tv Worldwide Exchange CNBC August 14, 2019 5:00am-6:00am EDT
it is 5:00 p.m. at hong kong international airport and 5:00 a.m. at cnbc global headquarters here is your five at five. calm washing over hong kong's main travel hub today after violent clashes between demonstrators and police and travelers. a live update from that region coming up. violence in hong kong. a cooling of u.s./china trade tensions sending wall street on a wild ride. the dow coming off its best two-day stretch in two months. and it could a be a recessi
red flag the main yield is nearly inverted and germany's benchmark bond yield hitting its own all-time low after weaker data out of the economy. and the spice returns earlier than ever. how starbucks is planning to bring a little fall to its late august menu. it's wednesday, august 14th. "worldwide exchange" begins right now. ♪ good morning welcome to "worldwide exchange." i'm dominic chu. what you're seeing here, lye shots, live pictures of hong kong the city's international airport resuming check-ins today after days of mass demonstrations and disr disruptions. first here's how your money and the global markets are setting
their day up stock futures indicating the dow will open slightly to the down side marginal losses, about 37 points the s&p would open down by 5 points if these losses hold into the regular trading session and the nasdaq off by 14 the dow is coming off its best two day stretch in two months thanks to a cooling off of trade tensions between the u.s. and china with the trump administration delaying a new set of tariffs that were supposed to take effect in the beginning of september the bond yield, the bond market, a huge focus ten-year yields and two-year yields, right now, ten-year is 1.652. two-years, 1.642 that one basis point separates flatness between the two-year and ten-year treasury. remember, now just x basis points, we're one away a phenomenon many label as a recession indicatoindicator. we'll watch that all morning
if you are look on the bottom of your screen, because there's so much interest in the interest rate complex right now we will be showing you live updates throughout the course of the day with the two-year yield and the ten-year yield so everybody knows what's going on with that yield curve and the possible inversion at play let's go worldwide in the asian session we did see a little bit of positivity coming out there the nikkei in japan up bay percenpeby a percent. in the european trade, we're getting breaking economic data out of the eurozone. the first estimate on second quarter european union gdp at 0.2% on a quarter over quarter basis. 1.1% on the year those figures were in line with estimates. right now european trading is just about fractionally to the down side. the dax off a half percent the same with the cac in france. and the ftse 100 also off 0.01 let's get some insights with
paul markum from newton investment management. paul, we got the eu data coming out with gdp the german numbers came in worse than expected. the eurozone overall does it become the next hot spot for investors now that we've maybe calmed things down in hong kong? >> i thinkvaluations would be shorti i supportive of that statement the problem is growth has been difficult to come by for quite some time, investors will take some convincing that's the case. the ongoing trade disputes with china will push markets around and the underlying german economy is suffering weakness as a result of falling off of chinese demand paul, if we take a look at the overall complex, we've put so much emphases on interest rates, the differential between the u.s. and europe continues to widen out despite the fact that
we have positive interest rates here, negative in europe does that still mean that the u.s. becomes the place where capital ultimately flows, even in terms of distress and in times of good? >> one would ma'imagine that the interest rate differential be supportive of the dollar it will be a more healthy situation for u.s. banks, as that differential narrows, if the global economy starts to slow down, you may find some of those asset flows go back to those more undervalued currencies it appears the european rate environment will be influenced by some secular trends, structural trends that relate to the aging population, the growth of technology, and difficulty that's been evident for the ecb in generating growth i would imagine all else equal that the u.s. dollar should be the beneficiary of this. >> so we watched it play out
markedly yesterday with the headlines, tweets, everything else between trade and u.s. in china and tariffs being delayed. the u.s. stock market surged again. is this an environment now where buying dips in the overall stock market in the u.s. and abroad is still the best case scenario >> well, it certainly has been the case the difference now maybe that some of the underlying economic data are slowing it certainly is our view also that u.s. dollar liquidity is starting to become less abundant for other parts of the world which is an issue for growth to that extent it may be that the rallies, the snapbacks in markets will be shorter and sharper than the overall trend which may remain flat or down. so buying the dips is probably not the easy option it has been in the past, especially since central banks are running out of options when it comes to stimulating the equity
environment. a >> are you concerned about the flatness and almost inversion of the two-year to ten-year spread? is that important for markets and traders? >> it is it's clearly an indicator of how the market sees growth and inflation going forward. certainly the idea that the central bank policies that we've seen could inflate away some of the huge debt that we've seen is going away as inflation dies away let's remember that the policies which we've seen which increased debt and brought debt servicing levels down have been there to bring forward demand from the future the trouble with growth, you can't have it twice. if you borrow that, you can't have it again. so from that extent the two and ten spread would lead you to having an economic hangover at some stage >> key focus for investors,
thanks appreciate it. in corporate news, reunited and it feels so good cbs and viacom striking a deal to get back together after the media giant split more than a decade ago rahel solomon has the details on the entertainment empire >> cbs and viacom may be betting that a larger company can better compete in an industry dominated by bigger giants the new company will be called viacom cbs with cbs shareholders owning about 61% and have a market cap of $31 billion, still small compared to netflix at 130 billion. disney has nearly 250 billion, and comcast at almost 2 00 billion it will combine the cbs network with mtv, nickelodeon, comedy central and paramount movie studio they will own about 15,000 tv episodes and 3,600 films cbs and viacom split up in 2006.
