Skip to main content

tv   Worldwide Exchange  CNBC  November 30, 2016 5:00am-6:01am EST

5:00 am
good morning. oil shock. crude prices spiking as opec's secretary-general promises a supply deal today. a live report from vienna coming up. the trump transtransition. the president-elect adding to his cabinet picks. and the post-election rally. stocks ready to close out the month with big gains. we'll round up the biggest winners and losers. it's wednesday, november 30, 2016. "worldwide exchange" begins right now. ♪
5:01 am
good morning. welcome to "worldwide exchange." i'm sara eisen. >> i'm wilfred frost. good morning to you from me as well. >> let's check in on the global markets on this final trading day of the month. what a month it's been. a strong one for stocks. the dow jones outperforming the s&p, up more than 5% for the month. futures indicating a higher open. dow futures up 22. oil has a lot to do with that, i would say. s&p futures up 2. nasdaq up 1 1/2. yesterday the close was stronger, but just barely. a mini rally, not a full recovery from what we saw the day before. the russell ended yesterday lower. it has been the outperformer so far for the month. as for the price of oil, just mentioned some strength. we'll get to vienna in a moment. it's been an action-packed morning there. some comments, positive ones from key members like saudi and iran helping to lift crude
5:02 am
prices. wpi surging 5%. brent pore than 5%, 48.91. wti, 47. this after a selloff yesterday left wti below $46 a barrel. i put this 5% gain, the optimism around it we were down about 4% yesterday. we'll get out to steve sedgwick in about five, ten minutes. he's spoke ton an to all the ke players. i would say the iranian oil minister was less optimistic than the saudi oil minister. >> but both talking about a deal. >> the german index 0.2%. ftse 100, up 0.2%. banks moving around there. rbi down 2%, 3% after it failed the stress test and feeded nee raise capital. most of those results coming in line with expectations apart from rbs.
5:03 am
as you can see, italy outperforming today up 0.7%. asian trade. the mainland china market a bit weak. the chinese yuan is down 1% over the last week or so. so there is talk of possible pboc intervention at some point. shanghai comp down 1% today. >> the ten-year treasury note yield, some selling in treasuries pushing yields higher again. 2.32 is where we are on the ten-year. got that 3.2% growth for the third quarter. how does that bode for the current quarter? looks like yields are stronger. the dollar has been stronger all month long. doll dollar/yen has been a big mover, above 1.13. a stronger dollar, a weaker yen.
5:04 am
as for the euro, it's weaker. dollar strength there as well. just back above 1.06. the pound also sort of flattish, 1.2485. gold suffered heavily this month on the back of that stronger u.s. dollar. worst month in years for gold. it's weaker again by a quarter percentage point. 1,118.30. the dow this month up 5.4%. s&p up 3.7. nasdaq 3.7. the russell 2000 up 11.5%. that's been the story of the month as has been a stronger dollar and rising yields. you would say the last week or so has seen the momentum of those moves come off a bit. also some sector rotation. banks come back after a strong run. clearly huge gains. the election has been a positive
5:05 am
factor for risk assets. but we are just in momentum. >> there's two schools of thought as we interview strategists, investors, on whether the trump rally, as it's called, can continue, and whether it has momentum. the first is there's too much built on hope here, hope of a ro rollback in dodd-frank, boost in fiscal spending that will boost inflation and growth. hope of lower corporate tax rates, hope of lower personal tax rates, we don't have a time frame on that policy, a map on whether it will look like and whether there is congressional support for it. there are those who are skeptical and also those who are saying we're coming off an economy already building momentum back. we got that in the gdp and consumer confidence anybodies.
