tv Worldwide Exchange CNBC July 8, 2019 5:00am-6:00am EDT
♪ it is 5:00 a.m. at cnbc global headquarters, 11:00 a.m. in frankfurt, germany, a major developing story, deutsche bank announcing massive job cuts as it rolls out an $8.3 billion restructuring plan we are live at the bank's headquarters that's coming straight ahead futures under pressure as investors gear up for a new trading week we'll find out why and more investment, lower taxes, greek conservatives making some big promises following a landslide victory. we are there live in athens. the ipo rush back in high
gear what they just did that's getting a lot of buzz today. then, watch out verizon. why silicon valley may be asking, can you hear me now? we'll explain. it is monday, july 8th "worldwide exchange" begins right now. ♪ good morning and welcome to "worldwide exchange" i'm dominic chu. brian sullivan has the day off futures right now are lower, but they're off the worst levels of the session. we'll have more on that coming up but first, to our top story this morning. one of the world's largest banks announcing a massive overhaul. deutsche bank is pulling out of its globals equities in sales and trading business as part of that move. it's an $8.3 billion restructuring plan the german lender is also slashing 18,000 jobs across the globe. cnbc is in germany in frankfurt
with the latest. why are they getting out of the stock, sales and trading biz and what are the plans >> reporter: actually, deutsche bank has had quite many years now of low profitability of losses and on going problems to stay competitive with the likes of jp morgan and citi group. they came back they came from a level being a global investment bank but the last years have shown that this strategy didn't work at all anymore. so this is now the most traumatic overhaul we have seen from a global investment bank in the recent years it's the biggest job cut since lehman with 18,000 people bound to leave and we're hearing the first redundancies are already made in asia so deutsche bank is planning on creating a big bad bang for 74 billion euros worth of assets. and they're having a new return
on equity target of 8%, planning cost income ratio of 17% by 2022 so it's a gigantic plan. and they have been through a lot of restructuring rounds already, so yesterday i caught up with their cfo and asked him whether this is actually really the last restructuring we're going to get from the lender. take a listen. >> we're very confident this is the final reorganizations. this is how we approach the next phase in our restructuring, and we're determined for it to be the last >> reporter: so the shares are actually close to record lows. the key question is whether investors are going to buy that story, whether the equity story is really going to fly given the poor track record deutsche bank has had in the past when promising things to investors. >> so a huge question here is whether or not the investors will buy into this
obviously this plan is a massive undertaking, but can we also talk a little bit about just the focus that deutsche bank will have will they have to raise capital? and as they get out of this massive sales in u.s. equities what does it mean the bank will focus on in the coming years >> reporter: well, another part of that interview i asked what's the idea of the bank going forward? he was clearly saying they want to be the leading german bank with a global footprint. meaning they want to concentrate on germing corporates and to deliver investment banking solutions to german corporates, but they will exit all other areas of investment banking. they're also planning on trimming their fic trading, for example, from a stronghold of the bank and they made loads, tons of money. you see it's a recalibration of the lender they will clearly begin focussing on germany, on europe and not so much anymore on wall
street back to you. >> anita, thank you very much for that update on deutsche bank. back on our home shores, u.s. stock futures indicating the dow will open down by just around 70 to 80 points as investors remain on edge following friday's up beat jobs report casting even more doubt on whether or not the fed will cut interest rates and to what degree later on this month the bond market right now currently just about 2.02, 2.03% for the ten-year u.s. treasury note yield as you can see there, a slight move lower in those yields the 2-year, 1.86%. let's go worldwide in asia the trading was decidedly negative the nikki that japan off by half percent. the shanghai composite off by 2.5% as well as those fed rate cut at least probabilities start to move a little bit more into the asian trade. in europe it's red arrows across
the board but not by a lot right now the german dax off by one quarter of one percent the ftse 100 just about flat on the day as well. much more on those global markets coming up later on in the show but first, when we get back after this break, a very large landslide victory and even bigger promises from greek conservatives following that country's national elections we'll go live to athens coming up. plus, another black eye for boeing as a key mideast carrier cancels its order for more than two dozen model 737 max jets then later on, why james cameron's spiedy sense may be tingling this morning. a very busy hour still ahead when "worldwide exchange" returns after this
5:09 a.m. eastern time things are slightly dpark but getting brighter the lights are still up on the city that never sleeps welcome to "worldwide exchange." futures pointing to a lower open the dow would open by down by 84 points if the future losses carry into regular trading later on this morning. on the treasury side of things, we can see a little bit of movement in yields across the curve. those rates are moving to the
downturn ten year 2.03% slightly 2.03% and the two-year government note yield right now 1.85% as well. more investment and fewer taxes, that's the rallying cry behind everything from greece's conservative party following a landslide win over the weekend our own sylvia amaro is in athens live for us sylvia, what can you tell us about the election outcome and what does it mean for the economy and markets in greece? >> reporter: well, it's really the return of mainstream politics here in greece after the leftist party tsipras governed greece's 2015 you must remember the protests, the confrontational tone that syriza had against all the international predators that all the austerity greece has to deal with now new conservative party, democracy coming to power.
