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tv   Worldwide Exchange  CNBC  January 6, 2017 5:00am-6:01am EST

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good morning. it's jobs friday. the final u.s. jobs report before president-elect trump takes office. expectations and market implications straight ahead. breaking overnight, china's central bank guides the currency higher. fastest pace since 2005. we'll tell you why that matters coming up. and toyota the latest company to face the ire of the president-elect on twitter. now this morning the automaker's home country of japan is responding. we'll have those details. it's friday, january 6, 2017. "worldwide exchange" begins now.
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♪ >> good morning. welcome to "worldwide exchange." happy friday. happy jobs day. i'm sara eisen. >> cheers to the weekend. is that what this songs said? >> it's not the hands up for the weekend, but the same theme. >> it's friday. thank the good lord. >> and you're wilfred frost. and a very good morning to you. >> i was going to come to that. >> okay. >> i am wilfred frost, by the way. good morning to you all. let's get to the markets, check in with what's happening this morning. yesterday a bit of a roller coaster session. we ended up with the nasdaq up 0.2%. continuing its relative outperformance from other indices so far this year. the s&p 500 was bang on flat. the dow was down abot one point. we expect another slight negative open today. the dow down 22 points.
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nasdaq down 2. s&p down 1. in terms of stock and sector performance, it was the outperformers of the last two, three months that did suffer yesterday. some profit taking. we saw a big pull back in yields. hit a low of 2.34%. so, significantly now down, right to the edge of that chart from the highs of 2.64 a few weeks ago. the two-year hit a low of 1.16. all of that meant that the dollar had a tough day. >> it was back to the weak dollar, low yields, f.a.n.g. stocks back in vogue. apple sort of breaking out. is that going to be the trend? was it just a minor pullback to what has been a dominant trump rally? in asia overnight, china's central bank guiding the yuan stronger against the dollar again. fastest pace in a decade. the peoples bank of china has
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been trying to support the currency amid concerns of capital outflows. there's the chart of the chinese yuan this has people all over the world alarmed at the scale and scope of what must be happening in terms of the outflows and how china has moved so briskly and sharply to plug the hole of the capital outflows, and whether this is a stop-gap measure and signals something deeper is wrong, or whether this is just a correction of what we've seen over the past 12 months, a 7% decline in the currency. >> the highs were hit overnight. the reason we're seeing that chart, the dollar is stronger today and the yuan is weaker it has come off the lows or the highs it did see. 3% move in a space of three days, offsetting the move we saw last year, which was the big surprise this week. most commentators saying this is temporary. the attempts to stem the capital outflows is like putting your finger in the hole of a leaking
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ship. you can stop it for a bit, but this is not fixing the ship altogether. the yuan for the course of the year, the forecast is for it to weaken. >> especially if the trade rhetoric heats up. bank of america merrill lynch expects the trump administration to label china a currency manipulator, whether justified or not. they say that's an easy target and will launch broader trade war tensions. all the indications are things are moving in that direction. we'll watch that. >> asian trade, i have to say for the week as a whole and today is relatively negative. >> the data has been okay. >> in japan today, slightly disappointing in terms of wages, but nothing too significant. out of europe, german industrial orders fell more than expected in november, but orders surged in the prior month. german retail sales rose by 1.8%
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and 2.1% in 2016 year over year. a slightly lower growth rate than in previous years. european equities soft today. they had a decent week. the stoxx 600 across europe is up about a percent and a half for the week as a whole before today. so we're having profit taking ending the week. unsurprising given a relatively soft session on wall street yesterday. the ftse 100 did eke out a slight gain yesterday making it eight days in a row of gains. another record all-time close. just negative this morning. perhaps we can hit another record close today despite the red across the screens. let's show you what's happening in the broader market. oil after another solid 1% rally yesterday is a bit firmer again this morning. just crossed above $54 a barrel. 54.4. brent also up a half spent, 57.17. for the week up until today, wti is flat. this could push it over the edge in terms of a higher week.
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we mentioned the sharp correction in the dollar yesterday. it is back to strengthening a bit this morning. half a percent against the dollar/yen. pushing back towards 116. stronger against the pound as well. 123.89 or 90. and we check bitcoin, a huge mover lately. a lot of people looking at the negative correlation between bitcoin and the chinese currency as the chinese currency has declined, bitcoin has run up because of the demand from the crypto currency has occurred. it crashed yesterday, down 20% after that stunning runup. down another 7.5% potentially on the back of the chinese currency strengthening. we don't really know. we don't know what's guiding it. we know that everybody is paying attention. i'll check gold. safe haven traditionally which got stronger yesterday on the back of the dollar selloff.
