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tv   Worldwide Exchange  CNBC  November 22, 2016 5:00am-6:01am EST

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. good morning. market rally all four main u.s. indices soar to record highs for the first time since 1999. oil shock. crude prices continue to climb in anticipation of this month's big opec meeting. >> trump transition, the president-elect promises to withdraw from a 12 nation trade deal on his first day in office. it's tuesday, november 22nd, 2016. "worldwide exchange" begins right now. ♪ welcome to "worldwide
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exchange". good morning. i'm sara aseisen. my favorite song. >> i'm wilfred frost. and i'll say it again, welcome back. >> missed ten day rally in the there are. missed you. miss this major move in stocks. but, yes. >> you had a great time. >> i had a nice vacation, post-election vacation. let's check in on the global market. u.s. equity futures after another rally day on wall street yesterday left the do you up 80 points and trifecta of record closes. first time all four averages closed at a record since 1999. all three closing there august 15th. we're strong again. dew futures up 47, s&p futures up 4.5 and nasdaq futures up 18, more than 18 points. for the ten year treasury note yield a story of higher yields, the selloff in bonds, stronger
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dollar. there we are right now just under 2.30 on the ten year. there's the spike up. >> like you were never away. >> you know i have to keep paying attention to markets a little bit with such major action. >> you wouldn't believe what she reprice to while she's away. the ten year just slipping below 2.3%. big rise in yields since the election. let's have a quick look at oil prices. we had a spike in energy prices yesterday. big driver. energy was the best performing sector. we were up 5% last week. another 4% yesterday. another 1.7% today for wti. 49.05. very much back to focusing on that possible opec production cut and people believing it's more likely to happen now than not, $49. >> next week already. in asia we're following reaction to that 7.4 magnitude
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earthquake that shook fukushima yesterday. it did trig ear small tsunami along the coast and temporarily disrupted that nuclear reactor cooling system but no reports of deaths or serious injuries luckily at this hour. this is the same region devastated by the earthquake in 2011 which also led to a tsunami and the original nuclear disaster. >> it did thread the nikkei selling off a little bit earlier in trade but since recovered and focused on the fact that the dollar is higher once again against the yen today. asian trade four. nikkei higher. hong kong up. australia also very strong today led higher by energy and commodity names. if we look at european names, energy and commodity names that's leading the charge which is why the ftse 100 is the highest, best performer. italy bouncing back. so decent set of gains really
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across the world this morning. as for the broader market let's check out the currency market. dollar has been stronger, 13 year high against other major currencies. euro has bean big mover. 1.0645. the move down to parity getting more chatter. dollar/yen backing off a bit but still above 110.73 a big change from where i left it about a week ago. british pound at 1.2475. gold quickly on the flip side of the u.s. dollar which has been weak getting a bit of a boost, up a little more than half a percent. "wall street journal" today leads with small stocks lead the record charge which is a good thing. you mentioned the russell 2000. yesterday it was energy related propelling instead of the banks and industrials. there's a lot of optimism baked
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into this trump economic agenda. >> a broadening out. we got positive equity performance on a day where we saw the dollar soften a little bit and also yields come down. we saw the ten year go back to 10.3. not that traditional post-trump election rally which is a positive thing to look at. things could still go higher without all those factors taking place. >> where do we go from here? has the money been made from the rally? a lot has to go right here and we don't have any concrete timing. we don't have the president-elect as the president yet but does seem to be pretty indicated on what is a group of bullish factors. lower corporate taxes especially if they can repatriate the cash. deregulations. infrastructure spending leading to higher domestic economy. the wild card is what it means for overseas growth. not only on the trade agenda but on what happens with the u.s. dollar. emerging be markets already have
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to be worried about this climb. >> absolutely. the bigger factor is this rise in yields. something back in january and february markets were falling out of bed the fear that central bank support that lifted markets in the last decade won't thereabout. now yields have surged and we're very relaxed about it. we're celebrating that fact. i wonder if there's going a turn around or if we have to see strong economic data come through and if we don't we could see a big pull back. >> we're nearing the end of the year. we typically get a santa claus rally. what happens in january. remember this past january was very weak, totally different scenario. but we're marching in to december with nearly 100% odds of an interest rate hike from the federal reserve and you have a lot of positions being squeezed. once that shakes out and the dust clears, we go into next year that's the question. >> is there a thanksgiving rally? >> not so much. thursday the market is closed and then we have a half day --
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not usually thanksgiving but post-thanksgiving and we'll see what retail spend cigarette like. there's some optimism from macy's and target of the world on holiday spending such an important part 30% to 40% of their total sales in holiday sales. >> one piece of economic data on today's agenda october existing home sales out at 10:00 a.m. eastern. sales are expected to tick up slightly after a 3% jump in september. a number of companies will be reporting. we'll hear from medtronic, campbell soup, hormel foods and hp. >> landon dowdy joins us with three things to how much. good morning. >> reporter: welcome back. hewlett-packard enterprise the service side reporting fourth quarter results after the close. here are the three things to watch. first the numbers. many analysts forecast decent results despite macro economic concerns.
