Skip to main content

tv   Worldwide Exchange  CNBC  October 17, 2017 5:00am-6:00am EDT

5:00 am
on the hunt for dow 2300 the blue chips close in on another major milestone as more dow components get ready to report. netflix doubling down on content. the big bet the streaming company is making on original programming. and a wall street dog fight. why boeing is blasting rival airbus it's tuesday, october 17, 2017 "worldwide exchange" begins right now. ♪ >> good morning. welcome to "worldwide exchange" on cnbc.
5:01 am
i'm sara eisen >> i'm wilfred frost good morning to you from me as well very good morning to you i don't get to say that often. >> it's been a lot of travel lately >> and i'm today >> you're off for work >> west coast, for work. don't sound sosurprised. >> wanted to clear it up >> let's get to the markets. have a look at what they're doing. the dow getting closer to 23,000 we hit the highs in the morning, then sold off a bit. we close up for the dow about 0.4% less than that for the nasdaq. the s&p was up 0.2%. telcos the top sector. banks also did well as we saw yields pick up real estate and healthcare were the disappointing sectors. essentially flat this morning. yields did pick up yesterday that manufacturing data was better than expected really brought a smile to rick santelli's face as well. he enjoyed that number 2.31 the yield on the ten-year
5:02 am
that slight pick up helping bank stocks >> as for the overnight action in asia. sort of mixed picture. japan's nikkei continued to push higher, up 0.4%. loving that weaker yen hong kong closing flat shanghai comp down more than a tenth of a percent south korea up 0.2%. big economic number crossing british september ppi matching expectations but showing they have an inflation problem. 3% inflation which is the dilemma for mark carney >> that hit a half hour ago. just getting the european cpi, it paints the perfect split between those two countries or two currency regions september cpi at 1.5% year-on-year that was in line with expectations but exactly half the rate. it just paints that different picture. what europe is seeing is growth, and the uk is seeing still growth, but decelerating growth.
5:03 am
>> decelerating growth, that weaker pound and the hike in the next bank of england meeting almost fully expected. the jump in the pound small. so people expect a one and done hike for mark carney >> did have a chance to talk to -- i know you watched the chancellor, philip hammond, asked about this economic pain, slower growth, higher inflation and how much longer -- he went straight to the positives. the deficit is shrinking, unemployment rate at a multi-year low so it's not all bad news when it comes to the brexit impact. >> and on mark carney, his inflation target is 2% plus or minus one. only now has it hit three, will he have to write a letter -- >> love that tradition >> expected we'll see a rate hike, a one and done next meeting for the bank of england. broader markets, oil prices, which enjoyed -- they did rise
5:04 am
yesterday, around a percent or so because of that conflict in northern iraq. up today, 0.6% 52.2 for wti the pound jumped but not too much, up 0.2%. it's slipped a bit up 0.1%, highlighting how much people expected that higher inflation number gold prices for you, didn't do much yesterday slightly negative. today they are more meaningfully negative, down 0.9%. 1,291. netflix shares hitting an all time high after the company reported better than expected third quarter results. the streaming service added 5.3 million new customers around the world that topped estimates. the company expects to add another 3 million this quarter and they plan to spend $8 billion on content
5:05 am
let's bring in porter bibb who follows this one closely that's the big headline, instead of the $7 billion like last year, it's now $8 billion investors appear to be okay with it >> so far, that's right. but there are some hurdles that reid hastings and netflix have to get over. the big one is the price increase of $1 to $2 a month that he announced. that could have a deleterious impact on earnings for the next two quarters the biggest problem is the mounting debt. netflix has $28 billion of off balance sheet obligations and liabilities, that number keeps growing because this year alone they're spending over $8 billion on new content so netflix really is having to feed the beast to stay up there. they have a 250 times pe
5:06 am
they have a $90 billion market cap, i suppose the headline beyond the earnings is the fact that reed hastings says we're not buying the weinstein company, which would not be a bad deal, because they pick up a couple hundred movies, very good movies for not a lot of money. >> but porter, you say they're feeding this content beast it is paying off, the subscriber numbers again very impressive. this was actually meant to be a seasonally weak quarter for them on sub growth. >> most of those new subscriber are coming from outside the u.s. they just about peaked in this country. they're being seen as a mature service. yes, they're the pioneers but they have hulu, google, youtube, amazon, and the big news they must be nervous about is disney's movie channel which bob iger announced last week >> to me, it feels like this is