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miners rose to the top of the s&p for a change. given a bit back this morning. >> interesting on the bitcoin front, listening to a discussion on "squawk box" europe earlier today, two big correlations. one is with the chinese yuan. people looking at that. why is the yuan having these moves, and people pouring into bitcoin to diversify. that's a reasonable correlation, but it is is much more correlat to gold and geopolitical concerns. last year, 2016, when the industry saw the most signing up of new customers, the day trump won the election. a response to that and an international response to something that those people saw as a concern. >> there's been a cash squeeze in india. u.s. politics dominating the global market discussion. today the japanese government coming to toyota's defense after that tweet. president-elect calling out the automaker yesterday. trump threatening in his twitter
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account to tax toyota because of its plan to manufacture overseas. he wrote toyota motors said it will build a new plant in baja, mexico to build corolla cars for u.s. no way. build plant in the u.s. or pay big border tax. responding today, japanese officials said toyota is an important corporate citizen of the u.s. stressing the contribution of japanese companies to u.s. jobs. earlier in the week, trump went after general motors for importing production from mexico and said he was pleased to announce that ford canceled a planned new plant in mexico. shares of toyota dropped sharply on the tweet. other japanese automakers fell as well. this is one industry that is in the cross hairs right now. >> absolutely. not even a u.s. automaker. sort of rich for the president-elect to try to criticize where they will build plants. it should be seen as a bonus that any plants are here as opposed to any way around. that's something we will now
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start to see. when he attacks on twitter foreign companies, we'll see retaliation like this from the government of japan or whoever it might be. >> definitely disrupting the status quo. no question about it. for analysts and investors, they have to go back and look at companies and industries. yes, there could be a huge benefit from lower corporate taxes, less regulation, friendlier business environment in the u.s. you might have to start factoring in that boarder tax, will that raise the price of cars? >> this art of the deal stuff. but him attacking a foreign company like this. why don't we then see retaliation the other way around? some reports today citing some chinese companies most exposed to that. wynn, macau laand las vegas san.
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>> this is the fear for china. >> the stock of wynn over here, and las vegas sands. >> bloomberg has a report out saying chinese authorities have a plan to retaliate against u.s. firms. you have to look at starbucks, nike, apple, all of these companies betting so big on the chinese consumer and automakers. to your point, it's not just the consumer economies. >> i think he is taking it a step further when he attacks foreign companies. the big focus on the december jobs report that comes out midmorning. the expectations early morning likely adding 183,000 jobs last month. the unemployment rate is seen ticking higher to 4.7%. average hourly wages rising 0.3%. there are a few other notable items on the agenda november trade deficit numbers at 8:30, factory orders at 10:00. charms evans, jeff lacker and
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rob kaplan speaking. either way, interesting to see john williams yesterday suggesting three hikes. very much a reasonable expectation. a little ahead of where the markets got. >> we'll see what jobs report shows. this is important. yes, he said the last wone of te obama administration, but the first since the leak shuelectio. does that translate into immediate hiring plans for u.s. industry? it will be key to watch the sector breakdown of where jobs came this month in what is expecting to be slowing jobs growth. it's been tremendous. 188,000 on average over the last 12 months, slower than where it has been in 2014 and 2015. investors funneling $2.4 billion into u.s. stock funds. u.s. taxable bond funds took in
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1.2 billion, their first inflows in a month. bond and equity flows into those funds. european data just came out. euro area economic confidence jumped 1.078. consumers feeling more confident. happy to spend. that's another decent little bit of data from european. corporate news, back to that. gap reporting a surprise 4% increase in same-store sales in december thanks to demand for its gap and old navy brands. the company expects the full-year adjusted profit to be modestly high. gap shares up 8% in the premarket. other stocks to watch. nor varties teaming up with iona pharmaceuticals to license two cardiovascular treatments. the drugs aim to reduce heart risks in patients with high levels of lipo proteins. regeneron and sanofi plan to appeal a u.s. court ruling
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banning them from selling their cholesterol drug because it infringes on amgen's patents. a jury found amgen's patents valid last month. regeneron and sanofi could reach a settlement to give amgen royalties on the u.s. sales of drugs. samsung says fourth quarter profit likely rose 50 % to the iest lev highest level in three years. the optimistic outlook comes despite a slight drop in revenues and the expected $2 billion hit. some more stocks to watch. johnson & johnson and actelion have approached the takeover board about the structure of the takeovers. the proposed deal would let johnson & johnson buy actelion for $2.60 a share. it would allow shareholders to benefit financially from the companies research and development pipeline.
