tv Worldwide Exchange CNBC September 23, 2016 5:00am-6:01am EDT
good morning. global markets now, oil prices pulled back after many sessions of strong gains. this ahead of next week's opec gathering. >> and a cnbc exclusive, we'll hear from russia's central bank governor as she criticizes the easy money policies of other countries. >> plus, hacked. at least 500 million yahoo! accounts exposed in the world's biggest cyberbreach ever. and today the company blaming a state sponsored actor. it is friday, september 23rd, 2016. "worldwide exchange" begins right now. ♪ they call me stacy
they call me jane ♪ >> good morning. welcome to "worldwide exchange." happy friday. i'm sara eisen with dom chu. >> happy friday to everybody out there. >> big week for central banks. >> absolutely. >> and big week for the markets. let's check where we are this morning. futures giving a little bit of it back. we're coming off a two-week high for u.s. stocks after another strong day yesterday in celebration of the fed in action. and somewhat dovishness in terms of the tone. dow futures down 33 following oil. s&p 500 futures down almost 6. nasdaq futures down almost 7. as for the ten-year treasury note yield, lower yields buying up treasuries, we saw that all week long as central banks from japan to the u.s. show they are still committed to fighting the war on higher inflation and better economic growth. let's show you the ten-year treasury yield, down to the low 160s. still within that range from 160 to 170. we are six or seven basis points
from where we were last week to pull that up for you. >> if you look at the yields, the idea is you don't have any kind of inflation to speak of at this point, anywhere around the world. and that's why the central banks have the ability or afforded the luxury of not having to raise rates or do anything of the variety. showed it right there. 1.61%. we are higher than we were back earlier this year. but still at 1.6% you got to wonder whether or not the market feels as though there is any kind of a threat of any kind of interest rate hike down the line, we just heard again from what is happening with japan and the fed as well. >> what about europe? >> let's look at europe as well. you look at the stocks there, showing at least fractional moves to the downside, german dax down by a quarter of a percent, cac in france off by .7%. the ftse 100 off a quarter of a percent. ftse mib in italy off.
the real loser, spain's ibex 35. eurozone pmi falling to a two-year low, driving the trade there. asia, look there, overnight session, we saw weakness in the anyway okay. off by by .3%. the hang seng off by about by the same amount in percentage basis. >> as for the broader market, mentioned the price of oil, it is pulling back a bit today after a strong rally. we back off from 46 on wti, 45, 45, 54, excuse me. down 1.7%. brent is down a little less than that, 1.3%, above $47 a barrel. the focus for the energy market turns to next wednesday's producer meeting in algeria. this week some informal talks between iran and saudi arabia, two major producers often at odds, that's what happened last time, couldn't agree on the production freeze. will they next week? >> there is all kinds of job
ownings from opec. >> the weaker dollar is helpful for commodities including oil. this morning, taking a bit of a pause. stronger against the euro. just by a bit, hovering above 112. the dollar is stronger against the japanese yen, backing above that 100 level that we know the japanese are watching so carefully that weaker yen better for tone overall. the pound stays below 130, weaker against the u.s. dollar. just hit 130. we're right around that key level. as for gold, let's show you what's going on. strong week for gold, weaker dollar helps the price for gold. a little reversal in some trades. but nothing meaningful to speak of this morning, down about .4%. >> a light day for the economic data front here. several fed officials that make public appearances, you got september flash manufacturing out at pmi, at 9:45. weekly baker hughes rig counts,
that follows at 1:00 p.m. then patrick harker, atlanta's dennis lockhart, cleveland's loretta mester speaking in philadelphia noon eastern time and rob kaplan in houston speaking at 12:30. a lot of fed speak from a lot of folks who have opinions about what just happened this week. >> clearly the fed presidents have opinions and that's what was so confusing in the run-up to this big fed meeting. but i think janet yellen cleared it up pretty well saying we're on hold for now, we're patiently waiting for the economy to have, in her words, room to run, as well as inflation, and signaling that a hike is still very possible. potentially in december. doesn't give a calendar date. but for all of the hand wringing over the fed and the bank of japan, it has been a strong week. >> a great week overall. the only thing that some people will say is the idea that this week to date it is the utilities and interest rate sensitive