5:07 am
response to that, we will ramp up our own original content. a lot of the money that is being spent here will be on international and non-u.s. language films >> but they're facing a lot of local competition. u.s. films do not necessarily fly in every country around the world. each country they're competing in, and they're in almost 90 countries today, they have to face a lot of competition from local competitors. >> porter, quick final question. you mentioned the word mature, which we don't associate with netflix. on top of that was this offer from t-mobile to have it for free which reminds us of how traditional broadcasting works, you pay through your telecom company that delivers the link up does that point to slightly more mature status for netflix? >> does, indeed, but it also
5:08 am
shows that they're willing to play that game because they really understand that they have just about peaked in the u.s with that price increase, that is going to really be a potential hurdle that they may not get over >> you think so? they've implemented three price increases over the last 3 1/2 years seamlessly i would pay a dollar extra to see the new season of "stranger things." >> i would pay $100 for the next episode of "the crown. >> we're all looking at the skinny bundle, and all of these new movie channels that are competing with netflix add up. so that it's not just -- one wonderful secret of netflix is it's not baeen an expensive commodity, and people may not watch netflix month to month but watch a couple shows they don't mind paying 8, $9, but when it gets to $10, $12,
5:09 am
you have $30 from over movie channels, it makes a difference. >> porter, thank you very much for that everyone is talking about the next series of "stranger things." no one mentioned "the crown. >> when is that out? >> november 9th. >> the biggest headline is what reid hastings was wearing on the webcast. that red sweater >> from "stranger things." >>she he should have worn a crown. >> we'll get a trio of economic reports today. import prices, 8:30 a.m. followed by industrial production at 9:15 at 10:00, the monthly home builder survey patrick harker will be speaking this afternoon on the earnings front, results from goldman sachs, morgan stanley, j&j, united health and ibm. big banks reporting. what you are eyeing out of these two?
5:10 am
>> some of the themes from last week don't apply as much to morgan stanley and goldman sachs, which are slightly pewer investment banks, the key things to watch is goldman sachs fixed trading revenue. that overplay with some of the monsters because of some other parts of their business. for goldman sachs, it's been a big part of the business they missed heavily the last two quarters most people think that doesn't stop the rot yet this quarter. we could have another negative quarter for them morgan stanley did well last quarter. >> private banking is the story there. >> the wealth management has done well. a programming note, tomorrow wilfred will be sitting down with wells fargo ceo tim sloan i was wondering if we could mention this he will talk to simslosi tim sloan. >> that's the one yooe-year anniversary of him becoming ceo.
5:11 am
>> and that brutal grilling. >> since friday's numbers, which were disappointing for them. europe's airbus and canada's bomba bombardier are joining forces. landon dowdy has the details >> airbus will acquire a majority stake in bombardier cseries program for zero dollars. it gives airbus a 51% in the limited partnership which manufacturers and sells the jets, airbus ceo tom enders says the deal will improve the cseries passenger jets which has struggled for customers it will be built at one of the alabama plants, that's key because it could allow bombardier to avoid u.s. taxes the u.s. says the company is
5:12 am
unfairly subsidized by the canadian government. boeing blasted the deal saying this looks like a questionable deal between two heavily state subsidized competitors to skirt the haven't findings of the u.s. governme government, our position remains that everyone should play by the same rules for free and fair trade to work. you can see the stock prices. >> the political aspect of it is altered as well. >> will they run into antitrust issues. >> i don't think so. politically it's seen as a positive because it's saving jobs in that region. stocks to watch today, rbr capital launched a campaign to break up credit suisse the hedge fund built a small
5:13 am
amount into the company. >> it says they will bring back first boston this is all the ft reporting, and it says even though it has a small stake, 0.3% of the company, it has agreements with 12 other significant investors it represents this is getting focus. if you have an activist break up into three different ways of a big swiss investment bank, that's a huge deal if it happened comes back to thiem being there since 2015 european banks are down since he took hold, down about 10%. his turnaround has taken its time >> stock is up 1%. unclear whether investors are buying into that >> i think they're buying into that that's why it's up today interesting story. >> kobe steel says the justice
5:14 am
