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tv   Worldwide Exchange  CNBC  August 19, 2019 5:00am-6:01am EDT

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♪ it is 5:00 a.m. at cnbc global headquarters. here is what's front and center for markets and your money president trump sounding off on everything from the trade war and the economy to his meeting with apple ceo tim cook. then there's china unveiling a new round of reforms aimed at helping its companies weather the u.s./china trade war. then the bulls are ready to run seemingly green arrows across asia and europe and u.s. futures are pointing to a big jump on wall street's open it's monday, august 19th and "worldwide exchange" begins
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right now. ♪ let's get it started ♪ let's get it started in here good monday morning and welcome to "worldwide exchange" i'm dominic chu in for brian sullivan today here is how your money and the global markets are setting their day up, at least to start. stock futures indicating the dow will open by about 215 points. the s&p up by 23 and the nasdaq up by 61 points as well. the bond market right now is already in focus because yields are creeping higher. the yield on the ten-year treasury note right now currently just around 1.61%. the two-year note yield 1.53%. so for those keeping score, that eight basis point spread between the two getting wider after an inversion that briefly happened over the course of the last couple weeks let's go worldwide now in asian trading, central banks in china unveiled an interest rate reform aimed at helping lower borrowing cost for chinese-based companies. that in turn helped send the
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entire market in asia higher the shanghai composite up by over 2%. the hang song in hong kong up by over 2% as well and the nikkei in japan up by three quarters of 1% in european trading, stocks there helped by comments from germany's finance minister saying his country has the fiscal strength to mitigate any future economic crisis with, quote, full force. he suggested berlin could free up around $55 billion of extra spending in that fiscal stimulus or possibility of that moving those major boris up the ftse 100 about two thirds of 1% as well a big week ahead for wall street kicking off today with big tech executives testifying at a u.s. trade representative hearing tomorrow quarterly results from home depot, kohl's and t.j. maxx. on wednesday, fed minutes and report on existing home sales plus results from lowe's, target
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and l. brands. thursday the jackson hole symposium for the fed kicks off. fed chair jay powell will be speaking there on friday but it's the economy that's taking center stage this morning. more specifically president trump and his top economic aides pushing back on the idea of a looming u.s. recession, a threat that sent shock waves all across wall street last week and pushed the 30-year treasury yield to its lowest level ever. >> i don't think we're having a recession. we're doing tremendously well. our consumers are rich i gave a tremendous tax cut. and they're loaded up with money. they're buying i saw the walmart numbers. they were through the roof. >> i sure don't see a recession. we had some block buster retail sales consumer numbers towards the back end of last week. >> we have the strongest economy in the world money is coming here for our stock market, it's also coming here to chase yield in our bond market >> so, does the white house and
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the trump administration have it right? joining me now is timothy horseburg. timothy, you heard what the administration has to say. they have a point perhaps, but is it the recession and that fear of that's really driving the markets right now. >> well, i absolutely think when you look t the near term market action last week particular pli around concerns with the brief yield curve inversion we saw that is certainly one of the things setting the tone for risk assets right now, but with that being said, largely we have a similar view to what the administration is saying when you see some of the underlying strength in the u.s. economy right now. >> so let's put it this way, is the recession fear overblown given that brief yield curve inversion that you stated because there is a feeling that the economy in the u.s. not robust but good enough from a relative standpoint to the rest
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of the world >> there's certainly a rising risk of recession that's crept into the conversation today and right now, particularly as it concerns trade policy because that is one area where at least so far we have seen more of an impact on sentiment than we have on real growth, but there could be significant damage if all the proposed tariffs and the escalation of the conflict continues. >> over the course of the past couple weeks, cnbc viewers have noticed that we put the yields in that little thing at the bottom of the screen there we'll show you exactly what's happening with the 10 year, 2 year, 30 year. is it fair to say that interest rates are the key focus? >> i think that's certainly been the primary focus over the last few weeks because that's the one area of the market where we're certainly getting a more unusual signal than what we have been seeing in let's say credit markets, currency markets or even the stock market, which while you have seen some volatility isn't significantly below recent highs so i think that's one area that's signaling to us there
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could be concern on the horizon. but again we need so see much more persistent signaling from the treasury market, particularly around yield curve inversion for several months before we start to get really concerned. >> can we talk about that credit versus treasury side of things because that's one place where they're not seeing signs of stress the ten-year, two-year inversions and the generally lower curve, signs of stress but high yield and investment grade bond markets are not showing that kind of fear right now. is it fair to say they've got it right? >> absolutely. you know, i think that's a really interesting signal is when you look at what is corporate america saying or what are you hearing from the bond market, particularly on that investment grade credit side and high yield side and spreads have been really well behaved through this most recent selloff, so that us says there's still underlying strength in corporate earnings looking forward
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that positive signal is one reason we think this cycle can continue. >> let's assume that the markets do -- still have a constructive bias towards them to the upside, assuming that. >> yeah. >> if that is the case, where are the parts of market that are going to be under the most stress and where are the ones that are poised to outperform in this current environment >> well, i think naturally coming back to that trade conversation, some of those companies that are more levered to either global supply chains or trade are going to see stress over the next few months, particularly around uncertainty planning for the future, capital expenditures, all of those things are usually directly impacted by some of the trade conflict that we're seeing that being said, when we look at the broader market, we're still seeing the market pay up for companies who find ways to grow even in a slow growth environment. so favoring those growthier names over value even at this point in the market. >> any sectors in particular >> we still like sectors like tech that have that ability to
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continue to grow their revenues. >> what yield do you avoid >> i think what we're looking at from an avoidance standpoint, some of the defensive sectors still aren't appealing to us, utilities, we're not just not seeing the right conditions now to get super defensive on the equity side. >> thank you very much for joining us this morning. >> thanks. >> we appreciate it. when we come back on the show, what president trump said about his meeting with apple ceo tim cook and what it could mean for the future of the u.s./china trade war. plus, why tech giants hoping for a little huawei relief may have to hold their breath just a little bit longer. then later on in the show, the demonstrations continue in hong kong. we'll tell you what president trump says about them. a very busy hour still ahead when "worldwide exchange" returns after this commercial break. so, every day, we put our latest technology and unrivaled network to work.