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the street is looking for earnings of 60 cents a share on revenue of $12.8 million. cloud the software service provider is expected to post a rise in revenue thanks to strong demand for its digital and cloud service. hpe benefiting. and to split the business as hp continues to struggle for weak demand. hpe ceo meg whitman has looked to reduce its core businesses. listen for any updates on how the company restructuring is reassuring investors. take a look at the stock. shares of hpe is up about 7% in the past three months. back to you. thank you. in political news now donald trump turning to you tube late yesterday to update the country on his transition plans and
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outlining some key policy lance for his first 100 days in office. that does include withdrawing from the tpp asian trade deal. this video was created and distributed by the president-elect's transition team. it was not an event open to the press. watch. >> on trade i'm going to issue a notification of intent to withdraw from the transpacific partnership. a potential disaster for our country. instead, we will negotiate fair bilateral trade deals that bring jobs and industry back on to american shores. >> we'll have much more on the president-elect's priorities later. trade as a particularly noteworthy one. no one expected the turns pp to come through especially as democrats were opposed. hillary clinton and bernie sanders. but this is going to be item number one which sends a message as president obama, this is his legislation, tpp is traveling overseas to try to reassure
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allies. >> i completely agree. i don't think this is a surprise at all. the more interesting thing is he said to to do this via youtube. i wonder how regular that direct update will be. >> not having press having them produce their own video. >> we'll discuss all of that and implications of that in a bit. palo alto getting slammed. offering weaker than expected current quarter guidance down 12%. jack in the box earnings topping wall street consensus. same store sales grew less than forecast. and boeing named a new chief executive of its commercial airplanes business. kevin mcallister will take the job. >> chinese internet company beating estimates. results were driven in part by continued strength at microblog
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puerto. weibo released results. advertising and marketing revenue rising 48% in the la latest. ibm is trip technology number of cloud data centers it has in the uk. it joins facebook and google anyone vesting in the country after the brexit vote. ibm will build four new data centers. more to come on "worldwide exchange". oil prices continue to climb on expectations for planned opec cut. global market ripple effects straight ahead. don't go anywhere. you're watching "worldwide exchange". 32 years at this place and now
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>> welcome back to "worldwide exchange". good morning to you if you're just getting up. we're expecting another positive open on wall street to the tune of 0.3% or 57 points for the dow slightly better moves for the nasdaq expected. yesterday we had gains once again led by the energy sector. last week wti up 5%, yesterday it was up 4%. that, of course, drove that sector higher. broad rally yesterday ten out of 11 s&p sectors were in positive
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territory. let's look at trade. europe is higher again some of those energy names doing very well. ftse 100 the best performer. asian trade nikkei did open down after news of that earthquake off the coast of fukushima, it has since rallied in particular because the yen is a little bit softer against the dollar today. we have 0.3% gains for the nikkei. hong kong doing well property sector leading the charge there. >> oil prices have been a big part of the stock rally. for geoff cutmore it's following crude. what can we expect? >> reporter: very good morning. what we got going on here is an expert as meeting in vienna right now. they are meant to come up with an agreement about an output cut. there's talk of 32 to 33 million barrels per day, shrinking back to that level of output and that would be positive generally for
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oil prices. and as you can see the speculation as it continues as to whether this deal will to be done, it has driven wti and crude quotes much higher here. but i have to say trying to get these 14 opec nobs agree is a little bit like herding cats at the best of times and over the last hour we've had conflicting reports from different members as to just how the negotiations are going. i have to say nigeria suggesting we could have a deal at the end of the day. iraq and others say a negotiated deal is some way away. i want to remind you it's a kmeeft experts that's meeting in vienna. they will then draw up a deal. that deal will go forward to the november 30th meeting of opec. so even if we appear to have an agreement we will not see that ratified until the november 30th