the holding compaprevious efforr failed because of price and clashes and who would run the company. bob backish will be president and ceo. joe ianello will be the chairman and ceo of cbs bob backish will be on "squawk box" this morning at 8:40 eastern back to you. >> thank you very much for that update. in whale watching, trian partners staging an impressive comeback in 2019 the $9 billion hedge fund posting an 18% gain through the first seven months of the year that's according to "the financial times," this after peltz suffered one of the worst annual losses in a decade last year among the notable holders, you
have prokcter & gamble and cisc. nelson peltz will be at the delivering alpha conference. mike pence will also be there. register for your tickets at deliveringalpha.com. relative calm in hong kong after two days of violent unrest sent global markets for a rough ride a live report from hong kong coming up. and the pot stock burning investors this morning after a ru rough second quarter. and it's not baseball, football or even hockey. the one pack of trading cards that just fetched a cool $100,000 at auction. a very busy hour still ahead when "worldwide exchange" returns. i was on the fence about changing from a manual to an electric toothbrush.
but my hygienist said going electric could lead to way cleaner teeth. she said, get the one inspired by dentists, with a round brush head. go pro with oral-b. oral-b's gentle rounded brush head removes more plaque along the gum line. for cleaner teeth and healthier gums. and unlike sonicare, oral-b is the first electric toothbrush brand accepted by the ada for its effectiveness and safety. what an amazing clean! i'll only use an oral-b! oral-b. brush like a pro. ♪ ♪ applebee's handcrafted burgers now starting at $7.99. now that's eatin' good in the neighborhood
this is xfinity x1. featuring the emmy award-winning voice remote. streaming services without changing passwords and input. live sports - with real-time stats and scores. access to the most 4k content. and your movies and shows to go. the best tv experience is the best tv value. xfinity x1. simple. easy. awesome. xfinity. the future of awesome. welcome back a developing story in hong kong. live shots right there flights at one of the region's busiest airports have resumed after two days of mass demonstrations there janice macker-frayer joins us now. >> things are trying to return to normal here
the airport authority secured an injunction to prevent a third day of disruptions thousands of protesters flooded the arrivals and departures levels cathay pacific saying 55,000 passengers were affected there are still some protester here's in the terminal they're behind me now. they're told they have to stay in this area they're being contained to this one section. they're told if they violate those terms, that they will be seen as acting unlawful. there is a greater police presence here and reports of some riot police who have taken up station at the other end of the arrivals hall. certainly a contrast to the chaos that we saw here last night when the riot squads moved in, trying to make arrests one officer was beaten with his own baton. he pulled a gun. quite a lot of tension
now some trepidation trying to figure out what authorities and what china may do next >> there's been a response from the chinese government with regard to all of these protests, not just the chief executive of hong kong, carrie lam. what has been the mainland response to the demonstrations is that having a real effect on the level of protesting we've seen it is a mystery to know what the chinese leadership is thinking the best signals can be seen in state media and the messages telegraphed. if you look at what has been happening over the past week, state media describing the protesters as rioters, today now being called radicals. officials had been using words like terrorism which is a bro
broadly defined term in china which could justify the use of certain policies and then there are the propaganda videos. apparently tonight at an airport across the border drills will be conducted for what it might look like if they had to quell riots there. all of these messages are being telegraphed from the tral gocen government in beijing, communicating to protests that theirpatience is wearing thin and they have a host of options to end these protests. we'll stay with hong kong. the stock exchange saw a sharp drop in trading fees in the first half of this year as the u.s./china trade war and protests in that city hit market sentiment. the fees, which account for half of theeratoperator's revenues f