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actelion up a bit in swiss trade. helen of troy's third quarter results beat forecast and they're raising the full-year earnings outlook. however they are cutting revenue guidance on expectation that cold and flu season will be below average. helen of troy up 4%. shake shack says the cfo will return in march. he's been in the roll since 2013. the company is also naming its first chief operating officer, zack koff, part of the executive team since 2015. boeing nearing a $10 billion aircraft order. plus president-elect trump set to receive that highly anticipated intelligence briefing today. a live report from washington. coming up later, getting you ready for the big jobs report. we'll have our panel of economists and strategists with what you need to watch. you're watching "worldwide exchange" on this jobs day on cnbc.
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welcome back to "worldwide exchange." good morning. happy friday. yesterday we did see a seesaw session by the end of the day. down about 0.2% for the dow. the s&p was flat. during the middle of the day, we saw declines of larger amounts. triple digits for the dow, down about 1.6%. we rallied towards the end of the close. in terms of currencies. let's check in on those.
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that was a big mover yesterday. the dollar was weaker by 1.3%. particularly big moves against the euro and yen. the euro pushing 106 away from the 104 lows it saw a few days ago. the dollar/yen, as you can see, higher today by a half percent. back close to 1 16. the dollar rebounding today after a big bound of weakness yesterday. >> today's trade of the day, the trump rally might have investors feeling complacent with a measure of equity volatility. the vix below the 12 level t hasn't stayed at this level for so long. which etfs can investors buy if market volatility comes back? our data team at kensho crunched the numbers. they looked at periods where the vix rose three points in five
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trading days. traders flock to the safety of u.s. government bonds. ishare's 20-year savings bond, that was a top performer. frontier airlines is going for an initial public offering. they have hired deutsche bank, jpmorgan and evercore to plan the debut. they hope to raise a half billion. boeing is close to securing a $10 billion order from spice jet. the carrier is expected to buy 90 boeing 737s. the deal will help boeing expand its presence in the world's fastest growing aerospace market, india. toshiba will meet creditor banks on tuesday to explain a multibillion dollar writedown on its u.s. nuclear business. bankers will agree not to call in loans.
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downgrades by credit rating agency could put toshiba in violation. apple is moving in on samsung's turf planning to open its first retail store in south korea. the company won't say when the store will open or where it will be located. but apple has looked at space in the upscale gangnam neighborhood in seoul, close to samsung headquarters. >> that neighborhood made famous by -- >> gangnam style? >> you got it. like manhattan, chelsea, expensive upper market area. i don't know what the rest of the story means. >> did you learn the dance? >> by heart. i actually did. didn't everyone? >> we watched it. apple posting openings for 15 new positions in south korea including a store leader. maybe you should apply. >> i was about to crack into it.
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>> we need the music. >> we do need the music. >> we'll both learn it, deal? >> sure. when we come back, president-elect trump set to receive a highly anticipated intelligence briefing today. a live report from washington is next. first, here's today's national forecast from the weather channel's jen carfagno. >> good friday. we have a lot going on today. snow wrapping up in new york city this morning. ending up about midday in boston. attention goes to the south where snow starts today in places like oklahoma city and memphis. eventually transitioning to places like atlanta and raleigh by this evening. cold rain to start the day. wintry mix and then snow impactful overnight tonight with this big winter storm in the south. travel will be severely disrupted in the southeast. plus the cold is still on. temperatures are still running well below average. the windchills running well below zero. those windchill advisories
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across the upper midwest today. watching for freesing a ifreezi conditions for portland, oregon. "worldwide exchange" continues after this. bath?
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erwoa wa capita
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♪ >> you promised. >> only if you did it as well. i did it during the break. the moment is gone. ♪ ♪ good tune, though.