yesterday i spoke with the next prime minister kyriakos mitsotakis and he told me that this outright majority is going to help him put all the agenda he wants in place as soon as possible >> i ask for a strong mandate to change the country and the greek people delivered very, very grateful for the result we won an outright majority, which was our main target. we almost reached 40%, which is an incredible number given the context of political landscape and i feel that i have a strong mandate to deliver on my agenda, which is an agenda to grow the economy, to create more jobs but also to make sure that the greek people feel safe again the new government will be announced tomorrow, so i'll ask you for a little bit of patience for the new minister of finance. it will be sworn in on tuesday we will have our first cabinet meeting on wednesday and work
begins as of tomorrow morning. >> reporter: i also asked kyriakos mitsotakis who is going to be the next finance minister? there's a lot of focus on that at this stage because analysts want to understand if this person is going to be more focussed on the banking system or rather on the macro economic picture as a whole we should find out who will be the next finance minister as well as the entire cabinet really this afternoon and in the short-term what we should really watch out is the first meeting which is expected later this week and then what sort of measures kyriakos mitsotakis will push first. then let's not forget as well it will be very important to look at the 2020 budget in the autumn. >> so silvia, what exactly can we expect from this new prime minister with regard to that strong mandate you spoke about i only bring it up because if we can, folks, let's take a look at
a chart of the greek year -- the greek ten year government note yield. we're now sitting near historic lows for greek government bonds. it was not that long ago during the debt crisis when we were 15% in terms of yield on greek ten-year notes now we're at 2.11% that clearly means that over the course of the past few years investors have been expecting that the greek economy will do better is that correct to assume, silvia >> reporter: well, absolutely. there is still some positive sentiment regarding this election if you look at the market reaction this morning, you see that in equities but you also see that in the bond market clearly investors are happy about this change in greece and that's because kyriakos mitsotakis has said that he's going to put forward pro-business measures. these include, for instance, reducing the corporate tax rate to 20% in the next two years he also wants to double the
growth rate over the next four years. greece is currently growing at about 2% so he wants to change that to 4% but also kyriakos mitsotakis wants to renegotiate some of the conditions greece has at this stage with international predators, and that includes the primary budget surplus target of 3.5% that greece needs to show until 2022, in exchange for some debt relief measures but kyriakos mitsotakis wants to bring that threshold down so that he has more room for maneuver to invest here in greece and to keep attracting investors and investment to the country. >> silvia, thank you so much for that update on the greek elections this past weekend. sticking overseas, we're following a developing story out of turkey. the lira suffering its worst day in months after turkish president erdogan fired that nation's central bank governor no official reason was given for that particular dismissal, but
erdogan has expressed frustration with the central bank for keeping its benchmark rate at 24% since last september in order to support the lira, so central bank governors around the world coming under fire from their political leaders, not just here in the u.s. but in turkey as well still on deck, the ipo rush rolls on one of the most anticipated offerings of the year making an unusual move ahead of its big debut. plus, verizon, sprint, t mobile, at&t and now google? why silicon valley may be asking, can you hear me now? orwi ehae"s ck after this new align whole food probiotic.
