tv Worldwide Exchange CNBC June 13, 2017 5:00am-6:01am EDT
good morning the tech tumble. the nasdaq posts its worst two-day streak of the year the fed in focus the stall bacentral bank kicks s two-day policy meeting and congratulations to the golden state warriors who claim their second nba title in three years. "worldwide exchange" begins right now. ♪ good morning welcome to "worldwide exchange" on cnbc.
i'm sara eisen >> i'm wilfred frost, very good morning to you from me as well good to be back. >> good to have you back after a crazy week in the uk and we thought the comey testimony would take the week -- >> theresa may managed to shoot herself in the foot and the uk delivered another surprise june vote >> looks like she will forge ahead. >> just about. she will be able to continue for now. the question is for how long we'll discuss that later >> let's check in on the markets. after another big tech selloff dominated the trading day yesterday on wall street futures pointing to a bit of a rebound this morning dow futures up 45. s&p 500 up 6 nasdaq futures are up 21 so maybe a reprieve from the tech selling check out the nasdaq two-day chart. we're talking friday and monday. brutal day for tech. monday not as bad as friday. the nasdaq 100, which tracks these big cap tech stocks having the worst two-day session since
back in september. names like facebook, amazon, apple, netflix and google, the big winners and still are for 2017, suffering big heavy selling. they're up in the premarket. we should mention because this is "worldwide exchange," it's actually been a global phenomenon the tech selloff. ten cent in china, samsung in korea selling off on friday and into yesterday having a bit of a reprieve this morning. >> i think important to see the futures are up today this time yesterday those names were down about 2% this is already looking like the rot has been stopped another sign of that is the asian market yesterday asian tech, particularly in japan and korea, some names in china like ten cent they were down sharply. today asian markets showing signs of reprieve. korea up 0.7%. shanghai up a half percent japan basically flat hong kong itself is up today european trade for you as well
we are seeing some rebound th e there. yesterday, again that selloff infected european markets and germany and france were down some 1% yesterday. all markets in europe are up a bit on the note of the uk, we should mention, we had cpi, 2.9%, expected to be 2.7%. well above the target range of 2% for the bank of england the highest since june 2013. the pound has risen off the back of that. a look at broader markets. ten-year treasury note 2.22%. we are treading water ahead of that fed meeting due today very much a 25 basis point rate hike priced in already the question, of course, what happens going forward and how they do it, continue using interest rates or balance sheet reduction. >> we will get cpi numbers and
retail sales over the next two days the data as a whole could dictate the tone of the fed rate hike into tomorrow what they say about balance sheet reduction. how aggressive they want to be when it comes to rates let's check on oil oil prices back above $46 a barrel for wti 46.27, up 0.4% higher again this morning. higher yesterday, too. brent, 48.48, up 0.4%. nat gas popping about a quarter of a percent as for the u.s. dollar, little changed into the fed meeting it's been sort of quiet after the turmoil of last week with the british pound weakening on the back -- >> kind of rebounding. it was doing that any way this morning. cpi helped it more just back to 1.27. recovering a bit but unlikely to see a strong recovery from here until we get that agreement between theresa may and the dup and the government is able to govern
at the moment a little uncertainty, an outside small chance you could have another election theresa may held off the -- >> another election? aren't they sick of elections over there >> definitely. everyone is. why is theresa may able to hold a government and not been ous d ed yet is because conservative mps like boris johnson realize if you had another leadership change you would likely have to follow it with another election. that's why she's surviving now but in the short-term she needs an agreement with the dup so she can govern >> the key is whether selling continues, buyers step in and whether there's fundamental reason, whether the fed gives it or not one thing about the selloff, we talked to a number of portfolio managers about this yesterday and tech strategists, not one fundamental reason that they can pinpoint some people look at the goldman sachs cio note last week saying the tech stocks have had outsized gains it doesn't make sense.