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when did it come back? we all got behind it. we did in london. any way -- guys, you should have warned me. i would have practiced. i got all nervous now. we'll talk politics. trump's meeting with intelligence officials over the alleged u.s. hacking of the election is tops today. tracie potts has more. >> reporter: another briefing on capitol hill before the nation's top intelligence officials head to new york. nbc confirmed exclusive details from the top secret government report on russian hacking. sources tell us authorities traced russian attacks and attempted attacks on the democratic party, the white house, the joint chiefs, the state department, even private businesses back to 2008. >> every american should be alarmed by russia's attacks on our nation. >> reporter: outgoing director of national intelligence, james clapper and others first head to capitol hill today to brief select lawmakers and then to new york to face a skeptical
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president-elect. >> you will be challenged tomorrow by the president-elect. are you okay with being challenged? >> absolutely. >> president-elect trump has questioned whether there's hard evidence. >> it's important that the president is getting the very best non politicized intelligence possibility. >> reporter: sources tell us investigators identified russians who leaked democratic party information to wikileaks. wikileaks denies that. an intelligence official tells the u.s. picked up senior russian leaders celebrating trump's win. the report does not conclude russian interference affected the leelection's outcome. the public version of that report is due out next week. president-elect trump may ask congress to pay for that border wall with mexico rather than making mexico pay. that would be a change to a major campaign promise.
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reports say that trump's transition team has spoken with republican congressional leaders about the possibility of using u.s. tax dollars for the project. still to come on "worldwide exchange," the top stories including the big jobs report. expectations, possible market implications. stay tuned, you're watching "worldwide exchange" on cnbc.
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good morning. the december employment report
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tops today's economic agenda. president-elect trump takes a shot at toyota. and today's top trending stories, including an ed sheeran teasing, a new track with a snapchat lens. >> we just did it. >> always fun to take a selfie. you're watching "worldwide exchange" on this friday morning on cnbc. ♪ good morning. welcome back to "worldwide exchange." happy friday. happy jobs day. i'm sara eisen. >> i'm wilfred frost. good morning to you from me as well. >> let's check in on the global markets this morning. u.s. equity futures after a down day yesterday. looking a little bit weaker this morning. dow futures down 16. a little spooked by what's going on in the chinese currency which
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had a sharp two-day rise. the most we've seen in decades. s&p 500 futures are flat. nasdaq unchanged looking for direction. in yesterday's session it was the tech stocks, the f.a.n.g. stocks, facebook, samazon, netflix and google that gained. >> big turnaround. >> early indications for europe, trading there across the continent, a bit weaker. the ftse 100 a notable outperformer. the german dax down about 0.2%. france down double that. the ftse mib in italy down a third of 1%. as for asia overnight. a lot of focus on that stronger chinese currency. still we didn't see sharp declines in the shanghai comp, perhaps an indication that traders are not worried about that disruption we've seen over the last week or so. the comp closing lower by 0.3%.
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hong kong finishing higher, a quarter percent. the nikkei in japan did not like that risk aversion that we saw sweeping global markets yesterday. strength in the yen. there's the chinese currency chart. you can see stronger dollar, weaker chinese yuan over the last year. that has sharply reversed the last few trading days. making people question how much is flowing out of china. how much outflows they're dealing with and trying to raise short-term interest rates and put a cap on that. >> today the u.s. dollar is stronger by 0.4%. tuesday to late night, it was 3% move higher, massive for a pegged currency. certainly the story of the week has been surprise at the fact that the chinese have been able to stem capital outflows. most commentators saying this is temporary. soon we'll go back to a steady weakening of the yuan over time. which, of course, is the fear for china. whether it can manage the
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currency down in a slow managed fashion or at some point leg down. this week it's gone up. broader markets. oil prices which did have a slip yesterday, we're having one today. up 0.8%. ten-year treasury note, big move in that yesterday. we saw it down to hit a low of 2.34%. the two-year note hit a low of 1.16%. so as well as equities pulling back, we saw a reversal in the trend in terms of what we've seen in bond markets and the dollar since the election. yields slipping yesterday, at 2.35. the dollar slipping markedly yesterday. down 1.3% against a broad basket of currency. big moves against the likes of the euro and yen. euro pushing 106. dollar/yen close to 116. today the dollar rebounding a bit against the yen by a half percent. big move yesterday. looking like the dollar index will end down for the week as a whole for the third negative
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week in a row. highlighting ga ining again tho to the back end of 2016. the dollar will continue for this week as well. bitcoin had an outstanding run up, close to record highs earlier in the week, but has pulled back significantly in the last two trading days. big fall yesterday and today, down 8%. gold prices, got close to parity. bitcoin at 9.22 per dollar. gold at 1,178. lots of comparisons between the two. gold ending the week about flat. the top global market story of the day, the u.s. jobs report. landon dowdy has three key things to watch. good morning. good morning to you. we have the final snapshot of the labor market of 2016 with a december jobs report. here's three things to watch. the numbers. unemployment is forecast to tick up slightly at 4.7% after hitting its lowest level since
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2007 in november. the u.s. expected to add 1 8 1 83,000 last month. second, the sectors job growth will remain strong in healthcare and professional services. however energy, mining, trade sensitive manufacturing remain under pressure. economists expecting we will likely continue to see less demand translating to fewer opportunities for new workers. the third thing to watch, wages. average hourly wages are forecast to rise 0.3%. wage growth has been tepid raising a strong sign there's slack in the labor market. back over to you. >> thank you. the last jobs report of the obama presidency and the first post the election. we'll see if business confidence translates into more jobs. u.s. politics dominates the global market discussion. the japanese government has come in and responded in toyota's defense after president-elect trump called out the automaker in a tweet yesterday.
