tv Worldwide Exchange CNBC November 9, 2016 5:00am-6:01am EST
decision 2016. donald trump declares victory. >> no dream is too big, no challenge is too great. nothing we want for our future is beyond our reach. america will no longer settle for anything less than the best. >> the global markets shocked by that stunning upset. we'll bring you reaction from top analyst, economists, and strategists. what it all means for your money
straight ahead. >> it's wednesday, november 9th, 2016. a special presentation of "worldwide exchange" begins right now. good morning and welcome to a very special presentation of world wide exchange. the morning after. i'm sara eisen. >> and i'm wilford frost. a very good morning to you from me as well and congratulation to president donald trump a. >> u.s. futures have been extremely volatile as it started. dow futures one down at more than 800 points. it's the biggest we've seen since 20011.
we've recovered a lot of the losses and as we march into the u.s. open, the dow down 300. s&p futures down 39. nasdaq futures. it's getting hit hardest but this has been a global market selloff and while we are off the wofrpt level os testify session, stocks are still lower across the board. nbc news projecting donald trump winning 278 electoral voigt. hillary clinton projected to take 218. in congress, a clean sweep. the republicans holding control of both the house and the senate. trump aimed for a theme of unity in his victory speech which could be part of the reason his market has recovered. have a listen. >> now it's time for america to bind the wounds of division. we have to get together. to all republicans and democrats and independents across this nation. i say it's time for us to come
to come together as one united people. it's time. i pledge to every citizen of our land that i will be president for all americans and this is so important to me. now for some color, the front of "the wall street journal," president trump. possible surge lifts. and then billionaire candidate scores white house victory and "the new york times" reads trump triumphs outside mogul. captures the presidency, stunning clinton in battleground states. really quite extraordinary stuff there. i have to say before we dive into some of our guests to discuss the detail, deja vu from
the 23rd of june in terms of the level of surprise, market reaction, and really how this came about. down to factors like turnout. that just blew this out of the water. >> so much surprise and so much was wrong. the pundits, the polls, the odds, the markets, and that is really where we have been warning. we talked a lot about this after the brexit, where the parallels come down. the question from here is the reaction going to be a brexit. we saw major markets from around the world and a quick and sharp recovery for global markets. we realized it would take a long time to play out. will this be different? is this an epic buying opportunity like that one or are we in for more prolonged sustained selloff as big questions that investors have to unpack this morning? what happened to the supreme
court, immigration policies, tax policy. donald trump's rhetorics are no longer just that, they're no longer platforms. they're reality. and we're going to guide you through what it means for your investors and this country. >> the only asset that continues to sell off and is sig knif can'tly lower -- >> the pound. >> is that something we should be looking at. at the moment u.s. markets have had their losses. the celebrations are still under way at trump tower. robert frank is there. he joining us now. tell us what the atmosphere is like. >> reporter: well, will, this is the building where it all started. it's the building trump tarter where he started his real estate building back in the early '80s. he came down the escalator a little over 500 days ago starting this unlikely campaign
that is now being put to bed, retiring to that top 66th floor, three-story penthouse that he lives in and is also the building, which houses the trump organization, his private company. the crowds here have been gathering all morning. snow probably 50, 60 people gathered in front says brating. just to show you how raw the divisions are, mr. trump says he wants to be president for all americans. right now in the front tower, a lot of emotions. we had a woman come through with a hillary sign. people chased her and tore the sign apart. emotions still running high here. we're not sure whether mr. trump is asleep, but he's receiving a call from president obama and calls from putin and around the
world. >> europe has had its initial losses. it opened down about 3%. now looking at about a percent of declines for the french index. less than that for germany and significantly less for the -- wind falls of one point. so the losses we're seeing in european markets incredibly mute. we can see a sign of that. asia closed at the trops of the day. the nikkei down 5.3% partly because we saw a yen surge. still 2% of declines for significant other markets like hong kong and south korea. oil prices also have had their initial loss. they were down 3%. now down half a percent for it. they initially saw buying relative to other asset classes