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meeting. but, hey, the markets are having fun while they can with this story. let me just show you how some of the equity prices are doing on the back of the speculation of a deal to reduce output. as you can see we're seeing all the european trading in the majors higher at this point. back to you. >> geoff, the opec meet cigarette on the agenda. if i may switch focus. how worried are people in london about that december 4th event coming up, of course, in italy? >> reporter: i think they are very worried. clearly at this stage renzi has staked his political future on being able to drive forward these constitutional reforms. if his referendum is voted down by the italian people and renzi's government falls or he falls as prime minister then we're back into a very difficult space for europe politically. i think we could expect more
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pressure on the single currency at this point. and quite frankly a lot of confusion about the european political agenda moving into 2017 because as you know we've got elections in france, we've got elections in germany, and here in continental europe people are increasingly worried that the polls in the wake of brexit and the election of donald trump are not really reflective now of popular sentiment against both reform that brings austerity and, of course, increased immigration or migration from north africa. back to you. >> great stuff. thank you very much. i would just point out on the energy trade looking at the s&p energy sector the companies that trove the rally yesterday worst performing group in 2014 and '15, best performing group of the year so far in 2016. on this big come back. >> december as well was setting
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the tone for the home be the best this year. they had a terrible december. >> last year. we'll see what happens in december and whether they can hold their place. >> still to come the trump transition. the president-elect lays out his first 100 days. >> here's today's national weather forecast from kelly cass. good morning sara and willford. snow is piling up. some places are seeing three feet of snow east of lake ontario. residual snow shower activity but it's dying down today and we're quiet for travellers from boston to new york all the way down into the southeast. watch out in the middle. this is where we have a chance for strong thunderstorms that could turn severe. parts of texas and oklahoma, rain right here in the middle. wintry precipitation along 35 in minnesota. and some snow showers back towards denver and, yes, another system affecting the west coast from seattle all the way down
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towards san francisco. temperatures are going to be pretty mild in texas today all the way into the 70s and still above average and still dry and unfortunately for atlanta with highs near 65. that's a look at your weather. we'll be right back. plan your never tiring retiring retired tires retirement with e*trade. i'm in vests and as a vested investor in vests i invest with e*trade, where investors can investigate and invest in vests... or not in vests. sign up at and get up to six hundred dollars.
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okay then, let's dance. (everybody cheers) yeah baby! welcome back to "worldwide exchange". to politics. nbc's tracie potts joins us from washington with all the latest on donald trump's transition. good morning. >> reporter: good morning. first of all donald trump hasn't had a press conference a back and forth with the media to answer questions since he was
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elected three weeks ago. now his spokeswoman said that's unusual, by the way, for a president who are elected. his spokeswoman said he'll do so soon. she has not said specifically when. we know he's going on break this afternoon for the thanksgiving holiday. she also says he's been working 18 hour days on this transition. vice president-elect mike pence heads to new york today to rejoin the transition team. they are nine hurry to announce more cabinet officials before thanksgiving. >> it could come this week. could come today. but we're not in a rush to publish names just because everybody is looking for the next story. >> reporter: sources tell nbc former new york mayor and trump confidant rudy giuliani is now being considered as director of national intelligence. newt gingrich has confirmed he will continue to advise but will not be part of the president's cabinet. he favors rudy giuliani over mitt romney as secretary of state. >> rudy is a better pick and has