valuations are high. generally chocked up to healthy profit taking after a nice run the question is does it become more violent and worrisome to drag down the market for the summer this morning a bit of a reprieve >> either way, a bit of reprieve in tech stocks and asian tech names. but even before that the encouraging thing was that the rest of the market wasn't dragged down too much. two sectors were focused on. oil prices stopped their slide, so friday and monday we saw the energy sector perform. >> and the banks >> banks is interesting. banks had their selloff a month before now tech is having its profit taking banks on the other side have been able to rally off the back of that and had a great week last weekend and all eyes on the next couple of weeks for the banks. first of all we get stress test results on the 18th of june. that's a huge moment for all of them less than a week after, we get reported earnings. >> we also got last night the
treasury recommendation for regulation. the day ahead, another important one in washington. attorney general jeff sessions heads to capitol hill today to testify before congress. he will be appearing before the senate select committee on intelligence sessions will likely face questions about the firing of former fib fbi chief james comed his relationship to the russian ambassador to the u.s. during the election his testimony gets underway at 2:30 a.m., it is unknown how much he will answer or whether he will invoke executive privilege. a close friend of president trump says he is considering whether to fire robert mueller, the man leading the special investigation. appearing last night on pbs, chris ruddy, the ceo of news max media says trump is weighing up
that option. >> mueller is a man of integr y integrity, but we all know in the history of special investigations they go far and wide they go well beyond what the original jurisdiction was. he's bringing in some of the top prosecutors that have worked in the justice department this is not going to be rosy for the white house. >> in a statement sean spicer said while ruddy was at the white house yesterday he never spoke to the president about mueller. in other news out of washington, the treasury department unveiled a plan to overturn rules for banks and finlt fi financial firms put in place after the financial crisis it takes power away from independent regulators, gives political leaders more influence over the process the changes would eliminate rules that affect smaller banks. separa separately steven mnuchin
testified about the budget >> if for whatever reason congress does not act before august we have backup plans to fund the government. i wanted to make it clear that's not the time frame that would create a serious problem however markets don't want us to wait >> treasury secretary steven mnuchin making the case for raising the debt limit by the september deadline something that has run into resistance from the president's own administration >> i want to come back to the recommendations on banks one other key bank there was no line alongside glass-steagall and bringing any of that back. also no clear line on repealing parts of the volcker rule around prop trading the general tone does make one key point, we could move towards a theme of deregulation or certainly less re-regulation without significant laws passed. that was encouraging particularly on capital levels in terms of stress tests moving
forward. that's why we focus on june 18th this is a different tone from regulators moving forward, and it could lead to big banks having a billion or so of capital which they can use differently. something that people have been focusing on a lot with bank share prices a simple win for them. >> used differently to buy back stock or -- >> we don't know if they'll be using it for buybacks, dividends or reinvesting it. it doesn't need to be on the sidelines. president trump is hitting the road to talk jobs. the president and his daughter are traveling to wisconsin where they'll visit a technical college to promote skills based education. this is part of president trump's push to expand aprenstiesshapren apprenticesh apprenticeships. later today he will speak at a fund-raiser for governor scott walker uber is expected to release the findings of that highly anticipated investigation into
the company's culture. the investigation which was conducted by eric holder is expected to include recommendations for how the company should address issues in the future the report was commissioned earlier this year following claims of sexual harassment and gender discrimination at the company. this was promised to be released to employees today already reported that the recommendations in the holder report were taken by the board in their special sunday meeting. the big question is whether travis kalanick takes a leave of absence for three months or so >> which is a big focus. >> they lost a lot of key executives almost all of them >> absolutely right. imax announcing it will lay off 100 full time employees or 14% of its work force in an effort to rein in costs. the cuts will take place across multiple divisions including
finance and marketing. imax is trying to reduce costs by $20 million annually the company also announcing it will buy back up to 2$200 millin of common stock over the next four years the ceo says the moves will help increase efficiency and give it the bandwidth to pursue important new initiatives including original content and virtual reality. the move comes at a time when the imax stock price is sagging. shares of the big screen giant are down 30% in the past three months and trading up about 1.25% in early trading back over to you >> thank you very much for that. more stocks to watch today toshiba is being sued by a group of foreign investment for 3.$3. million over an accounting scandal. no real move in the share price. hyundai unveiling its first sub compact suv.