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he threatened to tax toyota because of plans to manufacture overseas writing toyota motors said it will build a new plant in baja, mexico to build corolla cars for u.s. no way. build plant in u.s. or pay big border tax. japanese officials said toyota is an important corporate citizen of the u.s. stressing the contribution of japanese companies to u.s. employment. earlier in the week trump went after general motors for importing from mexico to the u.s. and said he was pleased to announce that ford canceled a planned new plant in mexico. shares of toyota did drop on the tweet sharply. they fell overnight in japan. other japanese automakers also fell in sympathy. the automakers front and center now, catching the ire of the president-elect. >> as we said earlier, the difference with this one -- it's a for win company. that will spark more retaliation than -- >> cross-country.
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and more talk of this border tax. is this a threat? is this the opening negotiation tactic on twitter or something that investors and analysts and economists will have to start to factor in amid all of those beneficial policies like lower corporate tacks and deregulation. this border tax issue. big one for any company that gets any materials, cars, clothing overseas. >> a warmer international announcement this morning. one you don't care so much about, but i do, the british prime minister's office announced that theresa may will visit trump in the spring next year. >> i do care about that. maybe we should be here. >> we should be. >> d.c. maybe trump tower. >> maybe trump tower. joining us now is david sourby from loomis sales. >> good morning will. hi, sara. >> let's discuss what we expect from the jobs market today. is that as important as it has been in past months and quarters or less so because now we're so much more focused on things like
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trump tweets? >> it's always one of the key numbers every month. i would also point to the couple days ago the ism manufacturing index. if i had one number i would watch every month, it would be the ism index. 54 in the u.s. very good number. globally continues to improve. a little shout out to detroit, the number here in detroit is above 60 that something namsignl expansion which has taken place. >> you continue to come to this issue that it's healthy and it's normal not to see the kind of job growth we've been used to seeing in 2014 and 2015. 200,000 plus. normal in a strengthening labor market and that we just can't get to those levels. >> perhaps not. we will see there 2017, as small
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business confidence has rebounded, simply look at the russell micro cap index as a sign of renewed entrepreneurial spirit. it's up 18% since the election on november 8th. the key will be will the jobs number follow and will it follow in the all-important smaller business segment? perhaps not in the first half of 2017, but i think it's likely to improve and the needle will move in the right direction. >> in terms of risks for next year, one to note for your comments here, reflation trade could get ugly what do you mean by that? what kind of percentage chance do you attribute to it? >> certainly. let's talk about it specifically from the stock investor's point of view. inflation today, let's call it 2%. that's usually a very good back drop to double digit gains in the stock market. the line in the sand is usually when inflation rates go above 3.5%, which we're quite a ways
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from, then it becomes problematic for stocks. when the real return or inflation number turns negative. reflation is good for small cap stocks where i'm leaning, 3.5% is my yellow if not red flag. >> what about the sector breakdown within that, if you're buying the trump rally. does that mean stick with what has worked? >> generally in a reflation rising interest rate environment, if you look 12 months down the road, it's consumer discretionary stocks that do better, industrials, financials, those indust ris do better. utilities, consumer staples do not. staples and utilitiy iies wheret high dividend, high yielding amount. if you lean within sectors and
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industries to those companies still generating healthy cash flow from operations, high free cash flow, i think valuations are still reasonably or better than reasonably compelling, you can see a pretty healthy year for your investment stock portfolio this year. >> david, thank you very much for joining us. dav >> my pleasure. to some top trending stories. this is really all about snap. ed sheeran's latest song is hiding in a snapchat filter. the app debuting a 30 second clip of his new song released at midnight. it's a filter and it consists of bright blue sunglasses, shining lights with no sign of any ed sheeran branding. then you hear it. the song lasts 30 seconds. but you can only record and share ten seconds at a time. >> odd thing about this. firstly, doesn't say ed sheeran at all. not giving him publicity. they didn't announce it either.