sectors leading the way higher. all of that because of that more dovish central bank stance, not just from here in the fed but elsewhere around the world. >> the dow up 1.5% up until now for the week. the nasdaq closing at a record high. it shows you how much there has been in terms of momentum. technology, a bit of a leader, thanks to amazon, which topped $80 a share -- >> $800. >> $800, excuse me, in yesterday's trading session. there are pockets of leadership outside of the utilities and the consumer staples, the amazon chart pretty much a moon shot. >> it is pretty amazing. we talk about this idea that with the fed in play now, they also did make the case, the case improved for a rate hike. economic conditions are -- they're not robust by any measure but still getting better. that's why some of the optimism -- >> you might look at the charts and wonder why so much strength just on a hold in september if they're signaling they're going
to hike rates in december. and it seems like the research and the economists are saying that even if they do go in december, they made it clear from their forecast and from the messaging and the communication that it is going to be slow going after that. it is not going to be some stair step rapid hiking cycle which is always a question mark, which could actually put the brakes on the economy and the market and therefore a lot of investors saw this as a buy signal. >> the best part about this, we'll get a lot more about that is going to happen with the fed, the view from out there. we have steve englander from city later on today. we have tony talking about that later on today, just this idea we could have strategists maybe responding a little bit to what they think this whole view is going to be going forward. now that the fed laid out a little bit better what it thinks about the interest rate picture. >> now to this morning's corporate news. wells fargo ceo john stumpf has stepped down from the san francisco fed's advisory council. in a statement, wells fargo saying, stumpf, quote, made a personal decision to resign saying his top priority is
leaving wells fargo. the announcement comes days after stumpf appeared before a senate banking hearing on wells fargo sales practices. it was a, dom, bipartisan beatdown. he felt the pressure of that. this, not a huge deal, to be off the fed's advisory council, does mark an escalation and does show that he's feeling the heat. >> it is also a very symbolic step that perhaps he's kind of making at least a slight act of contrition here for what has been going on at wells fargo. we don't know whether it will lead to any other signs down the line about what is going to happen with the executive ranks or the board there as well. wells fargo one to watch. watching a number of stocks today f you look today. if you look at imperva, bids for the firm are reportedly due to come out in a couple of weeks. see the shares up by 16%.
a spokesperson says the firm doesn't comment on resumers or speculation. no shock there. the shares up by 24% in extended hours trading. twitter sliding after a follow tech analyst on wall street downgrade the stock. mark ma haney, he's predicting a 25% drop in shares of twitter on weak interest from advertisers. the rating now an underperform, a $14 price target, those shares just around 18 bucks a share. >> other analyst calls of note, walmart stores upgraded to overweight from equal weight. glue mobile announcing an extension through 2020 with the reality star and shares of amazon closing at the highest ever, breaking 800 bucks a share. that rally was fueled by news that the service handmade will now be launching in europe. every day an incremental
expansion project. >> something going on. we're watching shares of valvoline, pricing its shares $22 a piece within the expected range. the engine and automotive maintenance business is being spun off from ashland, raising 660 million bucks in the ipo. valvoline will begin trading today on the new york stock exchange under the ticker symbol vvv. for all the car folks out there, you know why the v. if you change your own oil, you probably know valvoline. yahoo! confirming information from at least 500 million user accounts was stolen by hackers during a data breach that goes back to 2014. the company says a state sponsored group accessed names, e-mail addresses and possibly security questions and answers. they began investigating last month after reports surfaced that 200 million accounts were being sold online. the company's internal probe days after striking a deal to
sell its core internet business to verizon. verizon says it was informed of the breach on tuesday. still evaluating what to do about it. unusual that yahoo! came out and said it was a state sponsored actor. the team noted the last time this happened was google a few years ago in china which led to the decision to pull out of the country. >> and 500 million. more than the population of the united states. >> we're almost desensitized to the numbers and the hacking information. but this one seems like it goes deep, especially if it gets into the security q and a. >> from such a brand name, in the internet business like yahoo!. a big deal. >> i will note the stock was unchanged on this question about whether it means anything for the deal or whether verizon will go back on this challenge. we'll be watching the shares. today, it is down more, down 1.5%. >> 43, 47 the last trade there. coming up later, the central bank criticizing the easy money policies of its peers as cnbc has the exclusive from moscow.
