tv Worldwide Exchange CNBC April 11, 2017 5:00am-6:01am EDT
good morning. markets now, stocks pointing to a lower open on wall street as oil backs off a five-week high. food fight. the big battle brewing over whole foods after activist investors upstake its investment in the company. and sky high outrage, both companies and investors demanding answers from united today after a video shows a man being dragged off a plane. it's tuesday, april 11, 2017, "worldwide exchange" begins right now.
♪ good morning. very warm welcome to "worldwide exchange" here on cnbc. i'm wilfred frost. >> i'm seema mody in for sara eisen. good morning to you. >> nice to have you with us. >> good to be here. let's check gobel mlobal market. futures or i should say u.s. stocks ending higher yesterday. the s&p closing about 1.6% away from the record closing high. futures indicating a lower open. down 3 for the s&p 500. dow jones off by 14, and the nasdaq off by 3. this as we kick off the earnings season for q1. treasuries have been in focus. yesterday fed chair janet yellen dropping a hint that rates will be likely rising again shortly. the ten-year yield hanging out around 2.3% to 2.4%. right now at 2.34. let's look at equities around
the world. asian equities first up. the nikkei and hang seng both down a bit today. hong kong almost down three quarters of a percent. shanghai up about 0.6%. european trade to move on to that, we had some data hit the wires. eurozone industrial output down 0.3% month on month. it was forecast to rise 0.2%. the eurozone industrial output a little bit soft. we just had this business confidence index, current conditions were strong as were the economic expectations. so the number, german business confidence was better than expected. industrial output was worse than expected. moments ago we had uk inflation data. the cpi reading came in at 2.3% for the second month in a row. february and march above the
bank of england's forecast at 2%, raising questions for what that means about monetary policy moving forward. those rtd euroare the european board. >> as for broader markets, across various asset classes, let's look at the price of oil, which last week had a very strong week to the upside. that's why we saw energy stocks outperform. you can see wti crude reversing those gains, down about 0.3%. ice brent crude, the international gauge of oil at 55.84. nat gassying gre iseeing green. and the dollar will be a focus for earnings season. will the stronger dollar at all impact some of the multinationals. we've seen the dollar come off the highs as of late. so maybe that's a benefit to names like walmart and apple that do so much business overseas. you can see the yen higher
against the u.s. dollar by 0.2%. the pound, in response to that inflation data, holding ground at 1.24 against the u.s. dollar. >> not much movement from the european data or the uk data. dollar not doing much today. gold prices are up about 0.4%. about a third of a percent today. down a similar amount yesterday. making headlines this morning, janet yellen says the u.s. economy is healthy now and should continue to grow at a moderate pace. speaking at an event at the university of michigan last night, janet yellen said the central bank is shifting its focus. >> before we ever put foot press down on the gas pedal trying to give the economy all the oomph we possibly could, now allowing the economy to kind of coast and remain on an even keel, to give it some gas, but not so much that we're pressing down hard on
the accelerator. that's a better stance of monetary policy. >> janet yellen did not offer specifics on the timing of rate hike or the potential reduction of the 4$4.5 trillion balance sheet. to the economic agenda. the national federation for independent business puts out its monthly small business survey at 6:00 a.m. eastern, followed by the job openings and labor turnover survey by the labor department at 10:00 a.m. minneapolis fed president neel kashkari is speaking this afternoon. jana partners raising its stake in whole foods to 8.8%. jana wants the company to speed up a turnaround, improve technology and operations and explore operations, including a possible share. shares of the grocery chain lost nearly half the value since peaking in 2013. jana lined up possibility board
nominees. glenn murphy, tad dickson and meredith adler, jana is also working with diana dietz and mark bittman as consult instants. all of these people bought shares in whole foods. sources tell cnbc that jana has yet to speak to whole foods management about the ideas. >> some deal or m&a in the food space or in the grocer space. i wonder who would buy them. whole foods already has a market value of $10 billion. super value at 1 billion. already quite large. >> it's niche and high-end, which means many think it's more protected from the changing nature of the grocery market. clearly it suffered from that either way in the last couple years. i wonder, y tshgs yes, the shar have come down significantly,