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♪ all right. in corporate news this morning, we work as reportedly seeking to raise $4 billion in debt ahead of a possible ipo. sources say the company met with the ceos of goldman sachs and jp morgan to discuss the potential offering wework was recently valued at $47 billion in a private funding round. so those particularly developments certainly getting headlines. google is denying a report in the new york post its in talks with dish network to create a u.s. wireless carrier the post says alphabet director and former ford ceo was speaking to dish in a statement to the website 9 to 5 google, a
spokesman says the claims, quote unquote, are simply false. boeing losing a big order for the 737 max to rival air bus. saudi airline will buy 50 air bus a-320 model jets in a deal around $5.5 billion at list prices the airline had committed to buy 737 max jets just last december. so we'll watch boeing. still ahead on the show, starbucks on defense after an interaction between a barista and police officers goes viral. plus, why a growing number of americans say they will never retire that's according to one survey that's what he said. "worldwide ehae"etnsn stwo minutes i - by consolidating your credit card debt into one monthly payment. and get your interest rate right. so you can save big. get a no-fee personal loan up to $100k. i had a few good tricks to help hide my bladder leak pad. like the old "tunic tug".
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welcome back to "worldwide exchange." let's get you up to speed on what's happening with the markets right now. if these future losses hold into the opening bell, you could expect to see the dow jones open down by 105 points the s&p off by about 11 points and the nasdaq off by about 45 points to the macro markets now oil prices in focus yet again. oil prices ticking slightly higher today flat on the session is crude $57.52 the last trade there. ice present crude futures up one quarter of 1 prgs, $64.39 the last trade there in political news, congress is getting back to work this week health care topping the agenda as new poll numbers are giving
president trump reason to celebrate. nbc's tracie potts joins us now from washington and this latest poll does have some positivity for the administration >> reporter: well, it has some positivity specifically for president trump, even though he's not doing well in some specific areas, health care you mentioned, gun violence, climate change, immigration. the poll does show, dom, that his overall approval rating is climbing president trump is more popular than ever. a new washington post/abc poll gives him a 44% approval rating, his highest ever americans trust him most on the economy. >> we're doing better than any nation on the planet >> reporter: but 65% believe president trump has acted unpresidential >> there are people who disapprove of the president or at least don't approve of the president's performance who are nevertheless saying in the same poll they're ready to vote for him. >> reporter: in head-to-head matchups with top democrats, president trump loses or it's a
virtual tie. >> you look at these poll numbers and it's good for him, it's way, way too early. >> former vice president's joe biden lead's is narrowing, despite apologizing for his comments about working with segregationists. >> i'm sorry for any of the pain or misconception they may have caused anybody but, should that misstep define 50 years of my record? f fighting for civil rights, racial justice in this country i hope not. >> he is right to recognize the impact of his words, and aapplaud him for doing that and having the courage to do that. >> reporter: president trump tweeted biden is a reclamation project. but we've also got political analysts telling us, dom, biden needs to get ahead of the next big disconnect with democrats which could be his vote to support the iraq war >> all right, nbc's tracie potts, live in washington, d.c thank you very much for that. when we come back on the show, will they bend
fed chairman j. powell keeping investors on edge as the central bank looks less and less likely to cut rates later on this month. plus, one of the world's largest bairnks unveiling a multibillion dollar overhaul program. more on the big story out of deutsche bank. later on in the show, it's james cameron versus bob iger in the race for the biggest box office success could "end game" be the new number one nduthe"wldde exchange" returns right after this
a big bank overhaul, deutsche bank announcing major layoffs as it undergoes a massive restructuring. futures under pressure we'll find out what's weighing on stocks. we work reportedly piling on the debt as the company gets ready to go public the full details on all of these big stories coming up. it is monday, july 8th and you are watching "worldwide exchange" right here on cnbc ♪ welcome back to "worldwide exchange." thanks for being with us on cnbc i'm dominic chu. brian sullivan is off today. today's top headlines. marly hall with the latest. >> good morning. a billionaire who befriended some of the world's most popular or powerful people is due in