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welcome back to "worldwide exchange." if you're just waking up, let's get you up to speed. it has been a good week for stocks in the u.s., right now, we're taking a break. dow futures off by 26 points. .1%. just a bit of a pause. s&p futures off by the same point, and nasdaq 100 off by the same amount, six points total
overall. if you look at the oil side of things, always a focus in the early trade here. wti crude off by 1.5%. $45.59 the last trade there. brent crude futures off by a little over 1%, $47.11 the last trade there for crude oil. back over to you. >> it has been a strong week for stocks. it has been a week dominated by central banks. including the u.s. federal reserve decision and the bank of japan. this morning we'll head to moscow, jeff sat down with russia's central bank governor and she had harsh words for her peers. >> yeah, absolutely, sara. the point is i think this central bank governor wouldn't make any fed hawk look like a dove because she is tough on the currency, we believe in a hard currency, she's tough on debt and incredibly tough on inflation. this is an economy that still has stubbornly high inflation
and interest rates at 10.5% and not bringing them down any faster until she sees improvements in productivity. and that's her main criticism of the ultra loose monetary policy being pursued in japan, by the ecb and by the federal reserve. she says it is just not producing growth. let's listen to what she said. >> the key aim of economic policy in many countries and particularly in russia should be the sort of policy that stimulates productivity growth because only on the basis of growth of later productivity can we enjoy healthy growth. >> and the other thing she honed in on was the volatility issue. as far as she sees it, this policy of trying to convince asset prices higher is only creating volatility. she finished that segment of our conversation by basically saying the markets are watching these central banks very closely.
the one positive she could say at this point was she hoped that their policy decisions would be predictable and understandable by the market. now at 45 minutes, i'll sit down with the finance minister here in russia. we expect him to have a few things to say about that upcoming opec meeting and, of course, we'll report them back to you as we get them. back to you from the moscow finance forum. >> that -- we're looking forward to that. market moving. just on that conversation, can you give us an update on russia's economy. top ten in the world, really important to a lot of u.s. companies including pepsico, which reports earnings next week. it was in recession, right, because of the decline in oil, couldn't control the currency, but doing a lot better this year, hasn't it? >> they had two miserable years here, sara. it has been desperate. they have had recessionary conditions. they have had household incomes falling. and, of course, there has been an increase in unemployment as
we have seen a number of western companies pull out of russia because of the sanctions and because of the pressure that has been put on them by washington and by brussels. but things here seem to be steadily improving. companies are beginning to understand what the sanctions regime actually means and we are seeing a lot of western companies starting to inch back into this market, so the economists are forecasting we will get growth back in 2017. in fact, it could come as early as the end of this month. but, you know, the real success story in the last few days here has been a euro bond issue. they basically topped off a 3 billion euro bond issue to the market, put out another billion and a quarter and you know what, it snapped up. and the yield has declined from 4.75 to under 4, which shows some people are more interested in getting back into russian assets now. back to you. >> we have seen that currency rally, one of the best
performers in emerging markets this year. jeff cutmore, thank you very much, with that exclusive. still to come, all of today's top political news with both candidates unveiling new policy proposal ahead of monday's big, big debate. but before we head to break, today's national weather forecast from the weather channel's reynolds wolf. >> good morning. let's look at the forecast around the country and we do have a chance of showers, maybe thunderstorms in chicago early, but if you make your way to the northeast, showers in parts of new england, but lovely day for you in new york for first full day of fall. 87 degrees expected in atlanta. summertime is still hanging on. we have 87 there. dallas, 94. low 80s in los angeles. lovely. dry conditions, but opposite of seattle. puget sound, cloud cover and showers could be firing up. into the central plains and out to the black hills of the dakotas, maybe thunderstorm activity to deal with. denver, breezy conditions, mix