the launch comes as the company offsets sliding sales in china and works to catch up to rivals in the suv market. deutsche bank reaching 1$170 million settlement with an investor claiming the lender conspi conspired to manipulate the euribor. shares up 1% in german trade. shares of science applications taking a hit. the defense contractor reporting revenue that came in below the street's targets as well as lower mar sxwrgins shares of acceleron is slipping. and merck is enrolling in a blood cancer study prime minister theresa may holding talks with her rival today. and european stocks this
morning in early action are pointing to gains across the board. the german dax is up more than a half of a percent. france is up a half percent. even the ftse 100 is doing well. >> did well last week, too because of the softer pound. >> absolutely. rhre political certainty peaps. we'll track that situation next on "worldwide exchange." hey dad, come meet the new guy. the new guy? what new guy? i hired some help. he really knows his wine. this is the new guy? hello, my name is watson. you know wine, huh? i know that you should check vineyard block 12. block 12? my analysis of satellite imagery shows it would benefit from decreased irrigation. i was wondering about that. easy boy. nice doggy.
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. welcome back to "worldwide exchange." dow futures up 42 points nasdaq futures up 21, watching that closely after two days of selling. the nasdaq 100 suffering the worst back-to-back session friday and monday since back in september as some of the biggest winners, facebook, amazon, alphabet and netflix give back gains. s&p zfutures up 6 s&p yesterday only lost a tenth of a percent because other groups balanced out the tech slide. >> oil prices recovering, a boring rally but the most important thing is the rest have not sold off in global political news, british prime minister theresa may is meeting with the head of the democratic unionist party in
a deal that would find the dup supporting conservatives without a deal may would struggle to govern and the uk could be headed for another election that would cast brexit talks in doubt if that would happen aled head of that, theresa may l travel to paris today to meet with the new fresh president, emanuel macron the pound today having a bit of a rally around the 1.27 level. >> how is that meeting going to go he's just coming off an amazing election victory, i got his majority in parliament -- >> almost got his majority needs that confirmed in the second round on sunday either way, both the brexit talks on monday when david davis talks, theresa may has much diminished authorities.nations g
their hands with glee at this result >> from the market perspective, i wonder if he'll convince her softer brexit is the way to go >> i think the bigger debate is whether theresa may's own mps can convince that position >> bwhat is clear now is two things in the manifesto, no deal is better than a bad deal. she'll have to push ahead for a deal, and if brexit comes at all, there's going to be hard aspects to it. kit juckes, a friend of the show, is skeptical that we get a short covering rally, because he says if brexit happens, which it will, it is hard in the grafrnd scheme of things big celebrations in california as the warriors bring home the nba championship. and if you didn't love pit bull before, you will love him
now. what mr. worldwide said to cnbc about currency first as we head to break, here's the weather forecast from nbc's bill karins. good tuesday morning to you. the heat wave continues today. but it's going to break. today is the last day of the really hot stuff in the northeast and the great lakes. it will feel like 92 in chicago. new york, 97 the only one hot ser dallas. new york one of the hot spots on the map. the forecast into the end of the week keeps it warm in chicago, warm in little rock. the northeast will get some relief temperatures will drop down into the 70s. 60s in maine new york city, 72 on friday. so cooler weather is on the way. we will have severe storms on the way. yesterday 30 tornados reported today a few more from nebraska to minnesota that's your business tveral forecast more "worldwide exchange" when we come back looking from a fresh perspective can make all the difference.
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welcome back to "worldwide exchange." let's get you up to speed in the market action. important thing is that the tech sector has stopped its slide this time yesterday we did still see that premarket move, the likes of facebook, amazon, apple down 2%. that's not happening we are higher by a tenth of a mer sent, percent, 0.2%. a quick look at some of the bigger tech stock names.