21%. the head of the exchange says markets continue to be sensitive to the social unrest in hong kong as women as a poteell as al no-deal brexit the hang seng is down 8% since june 12th when protests escalated. still on deck for the show, high hopes for some cannabis investors are up in smoke. we'll tell you about what tilray said in a moment first, it is your birg number o the day. 27%. that's how much the u.s. budget deficit grew in the past year. that brings the total deficit through july to over 8$866 billion. with two months left in the year, the treasury department is predicting the gap will top $1 orwi eon "wlddexchange" is back
a lot of folks ask me why their dishwasher doesn't get everything clean. i tell them, it may be your detergent... that's why more dishwasher brands recommend cascade platinum. it's specially-designed with the soaking, scrubbing and rinsing built right in. cascade platinum's unique actionpacs dissolve quickly... ...to remove stuck-on food. . . for sparkling-clean dishes, the first time. choose the detergent that lets your dishwasher do the dishes! cascade platinum. the number one recommended brand in north america. . welcome back to the show let's look at some stocks on the move tilray shares are down sharply right now. the marijuana producer reporting a wider than expected second quarter loss as it ramped up investments to boost production. revenue beat forecasts tilray warms growth will be
muted in canada where recreational pot is legal. shares are off 10% now myriad genetics slumping today. they reported a fourth quarter net loss and revenues that missed forecast. they blame that on lower reimbursements for one of its screening tests. the first quarter outlook is also below estimates shares of realreal are higher the site which sells secondhand luxury goods are reporting a narrower adjusted loss since going public in june sales rising 51%, in line with estimates. shares are up 12%. still to come, why the nfl is tapping jeff bezos to heay h new cultural outreach effort and look at this the spread between the ten-year note and
the two-year note, and if that turns negative, that's widely watched recession indicator. something we'll be watching all morning for you when "worldwide exchange" returns after this mr. clean. he'm cleaning tough bathroom and kitchen messes with sprays and wipes can be a struggle. there's an easier way. try mr. clean magic eraser. just wet, squeeze and erase tough messes like bathtub soap scum and caked-on grease from oven doors. now mr. clean magic eraser comes in disposable sheets. they're perfect for icky messes on stovetops in microwaves and all over the house. for an amazing clean, try mr. clean magic eraser, and now, new mr. clean magic eraser sheets. they have businesses to grow customers to care for lives to get home to they use stamps.com print discounted postage for any letter any package any time right from your computer all the amazing services of the post office only cheaper
headlines. phillip mena is live in the new york newsroom with the latest. good morning there are more questions this morning surrounding the death of jeffrey epstein. two law enforcement officials are saying one thing being investigated is whether employees responsible for checking on epstein were actually sleeping on the job two sources tell nbc news that prison log books are being examined and compared to what is seen on surveillance video epstein's apparent suicide has already caused a shakeup at the correctional center. the attorney general reassigning the warden and also put two guards on administrative leave. jay-z is changing his tune about the nfl. he's teaming up with the league to quarterback a new social justice program to ease turbulent times in the wake of play procedure testtests it wilz coproducer of the halftime show.
red sox pitcher chris sale has a new mlb record under his belt he got his 2,000th career strikeout, reaching the milestone faster than any other player it took him 1,626 innings. that is 85 innings faster than pedro martinez who held the previous record. back to you. >> still a thorn in the rayanke side. when we come back, trade tensions between the u.s. and china are cooling off. that news fueling a rally tuesday that may be running out of steam now a rooif repolive report coming . and the alternative investment that could rally in the face of more global uncertainty. we're talking bitcoin and crypto when "worldwide exchange" returns.
it is the story that the markets are watching the main u.s. yield curve portion is nearly inverted we'll tell you why this is a very big deal. a flight to safety why bitcoin could be a new favorite haven in times of volatility plus why one major university says the word "the" is a very important word to the tune of big bucks. ohio, i hope you're watching it's wednesday, august 14, 2019. you're watching "worldwide exchange" on cnbc.