but with amazon expanding and the broader threat groceries are under, it's a tough sell. toshiba filed its twice delayed earnings report today without the endorsement of its auditor. pricwaterhousecoopers says it was unability to form unable to impression. toshiba reported bigger than expected losses due to write downs at its u.s. nuclear business, westinghouse. shares of toshiba down 2.7%. united airlines is responding to a social media firestorm after a passenger was dragged off a company's plane late on sunday. the video going viral yesterday shows a passenger on united flight from chicago to louisville being forcibly removed before takeoff. the flight was overbooked, after the united team looked for
volunteers, one person refused to exit voluntarily and law enforcement was asked to come to the gate. the united ceo said employees followed established procedures and called the passenger disruptive and belligerent. in a public statement earlier yesterday, the ceo apologized calling the incident an upsetting event. amazing when these things drag on for a second or third day, we're still focusing on them. but you can understand it. the outrage relating this is huge. not only is it a very sort of brutal and forceful removal by law enforcement operatives, not united employees, but following united's request to do so, but people were already on the plane. it's not like they decided to shift passengers off while they were at the gate. it adds to the confusion that this guy had grounds to say, no, i don't want to get off. >> in that video we can see the reaction from passengers, the surprise and shock as we watch that passenger be forcibly
removed. in separate news, the airline is raising its forecast for first quarter flight capacity. the company says this is the result of a number of completed flights relative to the number of flights scheduled. united now expects q1 capacity growth of 2.6% compared to a prior forecast of a 1% to 2% increase. the airline forecast passenger unit revenue during the same period to be about flat. now to the financial sector and wells fargo. following yesterday morning's board review in the sales practice scandal which was critical of former ceo john stumpf for failing to realize the miss ggivings of carrie tolstedt, i asked tim sloan how it was that he came to the decision to end her tenure. >> i worked with her on some things that i had asked her to improve on. and we just came to the conclusion within a few months
that it made sense for her to move on. and what i saw was an executive that while having a successful career had some challenges in terms of working with others. had so the dealt as aggressively with some sales practices issues as she should have. >> though the board review gave sloan a relative pass relating to the saga, i asked if he could have done more sooner. >> when i look back, i should have and could have done some things differently once the issues made its way to the corporate leadership level. and in hindsight i wish we would have moved more quickly. we would have made decisions, for example, that we made last fall, which was to end the incentive compensation plan in the community bank. >> finally we asked whether this review now means the worst is
over for wells fargo. >> the board was clear in its report that their investigation is over with. there are other activities that are going on in terms of -- at the justice department and in other government agencies, we're continuing to work with our regulators and so we have much more work to do in terms of rebuilding trust with all of our stakeholders. and making things right with our customers. no, i don't think this is a happen ter that chapter that's over with. >> the focus turns to earnings on thursday, and the agm on the 24th of april. on power lunch yesterday, despite this board review, they stuck to the recommendation that 12 out of 15 board members of wells fargo, the shareholders should vote against them for
re-election. so a lot of focus on earnings and the agm. >> what this means for the stock price long-term, that's something investors are trying to understand and assess? >> definitely. sales figures initially dropped off significantly. they improved since then. the trend on that front is that the comparisons on a 12-month basis still disae pointippointi the trend on a monthly basis has improved. the whole sector front and center for investors at the moment. let's talk about qualcomm. it's counter suing apple in a dispute over licensing fees for mobile technology. the chipmaker accuses apple of interfering with royalty payments. this comes less than three months after the iphonemaker sued qualcomm for $1 billion. a top ford executive predicts the suv boom in the u.s. will continue. ford's vp of u.s. marketing says
the company expects the market share of suvs to rise to 45% of industry sales within five to seven years. we're watching shares of tesla. the company officially becoming the most valuable u.s. carmaker yesterday. now boasting a bigger market cap than ford and gm. definitely got auto analysts talking. more stocks to watch, boeing hiring norsk titanium. the norwegian 3-d printing company says the move could shave $2 million to $3 million off the cost of each plane. i don't know if that was meant to be shave or save. both words work. i bet it was meant to be save. >> toll brothers outperform from sector perform at rbc capital, the price target $43 from $47. retail me not agreeing to be bought by harland clark for 5$55