for the most part pointing higher this time yesterday the board was pointing to a 1.5%, 2% decline. >> former presidential candidate jeb bush has a message for president trump and he delivered it on cnbc at the emerge america's conference liste listen >> i'm not happy when he injects himself in a place and creates a legal hazard for himself he should stop tweeting. he should focus on an agenda to restore economic growth. it's not about him it's about peoples hopes being lifted that's my advice donald, i know you watch cnbc, you're an avid cable watcher get on with it, man. you're president of the united states, you have great opportunity, the country will rally behind you >> of course he's not the only person who suggested that the president will slow down with the tweeting
i'm not sure the president will listen to jeb. >> correct >> unlikely to get across. lots of people saying that same message. >> we heard from pitbull at the emerge america conference. he sat down with melissa lee talking bitcoin. >> i was having a conversation back stage about bitcoin i had my arm around that five years ago. >> are you in it. >> i'm not, to be honest with you. i don't understand did to this poi it to this point we see reality is becoming virtual. >> i don't think he's the only one who doesn't understand it. >> the only one that regrets not being invested in it >> absolutely. hit 3,000 on sunday. >> not just a five-year view, but a month or two-month view. >> i like that he's savvy. talking about it everybody else is talking about it on wall street as well. >> lovely to see someone who made his fortune or his success in music but still has an
interest in global macro things. he's a business guy. he loves his stuff to sports. for the second time in three years, the golden state warriors are nba champions. they beat the cleveland cavaliers 129-120 to close out the finals in five games this is the fifth championship in the warriors history and the first they won on their home court. kevin durant was named finals mvp. the warriors and cavs could meet up again net year. vegas has golden state as the favorite to win the title in 2018 cleveland is second at 3/1 >> golden state favorites again. >> because it's not just steph curry now, they have kevin durant as well >> steph messaged you since? >> he hasn't everyone is asking why i didn't root for cleveland because i'm an ohio girl >> obviously -- >> when i travel to asia -- >> steph is playing. >> congratulations to curry and
the warrior team coming up, the top stories and a round up of global markets. plus justin bieber beats a record last held by the beatles. >> i read more into this the beatles still just ahead on this particular issue. >> good. i guess people will be happy to ayar that. st tuned to "worldwide exchange."
is the sector wreck over with? >> president trump hits the road to talk jobs. and a sign of the times as justin bieber breaks a big money milestone. it's tuesday, june 13, 2017. "worldwide exchange" continues right now. ♪ good morning welcome back to "worldwide exchange." i'm sara eisen >> i'm wilfred frost >> let's check in on the markets. a bit of a rebound some relief after two days of tech stock selling dominated the action dow futures up 36. nasdaq up 18 and s&p futures are up 5 the tech rebound happening overseas a alibaba, ten cent, asml all in
the green. that's important because the tech drop in the u.s. started to move overseas. t tencent selling off a bit. the nasdaq 100 coming off the worst two-day stretch since september. the nikkei closing flat. we saw gains in south korea and shanghai the ftse 100 towards the flat line giving back some earlier gains. a nearly 1% move higher for italy. oil prices which have been important, offset to the tech slide, they were down 3.5% last week but rebounded on friday they rebounded again yesterday oil up a half percent. it is up another 0.4% today. 46.27. energy market -- energy sector within the s&p has done well off the back of that friday and
monday ten-year treasury note for you, all eyes on this, if we get a rate hike today -- tomorrow, very much expected 25 basis points. the question for the market is what is forecast moving forward. more tightening and in what format balance sheet reduction or more hikes. dollar board for you treading water a bit of a mixed picture ahead of the fed meeting today a bit of dollar strength against the yen. flat against the euro. the pound rebounding, back above 1.27 up a bit before this morning before inflation data. inflation data coming in and raising questions about what the bank of england may do on thursday at their meeting. gold prices this morning are just about flat. no, down 0.4%. >> they have been pulling back in the last few sessions.
in washington news, president trump hitting the road today to talk jobs as his attorney general takes the hot seat on capitol hill kayla tausche is in washington with more. good morning >> good morning. those two events this afternoon happening nearly simultaneously. white house pushing on with its policy themed week as the russian investigation comes into the spotlight again. attorney general jeff sessions will testify in an open hearing this afternoon and face questions about his meetings with sergei kislyak and his role in firing fbi director jim comey. on the latter point, sean spicer was asked whether the white house would seek to keep those conversations private between sessions and the president here's what he said. >> when jeff sessions testified tomorrow, do you believe he should invoke executive privilege on conversations between himself and the president as it relates to jim comey? >> depends on the scope of the questions. to get into a hypothetical at this point would be premature.