department asked for information about substandard products it sold to u.s. customers earlier this month kobe steel admitted to falsifying paperwork. the scandal may have stretched back to 2007 affecting 500 companys >> apple reportedly considered expand nothing healing into hea clinics. they considered buying cross over health but discussions did not result in a deal crossover builds and runs on-site medical clinics. we know apple has been interested in health apple, did you see, had the best day since august. biogen upgraded to buy stifle says biogen has done work on several treatments for stroke patients that will be worth following. sonic reported fourth quarter earnings that beat forecasts but revenues missed. same-store sales fell 3%, the
5:15 am
drive-in site says it is due to hurricane harvey. and nelson peltz lost his seat because of 0.2. you have been gone that's why i haven't been corrected. so i slipped back into his old habits this is a preliminary tally which could change based on certification by an independent firm last week p&g said peltz lost the proxy fight, peltz said the fight was not conceding. unbelievably close >> closer than originally expected peltz says it is still too close to call. i don't see how this is a victory for p&g. 0.2% after all the money and effort they spent. >> all the insider votes they had. >> i talked to david taylor after the meeting, i said it was so close, would you consider adding him to the board because the shareholders voted, he said, no, not if it's a win. >> was that before or after ice
5:16 am
cream. >> after one and before another. uber and softbank deal likely to occur within the next week arianna huffington did not disclose a price tag on the deal she did say softbank could end up with at least 14% stake in uber huffington commented on uber's efforts to mend its culture saying the new ceo wants to get people to love the company, not just the product in other news on softbank, recode reports the company is in early talk to raise a second tech fund. the japanese conglomerate upending silicon valley by making bold investments across the tech sector with its $93 billion fund the new fund could be substantially larger than that still ahead, we'll head to china. major preparations underway ahead of the communist party congress a live report from beijing about what investors need to be watching here when "rlidwodwe exchange" returns.
5:17 am
♪ can i kick it? ♪ yes you can ♪ can i kick it? ♪ yes you can ♪ can i kick it? ♪ yes you can ♪ well i'm gone
5:18 am
5:19 am
throughout history, the one meal when we come together, break bread, share our day and connect as a family. [ bloop, clicking ] and connect, as a family. just, uh one second voice guy. [ bloop ] huh? hey? i paused it. bam, family time. so how is everyone? find your awesome with xfinity xfi and change the way you wifi. welcome back to "worldwide exchange." china's biggest political event of the year is about to kick off. eunice yoon has all the details for us thank you very much. beijing is in lookdown ahead of the 19th party congress. if you want to come to the capital, prepare yourself to have a lot of patience, if you go to the airport, expect extra
5:20 am
security checks. there are full body scans and bag screenings on the subways. if you order anything online, just be prepared that you probably won't receive it until after the congress ends, which is on october 24th even airbnb is off limits here the company said it had to c cancel bookings within a 20 kilometer residence of tiananmen square the state media has been playing up the achievements of party and president ping there was a commentary criticizing what it says it chaos swamping western democracy in contrast to china's political stability and social harmony to maintain that harmony, this year's congress will be much more austere, in line with
5:21 am
president ping's anti-corruption campaign organizers say for the delegates, no free air cuts or facials, no free food in the hotel rooms, no big bouquets of flowers, and no seafood delicacies on the menus. there will be free lunches but all buffet style >> no hair cuts? was that an issue in past years? >> yes, they would get free hair cuts, spa treatments lots of eyes on that eunice, thank you. it's the biggest political event in the far east every five-year period, but it's hard to interpret what it means for markets. the fact that president xi will cement his grip on power, it means it shouldn't be massive more markets >> i was at the imf world bank meetings talking to a number of
5:22 am
economists, policymakers, i bring up the china question, it linkers out there. they managed to keep growth strong in the face of a slowdown what about the debt? what about the credit problems you know, christine lagarde has been an advocate for some chinese policies she said they get it it's under control they're taking steps and measures to sort of address that problem. i think that's one that's out there. >> definitely. the debt issue, they have never reduced it it continues to increase quickly. still to come, we've never seen stranger things happen on a corporate earnings call. why netflix's reed hastings was supporting this ugly christmas sweater.
