Skip to main content

tv   Worldwide Exchange  CNBC  January 23, 2019 5:00am-6:00am EST

5:00 am
>> stocks looking to rebound after a four-day winning streak. trade turmoil front and center the white house shooting down reports of a canceled meeting with china more on the fall-out ahead, and on the record are, the ceo of dow component coca-cola joins us live from davos in just a few minutes. it is wednesday, january 23rd, 2019, and "worldwide exchange" begins right now
5:01 am
good morning worldwide exchange i'm dominic chu. brian sullivan off today let's get you up to speed following yesterday's very big sell-off take a look at the dow the nasdaq up by 19 after big losses yesterday they're all at least in the extended hours they're shooting a little bit higher apple leading the way here by about a half a percent, and all of them kind of moving to the up side after yesterday's bigger sell-off oil also wti just about a half a percent to the up side about $53.25 brent crude futures up a half a percent as well.
5:02 am
$61.84, a big nat gas trade to talk about right now in much of the united states we'll have more on the markets in just a second, but first, to this morning's big news maker, the ceo of dow compoen ebts coca-cola going on the record. let's send it down to the squawk team over in davos, switzerland. becky, over to you guys. joining us right now the ceo and chairman-elect thanks so much for being here today. >> thank you great to be here it's our first live interview of the morning. everybody is feeling pretty good the sun is out here. overall the mood at davos this year seems to be a little bit more gloomy. it kicked off with the imf taking down global growth numbers for the year global growth expectations
5:03 am
you are passing that on in terms of higher prices do you think about that when you are looking at an economic downturn >> i think there's a difference between a downturn and less growth i think we're in the phase of 2019 where we are likely to see a little less growth or a little less tail wind i'm not sure i would go as far to say it was a head wind. it is going to be a slightly tougher year than 2018 in macroeconomic terms, and i think we just need to work our way through it i think the cost pass-through of some of the commodity increase largely happened, although there are cost pressures out there >> soour not worried about it. >> the day i don't worry will be a weird day. i am kind of concerned about what's going on. i think in a way the biggest issue is not so much that we see a little less growth, but there's more uncertainty there's been a more volatility over the last couple of years, so i think people are going into it going, okay, a little harder than last year, but i feel a
5:04 am
degree of uncertainty out there that you can't quite put your finger on. i think it's making -- >> is the uncertainty everywhere for you, or are you thinking about a specific spot on the global where you think it's going to be harder hit >> i think the uncertainty is actually kind of global rather than it's one region, and, actually, in the modern global economy, something that goes wrong in a major piece here transmits itself arnoound the world. i think there's been a lot of volatility in some of the developing countries in the last few years, and we see that continuing i think there's just a little cloud of uncertainty over the growth forecast. >> everybody is facing the same thing, i guess it's how you -- that's why you are a ceo, i guess >> yeah. >> it takes you to manage it i'm just thinking how a coke ceo from 25 years ago, it was alm t almost -- that people are going to drink coke, and you have to a point where you have to think about so many different things, and first it was sugar oh, no
5:05 am
then it's aspart a amspartame, n everybody is drinking water. you need to be ahead of the -- i wonder if you can tell us what your ideas are you is made six ak quits igss last year or so? >> we made some small investments. look, at the end of the day whatever the macroenvironment is going to be, you can only really focus on thethings you can control. the ceos that get asked the question, what is the world going to do, but then they go back and world war i out, what can we dwul do what do we focus on and how do we move forward? i think that's the key of trying to address the problem as we kind of take a look at the opportunities we do two things we're going to follow the consumer what are the things that consumers are trying to do how are they responding to macrotrends? how do they serve them better? all the ierkz, whether it's bringing down the sugar content of our drinks or solving the world without waste, in the end our approach is you can't be against everything you have to be in favor of
5:06 am
something. >> is the bottling business, that used to be, what -- a coke ceo used to manage shelf space still got to be paramount. >> well, we've come off refranchising our bottles over the last few years we've talked about reorganizing the system. >> what are you doing in that situation, and do you feel like the consumers' tastes are changing faster than err is. >> i think the consumers are doing a couple of things firstly, they're drinking more commercial beverages some categories are appearing and disappearing others are staying
5:07 am