and we saw the yield push down to 1.7. what does that mean in terms o people's expectations for rate hikes? either way, rate hikes up. we've seen initial moves. very liquid at the time that the results started coming out. the dollar down, 1.7%. very small moves for the currency. the euro up, 0.3%. and, sara, if we compare that to the move we saw on brexit day, 8%. >> there's the move that. is the mexican peso. it's down 9.5%. so the peso is more acting like the pound after brexit in terms of the sharp fall bearing the
brunlts of the pain and the political uncertainty of the trump presidency. that makes sense. also the japanese yen, out of the peso, out of mexican assetses. is it an overreaction or is this going to be a sustained drop. that's going to be the question. >> the dollar move against the mexican peso, it's stronger against others. the dollar index itself overall is almost bang on flat and that's an extraordinary position to be in compared to brexit. the dollar almost flat. >> for more on this market reaction, let's get straight to nan deany rah ma krishen in london and in studio michael
purv purvis, chief global strategist. if you look at that reaction, clearly markets were not positioned before a trum press temperaturecy and there's been an bit of recovery, where do you groix nemt. >> you have to keep your eye on certain things. trump has artist pated on the campaign trail a couple of things, lower taxes. you can well see that tenure yield come a lot higher we have to step back. you mentioned brexit. what helped facilitate that bullish move on u.s. equities right after brexit two weeks after was the ten-year yield went to the record low levels. if that's really an unwind, we're going to see certainly
choppier markets for that one reason alone. the weaker dollar that we're seeing won't be enough to help buffer that. >> you think yields have ticked it off a above where they with. not because of changing expectations. >> on the tenure, yes, exactly. i mean the shorter term yields will, of course, pick up that lower december hike probabilities that you're seeing. i think they're down from yesterday. but the tenure treasury is going to be incredibly important here. you know, over the last year, 93% of its movements can be seen. >> another question is what's driving that? is it this other idea that's been brought up that we have to seriously look at the
creditworthiness of u.s. government debt? >> right. exactly. i think that's going to linger in the markets. trump has talked about structuring the u.s. debt. i doubt he follows through on that. that's going to linger. that's something you're seeing playing out three months later really in the uk. >> anyone deny, let's start with stouks. do you see this as this gut reaction as a buying opportunity? >> yeah, well, actually the opening doesn't seem to have been as drastically bad as maybe the sort of high beta nature or nervousness that had been baked into the markets. actually as it weakens a bit around 1%, 2%, if there are prices, they should find them and come back in. >> nandini, what stock prices
are most attractive under a trump presidency? >> this is always a tough one to call. looks like with a slight weakening of the u.s. dollar we're seeing some of the skprts if the u.s. economy really good but the cent earnings releases shows a prts strong growth. with that we like some of the trade affiliated but less dollar played ones in the market. >> what if you got a call with a tempt to buy. the dow looks to open down. >> i don't think you need to rush in here, right? because at the very least you can argue trump's made volatility grid again. there's so many known unknowns and unknown unknowns with the presidency. we don't know how much was campaign rhetoric and how much was put into place. if he's talking major tariffs,
if he really follows through on that, you're going to start seeing very interesting impacts in the earnings stream. ful if he comes up with it, you're not going to know that answer at the u.s. open. we're not going to know tomorrow. >> a lot of questions. thank you for joining us. nandini ramakrishnan and michael purves. still to come, reacting strongly. we're joined to dissect the jolt in currency markets. stay tuned. you're watching a special election reaction version of "worldwide exchange." we're back in a couple of minutes.
now that fedex has helped us simplify our e-commerce, we could focus on bigger issues, like our passive aggressive environment. we're not passive aggressive. hey, hey, hey, there are no bad suggestions here... no matter how lame they are. well said, ann. i've always admired how you just say what's in your head, without thinking. very brave. good point ted. you're living proof that looks aren't everything. thank you. welcome. so, fedex helped simplify our e-commerce business and this is not a passive aggressive environment. i just wanted to say, you guys are doing a great job. what's that supposed to mean? fedex. helping small business simplify e-commerce.
it's been what they call a historic event, but to be really historic, we have to do a great job, and i promise you that i will not let you down. we will do a great job. hopefully at the end of two years or three years or four years or maybe even eight yeas s you will say so many of you worked so hard for us, but you will say that that was something that you really were very proud to do.