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the right temperament. we really need somebody who is a fighter. >> reporter: in a video released by transition team president-elect trump says his first 100 days will focus on jobs. >> identify asked my transition team to develop a list of executive actions we can take on day one to restore our laws and bring back our jobs. it's about time. >> reporter: he's promising to withdraw from transpacific trade partnership and reduce regulations across the board focusing on energy. so we'll continue to look and see what happens if anything over the next day really, this morning. president-elect trump is still facing questions about conflicts of interest after his d.c. who pell that new one just a few blocks from the white house hosted a big reception for about 100 foreign diplomats. he tweeted only the media is making a big deal of this. his spokeswoman said their attorneys assure them there's no illegal activity going on in terms of any overlap between the
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trump organization and the presidency in this transition. >> i believe the tweet was crooked media. thank you, tracie potts from washington with the latest on transition which i was also glued to on vacation, big news besides the markets. just on that tpp withdrawal on day one we got i did reach out to any key which has bean big proponent of tpp, president obama was there last year, the lives when he was to push the trade agreement. nike, obviously, disappointed, says it has long been committed to free and fair trade and will continue toad voluntary indicate for policies and programs to innovate and expand our by while creating new jobs and driving economic growth. lot of their production, most all of it for sneakers happens in asia getting rid of tariffs would have been a big deal for nike. >> can't come as a big surprise. it's a confirmation. >> but could it thread more renegotiation and back tracking
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on trade deals. >> donald trump has one person in mind to be liaison between washington and london. nigel farage. they would like to see her represent great britain as their ambassador to the united states. he would do a great job. he said he's flattered by trump's suggestion. president-elect getting response from 10 downing street the spokesperson saying there's no vacancy the uk has an excellent ambassador to the u.s. the response in the uk press is pretty severe because it's not his job to pick uk representatives and clearly -- >> not trump's job. >> exactly. someone saying, one of the newspapers in the uk saying he needs to remember he's the president still not on the apprentice hiring and firing. >> can he do anything else? >> he could just say -- clearly the uk ambassadors are a british appointment. listen it's a fair point.
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he's saying i would give farage lots of access and i won't speak to the other person then it puts a lot of pressure. >> one of the first person in the golden elevators to visit. >> absolutely. the other thing in the uk that's getting attraction theresa may's phone call with him was ten minute and been reported pierce morgan had a 15 minute conversation with him this weekend. highlighting he's cherry picking who he wants to give access to. uk press has been on that. this moaning's top stories on what's driving this global stock rally. stay tune. you're watching "worldwide exchange" on cnbc. osts $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?
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global market rally all four main indices soar to record highs for the first time since 1999. crude climbs. oil prices jump in anticipation of an opec cut. driving forces coming up. today's top trending stories including kanye west cancelling his tour. all the stories and much more on tuesday, november 22nd, 2016. you're watching "worldwide exchange" on cnbc. ♪ good morning and welcome back to "worldwide exchange" on cnbc. i'm sara eisen. >> i'm wilfred frost. good morning. >> let's check in on the global
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markets. we're extending that winning streak. a quad factor. it's better than the august 15th trifecta record. russell 2000 as well. first time we've seen all four close at records since 1999. the strength continues this morning. nasdaq futures up 19. dow futures up 45. s&p futures up four. little in the way of economic data. focus is on politics and to some extent on energy prices as well. naerj big part fueling that rally yesterday. for europe a lot of energy commodity producers are helping the strength there as well as the optimism set in the u.s. yesterday. german dax up .6. fans up .7. ftse 100 doing well up almost a full percent. italy up 1%. we're starting to watch the politics here play out. italy, france with that interview myself did yesterday with myself le pen.