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a basketball costs $14. what's team spirit worth? (cheers) what's it worth to talk to your mom? what's the value of a walk in the woods? the value of capital is to create, not just wealth, but things that matter. morgan stanley welcome back to "worldwide exchange." a third night of protests in charlotte, north carolina, after the deadly police shooting of keith scott. police issuing a curfew on the city under a state of emergency right now. nbc's sara row sasario joins usm
charlotte with the latest. how are conditions on the ground? >> reporter: things are calm on the ground. protests last night were peaceful, even though protesters stayed out past curfew. what they're taking issue with is they want the police chief to release the video of keith scott's shooting death. it is something he says he won't do. a third night of people taking to the street with police in riot gear. but thursday night, a message rings clear. protesters appealing for a video showing the shooting death of 43-year-old keith scott. dying at the hands of police tuesday. their hope, to resolve different accounts of what happened. >> what i see in that video is an individual who is sitting in a car, who gets out, in a calm, peaceful manner. >> reporter: the police chief agreeing to show the video to keith scott's family. their lawyer and the state
bureau of investigations. >> i'm going to be very intentional about protecting the integrity of the investigation and in so doing i won't release the video. >> reporter: police say scott ignored multiple warnings to drop his weapon, although the chief admits he didn't definitively see him point the gun at officers. but scott's family says he wasn't holding a gun, but instead a book while waiting for his child to get off the bus. their lawyer says the video doesn't show a weapon. >> i do not see a firearm on the ground, i do not see a firearm at any point during those videos. it leaves more questions than answers honestly. >> reporter: despite the disparities, it is the latest officer involved shooting of a black man following a series of similar cases across the nation. the governor saying this is in no way a definition of who north carolinians are. >> we're not going to let a few hours give a negative impact on a great city. >> reporter: while protesters remained relatively calm thursday, tensions are high, with concerned citizens and
demonstrators hoping for justice. and we now know the person shot and seriously wounded in wednesday night's protest died from his injuries. the police chief reiterating he was shot by a citizen, not an officer, and says he's now investigating that case as a homicide. live in charlotte, sarah rosario, back to you. >> a tense situation. thank you for your reporting. we'll be monitoring all the details as they come in. now to politics. hillary clinton is targeting tax hikes on the wealthiest americans. she's now proposing raising the top tax rate on inherited estates to 65%. the estate tax or death tax imposed on assets for individuals. it would be the highest estate tax since back in the 1980s. matching the plan made during the primaries by her main democratic rival bernie sanders. >> courting that side of the equation, donald trump is outlining plans to cut tuition
costs for college students. he says he'll work with lawmakers with the federal funding and tax break side of things for schools with a good faith commitment by them to lower costs. trump didn't offer specifics on his plan, hillary clinton has proposed making in state college tuition free immediately for families that earn $85,000 a year or less, student debt in the u.s. has topped $1.2 trillion. in a programming note, trump versus clinton, this coming monday, in the first presidential debate, don't miss cnbc special your money, your vote, all that coverage monday night, starting at 9:00 eastern time. >> harvard's endowment fund lost in june. that's the steepest annual decline for the nation's largest endowment since the financial crisis that lost 27%. the previous year it saw 6% return on the investments, harvard lagged its rival for several years.
the school had 3 development chiefs since 2005 and is currently looking for another new one. now to sports, matchup two of unbeaten teams on thursday night football. the new england patriots versus the houston texans. patriots are playing without the suspended tom brady, their quarterback and jimmy garoppolo hurt his shoulder. new england not missing a beat. 27-yard touchdown, the first of his career, the patriots shutting out the houston texans, 27-0, it start the season with three straight wins. >> good night. coming up this morning, top stories, a wrap-up of a big week and a strong one so far for the markets. stay tuned. you're watching "worldwide exchange" on cnbc.