>> the 45th president of the united states, donald trump a few hours ago celebrating his victory, announcing he had received a call from secretary hillary clinton conceding the race. let's show you the currency markets following donald trump's presidential victory. we saw a ton of action overnight. buying the japanese yen. selling the dollar like the euro and the pound but buying it against the mexican peso that has slammed. plummeting almost 10%. still it is among the hardest hit. simon, we want to talk currencies, but looking at this bond yield, it's shooting up to 193. these are levels we haven't seen in a while. is this the creditworthiness of the u.s. in question? what do you make of the fact that they're selling of u.s.
government debt and the u.s. dollar? >> i think it's fair to say you've seen across the board. i suspect this is a reflex of more positioning of u.s. credit. i think we're talking about this. they're starting to take into account doesn't go in december. that, i think, is absolutely the interesting thing that's happening right now. it shifts so many different expectations over the next few months. i think it's something radically different.
in terms of the scale of moves, some of the things like that the nikkei, for example, some of the moves in dollar/yen at least earlier in the day don't look like the sort of thing we would see. the reason is this. you will also remember over the course from june through till september, actually within that period of calm, i'm wondering whether actually from now through the inauguration, it looks like they're going to ease rates. perhaps they'll see it. >> very quickly the losses were paired to the extent that the dollar is up against emerging markets. it's hardly down against the pound and euro. so outside the dollar/yen, it's
hardly suffered at all. is that a big surprise? >> i think relatively speaking, it's a reflection of the shift at this point. but remember, i think one of the things that when you're coming out of the aging session and into the european session, one of the big shifts. one of the big concerns is we're going to find out the actual results of the election at least until tomorrow. they're saying, look, we're going to have to wait and see what happens. therefore, when you saw hillary clinton carrying it out and saying, i have actually conceded the rash, that was the point when you saw a degree of risk back up. it may have been people looking up saying, fine, we are where we are. at least we have a degree of certainty. but i do agree that perhaps that the dollar do seem a little odd,
but i think all in all f you take into account that shift in expectations by the fed, my view is actually a little more likely. theover thing is you had the bank of japan implying they would intervene. you had comments again during the late asian session that perhaps they would be able to do something. there may be a degree of caution there. >> is there anything there for the global banks to have to speak up or possibly intervene in twak of a u.s. election? >> oh, that's a very good question. no, not that i remember. it is interesting to talk about
elections and the currency impact. one was in 19 992 when he was going to bring it to depreciate. actually then the market ignored that. the market then ignored that. then posted it. particularly when fred bergsten started speaking. then the pressure came on. for me rn for me, don't be that surprised if you have a surprising degree. but i do -- i would not be surpriset surprisu surprised if you saw it particularly as we get into the new year.
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exchange." americans wake up to donald trump as president. s&p futures down 42. nasdaq futures down 110. still we are way off from session lows when the momentum started to shift toward trump overnight, you saw a selloff that was more than 800 points. stocks went limit down as they say where they actually had to be holted with circuit breakers because they were plunging so hard. we've come off those worse levels by a lots but we're looking at a big selloff. a lot of action in government bonds. we're looking at levels here that we have not seen since april. 193. there is yelling of u.s. government debt this morning. we're trying to figure out exactly while getting a number from investors. out of dollars, stocks, and bonds is the trade. this after the initial election to buy treasures took yields down to 171, shot all the way
back up to 193. as for oil prices, let's show you quickly a little less action here in the commodity market. certainly off the worst levels of its session. wti trading just under 45 trading just under $46 a barrel and a lot of action in currencies where the dollar is selling off against the euro, the yen, and the pound, but it is gaining strength which are getting hit a lot harder, especially the mexican pay sow which is down almost 10% right now. >> what will trump presidency mean for the economy? we posed that question. he joins us from london. a very good morn dwroug. before we get to that specific question door you think the market moves we've seen so far this morning are justified, in particular i mean by that quite a significant rally from the lows. we're now down only a couple of percent in the premarket
equities. >> hello, wilford. i felt what we saw last night was more justified than what we're seeing this morning. of course, we don't know what a trump presidency really will mean, but if you go on what he said in the campaign and over the years on per rif real politics, the two key things donald trump believes in, i think, are both very negative for risks and for the markets as we've heard in terms of the market movement and they are that first the global trade isn't just a zero sum game but a negative sum game and therefore it's something that has -- the growth of global free trade is something that has to be
reversed. that's very negative for markets. the second thing he clearly believed in is a big surge in deficits and golf deficits in the u.s. would do the world and the economy no harm and probably quite a bit of good. now, that may actually be positive for assets in the u.s. but it ultimately will lead fairly shortly to higher u.s. interest rates which, again, are very damaging to risk assets all over the world. >> we ran into u.s. asset classes from dollars, bonds, equities. which of those do you think has rebounded too much? which do you think would play the more depressing view of the election result that you have? >> i would look at particularly emerging market and international equities. i think they have a lost downside from where we are today, which after all is near record highs essentially.