the dynamic is you have to do stuff organically. we drive our own stuff we invest in new brands. in the end if you don't manage the outflow, if it you don't kill off the zombies, it's going to clutter up the system and the shelf, the marketing we've had a big program of killing off the zombies, we call them it's not the best phrase, necessarily, but it's very evocative, and everybody understands what we want take out those skus that aren't working for us and get rid of them >> can you speak to the relationship between the u.s. and china and how you think that ultimately will end if it does and what that means to coke? >> well, i think all trade deals can improve, and we hope that's where the agenda ends up the coke business is both global and incredibly local in any country in the world 95% of what you drink was actually
5:08 am
made in that country all the cokes in china are made in china all the cokes in the u.s. are made in the u.s. >> what about the idea of brand america inc, in terms of coca-cola being the flag of the u.s. and we're here in davos talking about sort of that flag and what it represents today versus what it maybe represented years ago, and what it will represent. does that matter or change given the sort of politics of the moment globally? >> the politics of the moment, you know, shifting slightly left or slightly right. they make a difference coca-cola brand is anchored in the american ideal in the values, which has a lot of resonance really >> some people still actually like it. >> it's still a good idea where. >> can i talk about costa? how is that going to work? you don't competed against all the places that sell your coke it's not going to be, like, a starbucks, or will there be some stand-alone retail costa stores? >> we bought a business that has some stores, and the business --
5:09 am
and the stores are part of building the brand the biggest part of the market is selling coffee through someone else's store, which is way bigger than coffee shops and the grocery market who is the biggest provider of beverages to the people who sell up and down the street, the independents we are we're going to be able to take along side the cokes and the juices and the waters and the teas we're going to be able to bring a latte solution >> lattes or iced -- > it's a huge initiative you're addressing here there's hub bub about plastic strauz, but then you think about plastic water bottles or any of the coke cans. how do you tackle this problem what do you do >> i think the simplest idea is stop thinking about packaging as
5:10 am
single use everything that is single use in the world is going to tend to be got rid of everything needs to be collected and recycled the great news about whether it's a plastic bottle or a can or a glass bottle, all of those things can be collected and actually remade into new bottles. we set ourselves the objective by 2030 collecting back all the plastic cans and the glass that we sell. >> 100%? >> 100%. using at least 50% of it in making new bogtss. we already have out in the market bogttles that are 50% recycled i think what you see is the kind of distinction between what's one way of stuff that just gets thrown away and is never recycled and never used and that we need to convert into plastic that lives on forever. >> can you tl me the new slogan? does it have "it" in it? >> no, it's not evocative. >> "it" as in -- >> it's got "it. >> the real thing. >> the real thing. that's -- >> a lot of good slogans out
5:11 am
there. >> yeah. >> have a coke and a smile >> coke and a smile. good feeling >> the world could use a coke right now to drink together on a mountaintop. >> all of us together. >> like to ride the world -- thanks for coming in james quincy, the ceo and chairman-elect back to you. >> a coke and a smile for you and the entire squawk team thank you very much, becky, for that great interview with james kw quincy of coca-cola. a lot more coming your way from davos switzerland. just look at the line-up all day today. the ceos of chevron, cisco, anheuser-busch, dell, jp morgan chase, uber. that's just a sampling they're all going to be on the docket keep it here throughout the course of the morning on cnbc. well, still ahead on worldwide exchange, trade turbulence conflicting reports over u.s. and china trade talks sending shock waves through the global markets more on that fall-out coming up next and the shutdown showdown. it continues we are now in day 33 of the
5:12 am
partial u.s. government shutdown what the white house is saying about the impact on the economy whenorwi ehae tus wlddexcngrern whenorwi ehae tus wlddexcngrern after this his family. his steinway, which met a burst pipe. which didn't quite cover the steinway. but what if he'd met pure insurance? owned by members. he'd have met: lisa, your member advocate. who'd introduce him to gustav: leave it to me. a temporary address, temporary ivory, and help him get tickets to the mozart festival. excuse me, grant likes beethoven! uh, the beethoven festival. pure. love your insurance. take your razor, yup. up and down, never side to side, shaquem, you got it?
5:13 am
come on stay focused. hard work baby, it gonna pay off.
5:14 am
and the army taught me a lot about commitment. which i apply to my life and my work. at comcast we're commited to delivering the best experience possible, by being on time everytime. and if we are ever late, we'll give you a automatic twenty dollar credit. my name is antonio and i'm a technician at comcast. we're working to make things simple, easy and awesome. following's yesterday's big sell-off, futures pointing to a higher open. in fact, we are near the best levels of the early session in futures trading.