5:23 am
5:24 am
whuuuuuat?rtgage offer from the bank today. you never just get one offer. go to and shop multiple loan offers for free! free? yeah. could save thousands. you should probably buy me dinner. no. go to for a new home loan or refinance. receive up to five free offers and choose the loan that's right for you. our average customer could lower their monthly bills by over three hundred dollars. go to right now. trust #1 doctor recommended dulcolax. use dulcolax tablets for gentle dependable relief. suppositories for relief in minutes. and dulcoease for comfortable relief of hard stools. dulcolax. designed for dependable relief.
5:25 am
welcome back to "worldwide exchange." time for top trending stories. reed hastings lighting up the netflix call last night wearing a stranger things themed christmas sweater. >> or jumper as i call it. >> the same sweater available to buy at target as part of a sponsorship deal between netflix and the retailer this is a company that webcasts its conference call. obviously got a lot of attention. smart marketing move >> reminds me we're in q4, heading to christmas excited. >> do you have ugly christmas sweaters. >> yes i'm pretty sure we started it.
5:26 am
>> we? you? >> no, as in it's a bigger issue in the uk than here. everybody does it in the office. cnbc makes a big deal of it. >> yes, we do. we have a competition. >> we do i intend to win i haven't in the past which has been heartbreaking >> people get creative they light up their sweaters >> next, snap and universal are making a bet on in-app entertainment, they are working together to bring together programming to screens they are developing program exclusively for snapchat nbc is the parent company of cnbc still to come a round up of the global markets as the dow approaches 23,000. and the next fed chair, budget negotiations and nafta all on the agenda in washington today. we're live in d.c. straight wh
5:27 am
we're putting away acorns to show the importance of being organized. that's smart. who's he? he's the green money you can spend now. what's up? oh you know, gonna pay some bills, maybe buy a new tennis racket. tennis racket for a squirrel? he's got a killer backhand. when it's time to get organized for retirement, it's time to get voya. you myour joints...thing for your heart... or your digestion... so why wouldn't you take something for the most important part of you... your brain. with an ingredient originally found in jellyfish, prevagen is now the number one selling brain health supplement in drug stores nationwide. prevagen. the name to remember.
5:28 am
5:29 am
a rally triple play. the dow, nasdaq and s&p 500 hit record highs as wall street prepares for another batch of corporate prices oil prices continue to rise. we'll get a commodity expert's take straight ahead. and netflix makes a big bid on content, and investors are cheering the news.
5:30 am
it's october 17, 2017, "worldwide exchange" continues ♪ good morning welcome back to "worldwide exchange." i'm sara eisen >> i'm wilfred frost >> let's check in on the global markets after another strong session on wall street doesn't take much these days, record highs all around yesterday's session. dow, s&p and nasdaq. >> by definition it doesn't take much to go from a record high. >> we're getting a string of them importantly we're not getting the pullbacks in between it's been a slow and steady climb higher dow futures up nine. s&p futures up less than a point. nasdaq futures up 3 1/2. this is a real earnings day. this is where we're looking for earnings, not just big banks to set the tone, j&j, as well as netflix. ten-year treasury note yield let's show you that right now. as for the ten-year, looks like 2.30 is where we are hovering at the lower end of the range yields were up nicely yesterday that helped the banks.
5:31 am
>> slipping today. >> telecom did well on the session. moving lower this morning. >> asian equities for you, mostly higher today. we have a little bit of red in shanghai elsewhere gains, particularly in japan, up 0.4% european trade, which was sort of mixed yesterday, today is again mixed. germany and the ftse holding on to fractional gains. >> as for the broader market, the u.s. dollar getting a boost. there was a story out from bloomberg that president trump was impressed with his meeting from john taylor, the stanford university professor he's going through the interview round of apprentice fed chairmanship style he is considered hawkish he is the inventor of the taylor rule, which suggests interest rates should be higher are, ands boosting the dollar. following the developing story on the oil market.