good morning. stocks on a three-day win streak. we'll ask if the bulls can finish the week strong. under pressure, the dollar on track for its worst week in a month, the top currency strategists from city group will join us. that's straight ahead. >> get ready to binge. netflix debuting the october lineup. and it is already trending. friday, september 23rd, 2016. and you're watching "worldwide exchange" on cnbc. ♪ >> good morning. welcome back to "worldwide exchange" on cnbc. i'm sara eisen with dom chu. >> i love being here because the music is so awesome. >> our producer is an all-star deejay. >> let's get a check of what is happening on global markets.
we're seeing a pause for this great week for stocks post fed in the united states. if you look at futures now, we're showing just very, very fractional losses, s&p 500 futures down by 4 or 5 points. dow jones futures down by 23. nasdaq off by 4 points as well. very, very much a wait and see to see how regular trading kicks off. as opposed to what is happening in europe, seeing more weakness on a relative basis, still not a lot, but german dax off by .25. cac in france off by half a percent. the real laggards here, look at spain, off by about almost 1.5% at this point. the ftse mib in italy off. on asia, in the overnight session, we saw the fractional losses there as well, japan nikkei index off. >> part of the story behind the
weakness, dom, is the broader market picture. oil pulling back a bit, weighing on energy producers in miners strong this week. wti back off the $46 level which we hit yesterday. gasoline getting hit as well. ten year treasury note yield, everybody was stressed about higher yields, they have declined this week. almost ten basis points. 160. for all the stress about the central banks getting out of qe, starting to raise rates and going into normal policy, the opposite happened with the bank of japan introducing new framework and the federal reserve holding off from raising interest rates and projecting a slower path of raising ten-year yields 160. show you the dollar, weaker all week long with the theme on a slower fed. that's reversing a bit this morning. the euro holds above 112. you are seeing a stronger dollar
there. stronger dollar against the japanese yen as well, 185. and the pound stays weak at the 130 level. as for gold, quickly, little stronger, little bit weaker this morning after a strong week on the back of that weaker dollar. gold prices off .4%. that's our top story, dom, of the week. a strong one for stocks, the nasdaq to a record close. the s&p 500 within a 1% move of a record itself. steve joins us from citigroup. good morning. after a big week of central banks and a chance to digest all of the moves and the statements and the communication, what is the upshot for the markets for the rest of the year? >> well, i think you said it just before that the fears that there was some kind of agreement or consensus among central banks, they should back up yield curves and hint they were beginning to really move away from the liquidity provision, i
think the moves or lack of moves by the boj and the pretty dovish stance by the fed on the longer term view, you know, knocked the underpinnings out of that view. right now, the markets are trading. ever since the fomw, tc, as if only trade in town is to go back to the august trade. but the election is coming and with trump looking to have about 40% odds of winning, we expect that that risk will be factored into asset markets going ahead. >> you bring up a great point here, many moving parts to the story. if you look overall, we have seen equity fund flows tail off for places like europe, ramping up for emerging markets. is that playing out and can we expect to see that kind of outperformance on the eamericme market currency side.