5:06 am
th numbers. but this could be sustainability. stan druckenmiller was saying yields could shoot up, the dollar could shoot up, and you could be talking about a stronger u.s. economy. >> the banks rally because the yield curve moved, that's what they've been waiting for. some areas like that that's understandable. whether we see a rally, for me, comes down whether the rise in yields is for the right reason, growth and inflation is coming, or the wrong reasons, spending is inefficient and central banks will not be able to keep rates low artificially. we had a big rally in a short time. i wonder if we had too much of a rally. >> also end of year, which tends to be bullish. we'll have to see when the clock resets in january, especially after inauguration and we see what we will get out of this trump administration, where the sentiment is. watching the banks and industrials. now to politics and the
5:07 am
intersection here with business. wall street watching today president-elect donald trump expected to announce two key cabinet positions. treasury secretary and commerce secretary. john harwood is at trump tower early this morning in midtown manhattan with more. we've been waiting for these two for a while. >> that's right. and you guys were talking about positive economic news. it's clearly a big day for donald trump and his economic team on two different fronts, personnel is only one of them. as you said on treasury, as expected, donald trump later this morning it going to announce that steven mnuchin, former goldman sachs partner who headed up fund raising operations during the campaign will be treasury secretary. he joined the trump campaign in april. had done some business with trump, he had contributed to democrats in the past, that sort of thing, but he will be the
5:08 am
treasury secretary. and wilbur ross, the billionaire investor, someone familiar to viewers of our network will be the commerce secretary. both of these men are billionaires. they both have connections to donald trump, mnuchin through business deals. wilbur ross is a neighbor of donald trump, has a mansion near the estate of trump. and donald trump has persuaded carrier not to move operations to mexico. donald trump said his economic policies, lower regulation, lower taxes on the corporate side would be good for carrier,
5:09 am
so they decided to stay, also taxpayer incentives that the state of indiana governed by mike pence still, are giving to carrier, over long run a free market economy can't buy its way into keeping jobs that are less efficient to keep them in the united states. nevertheless, this is good news symbolically for donald trump, good news for the 1,000 workers whose jobs will be preserved in indiana. so the trump team will be celebrating today. >> let's talk about these appointments. he could have picked two people for these roles who are on one level more pro-trump and on another level more pro wall street? will this see a lot of people applaud in the investment community? >> it's certainly going to make the investment community and wall street happy. people who they know well who they get with for years. the question is whether or not it will make the populist supporters, those blue collar
5:10 am
voters who backed donald trump, whether they will see it as somebody who is on their side. wilbur ross gained reputation as the term vulture investor buying distressed companies. that involves austerity moves, cutting jocks to make them more profitable. donald trump is a billionaire himself. he is someone who managed to persuade those workers that he's on their side. by coupling this carrier news with the economic personnel appointments, i'd say he pulled something off here. >> it was stunning to see the coo and president of goldman sachs, gary cohn in trump tower yesterday, right before the election there was a goldman sachs bashing commercial for trump. steve mnuchin ex-goldman sachs. the fact that trump as a candidate may be different than
5:11 am
trump as candidate may be an encouraging sign to those on wall street and a lot of the establishment. >> that is true, sara. even as a candidate, donald trump was proposing policies that were good for wall street. he was talking about big tax cuts that are tilted towards people at the top of the income scale, talking about reducing regulation, getting rid of dodd-frank, getting rid of obama caring all things that many in business complained about. so the policies were friendly that. he coupled that with persuading blue collar workers that he was on their side. if he can sustain that, that is something that will serve him well. the question will be when he gets around to implementing those policies, do those workers, beyond the 1,000 who were saved for carrier, do they see him as doing things to
5:12 am
benefit him. >> he was seen having dinner last night with mitt romney. how important is it that he might get someone who may challenge him a bit? >> and how many courses did they eat? >> as usual, the pool was able to track them down last night. i think it is a decision that we simply don't know how it's going to come out. mitt romney is somebody who would be symbolically a gesture towards the whole team of rivals idea, just as hillary clinton was to barack obama in 2008. he is somebody who bitterly criticized donald trump during the campaign. you have aggressive factions within the trump transition pressing for rudy giuliani, pressing for david petraeus, bob corker was here yesterday, when he came out, bob corker is the chairman of the senate foreign
5:13 am
relations committee. he came out and said it's very important for the president-elect to have a secretary of state with whom he has no daylight between them. that's not a prescription for mitt romney, but it's donald trump's decision. don't expect to get it today. but we're watching. >> absolutely. romney's statement praising the president-elect was certainly different than what we heard from the campaign. thank you. >> quite different. >> quite different. a programming note here. do not miss a first on cnbc interview with the man of the day, steve mnuchin and wilbur ross. that's happening at 7:00 a.m. on "squawk box." certainly one not to miss. >> outstanding stuff. the other big story this morning is the opec meeting. steve sedgwick joins us live from vienna with the latest on that. oil prices up about 5% today.