>> the senate has approved new sanctions for russia, particularly for individuals involved in, for instance, cyberattacks and interference in the election as well as new sanctions for mining and metals industry the president will have to sign off on those to add another level of intrigue a personal trend of the president was seen leaving the west wing, an hour before that friend told the president was considering firing bob mueller, the special counsel in the investigation. ruddy, the friend, did not meet with the president but they would not say who he did meet with on the policy front, the administration will take its push for apprenticeships to wisconsin today. and elsewhere, the financial services industry will dig into a 149-page report from the treasury report with suggestions on how to change dodd-frank. among them recalculating certain
capital ratios, and providing regulatory relief for both ends of the banking spectrum. >> is there any movement in the senate on healthcare i knows there been a lot of talk about what they're making public what they're not whether they will hold hearings or not is there progress on this front? >> all the progress at this point has still been made behind the scenes senate leadership are still drafting potential portions of this healthcare bill and sharing that with the congressional budget office to get a score it usually takes the cbo 10 to 14 days to put together a score. even if the senate had a full text at this point, the expectation is that it would take two weeks to get that score, which the senate requires before it can vote on something. senator john cornyn last night,
the whip, he doesn't believe a vote will happen in the senate until july some odds are starting to slim on exactly whether the senate can actually reach consensus on what should be included in that bill again, any progress is made behind the scenes despite reporters asking all of the members of the senate that very question every single day. >> we got much reaction from democrats to mnuchin's report on deregulation of the banks? is there much uproar and response to it >> not quite yet i think there's an expectation that where the democrats will want to exercise some of their opposition is in the hearings that will take place as some of this legislation is being drafted. i don't think they view it as productive to direct that at the treasury department. these are just recommendations, but ultimately the bulk of what happens on the regulatory front
will have to come from congress and so i think they're trying to save their efforts and energy to put that to work there >> just as it can be a distraction from the legislative agend agenda >> the fed is front and center this morning as policymakers begin a two day meeting. the central bank is widely expected to raise interest rates again. the fed decision is duz e at 2: tomorrow that's followed by janet yellen's news conference at 2:30 p.m. eastern justin bieber topping a milestone. he beat a beatings record for having two top three billboard songs for the most consecutive weeks. his song "despacito" hit the top
of the charts. you're fact checking this one? >> the beatles have done it twice. just saying. he's drawn equal with two of their records. so i think the beatles just ahead. >> that's fair >> the interesting thing is if he can do all three at once. >> that would beat the record. >> we'll see if that happens congrats to biebs. >> he also has some friends helping them with d.j. khalid. >> i'm a belieber. dennis rodman arriving in north korea this morning this is the first visit to the country since trump took office. rodman has received red carpet treatment on each of his past visits he's been criticized for making the trips during times of high tensions between the u.s. and north korea. >> what is he doing there? >> he's played an all-star basketball game. he's in the past described kim
jong-un as a close friend. the speculation is that he's paid handsomely -- >> he's one of few americans who have met him >> yeah. it's a big surprise. he has actually met trump as well in the past he was on celebrity apprentice i wonder whether -- this is of course highly unlikely, whether he's taking a meeting -- >> a broker? >> taking a message from the president. >> are some american people there in jails key d he could do some good if he gets through to the leader. >> the thought is why on earth is he going again for what is sort of enriching himself type trip at a time of such tension perhaps we're framing that wrong. >> very mysterious one fan paid big money to see the golden state warriors win the nba finals an unidentified buyer paying $133,000 for a pair of tickets to last night's game the fan making the purchase on sunday night through the warriors ticket resale site run
by ticket master >> 133,000 >> wild. >> a lot hope they're front-row seats coming up, why some think president trump's trade policies are anything but sweet the must reads are straight ahead. as we head to break, a check of futures and the nasdaq is leading the rebound. just slipped a bit but it is higher, not lower as it was this time yesterday the f.a.n.g. stocks higher in the premarket. back in a couple minutes it's an important question you ask,
but one i think with a simple answer. we have this need to peek over our neighbor's fence. and once we do, we see wonder waiting. every step you take, narrows the influence of narrow minds. bridges continents and brings this world one step closer. so, the question you asked me. what is the key? it's you. everything in one place, so you can travel the world better.