there's a lot of downside to bond prices all over the world because it seems to me that a trump temp if you'd like to regulate it to terrell '80s is bound to yield a higher rate and also a higher dollar rather than a lower dollar. >> just quickly, a lot of european elections coming up this year and next year. do you think the incumbents are going to be worried of a possible populist result having seen this and the brexit vote? >> i this i that i should be very worried indeed. i was pretty freaked out like most people but mainly because i thought it might be a leading indicator of a trump vote.
welcome back. we are continuing monitor the market fallout to that surprising conclusion of the u.s. election. donald trump will become the 45th president of the united states. dow futures are down 283 points. s&p futures down 35. the ten-year yield jumping past 193. this is a recover friday the initial reaction. we're bringing you all the best voices on the market this morning. jim cramer joining us of cnbc, on the way in to work, jim, how do you reassess the market's prospect this morning? >> well, first, sara, thank you for having me. we did joke for many days that this could be brexit. but it wasn't joking and i want to thank both of you. you kept this alive so i felt like i had a pretty good call on
the 17 stocks. >> wow, thanks for that. we were so traumatized by the shock then. this is very familiar. >> well, it is because what happened -- look. i don't want to get into the aspects because i'm going to let all the other people from the networks get involved in that. there could be economic retaliation against a man who for all the years i've known him, mexico has taken advantage of it, china has taken advantage of us, europe has taken advantage of us, then you have a bunch of companies that are just a mess. thinking those could be winners. but i think a lot of people -- a lot of ceos say cake and eat it too. wants to lower taxes, raise growth and wants to think that it's going to all work out in a
fairyta fairytale, and it's not going to. we're in nine straight down days we had right before this rally monday and tuesday. >> you said last night on "mad money" the sectors of infrastructure and farmer were two you liked. so even those sectors, you wouldn't be using this dip to buy them? >> the problem is i look at the tape underneath you. those stocks are up. do i want to buy america? yeah, johnson & johnson is trading down. i stick by it. those stocks look better at 11:45 than they are right now. i think paying up is a little davis.
i get a chance to sell it. when that happens. the group that's fascinating, i'm looking at the tenure. i'm saying, look, we'll talk about it. >> they like the higher yields. on the flip side you have to wonder what's driving the bonds? out of dollar, out of bonds, out of stocks, jim. >> i was amazed to watch the stoxx creep up in the last hour. to me the dollar is something you want -- you don't necessarily want to own the dollar of a currency of a man who was pour trayed in the media as being a little bit, you know, off the wall, because you'd like to have some stability. i think you have to look at he's going to slash taxes, lead the rupp grow.
he's got the majority and we're seeing the classes, okay, full speed ahead. forget about fiscal responsibility. can he pull that off? after winning last night, who are we to tell him you can't. >> to your point about the dow stocks, that has to make you nervous, riling tensions with countries like china and mexico and canada, very strong training partners. >> that's why i'm seeing 17 stocks. do you think the chinese communist party is going to sit there and say, you know what? we had a good run of the place but now we're shaking and we're scared? i know trump feels that way, but that's not the way they act. they know they geesht a degree in market. they also know that the interest, the large ceos privately was pro trump.