5:14 am
steve? >> thank you very much. it's quite an extraordinary last hour here. a lot of the pessimism of the last 24 hours, 48 hours has dissipated. there seems to be an air of confidence among the ministers that something is happening. the kingpin of opec is the saudi oil minister. we caught a few minutes with him and he sounded optimistioptimis. >> i hope that we will have a deal, but we will not know until the end of the meeting. >> what are the major sticking points to a deal, sir? >> the sticking point has been and continues to be that each and every country will have to
5:15 am
agree to the principles that production can strengthen agreement bringing us close or at the 32.5 that was adopted in algiers. it will have to be distributed transparently equally, a mechanism to monitor to insure full compliance, and then to ensure that non-opec will join in with substantial amount of cut that will add to what opec is offering, the 32.5, it's going to be above 1.2 million. close to 1.4 based on the latest production volumes. hoping for 600,000 from non-opec. that will be substantial volume that i think will bring health back into the market. >> contributions from elsewhere, not just from the gcc or saudi arabia, but also perhaps a freezing from iran as well, which is one of the big sticking points before this meeting. if they can get 600,000 barrels from nonopec, that's a substantial amount of oil to come off the table and aid in the rebalancing. these are still big questions about who will do it, over what time frame and from what levels they are taking cuts from. many estimates are that from
5:16 am
november, production even ramped to 34 million barrels a day to 35 million barrels, to get down to 32.5 million, that's a long stretch. i spoke to bijan zangeneh, the iranian oil minister, he seemed to think there was a lot of details still to be worked out. and where exactly the presanctions level was remains to be seen. it's a contentious issue where you take your benchmark. they also talked about russia, russia not just freezing, that's what russia talked about previously, but actually cutting in production. lots of details still to be worked out. the market likes it at the moment. >> steve, great stuff. we have to leave it there. great coverage. >> we'll let you chase down
5:17 am
those opec ministers, nobody does it like you. >> excellent training on the rugby fields for that meeting. moving on, bank of england revealing the latest results of its stress tests. three banks failed, royal bank of scotland is the biggest loser. it failed the test and also required to raise more capital. plans for which have already been submitted and accepted. barclays and standard chartered also failed to meet some requirements. the share price, barclays and standard chartered not moving too much to the down side. overall the bank of england's mark carney said the bank of england is in good shape and could keep lending even in a situation of economic turmoil. these tests were submitted in
5:18 am
march. they don't contain the brexit vote in june. here's mark carney. >> overall eu membership has increased the economy, facilitated dinavism, but also created challenges. >> looking forward, the november adp report is out at 8:15 eastern. read on private sector jobs. followed by october personal income and spending numbers at 8:30. then at 9:45, chicago pmi. at 10:00, october pending home sales. this afternoon, the fed will release its monthly beige book report at 2:00 p.m. eastern. always a good read for some color around the fed driktds. a trio of fed officials are speaking today, powell, mester
5:19 am
and ckaplan. don't mi coming up, oil prices spike as the secretary-general hints a deal will be reached today. thank you for calling. we'll be with you shortly. yeah right... xerox predictive analytics help companies provide a better and faster customer experience. hello mr. kent. can i rebook your flight? i'm here! xerox customer care services... ...soon to be conduent. wait i'm here! mr. kent?
5:20 am
(gasp) shark diving! xerox personalized employee portals help companies make benefits simple and accessible... from anywhere. hula dancing? cliff jumping! xerox human resource services... ...soon to be conduent.