♪ welcome back to "worldwide exchange" here on cnbc i'm dominic chu. here is how you and your money and investments are looking right now. stock futures pointing to some modest losses. you can see the dow would open down by 81 points if the futures losses hold into regular cash trading. the s&p off by 9 points. also watching the bond complex very closely a key portion of the yield curve, the difference between lower and longer term rates is nearly crossed you can see here two-year note yields, 1.642%, and the ten-year at 1.652%.
that will be in huge focus as the morning continues. let's check the asian markets. japan, hong kong, shanghai generally positive on the european side of things we saw weaker data out of europe on the gdp side of things. we're seeing the dax off bay percent. the cac in france, 0.75% the ftse 100 off by a hatch plf percent. global stocks are rising this morning after a delay on tariffs on chinese goods eunice yoon joins us fro industrial production is at a 17-year low. the tariff dispute is squeezing the economy here all the data set to be released today missed the factory output was the worst
we've seen since 2002. retail sales sank hit by weaker auto purchases the fixed asset investment for this part of the year was worse than previously. so it fell the chinese sta terse tistics bu says the economy faces downward pressure but it believed the impacted from the trade war was controllable president trump provided some relief for china when he decided to exempt or delay some tariffs set to take place in september to december. interestingly there was no official response from beijing after president trump made the announcement the state news agency, xinhua, did report on the phone call between the top negotiators, but this is the part that they said. they said that china's largest opposition in the phone call to the additional tariffs which are set to kick in on september 1s that suggests that china wants
to see more. and that it doesn't see this move as meaningful i spoke with suppliers who sell to the united states to ask them about what they thought the impacted would bi impact would be. they didn't think there would be a major impact because they were rushing orders any way to get stuff to the united states in time for christmas they did think it would help with pricing adjustment into 2020 >> eunice, we can't let you leave without talking about hong kong first we have seen relative calm return to that special administrative region of china is there a response that you can tell us about from the chinese government there, either formally or informally with regard to what's happening in hong kong and do you feel as though that's perhaps calming the markets over there and the general protest environment as well >> i don't think it's calming people here at all the sentiment and feeling towards hong kong has been
whipped up the chinese government described the hong kong protesters as terrorists, and peoples daily described them today as radicals the peoples daily also put out an editorial saying the hong kong demonstration is "nothing but a monster. so there's a feeling here that the government is preparing the public to be on its side in case it does have to take some sort of action which people are worried could be a crackdown jond th beyond that, there's a sense that the government here is trying to dehumanize the hong kong protesters. they don't really fit the narrative of having a large population in hong kong that are supposed to be good citizens, job -- people who have jobs and are working for the chinese nation in defiance and opposition to the chinese
communist party. the way that beijing works, the government here really doesn't want to have that sort of narrative out there. so that's another reason why they have been putting out all of this, state media and these videos as well as this pr campaign against the hong kong protesters the protesters today did put out an apology they issued an apology not to beijing but to international travelers in that apology they said please forgive us for this disruption we have to fight for our freedoms and fend for our lives. >> interesting statement for sure eunice yoon, thank you very much for that update. what do the headlines coming out of asia mean for global markets? joining me now is jay jacobs head of research and strategy at global x funds jay, it's a very, very tense time in many parts of the world.