>> i think that we're getting to see the performance other than mexico, still under pressure. if you look at the brazils of the world, other high yielders, they're close to their highs of the year. so i think that what the market is saying is for whatever reason we're going to put electioners to the side right now. and just trade off the fact that we have got some reassurance that the yield curve will stay relatively flat and that the central banks are not on any kind of hawkish rampage. the question is, given that trump moved up so much in the polls and everyone knows his views on trade, the question is why isn't more risk being factored into emerging market currencies. and it is unclear to me and we have had some discussions, the most of our client base acknowledge there is some risk to this benign risk on trade. were trump to be winning because of his views on how they would
conduct trade policy in the future. i say the reaction to the fomc where you saw this intense bidding up em, vols going to year lows in many cases, i think that tells you the market just isn't that worried about it right now. >> does it tell you what we learn from the fed that corporate america, which has been plagued by a stronger dollar over the last few years, we hear the excuse every single quarter, doesn't have to worry as much about the strong dollar because the fed has signaled that even if they do raise rates, it will be very slow, very steady, not so out of step with the rest of the world, or does that risk come alive again toward the end of the year? >> i think it comes alive if we end up seeing, you know, fiscal policy on the front burner. whether clinton and trump discussed that possibility, whether if ret really becomes practical, the dollar would rally again. i think in terms of economic outcomes, the damage that has been done by the strong dollar
until now, you know, certainly has been no more than expected. and quite possibly less. so i think that the -- the comfort level with the -- where the dollar is right now is, you know, better at least from an economic viewpoint. >> so is the message from the week, steven, party on, central bankers still have the market's back, not in any hurry to tighten and that should be good for stocks? bonds? and a weaker dollar? does that continue? is that what you're taking away? >> i think the message is party on if you're convinced that the election is not going to be an issue. we're much less convinced that, you know, 60/40 is, you know, means that markets should be so complacent about risk. >> i don't understand then, because we had a number of polls signaling the trump momentum. and it hasn't really impacted the market aside from the mexican peso. do you think that will change starting with the debates on monday? >> i think it is possible. or if the polls get closer i think the markets will begin to factor in there could be some
risk that, you know, supply channels get disrupted, the sort of trade expansion of the last 30 or 40 years gets disrupted and that has implications for emerging economies and for u.s. asset markets. >> steven englander, thank you for joining us. englander of citigroup. >> party on for sure, i guess. >> that's how the market took it this week. the question is to steven's point, as the elections start to turn up the volatility again. >> watching all of those currencies very closely as well. we want to kick off our sectornomics today. landon dowdy joins us with more. >> we're hoping this sector will party on. a tough year for the consumer discretionary stocks due to changing consumer habits and fierce competition. the seconder esector up a litt to the s&p 500, up 5% year to
date. there are bright spots. this year's winner, pbh core, investors cheering the parent company of tommy hilfiger, helping to offset weaker u.s. retail demand. wynn resorts, 47%, reversing its 2015 performance which was down 53%. morning star pointing out increased revenue at the macau resort helped to buck the trend. currently macau accounts for half of wynn's overall we have knew. the top performer, urban outfitters, it is volatile, but sales have been better than expected and lower markdowns compared to last year have boosted gross margins. and the losers, royal caribbean cruises down 29%. h&r and signet down 30%. geopolitical events like recent terror attacks abroad, brexit
and zika concerns weighing on the travel related stocks. signet down 37% as it deals with accusations it misled. >> it is not just about the macro picture. all of the individual stock stories -- landon, thank you. time for our daily twitter and facebook question. now that the fed decided to keep interest rate hikes on hold, are stocks clear to head higher? say, yes, don't fight the fed or no, a pullback is overdue or some people not paying attention to their 401(k) statements. so, anyway. >> the results later in the show. now to top trending stories. registering to vote can take less than it takes to post a selfie because a new chat bot called hello vote is easing the registration process. the chat bot lets you sign up for facebook messenger or a -- all you need is a cell phone, driver's license and last four
digits of the social security number and this has been a big problem with elections before. people not reg streistering. >> it is a contentious election, for sure. what we're also watching here is it is time to perhaps update your netflix queue. the lineup new movies and tv shows. netflix has pledged to offer more original content by the end of the year. that's the reason why a lot of folks are going to netflix now, not just for the library of stuff they had in the past. >> did they say anything about the new season of stranger things? is it coming back? next year. >> there you go. >> really good. coming up later on, the must reads. check out the weekend box office, speaking of movies. the magnificent 7, can't wait to see this one, expected to open with $35 million in ticket
the residential markets are really good. >> that was barry sternlicht sounding optimistic duringing the delivering alpha conference earlier this month. to hear the rest of his comments and good candid ones with thoughts from the other top investing minds on the panel including marc lasry, head over to delivering alpha.cnbc.com. >> he talked about the worst real estate market in the united states. have to go watch. the clips are great. now to this morning's must reads, stories catching our attention this morning. wall street journal, my pick is titled clinton's 65% killer death tax. the journal's editorial board writing mrs. clinton must realize her plan has no chance of passing as long as republicans hold the house or the senate. so it is odd she would even propose it now. and the takeaway is you're trying to court a certain part of the population, the voting population, in getting people to pay more taxes. it is being labeled the
billionaire tax anyway and aren't that many billionaires out there. >> and nod to the bernie sanders plan going after the wealthier americans. clinton's campaign claims that it would only affect 4 out of every 1,000 estates because people -- only certain people have that much money. >> it won't affect me. >> trump has gone after it pretty hard saying why should you have to pay taxes? >> the whole thing will be contentious for sure. taxes are going to be front and center for a lot of people. hillary hasn't made a lot of comments about the economic front in terms of her campaign. we know donald trump is laying out some of his cases, though details are still perhaps a little -- >> that is the case -- that's the key philosophical divide between the with on taxes, taxing the wealthy, and tax cuts from the trump campaign. american prosperity is one of the topics in the debate. >> coming up later on the show, the s&p on its longest winning streak in nearly two months. we're going to talk markets with tony crescenzi.