5:21 am
generosity is its oyou can handle being a mom for half an hour. i'm in all the way. is that understood? i don't know what she's up to, but it's not good. can't the world be my noodles and butter? get your mind out of the gutter. mornings are for coffee and contemplation. that was a really profound observation. you got a mean case of the detox blues. don't start a war you know you're going to lose. finally you can now find all of netflix in the same place as all your other entertainment. on xfinity x1. welcome back. oil prices are spiking as the secretary-general is promising
5:22 am
perhaps a deal today. charles, good morning to you. it seems a deal is potentially on the cards today. not totally confirmed. what's your latest reading of the headlines that have come out of the meeting? >> we're not surprised. we feel this is really last chance saloon if you'd like for opec to reaffirm cohesion and credibility. this deal is needed as much for opec's credibility going forward as anything else. we still have to understand the mechanisms. that's the crucial sticking point for previous meetings, where they have fallen apart at the last minute. it's not a done deal. >> given those high stakes you laid out, more than just a short-term move on wti, what are the implications if they don't reach a deal? >> if a deal is not reached,
5:23 am
we'll have further softness in the markets and we will continue to see under investment. we lost a trillion dollars of investment in this down cycle. that will have severe implications for future cycles. we need to pick up the rate of investment if we're going to stop oil prices from spiking during that time frame. very important we get the right signals out of this opec meeting. >> we all obsess in and around an opec meeting about oil supply, but also talk about demand picking up next year. what's your view on that and with it your expectations for where oil prices go into next yea year. >> of course it doesn't help with the weather you have in new york today. luckily it's a bit frosty here, mr. frost, in london.
5:24 am
we do see the opportunity for oil markets that are tighter than most people anticipate at the moment. as we go forward into next year, we should see the markets inventories starting to draw, very significantly. if you look at the data, oecd crude inventories have been drawing since may. this is a market, if you start to take 1 million barrels, 1.5 million barrels off the market, you will see 2.5 million barrels of inventory disappearing fast. sentiment rebounding and investment rebounding, which is needed. we shouldn't be frightened about the oil prices going up and shale investment kicking off. excitement for us is about this cycle hopefully not getting
5:25 am
overcapitalized like the last cycle. so less and slower access to capital should ensure that cost structures and margins are much better so we don't get what we saw from the oil companies last cycle, where margins were frittered away by overinvestment. >> charles, great stuff. charles wahl. coming up on the show, ford's ceo, mark fields, speaking out on president-elect donald trump, tariffs and trade. we'll hear from him next.
5:26 am
5:27 am
5:28 am
coming up, the top stories, including a spike in oil prices happening right now. you're watching "worldwide exchange" on cnbc.
5:29 am
5:30 am
good morning. global market alert. oil prices spike as opec's secretary-general promises a supply deal today. the president-elect expected
5:31 am
to make his picks for treasury and commerce this morning. all the details straight ahead. plus fandango crashes. we'll tell you what movie has so many people flooding the website. it's wednesday, november 30, 2016, you're watching "worldwide exchange" on cnbc. ♪ good morning. welcome back to "worldwide exchange" on cnbc on a busy when morning. i'm sara eisen. >> i'm wilfred frost. >> last trading day of the month of november. let's check in on the global markets. we have a lot of economic data, fed speak on the docket today as well as this potential announcement from this formal meeting of opec ministers. dow futures up 33 points, s&p futures up 4, nasdaq futures up 6. for a month as a whole fshg the
5:32 am
dow dow is up the most, 5.4%. so far this month, the s&p 500 is up about 3.7%. and the nasdaq so far this month is up about 3.7%. there is the russell 2000, small caps making a move higher by 11.5% for the month of november. a lot of that is pinned on the optimistic outlook of the domestic economy as a result of the rwin by donald trump. oil prices are higher. could be a big factor in today's trade. wti and brent more than that on word of a potential deal. getting all sorts of comments from iran, saudi arabia, two key oil players. nothing yet in terms of an announcement. wti up 6%. brent just above 49.55.