court today. jeffrey epstein is expected to face federal sex trafficking charges after he was arrested in new york on saturday law enforcement officials say his alleged crimes took place from 2002 to 2005 against dozens of underage girls at his new york city and palm beach florida homes. epstein made millions on wall street and counted among his friends former president bill clinton and britain's prince andrew, even rubbing shoulders with trump in the '90s. and that is a land spout tornado that touched down near the new jersey turnpike. it briefly swept across a parking lot in mount laurel. it was confirmed as an ef-0 tornado with winds reaching 70 miles per hour, strong enough to flip a car fortunately there were no injuries. a new poll finds nearly 1 in 4 americans say they never plan to retire. 23% say they plan to work well beyond their 65th birthday the ap/norc poll found financial
instability as the major reason. dom, back to you. >> i have a question for you do you have plans to retire? >> i've only been thinking about it since high school, but no seriously, i'm envisioning a casita on the beach. something i'm thinking about. >> warm weather and golf for me. i'm working my butt off to get there for me and my family i'm hoping i'm not one of those 24%. thank you very much live for our news update in the new york news room. check on the markets right now. futures picture pointing to a slightly lower open for the dow. the futures losses hold into the opening bell, these losses will lead to 116 point drop in regular trading for the dow. the s&p would open down 11 points and nasdaq down by 47 points as well. treasurely is a big focus this week with fed chair powell speaking before congress later on 2.03% a hair below that and 2-year treasury note yield
1.86%. turning overseas, the rate cut anxieties carried over into asian trading the nikkei in japan fell by 1% the hang sang and hong kong up by .5% the european market side of the things started off tame but now they're moving more to the downside, albeit just fractionally the german dax off by one quarter of 1% and the ftse off by .2% outside of the world of stocks, oil, wti crude just about flat on the day off just .1 of 1%. euro's currently showing some dollar weakness. euro gaining 1.12. gold futures up by half of 1%. 1407 the last trade there. let's talk more about the markets and your money, joining me now, victoria fernandez, chief market strategist at cross mark global investments. good morning, victoria
this market setup is very interesting. we're near record highs for stocks other parts of the world, though, not participating as much how are traders and investors positioned in your opinion >> well, i think the market really got ahead of itself especially here in the u.s. markets thinking that the fed is going to do either 25 or 50 bases point cut at the july meeting. we've been telling clients all year don't take off the possibility we could even see a rate hike at the end of this year we've come back a little bit on that just because of how the fed is positioned itself recently. but i still don't think we should assume we're going to get that rate cut, especially not at the july meeting possibly we see it later in the year markets want that. they're counting it. anticipating it. not just u.s. markets but global markets. the fact that that was pulled back because of the stronger jobs number last week, we're seeing markets react both to that on friday and this morning overseas. >> victoria, what's curious to me if it really was that strong jobs number that took the
prospects of a rate cut or deeper rate cuff off the table for this month in july, wouldn't the markets have reacted much more on the equities side to the downside it seemed as though we had just a very marginal loss on friday is the rate story still front and center for stocks? >> i think it is front and center a lot of that because there was that 50 bases point cut that was priced in somewhat on the futures market, now we're seeing about 93% probability of just a 25 bases point cut so they're still getting the cut that they want we're not sure that it's actually necessary we think the fundamentals are pretty strong. but we haven't seen the fed push back very much they came out last week to talk about how they don't think it's as necessary as maybe other members do, but i still think we're looking at a 25 bases point cut. we have to watch powell this week and his testimony on the hill this could be his opportunity to temper expectations a little bit. >> given your view on the outlook for rates, are there
specific parts of the market that you would be tilted more towards? from a macro side is it us and developed markets and within those markets as well, where do you find that value? is it specific sectors or stocks that you are looking at in particular >> sure. we're more focussed on the domestic markets at this point in time. we do think that the u.s. market fundamentally is strong. we have had some weak data come out lately but we also have a lot of positive numbers going forward and we've got the strong consumer, the consumer has been really good with household balance sheets, strongest they've been in ten years. consumer confidence doing well consumption averaging 3.5% annualized this year so we're just looking for opportunities not in specific sectors but across the markets some of the names that we've looked at this year include mcdonald's, charles schwab, palo alto so really looking across the board in places we find opportunity. intel is actually a place we added this past month just because that sector was hit so