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welcome back. we want to watch what is happening with facebook stock. facebook apparently overestimated average viewing time for video ads for apparently two years. and the ad world is not happy about it. let's put it that way. the company quietly disclosing the information in a post a few weeks ago. but not getting wider pickup. facebook basically acknowledging the fact that some of the numbers may have been inflated with regard to the time in which people were viewing some of the video ads. they went on to say it didn't affect monetarily anything that went on with the ad rates and what people were paying, but still certainly something we want to watch, facebook shares off by nearly 2% in extended hours trading. >> advertisers will have questions about the metrics. we're approaching the top of the hour. that means the team is getting ready for "squawk box." becky quick joins us. >> good morning.
we have a big show coming up for you this morning. we have been talking about a lot of the issues you've been covering with the markets, what is going on, the story on the front page of the wall street journal that points out the ipo market is one of the casualties of low interest rates for so long. you don't think about it all that much, but when companies can get access to capital without going through the public markets, that's a route they would like to take. we have seen a lot of that. there have been 68 ipos on the nasdaq this year, which is down sharply from where we were a year ago. we'll talk about that with a lot of our market guests this morning. also, talking with arnie sorenson about the star wood deal closing. pay attention to this. we'll get into a lot of details with him. and talk to him about what he's seeing with the consumer. both joe and andrew are out today. we have some special co-anchors who have come in. both joe and andrew are out. they took their chances. i could go any day into labor.
so i'm here. i have two excellent co-hosts with me. i'm not going to tell you who they are. stay tuned to the top of the hour to figure this out. we have one joe and andrew with us. joe sullivan, and andrew sherman -- shoeman, microsoft vp. they'll talk about the security surrounding selfies. and tune in to see who is here. you won't believe who is on set with me. >> we're going to watch for sure. >> don't go into labor. wait until after the show. >> thanks so much. becky. see you at the top of the hour. joining us to talk markets, we have tony crescenzi, market strategist and portfolio manager at pimco. we have been talking so much about the fed and what is happening with stocks and the markets are all bullish, everything is going great. is that the case right now? are we really -- are we all clear for a move higher for the risk type markets? >> pimco's view is that conditions are in fact stable,
but fragile. i consider the case of economic growth global ly to the united states, around 2%. 2% is close to stall speed, which is to say if it drops a little bit, there could be a growth recession, which is to say conditions that can feel very much like recession because the economy is not quite operating at its potential with companies cutting back on employment and output, to two main barometer of actual recessions of when they occur. central banks have been able to keep them stable in part through the rise in asset pricesment in the end, what is needed for 2017, in particular, globally and the united states is a pickup in productivity, which is to take more output per hour, main short fall there is a lack of investment, lack of confidence, the election, perhaps that will come back. but that remains to be seen for sure. so it is a stable but fragile
insecure climate. >> the stable and fragile insecurity climate, earlier told by steve englander of citigroup could be interrupted by fragility around the election, the risk of a trump presidency, which is rising. he put it at 40%. what do you see at pimco in terms of the odds of that and the impact of the market? does that disturb the party? >> populism is a worry for markets and the next year. there is economic uncertainty now that it is probably affecting the economy negatively because no one really knows what the economic policies will be for 2017. and if, in fact -- >> what about the market? what about the fact that there is a cyberleaf from the fed, does the election, as we head into the debates on monday, disrupt that? >> maybe in the short-term. let's use the warren buffett line and don't bet against america. there are checks and balances in the united states. while both sides of the party have things that the other sides