5:32 am
iraqi forces say they have taken control of all oil fields that were previously held by kurdish security forces. they moved out after iraqi troops moved in let's talk about what that means for oil prices helema croft joins us. explain this one to us and how big of an impact it will have. >> kurdistan produces around 600,000 barrels of production. the fields in disputed areas claimed by the kurdistan government and the iraqi government amount to 300,000 barrels. there were reports yesterday that oil workers were not showing up at disputed fields and that exports were down by about half so we're talking about 300,000 barrels. that's not insignificant in a tightening oil market, the question is do those barrels come back and do they reach
5:33 am
accommodation or are those stranded >> either way, the fact that iraqi troops have taken control of this relatively quickly takes the edge off >> depends right now we have a situation where some members of the kurdistan forces, the peshmerga are trying to reach accommodation with baghdad, pulling out of kirkuk. but others want to fight on. so does the iraqi army stop where they are now they say they've held this territory before 2014, before isis took over, they are going back to a status quo if they move further, that is a catalyst from unrest. >> this stems from the kurds pushing to get their own independence, but something they have almost zero international support for. >> i think it's interesting. they proceeded with that referendum after they were told to stand down. so the question is how can
5:34 am
barz barzani get a face-saving effort once you stoke the desires of independence in a population that says we are the largest stateless people in the world, can you get everybody to climb down from the positions they're on >> is the increased tension between the united states and iran playing into the trade here they're also a major proil dues oil producer >> i think everything is coming to a head in october by opting to essentially decertify, it kicks the can down the road but come january, trump has to decide whether he wants to renew sanctions waivers on iran. if he doesn't renew the sanctions waivers in january, we're out of the deal. the interesting question is how can trump say he's decertifying them because it's not in the national interest to certify the deal and then turn way round in january to say i'm going to continue to give sanction waivers. we could be out in january
5:35 am
>> how does that change the oil supply picture >> if we're out of the deal, then the question is does the u.s. sanctions regime come back in place those sanctions prohibited foreign firms from uploading >> can i ask about industrial metals they pulled back significantly in september, and in the last couple of weeks they've shot up again. what's behind that. >> it's part of a global growth story, we are watching this sort of global growth story, which i think helping a lot of commodities complex. >> final thoughts for oil prices going into next year >> right now one of the biggest headwinds for oil remains u.s. producer hedging once you get to where we are now, over 50 dollars, you get a new wave of producer hedging there's a geopolitical risk premium coming into the market
5:36 am
>> we'll keep oil above $50? >> if the geopolitical story stays where it is, youcan hold these gains. the question is how do you move higher how do you get into the 60s? we need another catalyst for that >> we'll see what happens with that let's switch focus to politics here in the u.s president trump will meet with janet yellen this week as the search for the next fed chair continues. eamon javers has all the details. >> we confirmed yesterday that the president will meet with janet yellen on thursday as he continues his round of interviews with potential fed candidates it's been fascinating to watch not clear where the president will land. the smart money is not oe jo gary cohn had once been seen as a likely replacement but he's slipped in the rankings. kevin warsh, glenn hubbard, john
5:37 am
taylor have been mentioned as potential fed chairs it's not clear what the president is thinking about this the president tends to make these decisions at the end of the process. it's a personal process for this president. it will depend on his relationship with the candidate and how he thinks that candidate will manage the economy the rest of his term in office. we think the decision could come within the next week or two, but the white house is not giving a final date for the decision to be made. >> the president also held a surprise news conference yesterday in terms of what he was discussing with mitch mcconnell, various news items coming out from that what are the takeaways? >> a big surprise news conference that they had us gather in the briefing room for the sarah huckabee sanders sanders that we were expecting and then they said everybody go to the rose garden, the president will come out and have media availability we trumped over there.
