had some sales exposure in the uk and weaker british pound has hurt and it's competitive out there. private label. everyone is doing organic. a lot of big traditional package food makers have been buying other companies. >> which has helped. >> especially after the whitewave deal and also made them more competitors against the likes of hain which has been a smaller company. we'll see somehow shares open up. they look set up open up down 25%. ouch.
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let's move on. volkswag volkswagon talks of settlement. the company could face fines as high as $1.2 billion and could be accused of criminal conduct. volkswagon shares off just slightly in germany today. time for some top trending stories of the morning. air bnb activating disaster response page. allowing hosts to offer homes to those in need free of charge. air b and b says all bookings in the affected area are free until september 4. there are according to some of the news articles, many homes listed for free for people to use. >> they used this before during other disaster issues. >> sort of like facebook and digital companies are adapts. >> good for them. snapchat acquiring vurb.
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helping users connect with things they're interested in. books restaurants, music and more. snapchat deal with vurb comes just after the acquisition of bit strips. the company behind bit mow apologies. >> i can see that. >> it takes up too much space on the phone. >> i wonder what this acquisition is. they seem to have greater ambitions to expand beyond selfies of yourself. >> the bigger question is going to be if instagram story aspect is going to take over snapchat. i actually think they can't sue for copying on that because it's just an idea. it's tough on snapchat. >> a lot of people are doing it. >> a lot of my instagram friends although the filter, you can't beat the snapchat filters. google released video calling app named duo. this is interesting.
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it's a mobile app. it's a direct alternative to apple's face time. difference lets you make video calls between android users. this isn't the first time google had created an app that apple sort of does already that you can use on the apple iphone, but sit a competitive threat. >> i wonder whether face time has to relax rules and open its up. that's one of the reasons they had it exclusive because there was no alternative. >> people don't do enough video calling because i can't video chat my father. he uses a samsung. dating app bumble is getting into the paid subscription. game. bumble boost cost $10 a month offering a slew of new futures. now be allowed to connect with previous matches, extend the 24
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hour time limit on matches and get new matches without swiping. a lot of options. $10 a month. >> are you tempted. >> no. i thought tender was free. when we come back, today's must reads. highlights from last night's big olympic event. stay tuned. you're watching yi ining "world exchange" on cnbc. [car horn beeps] [texting keystrokes]
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now to must read stories catching our attention in the papers. peter thiel, capitalist who backed facebook. spoke at the national convention and funded hulk hogan's against gawker. sensitive information can be relevant. exercising judgment is always part of the journalist profession. it's not for me to draw the line, but journalist should condemn those who willfully cross it. the press is too important to be undermined for those who search for clicks at the cost of reputation. goes into why he helped fund the lawsuit. when gawker outed him he talked about being gay. he announced at the republican national convention and that was his final point on why gawker he says will continue to thrive. it's up for auction. there's reportedly bids for it
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to continue and he says he doesn't want to eliminate that, but there that has to be a stricter judgment call when it comes to invading privacy. >> worth the read and, certainly, valid points. makes valid points in this article. my pick today in the "wall street journal" is titled trump's anti-terror strategy. coming off the back of his speech yesterday. in terms of the contents as usually included some good ideas, some bad. not really applauding, but highlighting the positives in some part. the conclusion reads the best message of the speech is it means we might get a national security debate this election year. the clinton campaign is hoping to disqualify mr. trump as a potential president without having to confront the issues or her record as secretary of state. mr. trump has trouble sticking to a message, but this is a debate the american public needs to hear and the reason i highlight that paragraph in particular is it's very similar to the situation we had this
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time last week. we gt a strategy speech last week on the economy this week on foreign affairs. can we now have a proper argument on those points or will we have some other factor that's going to throw up and be the focus on the media. >> he was reading a telepromp r teleprompter. >> he stuck on message. we have to wait and see will we get a proper debate on the facts. >> it's one thing to the next. always distracting. the corrupt media, which was ongoing. so we'll see what the reaction is to that. let's get to rio. andrew sorkin joins us where the highlights from last night's big olympic events. guilty or not guilty good morning to you andrew. >> good morning. a lot of action here. a bit of an interesting day. for the first time in 29 days of olympic competition, the u.s. did not win a gold medal, but the u.s. team did reach the medal stand yesterday. let's show you what happened in the track and field competition.