of the aisle don't like, in the end, it probably won't be major legislation passed that disrupts the u.s. economy and capitalism. this is mainly because u.s. senate probably won't have -- for either party, more than 60 seat majority, which is very, very important to stop filibusters and therefore to stop a president, whichever side of the aisle will be, from pushing through anything extreme that he or she might want. what we're going to be left with more than likely is something closer to the center in terms of policymaking, leaving capitalism to rule the day and low interest rates as well. markets in the end, they may see hiccups as possible, but the prognosis for low rates, the rest of the decade, look at japan, promising to keep the ten year yield at zero for some time, this is what the main thesis will be for investors looking to push outward along the spectrum. >> can we talk about that.
with amazon breaking 800 bucks a share, with the nasdaq hitting a record high, stocks speaking near record highs, what if anything are you watching in terms of the real possible cracks in this market narrative, are there places where you're seeing signs of weakness that could manifest itself later on down the line in the markets besides the election? >> we see consumer spending running pretty well. last quarter, 4.4% rate of gain, which was the second best in ten years. consumer spending the last two years averaged a little over -- a touch over 3%. years prior to that around 2. if there is a crack, if i look for one, i want to see it happen in the consumer. if consumption is high enough, the economy will do pretty well. 70% of gdp. watching the consumer holiday spending, particular, after the election. >> we'll pin you down now, tony. give us your ten-year yield
forecast for the end of the year. >> this is -- almost a call on the election. let's say over six months, yields rise slowly because the fed is very likely to raise interest rates in december and to deliver the two hikes that it is projecting for 2017. and that will push yields higher. and next year probably ten-year moves potentially over 2%. >> not until next year. >> not until next year because of the uncertainty surrounding the election and the economy, the fallout from it. >> thanks to tony crescenzi, thank you for the views here. we'll be watching what is happening with the markets overall. good week generally speaking for u.s. equity markets. now to the results of twitter and facebook question, we asked are stocks clear to go higher? 46% said yes, don't fight the fed. 36% say no, a pullback is overdue. 18% say they're trying not to pay attention and watch those statements. we do this dance again with the fed, my chart of the week, it is industrials. second best performing group
good morning. markets now, the nasdaq coming off an all time high, but futures are pulling back this morning. crude oil bouncing off session lows, we'll have a full market rundown straight ahead. the world's biggest cyberbreach ever. at least 500 million yahoo! accounts exposed. today, the company is blaming a state sponsored actor. and hillary clinton taking a page from the bernie sanders playbook proposing a 65% estate tax rate for the wealthiest americans. it is friday, september 23rd,
2016. "squawk box" begins right now. ♪ all right it is coming home ♪ ♪ we got to get right back to where we started from ♪ >> live from new york, where business never sleeps, this is "squawk box." >> good morning, everybody. welcome to "squawk box" here on cnbc. i'm becky quick. joe and andrew are off. guess who's here? david faber, you saw him, and mike santoli, with us for the morning. thank you, guys, for coming in. great to see you both. good to see you guys. >> happy to be here. >> long time. >> this is what it looks like. i forgot. >> still dark. let's look at the u.s. equity futures at this hour. markets did close higher yesterday. yesterday, the dow was up by about almost 100 points. 98 points, building on the gains we have seen. the best two-day and three-day rallies we have seen for stocks since back to july. all of this is coming post fed after the fed decided not to hike interest rates in septembe