5:38 am
there were no seats. the president was with mitch mcconnell. the reason the two men appeared on the steps of the rose garden yesterday, they wanted to show the world that they have patched up their relationship after the fight they've been having since the summertime, where the president reg alreaularly needld mcconnell over twitter for failing to pass repeal and replace. they were saying yesterday that relationship is repaired i had the opportunity to ask the president about drug companies and insurance companies, but those two types of companies he's been teeing off against here's what he said in response to my question yesterday >> didn't speak to mitch about this today, but a priority of mine, you know this is coming up, will be the cost of prescription drugs we will get the costs way down, way down and those drug companies, so you have the insurance companies in one case, on the other case you
5:39 am
have the drug companies. they contribute massive amounts of money to political people i don't know, mitch, maybe even to you but they contribute massive amounts of money me, i'm not interested in their money. i don't need their money >> so the president there very much going after drug companies saying they charge too much for their products, you can buy products overseas that cost less he says the american consumer is being taken advantage of on insurance companies, the president said they have been benefiting too much from a deal under obamacare in which they get these csr payments that the president cut off last week. he said the insurance companies have been participating in a political payoff and their profits were too high. this is a president who has the drug sector and the insurance sect every very much in the cross hairs. i think we saw that reflected in some stock prices yesterday. >> unclear whether there's a proposal to do anything about
5:40 am
it what are we watching today especially out of the senate, they have to clear a few hurdles before they get to tax reform. >> we think it's possible that the senate could pass its budget this week. if the senate doesn't have the budget, you can't get reconciliation, so you can't do tax reform on a 50 vote margin, you have to do it with a 60 vote margin this is the key to unlocking that for tax reform this will be procedural and technical, but very important for them to pass it then you have to get the house to pass it and the two sides to agree. that's always -- not always the easiest thing to do. republicans in both chambers understand that if they don't do this, this week and possibly next t will be difficult to get tax reform done. >> eamon javers, thank you very much stocks to watch today, netflix shares hitting an all time high after the company reported better than expected third quarter results. the steaming service adding 5.3 million new subscribers. the company also announced plans
5:41 am
to spend up to $8 billion on content. sonic reported fourth quarter earnings that beat forecasts but revenues missed. same-store sales fell 3%, the drive-in site says it is due to hurricane harvey. apple reportedly considering expanding into healthcare clinics. they considered buying cross over health but discussions did not result in a deal crossover builds and runs on-site medical clinics. rbr capital has launched a campaign to break up credit suisse they have built a small stake in the lender and they want credit suisse to split into three parts, an investment bank, asset management group and wealth manager. still to come, why big pharma may be getting away with murder. first here is the national weather forecast from bill karins good morning to you. we're watching some of the
5:42 am
coolest air we've seen so far this season. temperatures in the 30s in many areas of new england but it's not going to last long. that's the key we'll see a quick warm up after today. so, we do have the patchy frost out there. frost advisories maybe some frost on the windshields, but we're not seeing an end to the growing season at least not yet temperatures will get warm in a hurry. middle of the country that had the cool air yesterday warming up considerably today. fargo, 73. montana in the 70s that warm air quickly moves to the east boston and cleveland back up near 70 after that chilly day today. towards the end of the week, temperatures look great. a lot of sunshine this is a fantastic forecast across the country for all your travel. that's your sissbune travel forecast more "worldwide exchange" when we come back jimmy's gotten used to his whole room smelling like sweaty odors.
5:43 am
yup, he's gone noseblind. he thinks it smells fine, but his mom smells this... luckily for all your hard-to-wash fabrics... ...there's febreze fabric refresher. febreze doesn't just mask, it eliminates odors you've... ...gone noseblind to. and try febreze unstopables for fabric. with up to twice the fresh scent power, you'll want to try it... ...again and again and maybe just one more time. indulge in irresistible freshness. febreze unstopables. breathe happy. you won't see these folks they have businesses to run. they have passions to pursue. how do they avoid trips to the post office? mail letters,
5:44 am
ship packages, all the services of the post office right on your computer. get a 4 week trial, plus $100 in extras including postage and a digital scale. go to and never go to the post office again. right in the heart of the was in his financial crisis, and saw his portfolio drop by double digits. it really scared him out of the markets. his advisor ran the numbers and showed that he wouldn't be able to retire until he was 68. the client realized, "i need to get back into the markets-
5:45 am
i need to get back on track with my plan." the financial advisor was able to work with this client. he's now on track to retire when he's 65. having someone coach you through it is really the value of a financial advisor. check out the premarket action of unh, united healthcare set to report earnings at 6:00 a.m. it looks like we have some premature headlines out of reuters releasing the numbers here unh profit growth, 26.3% net earnings attributable to shareholders rising to 2.49 billion, 2.51 per share in the quarter. revenues rising about 9% unh shares moving higher here in the premarket.