5:33 am
really another leg higher in the last ten minutes or so. up almost 7% on brent. putting this in perspective to the declines, 4% down yesterday. so, it is -- the pessimism over the last day or two steve s sedgwick reporting earlier, still pessimistic. >> we're back to the trump trade, buying buying commodities, buying the dollar. we'll get the adp report on the private sector jobs later this morning. slight gains yesterday on the equity markets. up about 0.2% for germany, more for the ftse 1 00. the banks are the big movers there. for the most part uk banks
5:34 am
passed the stress test but three did fail, including rbs who need to raise more capital. asian trade, a bit of weakness, shanghai market down 1%. lots of focus on the currency there. not panic but focus. it moved significantly in the last week or so. talk of possible pboc intervention there. the dollar, which was soft yesterday, the broad index down 0.35%%, up today. >> the biggest jump for the dollar against the japanese yen in terms of a monthly move since december of 2009. >> the dollar has been one of the big winners against all currencies over the course of november. let's look at gold which has been a big loser because of the
5:35 am
dollar strength. we've seen gold just decline a bit further, $1,189 for gold. >> the labor market is front and center this week. landon dowdy has three things to watch in the adp employment report. >> reporter: good morning. we look at private sector hiring with the adp data out at 8:15 a.m. eastern. here's what you want to watch in the report. first, the numbers. the private sector is expected to have added 170,000 jobs in november versus the disappointing 147 thoishgs a,00 the previous month. this sector has a big loss in construction and manufacturing jobs in october's report, economist also want to see if there's improvement in those areas and if they get a bump on trump's plan to spend on u.s. infrastructure. and watch to see if the trade,
5:36 am
financial, utilities can continue their upward trend. adp is not always a reliable indicator for non-farm payrolls, but which should provide some clues for friday's jobs report. back over to you. >> it will be a busy two days, thank you. now to politics and the trump transition. this morning the president-elect is expected to announce goldman sachs alum steven mnuchin as his secretary nominee, and wilbur ross is the pick for commerce secretary. mitt romney said he had a wonderful dinner with president-elect donald trump last night. he met with trump, dined with him and reince priebus. romney said they had an
5:37 am
enlightening discussion and he has been impressed with mr. trump's transition efforts. >> what i've seen through these discussions with president-elect trump as well as the speech the night of his victory and the people he selected as part of his transition, all of those things combined give me increasing hope that president-elect trump is the very man who can lead us to that better future. >> mitt romney after his dinner with reince and president-elect trump singing a different tune than what we heard on the campaign trail. so far the picks on trump's cabinet have been those who were loyal to him, mnuchin and ross were loyal to him, backing trump from an economic perspective. romney would be a departure from that, an interesting one, one investors would be happy to see. >> would the international
5:38 am
community. it's an important pick in terms of secretary state. it's the main face of the country aside from the president around the world. it would be a big single appointment that could offset some others in terms of not being a trip oloyalist. >> another trip out to a restaurant. >> they went to john george. >> that a good one? >> very fancy. >> stick with cnbc, on a programming note, both steve mnuchin and wilbur ross will be live on "squawk box" at 7:00 a.m. eastern time. must-watch viewing. also other news on the political front, trump's incoming administration and united technologies have reached a deal with carrier to keep 1,000 jobs in the u.s.
5:39 am
united technologies had planned to move the production facility to mexico until a deal was reached by vice president-elect mike pence. >> it is a big signal and a big win for president-elect donald trump. it's something that he is making good on. his campaign rom miss to keep jobs here, especially carrier which he called out a number of times. what corporations will be watching is what went into the deal, how were they incentivized to stay in indiana, and whether other companies can get a sweet deal like that. >> john harwood pointed out this comes on the day where he's appointed two more trump loyalists, and this offsets that a bit, it helps some of his core supporters who may have been disappointed by this ral street
5:40 am
nature of t wall street sector of the nominees. >> the fed and president-elect donald trump, fields has warned that trump's response to add a 35% tariff on car imports from places like china would have an impact on the u.s. economy. earlier fields was asked whether he thinks trump is listening to his concerns. >> as president-elect he is licensing. he made it a point he wants to bring the country together, unite them. we agree with that. we want to be part of economic development, support that and job growth in the u.s. as a company, our commitment to our investment in the u.s. and creating u.s. jobs has never been stronger. >> earlier this month, ford told trump it would keep production of a lincoln suv plant in kentucky even though it never considered moving the whole factory to mexico as trump said during the campaign. >> alo lot of focus on companie