our markets in the u.s. still remain not far away from record highs. what exactly does that say about the current setup that traders and invests have in the overall market >> it shows there's so much uncertainty around the world that the u.s. is the best looking environment right now. i'm honestly surprised we don't have a stronger dollar considering you have negative interest rates around the word you have low growth. i would think all investors would be looking at the u.s. as really a safe haven, whether you look at the fixed income or the equity markets >> doesn't that in some ways work against president trump's narrative that he wants the u.s. dollar to decline more versus other currencies that he wants the fed to ease interest rates so that we can be more competitive if the u.s. is the best looking scenario in the markets, that then tells you there should be relative strength in the u.s. capital markets as well leading to higher dollars, leading to higher rates and relatively
speaking as well >> that's the case if you want a weaker dollar, that's a challenge if you're paying almost 2% in short-term interest rates compared to europe which is a negative territory right now. it plays into the narrative of having a stronger stock market that could support a higher s&p number which going into election season is i'm sure something he will be talking of >> stay right there. we want to broaden out this conversation we will bring in jane foley over at rabo bank, she foe kicuses oe macro picture. jay brings some interesting points with regard to capital flows and the relative strength of the u.s. economy versus others around the world. how does that play out will we see continued dollar strength is the euro going to continue to fall will the pound continue to fall? maybe the only haven rising is the yen at this point. >> we have the japanese yen, that's the go-to safe haven when
things turn sour undeniably the u.s. dollar functions as a safe haven for an awful a lot of investors this can be linked to the dollar's prominence in the international payment system in a way, trump can't have it both ways. he wants a weaker dollar but he likes control over the payment system look for strains instance at thn situation. he threatened some french companies, and that if they dent pull out investments from iran, that they may not have access to the payment system he likes control over the payment system, because of that you can't unlink the dollar story with that of the emerging mar queket story. when we see invests moving out of emerging markets because of geopolitical concerns, trade wars, we generally see the dollar pushing higher. of course this again is really in simple terms a lot of investors need u.s. dollars, and therefore when we see crisis
elsewhe elsewhere, the dollar remains firment >> jane, just to follow up on this we were asking jay earlier about the idea that there's a dynamic developing in the marketplace where the u.s. is more competitive the interest rate picture is key for a lot of traders and investors out there. specifically the difference between yields and the ten-year treasury and the two-year treasury in the united states. is that as widely watched outside of the u.s. as what's happening right now here on the home front for us in america >> absolutely. the u.s. economy, the u.s. assets, they are watched by every investor in the whole of the world. but part of the story here is that there's is a wall of money. there is a huge amount of savings. investors are chasing yield. we see negative yields and a huge amount of government bonds now. we see investors who perhaps in didn't decades would be risk
adverse being pushed into taking risk and more risky assets than they perhaps would have previously wanted to take. they are moving into emerging market sovereign dead, mobt and corporate debt i think this is one of the reasons why u.s. equities remain relatively high considering all the global risks that are out there. >> so, jay, jane brings up a great point. there are asset flows and probably areas that are being more favored by certain investors. what exactly are you seeing on your end with regard to where the flows are going and what types of assets or stocks or sectors are in favor at this point? >> sure. it's coming in two places. the first is in income investors are not getting income from bonds because duration is paying nothing because of the platitude of the ten-year and credit is playing well
people are look at dividend payers, preferred stock, pipelines. anything that pays yield the second area where we're seeing inflows is pressures metals, silver and gold. >> are there sectors that you will be keeping a closer eye on as these trade talks continue? >> yeah. our eye is always going to be on technology there's a bifurcation in technology now between the hardware side which is effected by these trade wars and the software side. you will see a lot more protection and growth in the software side. >> jane foley and jay jacobs, thank you very much forev your comments. coming up, wilbur ross will be on "squawk box" at 8:00 a.m. this morning a must-see interview that you will not want to miss.
coming up, are cryptocurrencies a good investment when it comes to the market going on wild rides our next guest has the answer. later on, it still feels like summer but starbucks is first in line for fall. yes, it's the pumpkin spice announcement you have to hear about. "worldwide exchange" is back after this
♪ ♪ ♪ applebee's handcrafted burgers now with endless fries starting at $7.99. and get more bites for your buck with late night half-priced apps. now that's eatin' good in the neighborhood. my teeth have been feeling really sensitive lately. well 80% of sensitivity starts at the gum line, so treat sensitivity at the source. new crest gum and sensitivity starts treating sensitivity immediately, at the gum line, for relief within days and wraps your teeth in sensitivity protection. crest. your but as you get older,hing. it naturally begins to change, causing a lack of sharpness, or even trouble with recall.