million. harland clark offering 11.60 per share for the coupon provider presenting a nearly 50% premium to the stock's close yesterday. up 50% almost in premarket trading. if you're looking for a mover that's really seeing -- a big chart of the day, look no further than uk chipmaker dialog semiconductor down sharply this morning. set for the worst day in more than 16 years. analysts downgrading the stock to sell saying there's strong evidence that apple is developing its own power management chip replacing dialog's in the iphone as soon as 2019. last year shares of mimaginatio tech falling 70% after apple said it would not be using its chip any longer. this was a big mover yesterday
on-point le "power lunch." >> was a great article over the weekend in terms of the benefits and pit falls of being an apple supplier, off the back of imagination, one of the uk tech success stories alongside a.r.m. >> a.r.m. another great example. >> great analysis of the benefits and pitfalls. another thing this story has led people to look at is the difference between apple and samsung. samsung has such control over the supply chain for the galaxy smartphone, makes the chips, the screens. apple is reliant on other producers. apple is the one with the strong bargaining power compared to these other suppliers. samsung is in a stronger position in terms of the supply chain. still to come, g-7 foreign ministers in italy today. a live report from that gathering coming up next. as we head to break, a look at where european equities are trading. the ftse 1 00 up almost half a
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in particular ahead of rex tillerson's travel to moscow today. boris johnson trying to explain what's at stake for mr. rex tillerson as he travels onwards. >> we're trying to give rex tillerson the clearest possible mandate for us as the west, the uk, all our allies here, to say to the russians this is your choice. stick with that guy, stick with that tyrant or work with us to find a better solution. >> now, the travel of mr. tillerson this afternoon, he will be meeting with sergey lavrov in moscow later today. the message from clearly a lot of these people is they need to separate russia from assad, from the syria regime. the turkish foreign minister here this morning, he has been talking about turkish intelligence that indicate there's are still chemical weapons stockpiled in syria. he's been joined by representatives from qatar, jordan, uae and saudi arabia,
all trying to find a political solution for syria. >> willem, do we expect this unity among the g-7 being delivered forcibly by rex tillerson will make a difference to president putin's per spktspe on this issue? >> rex tillerson has a close relationship with his counterparts in russia. he is a man who might be listened to by them. one of the carrots being dangled is to return them to the g-7 and the g-8 fold. as far as pushing them aside, this is something sanctions could do. boris johnson talking about sanctions in syrian and russian forces involved in these attacks last week. >> i was going to tell you, wilfred, the move in the equity market has been interesting. the russian etf has seen three consecutive days of losses.
a lot of this on the uncertainty about the latest air strike in syria and what it means for u.s./russia relations. russia was seen as one of the big winners, if you will, for 2017. it already gained 50% last year. it was expected to outperform this year. but geopolitics now potentially changing that story. it will be interesting to see what happens when tillerson arrives in moscow. >> the other asset class to watch is oil prices. energy was the second best performing sector last week on the s&p. the best performing sector yesterday as oil prices jumped up 1.6%. still to come, a group of ceos heading to the white house today. we'll tell you what's on the agenda for them. first the national forecast from bonnie schneider. good morning. much of the country enjoying this record warm temperatures that we're expecting today.
85 in washington. 82 in new york city, that's about 20 to 25 degrees above normal. in texas, watch out for rain and strong thunderstorms into tyler with frequent lightning strikes. this could produce a flooding situation down towards san antonio and into austin. if you're traveling in this regioning you may have fligregi flight delays. looking cooler in the northwest. mild in the rest of the country. rain headed your way across parts of the northeast. be prepared for that. that's your business travelers forecast. more "worldwide exchange" when we come back. thanks for loading, sweetie.
nice. cascade. in washington news, president trump is hosting a big group of business ceos today at the white house, among them the leaders from gm, walmart, blackrock and tesla. this is the latest in a series of meetings president trump held with business executives to gain traction for his economic plan. the chicago cubs are celebrating a world series win five months later. the team raised the ham wlchampp banner at wrigley field last night. the players wore gold numbers on their jerseys. the cubs will get their world series rings tomorrow night. each ring contains 108 diamonds for the number of years since the cubs last championship. takes them a long time to get to the rings. why the delay? i need to find that out.