5:41 am
keeping jobs, bringing jobs into the u.s. >> we'll have to see what the concessions are. how widely spread with those be given and how expensive will they be to keep the jobs here. to today's top trending stories. hillary clinton making a surprise appearance at the unicef kn unicef snowflake ball last night. she recognized katy perry for her years of work working with unicef. katy perry was a passionate supporter of hillary clinton during the campaign. this is hillary clinton's second public appearance since the election. iphones may be more water proof than you think. an iphone 4 reportedly survived under water for an entire year. the owner went ice fishing in pennsylvania back in 2014. his phone slipped in the hole
5:42 am
that was drilled in the ice. a month later, the lake was drained, and the phone found. the phone was put in a bag of rice, and it still worked. >> if you're wondering what case the phone was in, it was in an otter box. >> extraordinary stuff there. >> that is ridiculous. apple should use that as an ad about the -- >> i'm sure they will. we have just done it for them. fandango, the website for movies exploded this week thanks to fans of the new "star wars" movie, rogue 1. they crashed on monday due to high demand for presale tickets. hundreds of thousands of tickets sold in minutes for those wanting to see rogue one. rogue one created a wait room
5:43 am
and sending out a tweet. due to an overwhelming amount of traffic, a wait room has been activated. get rogue one tickets soon, you will it said. >> still a lot of demand. >> sloan i went to see at the weekend. >> that's sacrilegious to say her here. >> what? >> not a "star wars" fans. >> don't dislike it. more star trek. >> no, not really. >> i am. >> before behewe head to break, price prices moving up. we'll watch for headlines for you out of vienna where opec oil ministers are meeting.
5:44 am
5:45 am
5:46 am
welcome back. time for our must reads. the stories catching our attention. my pick is from the financial times. former u.s. ambassador to the republic of south korea and also the former head of presidential personnel for barack obama, donald gipps writing an opinion piece entitled advice for a presidential move to the white house. not really criticism here, just sound, solid advice as we continue to report and watch the cabinet picks that donald trump is making for when he enters the
5:47 am
white house. it's a reminder that there are more staffing decisions that need to be made. here's a good quote. more than 4,000 white house and executive branch positions need to be filled including 1,000 that require senate confirmation, which means that picking ant appointee is merely the first stage and triggers the federal bureau of investigations security clearance, vetting, and the review by the office of government ethics to avoid financial conflicts. there it is. this idea that the fbi will find everything. not only do they have to pick good strategic choices but vet them carefully. it suggests that this all feeds to happen quicker. when you are in the white house, you want to hit the ground running, especially donald trump who has an ambitious policy. >> mine comes from the times in the uk. and it's a good timing to have
5:48 am
this. very strong argument for free trade on the day, of course, people like wilbur ross are appointed as commerce secretary. the title is we're heading for a trade war and we'll all lose. it goes through a number of arguments for why the argument against free trade is wrong. it says it forgets people who make goods also buy them. it ignores the fact that products are dependent on each other. it ignores the fact that competition provided by trade pushes up productivity, and it suggests it is wrong creating a mid the class in asia is bad for middle america but also said it is wrong that free trade is replacing high paid jobs with low paid ones.
5:49 am
it's an article that i will keep filed away. >> the president-elect said he is for free trade, just fair trade. we will hear more about this as this results in economic policy. we're approaching the top of the hour, so the team is getting ready for "squawk box." andrew ross sorkin has a look at what's coming up. the interview of the day you have coming up. >> we have other great guests, aryianna huffington will be wit us, but the main event, speaking with steve mnuchin, new treasury secretary for the first time and wilbur ross. we'll talk to them together. lots of questions for both gentlemen about their plans, about donald trump, about the new administration and what this all means. that's what we have. don't miss it. i don't want to miss it.
5:50 am
nothing else to say. >> it will be fantastic. great opportunity. wh >> what do you want to know? >> on the trade question, wilbur ross has been on with you many times, critical of some of the us trade dea u.s. trade deals, how far will president-elect push back on nafta. >> i'm confused as to where they want to go with that, extraordinary stuff. 7:00 a.m. >> see you in a bit. still to come, futures pointing to gains for stocks at the open. we'll get more thoughts from darrell cronk. he's up next.
5:51 am
which allergy? 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. xerox real time analytics make transit systems run more smoothly... and morning chitchat... less interesting. xerox transportation services... ...soon to be conduent.