5:46 am
looks like a good number unusual to get it during this hour >> the adjusted eps is 2.66, forecast was 2.56. revenue forecast was 50.4. that came in at 50.4, i think. so if these are the numbers -- 50.3 in line. up 0.7%. >> we'll watch for that official release to post around 6:00 a.m. jim cramer up early, getting the headlines on unh well connected >> speaking of healthcare, time for some must-reads. my pick is titled stop big pharma from getting away with murder the editorial board writing one of the biggest problems with
5:47 am
keeping drug prices from getting too high is the generic makers are not allowed to get products on the market. here's what the ed board said, perhaps the most novel ruse is preventing drug makers from getting access of branded drugs they need to run tests generic makers need about 5,000 doses of branded drugs to show their drugs are the equivalent the fda received 150 letters sent by companies complaining about access to the doses they need i thought it was an original take usually we hear more government regulation, let the government negotiate the prices, they're saying, no, just let more generic drugs come on to the market to lower prices in order to do that, the big pharma companies should be watched more in terms of how they give their doses to generics to let them test it. >> it's that classic debate, we saw it ahead of the election,
5:48 am
thought it would be more likely focused on hillary clinton if she came in to hit pharma, president trump yesterday was just as strong >> sort of the populist ideology right now. >> my must-read comes from the "new york times" deal book column titled how valuable is a unicorn, maybe not as much as it claims to be it's author joins us now with a little summary of the key points >> thank you thank you. >> i enjoyed it. what was the key point >> the key point is that we talk about these unicorns all the time on this show and elsewhere, and around the water cooler, employees spend a lot of time doing the math on the back of napkins trying to figure out how much their options will be worth, when you really understand all the various rounds of financing that so many of these companies, private companies, unicorns worth over 1 $1 billions have had, new
5:49 am
studies say most of these are wildly overvalued to the tune of -- out of the 135 unicorns out there, they're worth half of their headline price that's in large part because a number of these deals have ra se ratchets in them certain investors are getting preferred deals so that in the event of an ipo where the stock might fall at the ipo, they're still guaranteed more shares to make up for that loss. who pays for that? everybody else who are those people the employees. some interesting employees to the research if you have a moment, either read the column or better yet i would get you over to the research >> sort of makes me wonder if that's why some of the more high-profile ipos have been a flop >> i think there's an element to that, and also an element as to why we waited for as long as we have there was a sense among
5:50 am
management and venture capitalists that they would grow into the valuations. well, they've struggled to do that >> wouldn't you like to see the terms attached to softbank and uber i'm sure it wasn't cash for sales. >> a lot more to it. the researchers who did this went to delawareand you can ge a lot of terms of some of these deals if you go to delaware and scan the documents there's a semi-public way to see this not all of it, but some of it is available. >> andrew, almost out of time. what's up on "squawk box"? we have a huge earnings parade we will talk about it. this morning we have goldman sachs, morgan stanley, j&j, united health and ibm. we will talk about that. we have the cfo of johnson & johnson joining us that's what's on deck. and an astronaut >> we look forward to it. still to woman come on "wore
5:51 am
exchange," a guest who is sick of hearing this is a hedat bull market we'll tell you what his view is coming back. what started as a passion...
5:52 am
...has grown into an enterprise. that's why i switched to the spark cash card from capital one. now, i'm earning unlimited 2% cash back on every purchase i make. everything. what's in your wallet? ♪ ca♪ yes you can ♪ can i kick it? ♪ yes you can ♪ can i kick it? ♪ yes you can ♪ well i'm gone ♪ can i kick it? ♪ to all the people who can quest like a tribe does... ♪ what's critical thinking like? a basketball costs $14. what's team spirit worth? (cheers) what's it worth to talk to your mom? what's the value of a walk in the woods? the value of capital is to create, not just wealth, but things that matter.