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asia quickly let's show you what happened overnight to a reaction to a more than 7 magnitude earthquake in japan fukushima area toledo the underperformance of the nikkei. hong kong up 1.4%. shanghai comp over in china mainland up 1%. >> stronger performance globally at the moment, energy sector as sara said doing very well in the various indices and that's because oil don't gain. we saw 5% of gains for wti last week, 4% for wti yesterday and another 1.4 today. hopes opec will come together at its meeting next week and cut production helped solidify over the last week or so. treasury note we retreated a little bit back below 2.3% in terms of yield. we have seen the yield just a fraction over the last 24 hours
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the short end of the curve did rise a little bit further yesterday so a very slight flattening of the curve but still a markedly higher yield. dollar pries yesterday the dollar softdened but saw equities move higher. a break from the traditional post-trump victory rally. today no real movement from the british pound otherwise the $is flat. gold prices have been soft since trump's election victory. they are higher today bbiy 0.6%. >> october existing home sales is due out at 10:00 a.m. eastern time. it's expected to tick up slightly after a more than 3% jump in the move september. a number of companies reporting results today. watch medtronic, campbell soup
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and hormel foods and then hp and hp enterprise after the closing bell. >> in political news donald trump turning to you tube late yesterday to update his country on his transition and outline some policy plans for his first 100 days in office including withdrawing from the tpp trade deal. joining us to discuss some of the foreign policy implications of a trump administration is marco. let's kick it off with tpp. i suppose it doesn't come as a surprise because we knew from his campaign rhetoric he wasn't a supporter of tpp but he's confirm it. what are the potential ripple effects for global trade? >> by the u.s. taking a more protectionist approach the ripple effects is many allies particularly those in asia, from their perspective is the fact that it leaves a void, a void that can possibly be filled by china as the leader avenue economic integration order within the far east itself. so there's that geopolitical
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element to it. it's not just pure trade there's the geopolitics involved. >> u.s. stepping back allows china to really gather up the smaller nations. >> 12 nations negotiated over a series of years and basically that idea was, including india, japan, these are countries that want to contain china but want to somewhat keep a distance and make sure that there's still a u.s. presence in the region to balance things and by the u.s. not basically being a part of tpp any more that void it's having a ripple effect. if you look at the japanese prime minister shinzo abe who came to new york, met with president-elect trump basically said that without the u.s. tpp is basically ort nothing. >> has no meaning was the exact quote. but trump did say to look at it from an optimistic point of view he would work to negotiate fair trade deals and tpp was considered a nonstarter for both
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parties. there were all sorts of problems when it came to protection for american workers. why wouldn't he negotiate something better. >> bilateral deals. he said we won't look at these multi-lateral deal but focus on bilateral deals and try to get the best possible deal for the united states with each country. what this does basically at the ride front, he's fairly clear where he's heading. his approach to foreign policy is still generally a blank slate but the orientation is heading towards when he says america first it's basically doing somewhat of a raw cost benefit analysis. what benefits us now for this time we will pursue. in term of long term collective globalist views that is more on hold. or even beyond world view. his world view is a world of big power politics led by big power leaders whether it's in asia, europe, latin america, middle east. far more complex world. we're not just look at a change
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in the traditional way that things are being run but actually world views coming in to conflict between different powers which we're living in a world in flux. >> let's talk about what his victory means for europe. has that made the break up of the european union more likely? >> the break up, it elevates the debate in europe which needed to be healed long time ago. if you look at the upcoming referendum in italy you have reaction politics. reaction politics takes place because a lot of time the mainstream parties are disconnected from the grassroots and in particular in addressing grief jans and a sense of complacency and people react. you see that in different parts of europe. you look at france, the center right, the mainstream, who wins the center right in france will be the next president of france. that's still not definite. new center right leader who is emerge as a possible leader of the republican center right is actually calling for a remoch
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mound with russia, taking on certain policy positions which would not be held by mainstream parties. although they may not win out right victories they are affecting the political debate. >> trump allowing dhien fill a vacuum in asia would he allow russia to do the same in europe >> europe and middle east to that also. i think what he's looking for is saying if we're going to be allies, he's saying in public what was traditionally not said is stop of fact he elevated that burden sharing argument, that if you're not paying your fair share we're not going help you. that's his basic argument. i think europeans also have to assume more responsibility. when you have less than a handful of countries in nato actually spending their generally 2% of their budget on defense that's a big problem. he's elevating that to the next level. in terms of russia if we look at the middle east, obama's
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inaction in syria has created a void that russia is filling. what will he do in the middle east? he's not given up on the middle east but in terms of syria he says for the most part -- it's as if there's a victory for russia and the syrian regime. >> it was a 2.5 minute youtube video. the press was not invited. i had team put it out. and besides trade he made some calls for action on immigration, energy, national security and ethics changes. what was surprising as to what was not included in that? obamacare? iran? >> more details on foreign policy. he needs keep it as general as possible. but once again i go back to that foreign policy issue being a blank slate. i think he's working it out. when he talks about iran that teal is an international binding deal. what he can do is strengthen the unilateral u.s. sanctions. the problem that can create
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start partisaning european businesses that want to do business in iran >> you're talking about a lot of winners and losers. who has the most to lose >> it's a question that's fair but something we have to work on a case by case business. he's a blank slate on foreign policy. apart from the trade issue he's still working this all out. the question you're asking he himself has to answer in my opinion. >> marco, great stuff. thank you very much. i guess we'll have to have him back to answer these questions. now to the top trending stories. this is the big one. rapper kanye west is in a los angeles hospital after abruptly cancelling the remaining dafts his currents tour. west was taken in for observation late yesterday. the hospitalization follows a week of controversial statements. west publicly attacked jay-z and beyonce during a concert. told fans if he voted he would have voted for donald trump.