thankfully, the breakthrough in prevagen helps your brain and actually improves memory. the secret is an ingredient originally discovered... in jellyfish. in clinical trials, prevagen has been shown to improve short-term memory. prevagen. healthier brain. better life. with wild market swings showing no signs of stopping, investors are looking for safe havens, and some of them are finding their way to bitcoin joining us is nick hollis. i cringe i cannot say safe haven and bitcoin in the same sentence why are you telling me that bitcoin could be considered one of those haven-type assets in
this kind of environment >> a couple different reasons. first, it's kind of coming back to where it started. bitcoin started in january 2009 during the financial crisis it was born from that turmoil second, it's only grown since then it's obviously very global it's not just a u.s. safe haven but a global and convenient safe haven. and over the last year, year and a half, bitcoin has become sort of the standard of all crypto. a year ago bitcoin's market cap was half of all the cryptos. now it's over two-thirds 67%. all the scam coins have died and bitcoin is left standing >> i heard it mentioned to me, i heard it that cryptocurrencies and bitcoin specifically have been a bit of a leader in terms of indicating some signs of stress in the overall market is it fair to say when people
anticipate things will get crazy there is this initial push into bitcoin? >> we have seen that it perked up around the hong kong protests and the currency fight that happened out of congress congress and the mainland. bitcoin predicted that uncertainty ahead of time. nothing else was moving. bitcoin was. >> arthere are a lot of folks ot there who say bitcoin used to be almost a $20,000 per token asset. we watched it go down to a 3,000 handle yes, it's back up again. there's something to be said for the scars that happen the last time around. what is it that investors or trade e ners need to know aboutt presents that scathing from happening again? >> will happenagain. it's important to understand with all cryptocurrencies, bitcoin is included with that, they will always be volatile it's a young technology.
a young safe haven it won't be as stable as gold or bonds. >> one last question is there a target you're looking for with regard to upside or down side volatility >> with these assets we look at percentage change. when you saw 5%, 10%, 15% change in bitcoin over the week that was a flash that something would happen we look for now a pullback to confirm the notion that trade talks and hong kong tensions are lessening, but a 5%, 10% move to the upside, you have to watch the tape because something else bad could happen >> nick, thank you very much let's find out what else you will be talking about today. time for today's top trending stories. rahel solomon is back here with those. >> fall doesn't actually begin until late september, but starbucks is already ushering in the season they're bringing back the pumpkin spice latte on august 27th i see you shaking your head.
it's less than two weeks away from today this would be the earliest launch date ever for the popular fall beverage. >> you might as well put out the peppermint mocha drinks now. >> i actually heard that people are already advertising for the holiday shopping season. >> i enjoy the holiday-themed drinks, but the idea that you could be ushering in the fall when all of russ trying us are g with the fact that summer is almost over. the ohio state university, as in the ohio state university, filed for a new trademark on the word the or the they sell merchandise with the word "the" on it and they want to make sure no one else is cash in on the grand. it's unclear whether the trademark application will be accepted >> it's been a joke for a while. not the ohio state university, the idea that you put the -- so
many of these star athletes that come out of the ohio state university always say they're from the ohio stated yu univers. >> we're at the cnbc >> yes >> if you're in ohio, listen, if you can do it, go ahead. >> distinctions have to be made. if you managed to catch them all in the late '90s, you might be looking at a significant pay day. a full set of first edition of pokemon cards in mint condition sold for $107,000 at auction even if you have a closet full of pokemon cards in your house you probably won't make as much if you played with them. each card in this set, they were authenticated and found to have no folds, faults or scratches. >> it had be mint. transferred with white gloves
from the package into a case >> looking at it as an investment >> this story doesn't shock me i remember collecting baseball kids as a kid. you had to put them in those plastic sleeves. i would hope there would be a pay day. i don't think my cards would be worth that much. >> at least you're gainfully employed at the cnbc >> thank you, rahel solomon. >> you're welcome. coming up, facebook, google and amazon executives set to testify at a major trade hearing, but they're not the only ones in the hot seat. we'll explain coming up. and the newsmaker of the morning. the ceo of the new combined viacom cbs, robert backish will be live on "squawk box" at 8:40.
manhattan just getting things started it's 5:52. coming up on 5:53. time for your executive recap. the headlines you need in 60 seconds. executives from facebook, google and amazon will testify on monday at the french government's digital services tax. last month france's snt approen approved a 3% tax on big companies conducting business in the country. tesla getting a new title. it's now the year's most profitable short bet shares are down about 30% since january, and new data from s3 partners shows bears made 2$2.8 billion betting against tesla during that time span. we continue to watch the yield curve.