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>> that's part of the appeal. you find it on your own. >> then you're like, i like this song, what is it? >> right. it's new. it's fresh. i don't think it's intuitive to do such a thing, but then again i'm probably not the target audience. >> >> you also do not take enough selfies for this to catch on. >> your problem is you're so enthralled by the selfie, you didn't want the glasses or ed sheeran. you wanted your own selfiselfie. >> and my app wasn't updated. i couldn't use the filter. cadillac is launching a new luxury car sharing service called book. there's a flat monthly fee of $1,500. members can drive and swap out pricey cars when they want. subscribers can select what model car they want from a mean yu within an app and wait for the car to be delivered. >> cool idea. very delivered. high-end. coming up, an all-star panel to discuss the key jobs report.
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first as we head to break, check out the european markets at this hour. we're lower across the board. german dax down a quarter percent. >> ftse 100 could still have its ninth straight day of gains. otsp
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is k ofllgs
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gtoelr rili he we're approaching the top of
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the hour. so the team is getting ready for "squawk box." michelle caruso-cabrera is in new york with a look at what's coming up. >> the countdown to the jobs report. final one to the obama administration. probably explanation for plat trade at this point. talk about the implications for that jobs report and the incoming administration. also a look at the markets. i won't say it. >> nope. >> we have not mentioned it. >> okay. >> because big round number just hanging there. >> exactly. lots of other stuff. tune in top of the hour. it will be fun. >> we certainly will. look forward to "squawk box" in 14 minutes time. still to come, the final employment report as michelle just mentioned. we'll discuss it in detail. all the possible implications of it with an expert panel coming up on "worldwide exchange."
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welcome back to "worldwide exchange." today's top story, the december
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jobs report. the economy likely added 183,000 jobs in december. unemployment rate ticking higher to 4.7% from 4.6. let's discuss this further. with us is daniel dimartino booth, and in toronto, david rosenberg, chief economist and strategist from gleskin sheft. david what is your forecast? what are the tea leaves telling you about this december jobs report and where the bias is heading into today? >> especially after the adp number yesterday, and the fairly sizable decline in the employment component of the ism services sector, i'm shading the number closer to 150 than 180. you mentioned the consensus, but there's a wide range. i see some people as low as 125, others as high as 220.
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a wide range today. again, a lot of the economists i follow on the street are closer to 150. i'm comfortable with that number. >> danielle, you're in agreement to the headline numbers? >> i am. the contrarian in me says we're seen four disappointments in a row, so for all we know we are finally due for a bounce. one thing i'll try to pay attention to is the average hourly wages to see what income growth is look. also looking at the labor force participation rate. we've seen an interesting phenomenal arise, if you adjust for inflation, spending is outpacing income growth. americans are enthusiastic after the election, but spending beyond their means. this has been validated in credit card data. >> how important is it that real wage growth picks up, if not today over the first quarter for the trump rally to be a sustainable thing? >> it's incomes that will have
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to validate all of the enthusiasm. otherwise you'll see a pull back in confidence numbers. >> december is the first real month after the election. how long does it take for the animal spirits and the surge in business confidence to translate into more jobs and higher wages? >> we'll have to see facts on the ground. it's just as janet yellen and others in the fed eluded to. we have a lot of conjecture, hypothetical. so it's interesting because since the election, 80% of the survey data, which is your animal spirits, come in above consensus. less than 50% of the hard economic data have come in below consensus. what's struck me here this is just facts on the ground. not about something that is hypothetical or expect the. whatever donald trump accomplishes, we don't know what the timing will be. here's what we know about the facts on the ground. we know that the dollar has been
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firming. mortgage rates have been climbing. gasoline prices have been going up. which will krip that wage story. we had over 3% third quarter growth. i think we're 2% in the fourth quarter. i wouldn't be surprised if the first quarter comes in flat. what struck me in the fomc minutes, the reference to the strong dollar doubled in six weeks. you will see that in corporate earnings reports and how that affects corporate guidance. >> exactly. this is central banking 101. the first term that you learn when you walk through the door at the federal reserve is lag. janet yellen and everybody on the committee understands there will be some kind of a backlash pay back for this strengthening that we've seen in the dollar. around inauguration day, as we get first quarter earnings reports and ceos say we're suffering, especially the multinationals, i'm not quite