5:53 am
morgan stanley welcome back to "worldwide exchange." futures pointing up. dow futures up five. we will get a lot of earnings. peter boockvar from the lindsay group joins us now to help preview what we're seeing in terms of this record after record with very little signs of pullbacks. it's amazing how stocks have been holding their gains and their resilience what do you attribute that to? >> people are hanging on to global growth, it's really overseas that has seen the growth improvement europe to grow 2% is an achievement. we're seeingism pro isism impro trade. you look at the export numbers out of the asian countries, they've improved dramatically. also the liquidity story still
5:54 am
is going on. that changes next year >> one of the positive arguments people have for why markets can continue to go higher, they say it's an unloved bull market, a lot of cash could come into play, you disagree with that you don't think this is an unloved bull market. >> i look at the stats for that. if you look at the investors intelligence numbers, the weekly numbers, bulls above 60. bears down to 15 the university of michigan confidence survey on friday, they ask people where do you think the stock market will be over the next 12 months, higher or lower this question has been asked since 2002 in this 15-year period, the most amount of people say it will be higher over the next 12 months the previous peaks were the end of june 2015, right before the chinese devaluation, and the time before that was july 2007 we know what happened after that just based on those statistics,
5:55 am
there is a lot of bullishness. if you look at household wealth, that's at the highest, too so the allocation to equities is elevated >> how you are gauging the expectation of tax reform passing in the u.s. stock market what would it mean for a market if there was a hurdle in congress and getting it done >> let's look at the market last year earnings growth was zero last year the s&p was up 10% and a lot of that was after the election on hopes for tax reform and regulatory relief. so earnings will be up 10%, the market is up more than that. so there's certainly an understanding and an expectation that we will get tax reform. whether it's the end of this year or next year, it's a question of what form it will take there's a debate all the time, what's priced n what's not when trading at 18 times forward earnings, you have to assume a lot of good news is priced in. >> especially on the corporate
5:56 am
side corporate cuts, which appear to be most likely >> we will get it in some form you want it to happen sooner rather than later. most likely an early 2018 event, but it will happen >> just quickly in terms of where the yield curve is, it was under pressure with disappointing core cpi, better manufacturing yesterday. where does it go for the rest of this week? >> that's the most interesting thing. the 210 spread is at aen it-year low what is that telling you about global growth or u.s. growth what is that telling you in contrast to what the stock market is saying it's telling you the fed will continue to raise short-term interest rates, continue to tighten through shrinking the balance sheet and the bond market is more worried about what impact pa that withat will the u.s. growth. hence the flattening >> peter boockvar from the lindsay group. >> i'll be focused on morgan stanley and goldman sachs.
5:57 am
>> and an official relief of unh, see what they see about obamacare which is still front and center right now as president trump makes some executive order amendments >> that's it for "worldwide exchange." "squawk box" is next
5:58 am
5:59 am
quarterly earnings on the docket from united health and johnson & johnson as the dow is closing in perhaps on 23,000, numbers and reaction straight ahead. netflix shares rising to a new high after the company reported an additional 5 million new subscribers, and announced it would spend up to $8 billion on content in 2018 and a wall street dog fight, why boeing is blasting rival airbus it's tuesday, october 17, 2017 "squawk box" begins right now.
6:00 am
live from new york where business never sleeps, this is "squawk box. >> good morning, everybody welcome to "squawk box" here 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 the s&p 500, the nasdaq and dow all closed at record levels. the nasdaq was higher for the fourth out of the last five sessions this morning things are flat dow futures and nasdaq slightly higher the s&p futures are fractionally lower. overnight in asia, records set there as well. in japan, yet another record close for the nikkei the record for about 21 years. this is up for the 11th straight session. it looks like the nikkei closed up by 80 points to 21,336. hang seng was up just slightly the shanghai was


info Stream Only

Uploaded by TV Archive on