the u.s., mexico and canada planning to make a bid to co-host the 2026 fifa world cup. if successful it would be just the second time the tournament that had multiple hosts. japan and south korea co-hosted in 2002. the world cup will expand from 32 to 48 teams in 2026 increa increasing the number of matches to 80. under the joint bid, the u.s. would host 60 games, mexico and canada would have ten each. just interesting, the three countries may not be able to agree on trade, but when it comes to sports, it unites everyone. which is great. >> that would be a great world cup. i'm all for them winning that one. do you remember the 2002 one in japan and south korea? it was a great tournament. england beat argentina, david beckham with the penalty. but then crashed out against brazil. he was cap ptain back then.
geopolitical fears. we're digging in on what's next for oil. and demanding answers. the growing outrage over this now viral video of a man being dragged off a united flight. it's april 1 1, 2017, you're watching "worldwide exchange" on cnbc. good morning. very warm welcome to "worldwide exchange" on cnbc. i'm wilfred frost. >> i'm seema mody. good morning to you, wilfred. it's 5:30 a.m. on the east coast. looking at markets, u.s. futures pointing to a lower open after we saw marginal gains in the u.s. last night. dow jones off by 14 points. s&p 500 lower by 3. the nasdaq, as you can see, off about 3 points here. it was a mixed session overnight in asia. some rising geopolitical concerns, reports of deployments of u.s. naval forces to the
korean pa innoceneninsupeninsul. we saw strong rhetoric out of north korea. the japanese nikkei closing down. hang seng down by 0.7. the chi naez marketnese market, green there. some important export data coming out of china tomorrow. european equities, let's look at how stocks are trading in europe. eurozone industrial production slumping. that's a rare set back in the eurozone economic recovery. stocks mostly lower. the ftse 100, the out-performer up about 0.4%. we saw inflation data come in 2.3%. so steadying a bit. >> yes the uk. notable thing about that, it's the second month in a row above the bank forecast of 2%. just raising those possibilities that the loose policy we've seen from the bank of england since brexit may have to be changed at some point coming soon. >> we've already seen some dissenters voice opinion on that
topic. the pound, sterling climbing after we did see that uk inflation data come out. switching focus to russia. russian stocks rebounding today after seeing three consecutive days of losses. the syria conflict putting the united states and russia at odds. that's why there's so much focus on secretary rex tillerson's visit to moscow and what that visit could mean. especially when it comes to the topic of syria. >> the other piece of data, the german business confidence, stronger than expected. oil prices, rose about 1.5% yesterday. allowing the energy sector within the s&p to be the best performer. the energy sector was up 0.7% in what was otherwise a flat day for equities. today wti slipping about a third of a percent. 52.9. just below $53 on wti. ten-year treasury note settled in and around that 2.4 level.
just slipping in terms of yield. bond buying, which also points to why equities and the futures markets are softer. money going from equities into bonds. dollar board, not much movement today. we had that slightly better inflation data out of the uk. didn't really move the pound. 1.24 the level there. a bit of movement in the yen higher, which explains that nikkei weakness earlier. gold prices to round things off, up about a third of a percent today. down about that same amount yesterday. new polling out of france shows the first round of the french presidential election could turn into a four-way race after a big surge from the far-left candidate, mr. melenchon. here are the latest polls. the latest of the top four candidates. 18% for mr. melenchon. he did well in the latest tv debate.
he's been gaining since then, taking some gains out of the front runners of marine le pen and emanuel macron. the interesting thing here that people are focusing on is how divided it is and how close the first round will be. it raises the question of who could be the final two going into it. but also if it is the far-left of mr. mellenchon versus the fa right of marine le pen, it raises the question of if mr. melenchon doesn't make it into the final two, as a far-left candidate, he doesn't agree with any of the people in the center ground, will those voters turn out for the nonle pen candidate in round two or abstain? so some worries off the back of this latest poll. >> especially because nobody expected melenchon to do this well in the latest polls. we're two weeks away until the first round of the presidential
elections. looking at these polls, it will be very tight. very close. we're seeing a bit of movement in the bond market. let's get a take from a market expert. boris schlossberg joining us. great to have you on the show. what do you make of the latest frefrnl preside french presidential election polls. does this have an impact on the euro? >> it's been having impact for the last couple of weeks certainly. there was a lot of comments because macron looked like he had it in hand. the fact that melenchon is coming up is creating more turbulence in the euro. having said this i think macron takes it in the first round, at that point it becomes interesting. he's been good at positioning himself as a candidate of change. if he can maintain that message, he has a reasonable chance. he's been up about 20% against le pen in a head to head vote. the protest vote is very strong everywhere across the west.