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sure that this level of froth can continue. >> though, david, it's not a secret the dollar is strengthening and the stock market doesn't seem to be too worried about it. they're giving a pos ass to som multinationals on the idea that fundamentals will improve. corporate tax rates will go down. you will get an infusion of fiscal stimulus, unless regulations and all of that offsets stronger dollar and a cut in overseas profits. >> sara, i know that. john kennedy had a huge honeymoon period. that extended beyond the inauguration date of 1961. look at what the market did in the 1962 era. ronald reagan had a huge honeymoon period and he cut taxes in 1981. look what the market did. we're just taking the myopic approach look at this honeymoon rally. your point is well taken but the
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reality is that you talk about the survey data. when you look at consumer confidence surveys, headlines have surged. but spending components haven't. when you look at the nfib, small business survey, look what the small cap stocks have done. the sentiment survey has surged. but digging below the surface the capital spending planned component -- >> you're not buying it? >> sentiment is one thing. what happened to the bernanke green shoots? it would have been on here in 2010, as if that gave us a good read on what the economy will look like for the next several years. back in 2002 we came off of 9/11. we were going to have a big rebuild in the economy. look what happened in 2002. we had a growth relapse. the stock market in the months following 9/11 on that expectation of a huge investment of infrastructure rebuild, it
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never happened. i've been through too many headfakes -- >> danielle, are you as skeptical of that trump rally, that it's just a honeymoon and of the projected growth boost? >> i think yesterday's headlines were really telling in terms of where we're headed a great chart came out showing the september through december period for retail hiring was the lowest since 2009 and resecessionary levels, then you hear macy's at low levels, sears closing all these stores. so retail, real estate, commercial real estate, mall closures will be a big theme in 2017. i doubt many sale-side economists factored it into their outlook for the labor market. >> where does the dollar go for the rest of this quarter? is it responding to fundamental data like we're getting today or other factors? >> it's responding to the
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peoples bank of china in a big way and action the of late. but look at ten-year. yesterday was one of the most dramatic poeint changes that we've seen in a long time. we have really had a dramatic pullback in the ten-year. that's beginning to communicate a message. we're seeing a quick flattening of the yield curve. janet yellen will pay attention to that. >> david, 30 seconds left. your view on the dollar from here for the rest of the quarter? >> i think the dollar will come overbought. you look at the net speck long position on the intercontinental exchange, very crowded trade. i do think we can get more of a give back here on the dollar near-term, yes, i do. i think part of it is so reappraisal of the fed, which people think has turned hawkish. it's data dependent. my sense is that the hard data will not follow the sir va data over the course of the next several months. so i'm cautious on the green back.
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>> david, danielle, thank you for joining us. pleasure to see you both. >> not a lot of animal spirits there. that's it for us. have a great weekend. e, in l tiss?th sghuranyo'0 ins ptoso onmatt
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good morning. it's jobs friday. really? so fast these things are flying by. the final u.s. employment report before president-elect trump takes office. expectations and market implications are straight ahead. shares of retailer gap surging after the company posted a surprise increase in same-store sales. plus a political fight. toyota the latest company to face the ire of the president-elect on twitter. now this morning the automaker's home country of japan is responding. it's friday january 6, 2017.
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"squawk box" begins now. ♪ live from new york where business never sleeps, this is "squawk box." it is time to celebrate. good morning. welcome to "squawk box" on cnbc. we're live from the nasdaq market site in times square. i'm michelle caruso-cabrera. along with joe kernen and andrew ross sorkin. we're playing that music. we have two celebrations this morning. first, we want to wish joe a happy birthday. he's turning 40. >> 4 1. >> 41. i don't want to exaggerate. and congratulations to andrew on the birth of his daughter sidney. not on the same day as joe kernen's, but close. >> thank you. >> beautiful photos. >> thank you. i saw that you ran some on tv yesterday. >> yes. beautiful.

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