hard with the china trade tariff issues look for places to find specific opportunities, not necessarily all in on one sector. >> i'm curious the intel story i can kind of see. it's been a very beaten down stock on the semiconductor side of things. i mean, trade related and certainly company execution related. however, i'm curious about the thesis for mcdonald's. a company that keeps on making new record highs seemingly every other day in the market, why is it that mcdonald's stands out even after the run it's had to record highs for that stock? >> sure. mcdonald's is a name that we added earlier in the year. we actually put it in the portfolio at the beginning of the year and added a little bit more around the end of the first quarter. so, we've had that nice run in the holding. we're not adding to it at this specific point in time but it's something we're still looking at it's got strong fundamentals we've shifted a little bit more towards value in our portfolios and that plays into that story they've got good leadership going. so we think there's more room for mcdonald's to run here >> all right
so with that mcdonald's in place, as we talk about whether or not the economy in your mind is going to be supportive of the market overall, it seems as though mcdonald's is one of those plays that benefits more when things are perhaps not as robust do you feel as though the u.s. economy is still doing well enough to support the equity valuations as we currently see them today >> we do think the economy is doing well i mean, everyone talks about how we're at the end of the cycle. and that's true. we get closer to the end everyday none of us know where the end will be. we think the fundamentals are there. we think the consumer is strong. we're about to go into earnings next week and launch and see how that works for the second quarter. expectations have come down, so it will be easier maybe for companies to beat those marks they set for themselves. so we'll continue to watch and shift as we need but we think the economy has some good fundamentals and the foundation is strong going forward. so we believe it will continue its bull run here at least until the end of the year.
>> victoria fernandez for us in houston. thanks for joining us this morning. >> thanks, dominic. in corporate news, deutsche bank is announcing a major overhaul including thousands of job cuts let's bring in now our own willfred frost with all of those details. this is a huge exit from a fairly high profile business for the bank at least visibly to the stock investing community. is that correct? >> absolutely, dom, more than just visibly as you said, they announced this radical restructuring plan and it's gone further than expected. it includes 18,000 job cuts. that's from a total of 94,000 at the bank that cut will fall disproportionately on the investment bank business line and on the u.s. by region. sources tell me that the majority of those departures take place today and took a large number of people by surprise with around 20% of the departures staggered for time for individuals that need to wind down positions for the
bank the move will create a bad bank to wind down 76 billion euros of assets but the headline as you said in this that they are closing down their equity trading business globally. a much bigger move than had been expected what duds this mean for the u.s. players? last year deutsche bank made 2.3 billion dollars in equity trading globally the market share gains to come will be more significant for the european players than the u.s. guys but nonetheless this is good for all concerned. it's fair to say that deutsche bank strength in trading was not in equities but in more macro-related products like rates, currencies, derivatives those latter business lines which they're keeping also support their important corporate banking unit so this plan could work. market performance over the last month for the share price does suggest that investors like this i say last month because details
had started to leak over the last month and the share price over that month period but from an incredibly low base, dom, as we know. in fact, the shares had been up and trading around flat or just slightly lower. >> it's interesting we bring that up, wilfred this is not negative commentary on the stocks business at deutsche bank per se, but when i was on wall street back in the early 2000s, deutsche bank was always in the lead tables, most well known for its fic trading >> which they're keeping. >> which they are keeping, but now there seems as though there will be more of a focus on servicing corporate clients on more banking-related products there. is this a plan that in your mind will work or is that margin pressure going to be there in the future because they're ratcheting back from some of the riskier businesses per se? >> great question, dom i make three points as to whether or not this will work or not. the first we've already discussed, their strength any way within trading is in the