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sam hendriks took bronze. alislyson felix took silver. simone biles did have a disappointing finish in the individual balance beam. on if you had a chance to see this, but does have a chance to go for gold again today. she will be involved in the floor exercise. her teammate took home the silver. also another big story in rio yesterday was the weather. we had some pretty heavy winds. some rain causing cancellations of several sailing events. leaving today with what is going to be pretty packed day for four medal races. you probably heard about the camera going down behind us, but those winds causing a little bit of trouble there also. we should tell you today the semifinals in beach volley ball where the u.s. women's team will take on brazil. showing you where the athletes and families go to mix and
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mingle in rio. you'll see me playing table tennis. being dominated. >> i hear you're pretty good. >> well, i thought i was pretty good until i spent time with her and then we. >> it's all relative when you face an olympic champion i suppose. >> we got a little bit of time with justin rose as well. just for you wilfred. we're going to show that off. he was on squawk a couple weeks ago in new york. tell you finally to add to your must reads, a column in the newspaper in the "new york times" with a rio date line. about the 2024 olympics and the contest for that. and casey wasser man representing los angeles one of the four final lists will be on this show. >> we look forward to that. first prize is the chance to lose billions. your article going through the bidding for the next one. and the fact that normally,
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almost always everyone loses a lot of money. i'm interested in your article because you obviously highlighting how the last time la hosted the olympics, it did turn a profit. i'm wondering if your view, does the olympic committee care about that? surely they want to make sure lots of money is spent and the olympics are great. >> they've not talked about how they want to make the olympics sustainable and what you're seeing now, the four finalists for 2024, all of their campaigns are about keeping these things at a very low cost, but as a result they're basically cities that have done this before or already have the infrastructure so paris, rome, budapest. i should tell you rome, the mayor there is already saying she doesn't want it there. i've suggested towards the end of the column a different idea which is actually that the host is given the olympics not just once, but twice. you get it once now and once 12
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years from now and it might change the economics and give you the opportunity to think long-term how you're going to build this into the city and how it works with taxpayers. we'll see. >> andrew, great stuff. we look forward to that interview on "squawk box" coming up. point to note the mayor of rome is five star movement, anti-europe. a lot of factors come to play. >> when we come back, records continue to fall. stocks hitting new highs. chad morganlander. stay tuned you're watching "world wide exchange." first in business worldwide.
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welcome back to "world wide exchange." u.s. equity futures taking a pause from the buying. coming off of record closes, but barely. talking about minor moves. the dow down 14. that has improved over the course of the hour. s&p down 1. nasdaq down 1 as well. joining us now is chad
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morganlander. portfolio manager. to what do you attribute this sort of slow and steady meltup to? >> interest rates that are negative across the globe. you know fed quite accommodative as well as other global central banks. where are they to put money to get a proper return. the they're running into the equity markets, high yield markets. it's really a classic meltup with low growth, very little earnings vitality. >> also very low volume. is that a concern? we hit new highs with low volume. >> after 22 years of doing this, it seems as if august low volume always is this little melt up and then going into september you go back to realty. realty of what's in the global economy. deceleration there. with very high and lofty expectations. >> so are you positioning for this to come to an end. >> we're slightly underweight
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risk at this juncture. we do have a gold waiting. when it comes to fix income exposure. we're in the highest quality quality and we moved up the quality spectrum there. we're expecting a low growth environment with returns over the next several years. i wouldn't be surprised to see somewhat of a selloff over the course of the next six months. >> huge differenthall performance sector wise. some opportunities there to differentiate in your sector performance. >> without a doubt. i would look at value sector. look at the health care industry. it's been an under performer. we see opportunity there. i would be somewhat cautious on the telecom and interest rate sectors at this juncture. there's no place to go. they're leaving the bond market and going to the equity like bond vehicles. >> so what triggers this selloff that you're expecting? is it a valuation question?
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>> i'm snnot saying it's going be a dramatic selloff, but there's going to be slight deceleration there. i think its valuatiovaluation, going to be an earnings concern. it's also the convergence. >> aren't earnings getting better? >> better from what? from negative 2% to 1%. >> yes. >> it has shifted, but the expectations are so lofty over the next 12 months. revenue growth, 5%. that's the expectations. earnings growth of 8%. we don't see it happening. we see margins continue to roll over. and doing back to what would trigger it, we think the federal reserve will start to raise rates after the election. and then signal another continuation of glide path with rates going higher. >> like a december déjà vu. >> thank you. good to see you. >> not much time left, what are you watching today. >> i'll be watching energy. wti is higher. that's helped the rally. >> and the retailers we get to
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hear from more of them including home depot before the bell. that's it for "world wide exchang exchange". "squawk box" coming next. bacteria from ruining your day with 4 simple steps: clean, separate, cook, and chill. the roadchip to food safety starts at foodsafety.gov.
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good morning t. dow, s&p and nasdaq all at record highs, but a surging end drag down the nikkei overnight. and u.s. equity futures are falling this morning. europe is weak as well. earnings alert, home depot, those results are imminent. bring you the numbers and reaction from wall street. and olympic highlights from the track, balance beam, plus andrew caught up with justin rose. it's tuesday, august 16, 2016 and "squawk box" beginning right now. ♪ ♪ ♪ ♪
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>> good morning, welcome to cnbc. i . let's show you what's going on with u.s. equity futures up this hour. they suggest a slightly negative open. not by much after yesterday's try if he can ta record. in currency news, the yen surging overnight. look at that, 100 yen for every dollar. the dollars is weak against all the major currencies. trader cited dubbish comments from fed president john williams as a reason for selling the dollar. and once again, 100 yen for every dollar. asia was weaker overnight. nikkei lower

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