i end up saying, listen. there is going to be retaliation. you're not going to be able to take your cake and eat it too. it's a new paradigm. if you're going to cut taxes and you find a world where you find onshore, what do you do with apple? do you call tim cook and say, listen, i'm done with you building iphones in china? >> he's gotten really personal with some big ceos. >> right. what you want to do is see whether the rhetoric is that very kind nice speech that he gave last night. but i will say this. the biotech stocks and a lot of them have been under tremendous pressure. that preesh's off. making them feel like they're
going to have to roll back prices. so that area is interesting. remember, you're talking about people. i can get behind 35% of the s&p right here right now if i have to. that's not so bad. >> jim, great stuff. we can keep going throughout the rest of the show, but we know you have to get going, so we will let you escape. >> thank you for keeping me skeptical. thank you for keeping me skeptical every morning. thank you, guys. we'll talk to you soon. >> we'll see you on the "today" show later this morning. >> jim cramer there for us. let's get back to the political conversation. joining us is sara fagen, former senior aide to former president george w. bush. good morning. >> she's had four minutes of sleep. >> plenty of discussion points. but there is so much to discuss. just recap for us on the political side of this what an extraordinary upset this was and where it came from. >> it's a political earthquake
that really almost no one saw coming from either side of the aisle. think about this. not all the votes are counts and the races counted but it looks like republicans will control more political territory in this country than at any point in history. it wasn't long ago that people were writing the demise of the republican party. donald trump has a very difficult job to do which is to take a wide swath at the republican party which is in disagreement with many issues and bring them together. he passed his first test tonight. he gave a very good unifying speech, i thought. so time will tell. >> he said, i want to be the president for all americans. he reached out to the world community. he touted his relationship, his strong relationship with the rnc. also joining us is stan kol an dear. executive v.p. and financial director of financial communications from ll group a
former senator on both the house and budget committees. you watch these things so closely. i think you tend to lean left. everybody is surprised about it. what say you? >> i say shocked. you know, you go with the pollsters, the data, and it was just wrong. they talked to the wrong people. the other people voted who they weren't expecting. it's almost a mere image of 2 2 2012. i was stunned, absolutely stunned. what little sleep i got was rather fitful as a result. >> you asked a good question which is where did it come from. stan touched on it. but it's wider than that. this is the lowest turnout since 2011 which means many of the noneducated supporters showdown
up. they showed up in droves. you look at the college educated, they were disgusted with both options. many didn't show up. the african-american turnout tends to be low in a lot of the cities. so the combination of hillary clinton not turning out barack obama's coalition brought about donald trump's being put in the white house. >> was there a conciliation amongst clinton supporters? >> it's hard to say when you had the comey situation and clinton voters going a little nervous about it. there was clearly some concern within the campaign in the last couple of days and they tried to get their voters out. it's one of the great questions i have. what happened to the great hillary clinton turnout mechanism. we were told they had this pham ground game, but it wasn't as
much as what we expected it was supposed to be. >> so much was turned upside down but the biggest message seems to be the american people are ready for a change. >> they're ready for an outsi r outsider, ready for donald trump. now the question is whether his party will execute it. >> his first test was last night and he passed it. i think his second test is how does he deal with paul ripe. what does he say about his first interaction with paul ryan? is it i want to work with him for a pro-growth or i want to punish paul ryan for not being as strong of a supporter of me as i would like. >> stan, you've been writing a lot on paul ryan as house speaker. and sara is right.
i don't think it's trump's call here. they may want to exercise their right. they may look at this, a time to put a freedom caucus speaker into their seat. ful ryan might very well decide this is not the time to try to continue in that office. >> donald trump when he made the comment that said there are some of you that didn't support me and i want to speak to you and i want to let you know i want your advice and am reaching out. he was talking largely to republicans. that toe me was an acknowledgement of that. for him to make the first move and go to support somebody other than paul ryan would be really poking the eye of the establishment who he's going to need to bring around. when you're president, you're going to eat a lot of crow. he's going to eat a lot of crow
even though he won a huge victory. he shouldn't have to. if he wants to have a successful election, he's going to need a lot of crow. >> we all eat a lot of crow. >> stan collender and sara fagen. we're going to take a break. the dow futures is down 300 points. stay tuned. this is a special presentation of worldwide exchange on cnbc. 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 and the fortune 500, and, can deliver insight person to person, on what matters to you. morgan stanley.