welcome back to "worldwide exchange." i'm sara eisen along with wilfred frost. time for our must-read stories my pick is in the "wall street journal" from the ed board, "tru "trump's new sugar high. i picked this because the "wall street journal" has wavered in terms of support on president trump's economic policies, but one that they have consistently disapproved of is the trade policies, renegotiation, protectionist impulses this deal was made between the u.s. and mexico. basically the journal ed board says it results in higher prices for consumers. the new minimum price for raw sugar is 23 cents per pound, up from 22.5 cents. the world market price is 14
krefr cent if this is a glimpse into team trump's trade policy it no, i didn't pretty. the dell suggests the strategy is to use government power to enforce cartels that protect plitt kay powerful producers, and mexico's decision to roll over may encourage the white house protectionists to ask for more so much for the little guy >> it's an interesting article it leads nicely into mine, which brings it to what this all means for the market it's in project syndicate from jim o'neill "trumping the dollar." of course jim o'neill former goldman sachs chairman of asset management he outlines three reasons why the dollar had a slide one, we have not seen the growth agenda materialize in the u.s., and places like europe have seen better growth, and the third is
that the markets have built in a risk premium for the dollar, to account for uncertainties that trump's presidency has introduced it's an interesting factor in terms of the reasons why we've seen the dollar selloff. quite a big amount of it, he says, is down to this wildcard factor that people are not sure which way the u.s. is headed >> which goes back to the point we were making several times last week when you were in the uk, the political risk, for those who say it's not showing up in the markets, it's in the currency market. you have seen the volatility there, the movement every time there's a disappointment or bigger uncertainty hole that has opened up. that sounds like what o'neill is arguing. >> on the flip side, one of the reasons that euro has rallied is more uncertainty around the political front. the pound weak against all currencies it trades with because of political
uncertaint uncertainty. >> the question is, you know,vos destructive for economies. it impacts economies, and can be unstable the question is will it impact the equity markets on that view. so far not yet >> we'll have to wait and see. what goes up must come down. why one market pro says this recent downturn in tech was a long time coming he'll explain when "worldwide exan" mes ghchgecorit back i love you, couch.
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like samsung and tencent doing better today nasdaq futures up 14 off the highs of where we were about a half hour ago. still pointing to a positive start. ten-year treasury note yield has been firm. fed kicks off the two-day meeting today. decision and rate hike expected to come out tomorrow we'll get the news conference, dot plot and the whole thing ten-year has been steady, which has allowed banks to make a move higher. uber is expected to release the findings of a highly anticipated investigation into the company's culture. the company conducted by former attorney general eric holder is expected to include recommendations about how to address issues in the future tock toshiba is being sued another group of foreign investors for 3$399 million in damages over that accounting
scandal. the company will book an addition prol visivision for the lawsuit. hyundai unveiling its first sub compact suv. the launch comes as the company offsets sliding sales in china and works to catch up to rivals in the suv market. deutsche bank reaching $170 million settlement with an investor claiming the lender conspired with other banks to manipulate the euribor shares of scienc applications taking a hit. the defense contractor reporting revenue that came in below the street's targets as well as lower margins. shares of acceleron is slipping the company says a phase two trial of a kidney cancer drug was not successful in increasing progression-free survival. merck is pausing enrollment in studies of blood cancer treatment following the recommendation of a data monitoring committee
diabetes drug from johnson & johnson showing a heart benefit in a large safety study. the company presenting the data at a medical meeting yesterday. shares of synaptics announcing two deals, buying an audio company for 3$300 million and a multimedia business for 95 million. the fed kicking off a two-day policy meeting today with us now is paul hickey thanks for joining us. >> thanks for having me. >> let's talk about the tech selloff. the fact that we have asian tech stocks up today. the nasdaq i in the premarket. does that suggest this was a two-day bit of profit taking >> i wouldn't say it's something more worrying for the market as a whole, but looking back at prior events where the nasdaq hit a 52-week high and finished