5:15 am
the s&p indicated to open higher by just about five points. the dow jones up by 85 points. the nasdaq up by around 16 fang stocks will play prominently into the trade discussion for u.s. stocks on the european side of things, relatively flat, rather, and mixed. the german dax off by .1%. about .2% here for the ftse 100, and about just about .2% to the up side here for the cac in france a relatively calm market in europe, and we did see a more mixed picture as well in what happened with asian trading overnight. the bank of japan leaving rates rates unchanged overnight while cutting its inflation outlook. you can see here the shanghai composite pretty much flat the hang seng in hong kong, yes, pretty much flat, and the nikkei in japan just down .1% we're going to stick with asia china remaining front and center for investors following some conflicting reports over trade
5:16 am
national economic director larry kudlow came on "the closing bell" and shot down those reports. >> with respect to the story is not true right at the top, wilford. the story is not true. there was never any meeting. we are moving towards negotiations these will be, as i have said before, the broadest and deepest scope of negotiations with china in history >> larry kudlow also reiterated the high level talks with china on the trade front will take place in washington d.c. later on at the end of this month. well, let's bring in boris schlasberg boris, there was no doubt the markets took about 100 points off the dow on those financial times headlines about trade meetings being canceled. they, then, moved to session
5:17 am
lows and bounced on larry kudlow's kmincomments how sensitive are sentiments >> very sensitive. these are the three stories that are driving all of market trade right now. as a matter of fact, if you look at it, all the markets right now are really being driven by a political story rather than economic ones. trade is very important. shutdown is very important brexit is the big important story in europe. i think the key thing here right now is markets are just looking for some sort of relief. the reason why you saw a little bit of a bounce tend much the day and today we're having a bounce is because they're hoping that the trade negotiations go back on track. they're hoping that perhaps the shutdown vote in the senate takes place. they just are looking for any kind of relief of pressure from the political side so the economy can go back to work. that's really the story that you are seeing in the markets right now. >> boris, is it fair to say over the course of the past few months we've seen a number of headlines, trade-related, fed-related, you name it, and the markets have seemed to be a little less sensitive to those headlines with each passing
5:18 am
week is that a fair assessment? are we at least -- is the trading community putting a little bit more skepticism in some of the headlines as they come out more so than they have in the past few months >> it's a situation nothing happens tore for a long time, and then everything happens all at once. we could see another big leg sell-off all the way down to the recent lows that we saw. it's very important to see some progress markets are definitely looking because what they're seeing is that all this political turmoil is clearly starting to have an impact on economic demand. we're seeing synchronized global slowdown all across the world. i mean, it's not the only reason why global is slowing, it was slowing down ahead of time, but this political turmoil is really exacerbating the slowdown the markets are becoming more sensitive to the headline stories. they want to see some sort of resolution going forward
5:19 am
>> yesterday's down side action in the markets aside, is it fair to say that the bottoms near term have been put into the marketplace, or after a 13% run-off since the carnage on christmas eve, are markets due for a pause? >> i think they are due for a pause. they are looking for this positive catalyst. this is the problem. if the catalyst doesn't come, if we don't get any resolution, i think the shutdown story is also going to become much worse and much more important if it doesn't get resolved you know, the argument now is it's a nuisance that's not having a big impact on the u.s. economy. imagine a situation a week from now when everybody at tsa -- remember, most americans do not have more than one month's worth of money in their bank account a week from now all tsa goes out on a sick-out. you'll see an impact on the u.s. economy like you have never seen before i think it's critical that the political situation gets resolved, and that's what the markets are screaming for at this point if we get that, you get a triple whammy of positive news, and, yes, you're going to get a big up side move if we don't, i'm afraid it's
5:20 am