that's something that you need to be careful about. we learned the hard way not to forecast the consensus view at this point. there's clearly a risk in euro. >> is there going to be a big bounce in the euro once the election happens if it is a non-le pen outcome. we saw it rally to 1.08 and touch 1.09. but we learned it's the ecb's rhetoric that is driving this. >> there's two points of stress to the you'euro. one is the political point, the secondary one is the ecb was supposed to taper but they're not seeing inflation. that's a big theme across the whole g7 universe. the reflation trade which we all made our bet on is not showing up into an extent that everybody is looking at. even in the u.s. you're seeing growth but relatively tepid groe. growth. the single greatest catalyst going forward is going to be a
political catalyst, not an economic one. the u.s. won't grow to a 3% level organically. so it's contingent on whether president trump can do anything on tax reform and infrastructure before the recess in the summer. i think that's unlikely. therefore the markets are due for correction. >> boris, one place we got confirmation, there is reflation this morning is the uk. second month in a row for cpi being up 2.3%. does that mean you think moving forward we're likely to see the monetary policy committee take its foot off the easing pedal and that we might see sterling rally from here? >> actually the story in the uk is the worst of possible worlds. because the inflation is being driven not by any kind of final demand, but because currency is so weak, and the export and import factors are weighing on them.
if we taretail sales are weak a i think cable will be under stress to go down. the bank of england will ignore it because they need to make sure the country doesn't get into a recessionary point. if there's a place where we are seeing consumer prices improve, it's china and the emerging world. what do you make of the most recent picture, specifically with wall street taking a very overtly bullish view on china. if you do tea leaf reading from president xi jinping and president trump, do you think this helps the china story overall for investors? >> yeah. it's easy as she goes in china. tomorrow, trade balance data will be key to see that the two-way trade continues to expand at a yenl pace. i think china stabilized. that's an important story for global growth. and it's no longer a stress point that it used to be. again, the story there is you're not seeing any huge amount of
torrid growth. just the fact it has stopped contracting as much as it was before. that's good news but not great news going forward. >> boris, good to see you. thank you for joining us. >> nice to be with you. in corporate news, jana partners is raising its stake in whole foods to 8. are looking turnaround, improve technology and operations and explore operations, including a possible share. shares of the grocery chain lost nearly half the value since peaking in 2013. jana lined up possibility board nominees. glenn murphy, tad dickson and meredith adler, jana is also working with diana dietz and mark bittman as consultants. all of these individuals bought
shares in whole foods as part of the campaign. sources tell cnbc that jana has yet to speak to whole foods management about the ideas. brazil's third largest airline will take flight today on the new york stock exchange. azul airways raised $44 6$645 mn in its dual ipo. strong demand led the company to boost the size of the deal. the company trades on the new york stock exchange under the symbol azul. azul was started in 2008 by jetblue founder david neeleman. he will join squawk on the street at 10:00 eastern this morning. leeco has dropped its 2 billion takeover of they cite regulatory headwinds.
leeco faced financial troubles. time for our top trending stories. a kylie jenner spinoff series getting the green light at e!. e! is ordering eight half-hour episodes of the life of kylie, the latest spinoff series from the keeping up with the kardashians franchise. the show will debut later this summer. she has enough of a following. i know she has more than 1 million followers on twitter. >> i never watched any of these shows. i'm not sure i will. should i? >> i -- if you like it, if you like the kardashians, a bit of drama and spice, this is the show for you. >> i think you're giving it a generous spin. i'm not sure i'll bother. next trending story, new fcc chairman doesn't want you to make in-flight cell phone calls. he wants to ditch a 2013 regulatory proceeding that
sought to lift the ban on u.cel phones on u.s. airlines. the fcc chairman says he doesn't think moving forward with the plan is in the public interest. i think that's fair enough. just a bit disturbing if anything. it's good that you can use what's app and data on most flights. not british airways, as the lady who normally sits here has great complaints with. still to come, the must reads including a piece on why the passonieri yeier passenger off that airline is a symptom of the overbooking problem. we're back in a couple minutes. mom gets breakfast in bed...