areas they're keeping with the fixed income or fic business as you say. so that's a good thing and as you also said, that supports some of the other successful parts of the business the second part is that they've been drip feeding these sorts of changes for a long time. so, if they are going to lose non-corporate trading clients like hedge funds, they may well have done that already whether or not it's because they're keeping or losing equities now the in addition is they're cutting a lot of costs out, it won't be instantaneous, but now this might well lead to the sort of improvement in returns they want to see in the investment bank the third thing is other parts we haven't mentioned yet, advisory, ipos, debt capital issues, all of that is heavily linked into having a broad investment bank offering and you chop one key area out of that to the other areas start to suffer. the other sort of broad overarching point i make, dom, the markets liked this over the last month the market is applauding from
some analysts comments i've seen the idea they're finally embracing a rip the band aid off moment at this bank that has been struggling for so long. if this is the right move and it does work, the question is why not do it a year ago or even five years ago and the time that has been lost and perhaps the market share that has been lost already >> wilfred, how much runway does ceo christian have before investors really start to get more antsy about what's happening with this restructuring plan >> he's got a bit of time because the failures have not whether correctly or not been pinned on him in the past. the head of the investment bank only been in the job for 12 months left. that was announced on friday as part of this broader restructuring plan, and the chairman, who appointed christian, who is seen as very powerful, survived the most recent board set of votes. in fact, surprised -- survived them pretty strongly he got around 70% when people thought it might fall more
significantly. he appointed christian he likes him and they haven't gone down the path of any sort of m&a and gone with this restructuring plan and this ceo to see it through. he comes from not the investment bank that's facing most of the cuts that have been announced so i think this is sort of a vote of confidence -- it's not really a vote of confidence in anything, i guess, but it is a move down a path he is seen as the best place to execute. >> a massive story with wide ranging implications for all of wall street and of course globally thank you for that update on deutsche bank. coming up on the show, what wework just did that's got many thinking an ipo could be right around the corner. but first the bulls may be in hiding on wall street this morning, but they were out in full force in spain over the weekend. the must-see video to start your monday when "worldwide exchange" returns right after this ♪ (client's voice) remember that degree you got in taxation?
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♪ welcome back to "worldwide exchange" i'm dominic chu. futures pointing to a slightly lower open if these future losses carry over into regular trading the dow would open by 104 points, s&p down by 10 points and nasdaq off by 43. we'll have more on the marks coming up, but first time for this morning's top trending stories. kate rogers is here with those finally, finally i went to go see the avengers "end game". >> you can tell me all about it. i did not see it yet we'll kick things off with a big win at the weekend box office despite fears of franchise fatigue, sony's spiderman far from home had a monster opening according to com score the superhero sequel took in better than expected $185 million over the holiday weekend. meanwhile, spiderman prequell avengers end game is inching closer to a box office record the disney marvel film is now
just $15 million shy from taking in the most money ever while in theaters the 2009 film avatar still holds that top spot. i have seen avatar. >> but you haven't seen -- >> i haven't seen any of these. >> anything in the marvel cinematic universe you have never seen any of those movies >> you know -- >> not curiosity. >> i'm the superhero type chick. it's not my thing. >> you watch sci-fy. you watched avatar. >> i did i'm selective here i have seen the ironman fr franchi franchise. i did like that. i got nothing against it i don't get to movies that often. when i do i'm a romcom drama movie goer. >> when what is the last movie you saw? >> "is star a born". >> you saw >> i went and saw avengers "end game." i'm a massive marvel universe fan. i have seen all of them multiple times. but because of family logistics i don't get to the movies as much anymore i finally got to see it weeks after obviously it opened.