going to be a move become to the lows again >> boris, thank you for joining us this morning on those thoughts on the macroeconomy well, still ahead on the show, downplaying the dysfunction. what the white house is saying about the real impact of the government shutdown boris just spoke about. we're live in washington with the latest plus, a pair of drones halting all flights into one of maerks busiest airports right near us here at cnbc tas engoing to have those full deilwh worldwide exchange returns after the break. one-millionth order. millionth order. ♪
5:21 am
there goes our first big order. ♪ 44, 45, 46... how many of these did they order? ooh, that's hot. ♪ you know, we could sell these. nah. ♪ we don't bake. ♪ opportunity. what we deliver by delivering. (vo) ♪ here's a question. was it necessary to create a luxury car more teched out than silicon valley? with a cockpit fit for aspaceship. hang on. radar that senses things the human eye can't. busted. and the ability to make a thousand decisions before you even make one. was all this, really necessary? what do you think? ♪
5:22 am
5:23 am
s zpleemts that's significant
5:24 am
since the shutdown began 33 days ago, the senate has not voted once to end it now, leader mitch mcconnell is doing something he said he would not do he is allowing votes not only on the republican plan, but also on the democrats plan that the president says he won't sign >> two plans, two votes, and no solution >> this is nothing for anybody to be proud of >> tomorrow for the first time since the shutdown, the senate votes to end it. republicans will pitch the president's plan temporary protection for a million immigrants if he gets money to build a border wall >> why are democrats not supporting the president's proposal >> because they have their own reopen government for two weeks. then negotiate border security without support from the other side, both plans are expected to fail >> people are saying isn't there a way out of this mess
5:25 am
>> right now there's just finger-pointing. >> it's nancy pelosi the speaker's position seems to be that she demands the unconditional surrender of the president on every position involving the shutdown that's unreasonable. it's illogical, irrationale. >> we cannot have the president every time he has an objective to say i'll shut down government until you come to my way of thinking >> the fbi says the shutdown is making america less safe >> the failure to fund the fbi is making it more difficult for us to do our jobs, to protect the people of our country from criminals and terrorists >> we appreciate all of your help >> food banks feeding furlowed workers now a daily symbol of washington's dysfunction >> be on the lookout for senate votes tomorrow, house votes this week as well, on the other side of capitol hill. none of them expected to break this gridlock. >> let's get a check on the morning's top headlines outside
5:26 am
the world of business. nbc's phillip mena live in the nbc newsroom in new york with the latest good morning >> hi. good morning after a frantic three-day search for a missing boston woman, 23-year-old olivia ambrose has been found alive ambrose was taken to the hospital for ooel wags she went missing after meeting some friends at a popular bar. boston police found her in victor benia's apartment he is expected to be arrested on kidnapping charges teachers in los angeles will be back in the classroom this morning. the teachers union and the school district reached an agreement. it includes a commitment to reduce class sizes over four years. meanwhile, teachers in denver voted overwhelmingly last night to go on strike after more than a year of negotiations over their base pay the district is turning to substitute teachers and add mords with licenses to keep schoo
5:27 am
schools. >> baker died from complications from a fall in his home in virginia russell baker was 93 years old dom, i'll send it back to you. >> phillip mena, thank you for those updates. a tale of two markets coming up on the show. one wall street pro says it will be the best of times and the worst of times for your money this year. he will make his case ahead. first, we're headed back to davos for a cnbc sitdown with the ceo of dow chemical. what he is seeing for the global economy in 2019. stick with us. worldwide exchange will be back right after this so they say that some day ai will transform the human race. well, today you're a little busy transforming your call center. dealing with millions of customers a year, like this one. no, i'm pretty sure i didn't order a squirrel playing a guitar. that's why you work with watson. it works with your systems to resolve calls faster and improve customer satisfaction. i detected fraud and helped reassign a new credit card. honey, they're overnighting us a new card. woooo!!! woooo!!! for ai that works with tools you already use, choose watson.