the spread between ten-year treasury notes and two-year notes are narrowing to one basis point yesterday to a fraction -- just a fraction of a basis point here now futures now pointing to modest losses the dow would open down just about 60 points. 90 at this point the zs&p by 11. joining me now is jimmy urio, a cnbc contributor thanks for joining us. let's talk about the markets we saw these fractional losses yesterday. all it took was a tweet and a statement and everything else, then things changed. is this a market that invests need to worry about? is it all noise? >> i mean, there's a ton of noise. to put it in perspective, we're in the upper middle part of the range we established since august the greater fundamental picture is that there's plenty of things to worry about there's china, hong kong and
argentina. on the good side of the ledger, there's a fed accommodatedive. it seems like every time something bad hits the tape, the market in their mind does the math and the fed will adjust to it that, to me, seems appropriate it seems that the fed is showing us they want to get ahead of everything i'm not sure it's the right policy for them to be dovish, bz the but they are we have not become numb to the twitter bombs that happen. i want to get to a point -- they get reversed often the next day. last monday we were down in the dumps. something comes out on twitter and we rally are the algos just reading the headlines and jumping in at some point in time they will say this is not exactly great business because we reverse it the next day i'm not sure >> the markets have become slightly more numb over the course of the past three, for years to some headline risks we're not seeing the 3% to 4%
swing in stocks. when we have a trade announcement on tariffs, it leads to a 1.5% rise or fall in markets. maybe there is a little bit of sensitivity coming out of the marketplace. isn't that what you think? >> yes i believe you're right it seems like over the last couple of years what we've seen is that the initial tweet could easily be fully reversed the next day i'm not sure that 1.5% move is justified. though i guess it doesn't matter it is what it is right now right nowwe move 1% 1.5% it's changed a little bit. we are getting numb. i guess that's a good sign >> some people say that the two to ten-year spread on treasuries is not as important as we make it out to be it's not as reliable a recession indicator as it has been in the past what do traders what do you and your colleagues in chicago think about that particular statement? >> i'm certainly one of those
people i think the long end is distorted greatly over the last ten years. i've said this a bunch of times. people take it to mean i don't care that's not true. i think it's something that needs to be looked at. it probably has some predictive power. it doesn't have the power it did in the past. even when it was as powerful as it was before, the recession didn't happen for 14 to 18 months until after it inverted i'm a trader we talk about the now. many times the stock market correction doesn't happen for many months. i don't think the right time to panic is today we've seen this year a convergence and correlation -- the returns are almost identical for an etf tracking long-term government bonds in the united states and an etf tracking gold price as well. you throw bitcoin in there, you have a situation where stocks maybe are not the most attractive thing out there
take us through how traders are reviewing the various asset classes and where the opportunities are given this environment. >> this is an excellent question you had someone on before talking about bitcoin and how perhaps it's joined and sitting at the safe haven asset table. i think it is. remember, there's two characteristics that are important. one is a non-correlation to risk assets bitcoin certainly has that i'm not sure it's inversely correlated like the ten-year is and the u.s. dollar is at a time of panic money will automatically go from stocks to the ten-year they are going to bitcoin for diversification. and that's like the first box to be checked of a safe haven asset. i think gold, silver and bitcoin the story on them has been amazing. right when the fed started to begin the pivot towards more dovish, those things became more relevant i think it's an interesting thing that's happened, particularly the bitcoin part of
it >> all right jimmy urio, thank you very much for that apprecia appreciate it. that does it for "worldwide exchange." "squawk box" picks up the coverage right now keep your eye on that yield curve. good morning a tariff reprieve for american consumers help propel the dow to the best day in two months. will it be the pause or the beginning of a thaw in the trade war? dismal day overnight germany's economy contracted, we'll show you how global markets are responding and a somewhat calmer day in hong kong after violence erupted at the airport yesterday between police and protesters. we'll take you there live. it's wednesday, august 14, 2019. "squawk box" begins right now. ♪
live from new york where business never sleeps, this is "squawk box. good morning welcome to "squawk box" here on cnbc we're live at the nasdaq market site, i'm andrew ross sorkin along with joe kernen and kayla tausche who is hanging out with us today becky is off we have a big show today we want to start with yesterday's big market rebound the dow coming off its best day in two months thanks to a cooling of trade tensions between the u.s. and china we will see whether that's real or temporary the trump administration delaying new tariffs on certain consumer goods made in china they'll kick in in december instead of september they include cell phones, laptops, that sent apple stock higher by more than 4% we should say not all tariffs were delayed a tax of 10% will still kick in on september 1st for a range of goods including chinese made smart watches and smart speakers, including the amazon