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kanye cancelled sunday night's show in california without any explanation. obviously this makes the cold front "new york post" kanye meltdown. i've been to a few kanye concerts. he always goes on rants during his concerts. that's a hallmark. i guess those who follow him closely said that these rants had gone a little overboard. >> he pulled out a couple of concerts more recently when there was a specific case of his wife being held up at gunpoint. but this was more driven internally. >> and the hospitalization is a factor. >> instagram sri lankan agnew feature letting users send videos and photos that eventually disappear similar to snapchat and see if the recipient takes a shot of the video. when they introduce a story it was a copy of snapchat and this is another one. i get why they are doing it. i do think that's part of the
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reason for the timing of snapchat. they realize they got to get out there. >> they are growing fast. you use the instagram story. >> i've given up on snapchat. >> i'm not there yet. okay. when we come back today's must reads but first check out the european action. green across the screen following in the foot steps of yesterday's fourfecta and the strength continuing today. stay tune you're watching "worldwide exchange" on cnbc. h ? eees. bees? eese. trees? eese. xerox helps hospitals use electronic health records so doctors provide more personalized care. cheese? cheese! xerox healthcare services... ...soon to be conduent. that's it. how was your commute? good. yours? good.
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. welcome back. it's time for our must reads. my pick in the "the washington post," it's by eugene robinson a columnist titled trump isn't draining the watch he's deepening it. i picked it because this seems like this is the guy's strike right now of the press and columnists and observers raising questions about the conflict ever interest between trump's business and the fact that he's going president, he's raising questions about how president-elect trump handle. he wrote he must file an annual disclosure document listing assets and income but is not come foeld release his tax
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returns though recent presidents have done so. there is no law that would keep trump from continuing to run trump organization. this comes down to a question of character for the most part according to you gene robinson and something that he and other members of the press will don't raise to flag even though trump on twitter has fought back saying the media knew i had this major business empire. this is nothing new. we'll see how this plays out and how much pressure it does add to him and whether he'll put it in a trouft his children. >> first i can't believe there aren't rules already or laws to prevent this. given this rhetoric. i want stems us this is an obvious thing to do to get all the eggs in the same basket to move forward and not be blamed for having these conflicts of interest. anyway seems he's slow to retoobt that. my pick in the "financial times," eu to retaliate against u.s. bank capital rules. the european commission will
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unveil sproigs that mirror controversial u.s. intermediate company rules. if adopted the proposal would force banks like goldman sachs and jpmorgan to have additional capital in the eu. the reason i picked it there's been such optimism that we'll have deregulation under trump for the banks here stateside which as i was reporting last week is a little overdone anyway. add to that the possibility of the eu tree lie it aing against some of the more stringent u.s. requirements for european banks and this huge optimism around deregulation suddenly like it could go the other way. i think eu banking rules which we may or may not get tomorrow. >> it feeds into this whole idea of this anti-globalization, protectionist, tit for tat kind of, i don't want to use trade war. trump saying on day one he'll withdraw from tpp sends a clear message and tree lie ages against rules does the same.
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we're approaching the top of the hour so that means team is getting ready for "squawk box". kelly evans joins us. >> good morning. so first we'll talk to edwin and judd gregg to fix the debt. four years ago where does it stand right now with that incoming trump administration. we'll talk to tom warner who is the boston red sox chairman. and then right up your alley we'll talk to the ceo of hormel foods his first interview, tv interview since becoming ceo. i didn't know they own muscle milk. >> they've been getting into anything with high protein. what is muscle milk? >> i'm glad you don't know. but it's one of these things like all whey protein. i don't know. for athletes. >> it's cheating.
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>> they say peanut butter is cheating. >> maybe you should try it. you won knit to your suits you'll get too buffed. >> i don't know about that. >> hormel is an amazing stock. should be a good interview. >> they have been swept up in the whole consumer staple craze. a lot to talk about. >> we look forward to more. "squawk box" is in 11 minutes. still to come more insights on the economies. we head to the end of the year. stay tuned, willem buiter joins us next. i have access to the oil markets and gold markets. okay. i'm plugged into equities- trade confirmed- and i have global access 24/7. meaning i can do what i need to do, then i can focus on what i want to do. visit to see what adding futures can do for you.