5:28 am
hello! the best ai for the job. hello! ♪ hawaii is the first state in the u.s. to have a hundred percent renewable energy goal. if we don't make this move we're going to have changes in our environment, and have a negative impact to hawaii's economy. ♪ verizon provided us a solution that lets us collect near real time data on our power grid. ♪ if we can create our own energy, we can take care of this beautiful place that i grew up in. ♪
5:29 am
5:30 am
zpleenchts trade tensions remain front and center for investors conflicting reports over u.s. and china trade talks rattling the global markets we'll have the latest ahead. on the record. we are just moments away from hearing from dow chemical ceo. we'll take you live to davos, switzerland. it is wednesday, january 23rd, 2019 you are watching "worldwide exchange" right here on cnbc ♪ welcome to "worldwide exchange." brian sullivan is off today. i'm dom chu. the market action following yesterday's big sell-off futures pointing to a higher
5:31 am
open, and we are hovering right around the highs of the session premarket for those futures trading. s&p futures indicating a 6-point higher open at regular cash trading. the dow jones up by about 93 points, and the nasdaq up by just around 20 on the treasury side of things, we are seeing a slight uptick to what's happening with ten-year treasury yields. ten-year u.s. treasury notes yielding 2.75, just shy of 2.76%. the two-year, 2.6% on the oil side of things, a little bit of stability there as well $53.47 that's almost a full percent to the up side. ice brent crude futures, you can see they're up by a full percent as well. $62.07 we will have much more on the markets in just a moment, but, first, to another big newsmaker this morning let's send it out to sarah eisen in davos, switzerland. over to you, sarah >> good morning, dom joining me this morning is jim
5:32 am
fitterling, the ceo of dow chemical >> nice to be here zoo we are actually participating on a panel together here at the world economic forum about plastics. that's sort of interesting because you are getting out front on this issue for a company that makes plastics, some might be scratching their heads as to why you are tackling plastic waste. tell us what you are here to do. >> so last week in london we launched the alliance to end plastic waste. this is a cross-industry value chain alliance this is the first time -- this is the biggest alliance that's ever been put together to tackle this issue, and as you know, over the past year or so, the image of plastic waste in the environment, especially in the ocean, has captured the imagination of the word, and everybody agrees that it's a problem, including everybody in our industry we've gathered brand owners, retailers, waste management companies. all the resin producers in the plastics industry together have committed $1.5 billion to this initiative, and obviously,
5:33 am
that's capital that needs to go into solutions to end of life, and really what we're doing is creating the circular economy for plastics how do we take this waste and convert it into higher value products and keep it from going to the environment >> more recycled products and res -- >> more recycled right. how do we create recycling out of it? how do we create social value chain? one of the thing the alliance has to do is has to convince people there is value on the plastics a lot of the reason it gets thrown out is the value at end of life, which isn't true, and we all know that it can be recycled we've seen great examples in p.e.t. bottles, for example, that -- >> that's why coke and pepsi -- >> coke and pepsi have done a fantastic amount of work on taking p. emt t. and recycling it back into bottles and you can recycle it because fabrics and recycle it into a number of other materials. >> plastics is such an important and profitable business for you. do you see growth in this industry at a time where municipalities are banning
5:34 am
plastic straws and there's a war on plastic bags and countries in europe are looking at banning plastic plates >> well, plastics are the largest and the fast -- one of the fastest growing segments in the industry, and mainly because they are so sustainable. i mean, the reason we got here with plastics were packaging or for medical applications or for automotive applications for that matter is because you're able to make products that are strong, they're light, they give you better efficiency, they're cheaper to produce, and so you have reduced the co2 foot print. thereof a lot of efforts that say let's go back to glass and metal. in reality, the environmental footprint of that is four to five time as high as plastics. what we really need to do is create the circular economy for the plas i objects and create the value and put the infrastructure in place to stop the waste. most of the waste that gets to the ocean, and that's where people are focused that comes from about ten rivers in southeast asia, india, china
5:35 am
mostly it's there because the development has been so fast, the infrastructure hasn't kept up we believe we can tackle this, and we have very good reception and very positive uptick >> you also have big changes going on at dow preparing for the spin three companies, six divisions aiming for june. do investors get it? your stock price was down more than 25% last year >> well, the newdow will spin out on april 1st, and it's a material science division at dow dupo dupont the new ag company will spen out, and then dupont will be the specialties division the newdow, the material science company, closing bell about a 50 billion company, six businesses, focused on three market vertical solutions for the packaging industry, infrastructure, and consumer products. those are high growth businesses for us i think our shares have been down, obviously, with the general market and with what we saw with oil pricing that oil pricing has an impact