5:52 am
welcome back to "worldwide exchange." futures indicating a strong start to the trading day, the
5:53 am
last trading day for the month of november which has been strong. the dow and russell 2000 outperforming others. with us is darrell cronk. as we all debate whether this rally post-election has legs and momentum into the end of the year, next year, what sort of indicators are you watching to see whether it can continue? >> what's important is on this big rally a lot has been given to the results of the election. if you get behind the economic data, durable goods have been stronger, business spending has been stronger. stronger retail sales. as you think about the business economic data and the consumer economic data, they are both picking up nicely into this quarter, which i think is important to sustain the rally through december. >> how significant a pick up in the fundamentals particularly
5:54 am
growth and inflation do we need to see for the rise in yields that we've seen, not to be a problem? at the moment everyone is celebrating the rise in yields. six months ago we would have been bemoaning it. >> it's a great point. where we were back in the summer, say around 130, 150 ten-year treasury yield, i don't think was realistic and sustainabilisustai sustainab sustainable. you normalized where we started the year in 2016, 2% on the ten-year, 3% on the 30-year. if you get the rates to rise another 20, 30 basis points, the market could be concerned about how quick and fast those yields rise. inflation data would have to help push it along. >> we're not quite as correlated to oil as we were earlier this year, but seeing a nice 6% jump in wti.
5:55 am
some optimism of a deal out of vienna for opec ministers today, but no deal yet. we'll watch that. how important is oil prices? support of oil prices for the stock rally continuing? >> actually, as you think about vienna today, i think no deal would be bearish to oil prices. if you get that 500,000, 700,000 barrels, i would call that neutral to positive. anything upwards of 1 million would be bullish. that's what they're anticipating this morning. we just need oil to stablize in the 45, $50 range. we don't need it or want it to go higher we also don't want it to go lower. for the stock market, what's important, this quarter will see the year over year comps or comparables on energy earnings fall off. that will be a big boost to earnings for q4 and q1. >> what are the outstanding wild card fears you have for the market as we sit at these highs.
5:56 am
last year china popped up. that affected u.s. markets what are the big fears out there? >> if you think about what keeps me up at night, number one would be probably if we do see the new incoming administration turn inward on trade policies, really push a hard line immigration stance, both of those would not be received well from the markets. more importantly is, as i think about inflation, i think about three components of inflation, asset price inflation, which we got. wage inflation, which is coming, we will see the pce this morning. and ten price inflation ultimately which has yet to come. if all three of those move higher, that will bring the fed's agenda forward on tightening. >> we'll leave it there, thank you. darrell cronk of wells fargo investment institute. the interview of the morning, steven mnuchin and wilbur ross on some of these questions that darrell and investors have that we can expect from the next
5:57 am
administration. >> that's the main thing to watch today at 7:00 a.m. also steve sedgwick from vienna bringing you updates from the opec oil meeting. "squawk box" is next. generosity is its own form of power.
5:58 am
you can handle being a mom for half an hour. i'm in all the way. is that understood? i don't know what she's up to, but it's not good. can't the world be my noodles and butter? get your mind out of the gutter. mornings are for coffee and contemplation. that was a really profound observation. you got a mean case of the detox blues. don't start a war you know you're going to lose. finally you can now find all of netflix in the same place as all your other entertainment. on xfinity x1.
5:59 am
two key picks for trump's cabinet. the president-elect expected to name steven mnuchin as treasury secretary, and wilbur ross is said to get the nomination for commerce secretary. both men will join us on set at 7:00 a.m. eastern. and it's a busy day for the markets. crude rebounding bigley from yesterday's selloff. and a key read on jobs with
6:00 am
the adp this morning, wednesday, november 30th, a very busy wednesday morning, andrew "squawk box" begins right now. ♪ live from new york where business never sleeps, this is "squawk box." >> we have a busy wednesday morning. good morning. welcome to "squawk box." i'm andrew ross sorkin along with joe kernen, michelle caruso-cabrera is hanging out with us today. check out the returns so far. the trump rally. the dow up 5.4%. the s&p higher by 3.7%. the nasdaq gaining 3.7%. the russell 2000 up 11.5%. >> it will be more pronounced if you go from election day. >>

15 Views

info Stream Only

Uploaded by TV Archive on