down 1% like we saw friday, seems like you want to place weight into those events, but looking back they're not that uncommon about 25 other occurrences going back to 1990 it's like if you throw a big rock in the water, it will take time for things to settle down looki looking out over the next months, it looks like things will get back to normal this happened on a summer friday. i would put as much weight into the market events on a summer friday as you would like a bar near last call things seem important, but by the next day or a few days later you don't remember what happened >> are you saying you're a buyer on the dip >> the next few days you could take positions in the market for the market as a whole this is not a worrying event. two sectors did well in that
tech selloff were energy and financials you had the tech bubble in 2000, financial bubble in 2007 and energy in 2014 they all tracked each other over time energy you want to stay away from for a while financials are where tech was about 2011 so you could see financial outperformance >> financials have a lot of dates coming up. announcements about deregulation, stress tests, and earnings do you get into the banks before all of these key dates or wait for them >> with the banks you can get into them. the yield curve flattened. everyone says the banks can't make money when you have the flatter yield curve. while that's been true the last several years, long-term the yield curve has not been nearly
as correlated to the performance of the financials. what you've seen from a long-term perspective is overcapacity in the financial sector wearing off for the long-term perspective, if you have a long-term horizon you don't need to wait for earnings do come through >> which is a bigger risk of derailing the broader rally? a political risk sessions is testifying today or a market risk with the fed? which is announcing the decision tomorrow and the news conference and everything else. >> at this point the market doesn't seem to care about anything politically i would say the fed. the worry with the fed is that they've become more aggressive than the market is anticipating. you have a relatively flat yield curve. if you go on to autopilot and the curve gets inverted, that's a bad sign for the market. >> and for the banks >> it's a bad sign for everything with an inverted yield curve. so focus on the fed.
talk that maybe we won't get this rate hike in september, that may be premature. the economy is doing better this year than last year this time. last year the fed was still worried about issues in europe political uncertainty. brexit a lot of those issues are less pressing and concerning to the market and to fed watchers now as it was then you mentioned the market doesn't seem to care about politics. the currency market does what is your take on that particularly in light of a potential rate hike tomorrow is the dollar softness going to reverse course >> we are of the view that the dollar goes into multi-year waves. so you have uptrends and down trends in the dollar we have had an eight-year rally in the dollar, we're in for a period of longer term dollar weakness hear. it may not be straight line down, but it is under-performance versus other currencies in that environment focus on u.s. multinationals and emerging
markets. >> what have you found in terms of correlations? when the dollar is going down, bonds, stocks, bitcoin are going up, how long can that last >> that's a $64,000 question when the dollar is going down, other assets do tend to go up in value. that's what is so strange about the current period, commodities are going down that's the one thing where the fed can take a wait and see approach it's uncommon that you see oil and the dollar decline simultaneously in those periods where we've seen that, that's good for stocks >> so tech not too much of a worry but don't jump in today? maybe later in the week? >> for the market overall, not a concern. >> paul, great stuff >> thanks. >> less than a minute left i'll watch tech because that's really dictating the broader market the moves have been big in the last two sessions down
good morning tech under pressure. the nasdaq posting the worst two-day streak of the year it could have been much worse yesterday if you watched it. wall street's fear index hitting the highest level in three weeks. it's all relative. not up much. the fed is in focus. the central bank kicking off a two-day policy meeting, expected to announce an interest rate hike tomorrow. and attorney general jeff sessions in the hot seat he'll face questions from his former senate colleagues on russian interference in the election it's tuesday, june 13, 2017.
"squawk box" begins right now. ♪ live from new york where business never sleeps, this is "squawk box. good morning, everybody. welcome to "squawk box" on cnbc. we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. yesterday we saw a bit of a weakness in the markets. dow was down by 36 points. s&p off by two after friday's selloff, the nasdaq was down by a half percentage point this morning there is a rebound. dow futures indicated up by 38 points s&p up by 5 points nasdaq up by 18 points overnight in asia, you'll see that the nikkei was down but just barely. i would call this