5:36 am
on our end product prices, and that changes the psyche a little bit in the marketplace >> looking out into 2019, i mean, you are always a good economic barometer we just got the weakest chinese growth number for the year 2018 since the 1990s, and the global economy which is downgraded by the imf. is this how you see it are you less pessimistic going into 2019? >> 2018 was a strong year, so strong demand growth around the world. i think we saw as the year ended, obviously, some change in sentiment and people are attributing a lot of that to trade discussions, but i think around the edges there are also some concern about demand. demand is good for products. i think 2019 will be a good year the shape of the year may be a little bit different than 20 18. 2018 was a very strong start 2019 may be a mirror image of 2018 where we ramp into the year china is still a rapidly growing economy, and it's growing -- i
5:37 am
think the estimates are going to be around 6% on a pretty large base second largest economy in the world. >> so is that how you characterize the mood here slowdown, but not recession. not doom and gloom is that what you are getting for your fellow economictives and leaders? >> not doom and gloom. 70% of what we make goes into consumer products, and the consumer is still strong business results are still strong i think what most people are concerned about is are the political moves actually in the policy changes actually going to have a dampening effect? i think most of that is within the control of the governments and they're working through those issues they work through that on the trade side, and then i think we have possibly even some pent-up demand >> jim fitterling, good to talk to you good chatting with you >> thank you >> the ceo of dow chemical dom, back to you in the studio >> thank you, sarah and davos, switzerland. we'll have much more coming up just look at the line-up we have the ceos of chevron, cisco,
5:38 am
anheuser-busch, dell, jp morgan chase, uber all on the docket. keep it here throughout the morning on cnbc. in the meantime, let's get you up to speed on what's happening with the markets futures right now near the highs of the session the dow would open up by about 100 points 91 points at this stage. the s&p up by about six, and the nasdaq up by 18 after a bigger sell-off yesterday, snapping a four-day winning streak for the broader markets. let's bring in peter kucini, global chief market strategist at cantor fitzgerald thank you for being here let's dovetally off sarah's conversation with jim fitterling it seems as though the ceo of dow chemical is optimistic about the outlook for 2019, but in a more measured way. let's take that and take your view are you optimistic in a more measured way, or are things perhaps a little bit worse off than we could expect >> well, you know, as you mentioned in the setup, i think 2019 will be a bit of a tale of two halves in terms of the
5:39 am
financial markets. i think markets will continue to find support from really improved central bank communication early in the year. perceptions of reasonable valuation and also, you know, optics around trade talks with china. i think that will all improve. that will provide support for markets. the issue later in the year, i think, will be accelerating slowdown on the global economy, which has already begun. we're seeing the slowdown in china. they've injected liquidity into the system twice in the past few weeks. went through a short-term lending facility and then through a more medium term lending facility they've cut the triple r aggressively by a whole percent early in the year. frankly, i think that lever is starting to get a little bit long in the tooth, if you will i'm not sure how much below 13.5% they can cut it without running into issues around bank credibility at the banks that cut in the reserve rate has really been more used to help
5:40 am
absorb the fault losses at banks than it has to stimulate the real economy i'm concerned given the growth engine that china is that this slowdown will continue to evolve >> peter, it's intuitive to think. we know the markets are not the economy, and vice versa. >> yes >> it is intuitive to think that if there is a global economic slowdown, hypothetically in play, that markets would move lower with it. should we be worried about a steep market sell-off if the world slows down in growing, but doesn't go into recession? >> well, that's a wonderful question the word "recession" has been coming up more and more as we moved into the end of 2018, and really i think the reason my people are talking about it now is because of the steep market decline. i'm loathe to continue to circle back to it, but i think the sell-off at the end of the year was a bit overdone it was overdone on really what i would consider something of a botched communication from the fed on the heels of the ecb
5:41 am
ending its qe program. as the fed and other central banks have walked back on that very hawkish stance, obviously markets have responded the real issue, though, for me is that the fed has raised rates 2.5% let's call it that has chilled economic growth that has sucked, if you will, capital out of emerging markets, which are the growth engine for the global economy up 70% of global growth comes from emerging marks. that's the reason why, you know, after this rally, i think peter's sometime in the first quarter of this year, that i'm less constructive on the second half because i think that growth story will start to bleed into earnings >> really quickly, how would you then be positioned where is the puck going to be, and what stock sector industry groups, geographies, assets would you be in? >> it's a very difficult question there's going to be a lot of push and pull this year. i do think it is something of a sell, the rally, market.