but i was so happy with the way -- i'm not going to spoil it for people who already haven't seen it or anything else, but i would say that this ending to the avengers franchise, this iteration of it, was probably as good of an ending as you could have possibly asked for, much better than the "game of thrones" ending. >> which i also don't watch. i can feel the twitter ire coming my way. the annual rung of the bulls quicking off in spain over of the weekend. five people were injured during the first race which lasted just under three minutes. two americans were among the injured but treated at local hospitals. this festival will run for eight more years. >> would you ever do it? >> i'm more of a jogger. i don't think this is my scene >> you're speedier than i am. >> would you do it >> i don't think i would do it i see it happen every year. >> yes. >> and i just say to myself, those animals are so much stronger. >> i know. >> so much faster, so much more forceful why would i want to challenge it i will just acknowledge that i
cannot. >> yes same here. it doesn't seem very safe at all. not for us. >> i would watch it, though. >> this next one is more our speed. >> my speed? okay. >> i think it's my speed, too. every cookout has it debates, hot dog, hamburger, charcoal or gas grill but the hottest argument right now is playing out on twitter what is the perfect toasted marshmallow? one twitter user posting a wide variety ranging from barely warm to burnt to a crisp. >> so for those people listening on xm radio or cannot see the photos, this scale on twitter, this photo, shows basically on a scale of 1, a marshmallow that has not been touched by any kind of heat whatsoever meanwhile, 10 on the scale is basically a charcoal brickette on the stick. >> 10s, get out of here. >> i like 7, 8. >> me, too. >> we got to have a barbecue together so 1 is beautiful and perfect in its own right. that's a regular marshmallow, great. not what we're talking about
here i say anywhere between 6 and 8 is good for me. >> my secret to my perfect toasted marshmallow you let it set on fire for about two seconds. >> okay. >> then blow it out. >> blow it out, yep. >> do it again just keep on doing that until you get the brownness. >> you need to melt the chocolate in the smoer so you need the heat. >> it's not rocket science. >> no, it's not. that burnt to a krips, i don't know who is eating that. dom, in sports the u.s. women's national team taking ohm their fourth world cup title they beat the netherlands 2-0 on goals. megan and rose, to celebrate, new york will host a ticker tape parade on wednesday morning. what a win. >> it was awesome top watch. it was awesome to watch. it played out just the way you hoped a world cup final would, right? it was very close. 0-0 until the first hour then all of a sudden it became -- some controversy with regard to how some calls shook out at the end. >> totally i like all the bragging for the goals. that's my favorite thing what
everybody does when they show each other up. i love all that. >> controversy, absolutely right. speaking of controversy, we're not going to get fully into it, where do you land on this whole discussion about whether or not the women's national team deserves to make as much as the men do on that side of things? that's a big story these days, right? >> is there any debate. >> no, there's no debate. >> they should be making just as much. >> i'm the father of a daughter. i can very much empathize. >> we agree on that. >> kate rogers, thank you for those trending stories. coming up on deck, more on this morning's top corporate story, deutsche bank announcing a major overhaul another check on the market reaction for deutsche bank shares and the markets overhaul. plus, saying sorry starbucks apologizing after one location gave a group of cops the boot the details when "worldwide chgerernafr is ly begins to chan, causing a lack of sharpness, or even trouble with recall. thankfully, the breakthrough in prevagen helps your brain and actually improves memory.
♪ down marks for hong kong but a bright day coming to an end. it's 5:52 p.m. hong kong time. 5:52 a.m. new york time. welcome back to "worldwide exchange." i'm dominic whichchu. the headlines you need in 60 seconds. one of the world's largest banks announcing a massive overhaul. deutsche bank is pulling out of equities sales the german lender is slashing around 18,000 jobs worldwide those shares off two thirds of 1% in german trading. starbucks apologizing r to arizona police after an employee reportedly asked officers to leave. one of the company shops the request came after a customer reportedly felt unsafe by the officers presence in its apology, starbucks called the treatment of the police officers completely
unacceptable wework plans to raise billions of dollars in debt before it goes public, that's according to "the wall street journal. the office space company is seeking to raise between 3 and $4 billion in those coming months well, let's turn now back to the markets and your money futures pointing to a slightly lower open for the dow these losses hold into the opening bell, futures indicate 97 point drop in the opening bell nasdaq off by 42 joining me is portfolio manager at fed rated global investment management steve, it sure feels as though wall street in general is fairly balanced in its positioning as evidenced by the trading action that we saw on friday after a jobs report that could mean less of a rate cut. there are so many variables, but it doesn't seem like markets are that volatile these days. >> no. things have played out the way pretty much we expected them to in december, as crazy as that sounds we thought the market was