you get to do the dishes. bring 'em on. dawn ultra has 3 times more grease-cleaning power. a drop of dawn and grease is gone. "worldwide exchange." time for our must-read stories. my pick is from slate. the passenger dragged off a plane is a symptom of airlines outdated system. how could this happen? there may be no explaining away or accounting for the forced removal of a passenger whose face was bloodied in the process. that should have never happened. not just for passenger safety reasons but because united must know its overbooking practices are outdated. the economy has been too good for too long for the airlines and passengers have become too self aware for the usual ins
independei incentives to work. this story rumbling on. in video taken on sunday, became violent yesterday and a big issue. particular disdain for the overbooking took place once he was already seated on the plane, not while he was queueing outside. the idea of paying for a ticket and being ready to get on board, and then taken away, that's bad enou enough. >> united the center of controversy but around the world. i was on china's twitter, and united passenger trending right now. >> you are? >> i have friends in china. >> my pick is in the "wall street journal." what comes after the syria strikes. america can now lead the effort to bring some semblance of stability to syria, the aim should be to replace mr. assad's regime with new governance
arrangements and that can provide assurance and end the government's oppression of the sunni majority. what i found interesting about the latest air strike in syria is that it's a departure from mr. trump's isolationist view on topics like trade and middle east. his ability to intervene tells us that is this a change in his stance on geopolitics and if so, what could come further? will there be more air strikes and not just to defeat isis but oust assad? can you defeat isis without ousting the syrian leader. >> this is what he was appointed for, to deal with russia, when there are clashes in opinion. approaching the top of the hour. the team is getting ready for
"squawk box." kelly evans is there. >> we saw each other 12 hours ago. >> lovely to see you again. >> coming up, cliff robbins, the founder and ceo of blue harbor group. we have senator heidi heitkamp, she comes from north dakota, has been a supporter of gorsuch, has broken with her party on a few things. she's on the banking committee. we will talk to michael garland, talk to john engler, and you have to stay tuned for the next one, i'm so excited. william mcraven, university of texas chancellor, former admiral and author of "make your bed" which you might have seen in the "wall street journal" book review about a week and a half ago. it's great. ever since i read this, i not only tried to make sure i make the bed, but make it well. >> it's about physically making the bed in the morning? >> there's more to it.
he gave a great commencement speech on this theme that then became the basis for this book. the whole idea is you have to almost tell yourself every day, you know, i'm setting myself up for success today. i'm starting with the little things, moving on to the bigger ones. very powerful. >> as i depart at 3:20 a.m. each morning, i don't make my bed. >> i want you to rethink that. take 30 seconds. >> at 3:20 a.m.? give me a pass on this. ask him if i can have a pass. >> i'll ask. >> i'll see you at 8:30 a.m. as well. we look forward to "squawk box." thank you very much. >> thanks. still to come here on "worldwide exchange," it may be a holiday-shortened trading week, but that doesn't mean it's light on actions. bank earnings and key mick reports on inflation, retail sales up ahead. we get you set up for this with steven nicholas, that's next. you had some blocks and you had major thoroughfares and corridors
that were just totally pitch black. those things had to change. we wanted to restore our lighting system in the city. you can have the greatest dreams in the world, but unless you can finance those dreams, it doesn't happen. at the time that the bankruptcy filing was done, the public lighting authority had a hard time of finding a bank. citi did not run away from the table like some other bankers did. citi had the strength to help us go to the credit markets and raise the money. it's a brighter day in detroit. people can see better when they're out doing their tasks. young people are moving back in town. kids are feeling safer while they walk to school. and folks are making investments and the community is moving forward. 40% of the lights were out, but they're not out for long. they're coming back.