5:42 am
look, at 2.7, 2.8 on the new year, let's think short-term treasuries are an interesting place to be. it provides cash with yield for the first time in many, many years. i think, look, right now in particular we like energy stocks, and one of the reasons for that is valuations look quite reasonable oil looks like it could have some more legs, but the counter to that is if the global slowdown evolves in the way that we think it may, then energy will end and stocks will also suffer the same consequences, the broader markets. >> peter, thank you so much for joining us this morning. >> thank you >> all right thank you very much for that a pair of retail calls just crossing right now morgan stanley upgreading market to an overweight it does not see significant down side given the inexpensive valuation. peter just spoke about that. generally speaking morgan stanley slapping a $110 price target on the stock. in the same note morgan stanley also downgrading william sonoma
5:43 am
to an underweight. the firm cutting its price target to $49 per share. shares of williams sonoma down by 2 % in extended hours trading. well, coming up on the show, some more stocks on the move this morning, including two cops and a drop today's stocks to watch are ahead. first, a double play in the sports world one legend is in while one legend is out. we'll explain when "worldwide chgerernafthr is
5:44 am
5:45 am
♪ and if you feel, like i feel baby then come on, ♪ ♪ oh come on ♪ let's get it on applebee's. now that's eatin' good in the neighborhood. (voice) (danny)know what impressing the heck out of me. also, giving a shih tzu an updo. pet care ain't easy. 12 hours? 20 dogs? where's your belly rubs? after a day of chasing dogs you shouldn't have to chase down payments. (vo) send invoices and accept payments to get paid twice as fast. (danny) you deserve a treat. and by treat i mean cash. bacon-wrapped cash.'s time to get yours! (vo) quickbooks. backing you.
5:46 am
let's get you up to speed on the markets. futures in the green the dow up by about 95 points into the opening bell. the s&p up by about six, and the nasdaq up by 18 points. >> this hkind of a trend we've been seeing with drones. also laser pointers. people up to nonsense. >> i don't get why it is such a crazy safety issue involving countless lives if you have all of those things possibly disrupting flights >> referee: every we've seen what birds can do to a flight.
5:47 am
>> i don't have -- exactly well, check this out incredible images out of niagara falls. i remember how cold is gets, and i'm not even near buffalo. i was in ithaca, new york, and still the lake got pretty cold >> especially by the water you're a dad do you do a cool gender reveal >> we didn't find out the gender of our daughter, and we waited for the doctor to tell us in the delivery room. >> people aren't doing that anymore. >> no? >> nowadays it's about the gender reveal. there's a new type we're not talking about pink or blue cakes we're talking about los angelesana >> come on >> yeah. a new jersey restaurant chain is offering a gender reveal package. >> that's blue cheese.
5:48 am
>> yeah. they'll bake los angelesana with pink or blue tinted cheese to reveal the bundle of joy's gender i don't know if i'm into tinted cheese >> okay. if you want -- i mean, i guess it's no different than pink or blue frosting. i guess if you want to put it that way >> it is, though it's cheese. >> i would just say that i'm -- i know that a lot of people like to know the gender of their baby for planning purposes and everything, but i thought it was such a great surprise to not know until that last second and then say, hey, it's -- >> it was announced for the first time ever there was unanimous selection. formers yankees -- whae you want to call him, he joins his former teammate mike messina for this year's class at the australian open serena
5:49 am
williams, she's out. she was eliminated in the quarterfinals after twisting her left ankle a lot of replays on this overnight. a lot of people watching this pretty close coming up next, managing the risks. the fed, d.c. drama, and china all top of mind for investors. how you can best position your portfolio. plus, big pop. shares of ibm are soaring this morning. we'll tell you why when tethhae"om bk ng cesac afr is your joints... or your digestion... so why wouldn't you take something for the most important part of you... your brain. with an ingredient originally discovered in jellyfish, prevagen has been shown in clinical trials
5:50 am
to improve short-term memory. prevagen. healthier brain. better life. investment opportunities beyfirsthand, like because your investments deserve the full story. t. rowe price invest with confidence. his family. his steinway, which met a burst pipe.