the ten-year note, initially when the result came close, they pushed it to 1.7%. we now sea-bond selling to 1.9%. much more market analysis and analysis in just a couple of minutes. oh hey allison. i'm val, the orange money retirement squirrel from voya. val from voya? yeah, val from voya. quick question, what are voya retirement squirrels doing in my house? we're putting away acorns. you know, to show the importance of saving for the future. so you're sort of like a spokes person? no, i'm more like a metaphor. okay, a spokes-metaphor. no, i'm... you're a spokes-metaphor. yeah. ok. see how voya can help you get organized at voya.com.
welcome back to this special presentation of "worldwide exchange,". let's get right to it. gents, a very good morning to you both. mike, let's start with you. we saw, of course, an initial big sell, almost 900 points. is that justified, that rally back or is this something we should be seeing more weakness around? >> if one steps back from the craziness, i think one can assume that the business man, donald trump, won't go ahead and try to destroy, you know t
business prospects for the united states or the world for that matter as the markets were with predicting several hours ago. so i think it maks some sense. it's more to the point not so much the stockmarket but the bond market. >> is that how you explain what's happening right now? you see a selloff pushing into the 190s. >> exactly, sara. what you end up with is maybe the things that trump was talking about. we're in unprecedent times. maybe he'll actually do it. if that is infrastructure and economics, if he actually does follow through with that, then he has the house and the senate to back him up, we could end up with a little bit of inflation which means in the bond market -- >> how much money are you seeing these days, mike? >> over $5 billion. >> so someone oversee 5g billion, how much of that is
u.s. assets? >> over half. >> do you look at that? do you make changes? reasset it? >> no we have a global populism explosion going on. we had it in brexit before. we're going to get it all over the world. i think it's possible some of this will unleash better free enterprise possibilities for trum top take advantage of. the czech republic could do very well. >> brad, what buying opportunities are you seeing this morning? >> well, i think you have to look at the spread. heavily regulated center is poised to do better, if you look at health care, much of the downward pressure has been from fears of regulation from the clinton administration and there may be a bounce back there. >> brad, this volatility is it
going to be 152-hour thing or tread water till we get to inauguration or more volatility with markets to come? >> now there's going to be enormous pressure on mr. trump to say what exactly did you mean. in other words the markets reacted and said, oh, my god, it's the end of the world. what happens in next couple of days depends significantly on what mr. trump plans to do with that and how he plans to work with koj. that's going to be a much bigger challenge than the election was frankly. >> what do you need to hear? what do you need to hear from
president trump? >> i the he started with an exceptional speech. he talked about coming tote. common sense is what i hope to hear from him, that he's going smart things. he said he ee going to do smart things. we'll see in the next couple of things. i presume he's going to follow through and things will be okay. that's my guess. >> brad, emerging markets are getting hit pretty hard. is that going to be where the pain point lies until we get further clarification of the trade and policy? >> i think there's been this presumption of surgency. this calmness and complacency baked into the market. everyone thought they knew what was going to happen. you can see in the mexican peso how emerging markets were trading against a trump presidency essentially, so, yeah, i think we're going have a
good morning. donald trump has been elected the next president of the united states. we'll bring you a recap of the historic results and all the election night drama. markets reacting to trump's victory. u.s. futures are down but not out. well off the session lows. we'll show you the moves in europe. asia, currencies and goals straight ahead. plus a political fallout. we have a huge lineup of -- yeah, we're still bringing them on, experts, to analyze what the republican sweep will mean for the economy, health care, trade,
and the other issues that matter to your money. ist is wednesday, november 9th, 2016, and "squawk box" begins right now. live from new york where business never sleeps, this is "squawk box." good morning and welcome to "squawk box" on cnbc. i'm andrew ross sorkin along with melissa lee. we're going to be, of course, bringing you a full recap of this historic election. before we do that, markets, of course, have been reacting all night to trump's electoral victory. take a look at the equities this hour. as joe mentioned futures are down but not nearly where they were. just several years ago the dow looked like it would open down about 315 points. the nasdaq off about 105