welcome back. futures at this hour a bit soft coming off the back of a day where we were essentially flat. net-net, nothing really happening. yesterday was low volume, the second lowest volume day of the year. let's get you up to speed with what to expect on the day ahead. joining us is hans olsen. thanks for joining us. i suppose the real story the last three or four trading days has been oil prices, energy outperformed last week and outperformed again yesterday. is that really on these geopolitical concerns following syria? is it something that could be more meaningful? demand/supply dynamics that could last longer? >> it could be a combination of both, wilfred. i think the core of it all is the fact that the economy continues to expand. production cuts that were announced by opec are working their way through the system. it takes some time for it to come through. the fact of the matter is
consumption demand for oil continues. it has never abated. consumption growth continues. i think, you know, it probably at the end of the day is a combination of the geopolitical and then the basic supply and demand kicking into high gear with banks, healthcare next week. could that steal the pot slight from geopolitics? help the markets resume the upward trend? >> it should. we need good earnings to come through this period. i think the expectations for a 9% growth this quarter in profits yet for calendar year 2017, the expectations continue to tick down. most of that growth we expect will come from a handful of sectors, really three of the 10 or 11 broad sectors. it needs to broaden out.
not only does it need to be good, but be broad. >> let's talk about financials, a big week for them. three of the big six banks reporting on thursday. amongst others. are you optimistic for earnings season? can it justify the run up we've had since the election and yuf set the fa offset the fall we've had in the last month? >> i've been much more cautious on this. at the end of the day we'll see earnings growth in 2017 be more on the order of 5% or 6%, not the roughly 9.5%, 10% that the market currently expects. over the course of the year, wall street is typically overoptimistic about earnings and profits will be, and what we've seen so far this year is that that trend has not disappointed. it starts strong, over the course of the year expectations adjust. as i said, i think earnings growth this year will be probably half of what the consensus expect ed at the
beginning of the-year. >> do you see that being driven by organic rev flew growenue gr cost cutting again? >> i think we've seen a peak in the margins. the question will be about the quality of the growth. will we see much in the way of revenue growth. here again the revenue growth expectations are fairly modest. you know, when you look at modest revenue growth and a peak margin, it's not a stress to see earnings coming in lower than expected. this is important because most of the run we've seen in the market has been a result of multiple expansion, not earnings support. >> we talked about the impact of geopolitical concerns on the oil price earlier, following the air strike on syria on friday. rex tillerson traveling to russia coming up, should geo concerns be affecting other things other than oil prices? or is it fair that the markets have shrugged that off?
>> conflict, in an odd sense, has been good for capital markets. it creates demand. that said i'm not sure we're pricing in a cold conflict turning hot in places like asia. that's an area i'm most concerned about. you have a potential adversary that has the ability to strike back. i'm not really clear that's priced into markets at all at this point. >> final question, just quickly in terms of the dollar, not much movement today. your expectations for the rest of the year? >> my expectation s are the dollar will remain strong and strengthen over the course of the year. when you separate it out, forget the reflation trade, if you dial it back and look at the trends in economic activity, whether it's core inflation, core consumer inflation, employment and the like, and even the fed recently has said this, we don't need the extraordinary monetary policy longer. if that is unwound, we should have a stronger currency.
good morning. pr nightmare. united's ceo is backing his employees after video when viral of an overbooked passenger being dragged off a plane. then we got a food fight. grocery store battle billing over whole foods. jana partners raising its stake in the company. and the craft beer bubble. brewery growth leveling off after a decade of gains. booze news straight ahead. it's tuesday, april 11, 2017, "squawk box" begins right now. ♪
live from new york where business never sleeps, this is squx squ "squawk box." welcome to "squawk box" here on cnbc, live at the nasdaq market site in times square. i'm andrew ross sorkin, along with joe kernen. kelly evans hanging out with us today. look at u.s. equity futures. a bit of a mixed picture. virtually unchanged across the board. >> you say that every day. >> laically it's been flat. >> virtually unch. >> if we flip the board around, what happens? >> we could do that as well. the s&p 500 off by a point. the nasdaq up by a point. the dow up by a point. those things flipped around a few seconds ago. from the red to the green, from the green to the red. the nikkei, hang seng and shanghai a mixed picture. >> what did you make of th