worried about a recession. we wouldn't get one. rally back to the highs, which we have done as you sit here now, upside and downside looks more balanced in the short run. we still think the economy is going to reaccelerate at the end of the year. we don't think the bull market run is over. essentially 3,000 in the markets. we think there's an opportunity for disappointment over the summer so it's time to put a couple chips in your pocket. >> so with that being said, and the fed being such a focus, how much are you as a portfolio manager moving around people's money going to pay attention to what fed chair j. powell will say later on this week during his congressional testimony? >> i think this week is hugely important. it's not just his testimony, which is going to be critical, but we also have ppi and cpi, the two biggest inflation ratings we have left ahead of the july meeting our view has been that 50 bases points wasn't going to happen. the jobs number as disappointing it was to the market which is incredible to say that such a blowout jobs number was disappointing, it at least right
sized expectations back down to that 25 bases point cut. ppi and cpi come in where they're expected to this week, we still think you'll get that will it be a short-term disappointment for the market? potentially. but if there's weakness that comes out of that, that's something we would see as attractive. >> in your mind, is it appropriate or at least the right thing to do for the fed to cut interest rates at this stage? >> i think it's a valid conversation i think, yes, it is because what we think is going on is that you've got an underlying downward pressure on inflation, for good reason. it's technology. it's automation. it's a.i it's driving down costs. if that's the case, the economy can run a little bit faster without generating inflation and we can have rates a little bit lower. so i think that's a valid conversation i don't think they need to rush in cutting 50, 75, 100 bases points because of some impending end to the world. >> do you feel as though there's political pressure brought to bear on this i bring this up because we do
see turkish president erdogan firing in essence his central bank head. we know that donald trump, president trump, has not been happy with interest rates the way they are right now and has been publicly at least negative to fed chair j. powell is the fed being influenced in your mind by this situation right now? >> i hope not. job descriptions are a beautiful thing. they tell you what you should and shouldn't do the fed is supposed to focus on price stability and full employment and i think if powell does that, then you let the rest of the chips fall where they may. but from his perspective, the best thing he can do is play the cards that he's dealt. if there are downward pressures on inflation, the economy can run hotter without generating big inflation then you should cut. the president will do what the president does. >> you and your team of analysts over at fed rated look at valuations and interest rates are central to that. the lower the interest rates go the more you can pay for stocks, right, because they're valued at
slightly more given what they could do in the future so are you of the mindset that stocks really do have a next leg higher because hyperthetically the central bank could cut as they have around the world by the way? >> i think it's a contributing factor i don't think stocks are going to go higher just because of a cut. our view is that full markets end in recessions. as long as the expansion continues, markets should continue to hit new highs. we do not foresee the ingredients for an impending recession. we think the expansion will last and we think that a rate cut coupled with a trade deal and still strong consumer could lead to reacceleration of the economy. that's why we want to buy stocks >> just a bit left here. are there places in the market you like better than others? >> yeah. small caps it sounds crazy because it's late cycle, but 50% of their debt is variable rates, lower rates help they're cyclical, they benefit from a pickup in economic
activity we foresee and the ipo market is hot. you can get exposure to some of these disruptive companies it's great. >> thank you so much. >> always a pleasure, dom. take care. >> we appreciate it. that does it for "worldwide exchange." the futures right now pointing to a slightly lower open "squawk box" will pick up coverage right now good morning it's the end of an era for deutsche the bairpg pulling out of the global equities and trading businesses and announcing 18,000 job cuts as part of a restructuring plan the fallout on wall street is straight ahead. wework selling billions of dollars of debt in a move that could raise more money than its upcoming ipo we'll tell you why. fed chair j. powell in the hot seat cast doubt on rate cuts this month. we'll get you ready for the trading week ahead it's monday, july 8th, 2019. "squawk box" begins right now.
>> announcer: live from new york, where business never sleeps, this is "squawk box. good morning. very warm welcome to "squawk box" here on cnbc live from the nasdaq market site in times square i'm wilfred frost and mike santoli joe, becky and andrew are all off today. our guest post, peter, and cnbc contributor. let's check in on the futures this morning coming off the back of a full percent or so for the selling in asia, less than that in europe, down .2%. but we're down 95 points on the dow this morning of course, coming off the back of a very strong week last week, the s&p 500 as a whole up 1.6% led by communication services. ten were higher energy the only decliner last week was down about a percent or so. asia overnight as