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>> good morning. >> we've seen this tremendous run up in stocks record highs including the small caps yesterday and it looks strong again this morning. do you see these moves as justified when it comes to the u.s. economic outlook under
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president trump? >> slightly euphoric. the anticipation of a tax stimulus implemented around 2018 and the anticipation of early deregulation, fossil fuel sector, financial sector, pharmaceuticals and others are clearly good for profits, especially for tax cuts that are anticipated taking the form of corporate tax cuts that it's not completely great. >> why are we so relaxed not so much just about the stronger dollar but about the higher interest rates and higher yields because these were factors in the last five or six years whenever we saw a flirtation with higher yields or higher dollar we saw equities fallout of bed. >> there's good news high interest rates and bad news high interest rates. and these high interest rates are mainly the anticipation of future fiscal stimulus that
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brings up loan rates and strengthens the currency. those are mitigating responses to an expansionary shock. so there's no surprise about that. i think what surprises me is that the markets fail to price in the medium and long term effect of continued protectionism that is likely to be a hallmark of the trump administration, the withdrawal or rejection of tpp, the nonstarter of ttip and likely the attack on nafta. all of that is bad news. the market sometime in the future is ignoring it, not unusual but somewhat worrying. >> ttip declared negotiation between the u.s. and europe on
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trade. >> right. >> what's going to be the upshot of this. is this that the u.s. domestic economy and market is strong while the rest of the world hurts? how do you expect us all manifest next we're in the markets and global economy? >> remember, the fiscal stimulus in the u.s. to the extent itsunori onodei it boosts demand in the u.s. will be helpful to the rest of the world especially it will be accompanied by strengthening of the dollar. there's no across the board external damage there. a number of emerging markets especially fragile ones will be hit by higher long yields and anticipation of future increases in the federal funds. but i think only a minority of emerging markets will be
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affected by that. there's negative effect on the u.s. from this withdrawal from globalization in the u.s. and in europe that's continuing and tpp is an example of that and also, of course, the likely position of tight immigration controls there will be negative for the u.s. economy. >> i have to ask you about political risk in europe at the moment. how severe it is and which country particularly are you focused on? >> well i think it's extremely severe. we have a material risk, not a central scenario but a material risk that there would be further unraveling of the european union after the british brexit and the first, the greatest risk is the naerm risk in italy. they have a referendum nothing to do with the eu in and of itself but tied up with the survival of the government of
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premier renzi and that's on the 4th of december, day before saint nicholas and then of course the french inaction where if marie le pen were to be the next president, again a material risk could be referendum on france leaving the eu. either italy or france leaving the eu would be the end of the eu. >> pretty dire. i think citigroup has a forecast of euro/dollar going below parity by next year, is that right? >> well, i think there's certainly a possibility. remember, exchange rates is like predicting your cat's behavior. it's almost point. but, yes, there's no doubt that significant weakening of the euro in the face of this massive political uncertainty, athletics
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in italy, france, germany -- >> we have to jump in there. thank you so much for joining us. willem buiter from citi. thank you for joining us. "squawk box" is next.
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>> good morning. the rally cats are ready but do these cats say make america great. dow, nasdaq, russell 2000 and s&p 400 mid cap hitting all time highs. energized market oil prices jumping ahead of a key opec meeting later this month. trump transition. the president-elect promises to withdraw from a 12 nation trade deal. you know it as tpp on his first day in office. it's tuesday, november 22, 2016 and "squawk box" begins right
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now. ♪ . >> announcer: live from new york where business never sleeps this is "squawk box". good morning and welcome to "squawk box" here on cnbc. i'm kelly evans along with joe kernen and mike santoli. let's look at equity futures after this record breaking session we had yesterday. the dow poised to open higher another 37 points. 17 higher for the nasdaq. s&p implied to open three points hire. just can't stop these moves, i guess. let's check out interest rates. ten year note they are a little below 2.3%. a level we'll keep an eye on. >> oil prices building on yesterday's gains. we have that opec meeting coming november 30th. a little bit of a hint and expectations that maybe there will be discipline on supply. brent crude ochgapproaching $50


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