5:51 am
so grant met his insurance: you are caller number 12. which didn't quite cover the steinway. but what if he'd met pure insurance? owned by members. he'd have met: lisa, your member advocate. who'd introduce him to gustav: leave it to me. a temporary address, temporary ivory, and help him get tickets to the mozart festival. excuse me, grant likes beethoven! uh, the beethoven festival. pure. love your insurance. jienchts four big names to keep you on your toes today we're going to start with im the company's fourth quarter profits beating forecasts on solid growth from its cloud and services business, but quarterly revenues did miss despite big
5:52 am
blue reporting its first annual revenue growth in seven years. a big deal for big blue. ibm also offering a bullish forecast for the full year those shares up 6% in the extended trade capital one's fourth quarter revenues falling just short of forecasts, although profits beat the company is buying $9 billion worth of wal-mart's credit card businesses and balances from synchrony financial. the first quarter profits more than doubled topping estimates they cite market volatility in the past few months driving the client trades as well as acquisition of scott trade those shares up 2.25%. viacom also jumping into the streaming business the company is buying pluto tv for $340 million it runs a free ad-supported service that offers live streams of more than 100 tv channels and has 12 million monthly users let's get back up to speed on the markets. the futures pointing to a higher open the dow would open up by around
5:53 am
90 some points 101 at this point. that would be near the highs of the session for the futures market the s&p up by seven, and the nasdaq up by 20. let's bring in drew mattis, chief market strategist at metlife. drew, has this market action given you pause? has it changed your outlook? does this mean perhaps the markets are pricing in the likelihood, not the consensus, but an increasing likelihood of a recession sometime in 2019 or 2020 >> i think they're looking at 2020 it does give us pause because we have to be mindful of what people's expectations are. our own view is that it will be later than 2020, and we think there's a significant difference between 2020 and later the reason being is because a lot of the risks we see out there that people are worried about have to do with leverage, and if we can get another couple of quarters of growth, the amount of deleveraging that can occur during the quarter can be significant, and so if we're expecting recession 2021, someone is expecting one 2020,
5:54 am
your market outlook becomes markedly different >> how is that deleveraging play out? what would you look for? what signs in the market what indicators would tell you that there is a broader range delefrmging going on in the marketplace? >> there is always going to be individual companies i'm really say this sometime around you don't want to look at the trees. you want to look at the forest, and you want to see what picture the forest is showing you. >> the fixed income forest, credit and treasuries. you put it altogether. what does it show you. woef been speaking so much about the steep drop in high yield and bank loans and leverage loans and the mass i bounce back that we've seen it maybe was technically driven, but as you take a look at the entire fixed income picture, as a whole, is it safe to say that the markets are at least
5:55 am
healthy, or are they deteriorating? are they improving? if asked people 20 years ago what the fed's balance sheet was for, they would struggle to tell you. even people who worked in the business nowadays i think people still struggled to tell you what it's for, but they would have an opinion on what it was doing to the marketplace. i think that's the dynamic that we're in now, which is there are a lot of moving parts right now. people don't understand all the moving parts, and so the markets are reflecting the uncertainty not just on when the next recession happens, but impacting the shutdown impact to the fed's balance sheet. what the natural rate of interest is. i mean, natural rate of interest when i graduated from college, i'm not even sure that term existed. i'm really not sure what use of
5:56 am
a variable that is in the kind of shorter term trading idea >> what is the strategy given that outlook, then how do you position for that >> well, i think you look at the risks that are out there, and you try to mitigate them as much as you can you know, for example, if i think of the asset classes out there, and i think to myself something is going on in trading with china, i'm not sure how bad i going to get or how good it will get maybe i just want to be exposed to the u.s. consumer because i know that the consumer has a low unemployment rate. i know that wages are beginning to accelerate. maybe, you know, more structured finance product instead of credit those kinds of analysis inside of credit you can look at the different credit components. wordwide exchange coming up. "squawk box" live in davos with
5:57 am
a slew of huge interviews. as we head to break, check out what's happening with futures reason we are going to see a nice positive open. ine dow up by just about 100 pots keep it right here a lot more coming up this morning. i'm a veteran
5:58 am
and the army taught me a lot about commitment. which i apply to my life and my work. at comcast we're commited to delivering the best experience possible, by being on time everytime. and if we are ever late, we'll give you a automatic twenty dollar credit. my name is antonio and i'm a technician at comcast. we're working to make things simple, easy and awesome.
5:59 am
good morning another huge line-up life from the world economic forum in davos, switzerland watch the hour with jp morgan ceo jaime dimon and uber ceo dara earnings from procter & gamble united technologies and our parent company comcast also on the docket on this wednesday, january 23rd, 2019. "squawk box" begins right now.
6:00 am
this is a special presentation of "squawk box. live from the world economic forum in davos, switzerland. good morning, everybody. welcome to "squawk box" here on cnbc we are live from the world economic forum in davos. i'm becky quick along with joe kernan and andrew ross sorkin. take a look at the u.s. equity futures at this hour they are indicated higher, but not by enough to wipe out the loss that is we saw yesterday. big concerns yesterday about what will happen between the united states and china with


info Stream Only

Uploaded by TV Archive on