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♪ from tim apple to cook dinner, president trump sitting down with the apple ceo over the weekend talking everything from trade to competition elizabeth joins us now live from london where she's got the latest on that particular meeting. elizabeth, what did they talk about? >> hey, dom. president trump and apple ceo tim cook sat down for dinner friday night at the president's golf club in bed minister, new
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jersey the president saying cook made a, quote, good case about how a new round of tariffs could hit some apple products and could set the company behind in competition with its south korean rival samsung take a listen. >> it's tough for apple to pay tariffs if they're competing with a very good company that's not. i said how good a competitor he said they are a very good competitor so, samsung is not paying tariffs because they're based in a different location, mostly south korea, but they're based in south korea and i thought he made a very compelling argument, so i'm thinking about it. >> now you remember south korea and the u.s. struck a trade deal last year while apple meanwhile still relies heavily on production and on sales in china. apple's stock has been on a roller coaster since president trump threatened additional tariffs on 300 billion dollars worth of chinese goods, including electronics. samsung is the biggest smart
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phone seller in the world, it captures about 23% of global market share and is trailed by huawei and then apple, that's according to the latest data from research firm idc, dom. >> so elizabeth, speaking of that huawei side of things, we're expecting an expiration today for those temporary licenses from commerce department on doing business there. what kind of dynamic does that bring to the overall relationship with china, the trade talks and everything else within the tech universe especially for smart phones? >> yeah. it's a huge part of it, dom. president trump saying he doesn't want to do business with the chinese tech giant, with huawei because of these national security concerns. in may the trump administration did issue that temporary license that allowed huawei to continue working with its u.s. customers despite the underlying security fears. now that license, as you mentioned, is set to expire today. we did get some reports over the weekend suggesting it could be extended yet again, dom. this back and forth continues
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with huawei sort of stuck in the middle between the u.s. and china in these trade negotiations. >> thank you very much for that update we appreciate it still on the deck for the show here, president trump doubling down on his strategy to link the u.s./china trade war to unrest in hong kong as demonstrations there continue. then later on, tesla relaunching its struggling solar panel business with a pretty attractive price tag, but there's a big catch. "worldwide exchange" is back right aftethr is
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♪ welcome back tens of thousands of protesters hit the streets of hong kong yesterday. this was the latest in a month's long series of pro-democracy demonstrations there the crowd did not obey a police request to stay within the bare yers of a park, but the atmosphere was more peaceful than in other recent protests. here is what president trump said yesterday >> i really believe if president xi sat down with representatives of the protesters, and they do have representatives, pretty good representatives, pretty strong representatives, i've been watching and seeing them. if he sat down, i think he could work something out. >> but however, in beijing, a spokesman for china's legislationture condemned statements from u.s. lawmakers
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supporting that hong kong movement, calling them, quote, a gross interference in china's internal affairs well, still to come on the show, wicked weather ripping across the country over the weekend. the incredible video you have to see. later on, why days of working 9 to 5 could be a thing of the past. we'll fill youn en iwh "worldwide exchange" returns right after this break devices are like doorways
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cnbc this morning. futures right now pointing to a solid open for stocks if these futures gains hold into the opening bell the dow would open up 240 points the s&p by 25 and the nasdaq up by 72 as well. coming up on the show, futures pointing to that more than bigger huge jump there when "worldwide exchange" returns after this the big stories you'll need to watch. ahh... your teeth hurt? sensitivity. gotta do something about it. new crest gum and sensitivity starts treating sensitivity immediately, at the gum line, for relief within days and wraps your teeth in sensitivity protection. ohh. your teeth? no, it's brain freeze! crest.
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♪ no recession
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president trump pushing back on fears of impending economic downturn working with huawei. a temporary deal that lets the chinese company do business in the u.s. expires today a live report from beijing that's straight ahead. plus, could the european work day be getting shorter? why one lobbying group is hoping to make that happen. it is monday, august 19th, 2019, and you are watching "worldwide exchange" right here on cnbc ♪ ♪ working for a living ♪ working for a living welcome back and thanks for being with us here right on cnbc i'm dominic chu in for brian sullivan today the top headlines, phillip mena with the latest. >> good morning. extreme weather ripped across the country this weekend in pittsburgh, a violent micro
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burst caused two buildings to collapse powerful winds brought down trees and power lines as well. amazingly, officials say nobody was hurt as powerful storms move through the midwest, wind gusts reaching over 80 miles per hour caused two trains to derail in kansas and dozens of cars had to be turned up right with the help of heavy machinery. a suspected wedding crasher is now the subject of a police hunt after authorities say she attended several weddings in texas uninvited and stole gifts. police say the unidentified woman primarily took envelopes of cash and gift cards officials posted surveillance photos of the suspect on facebook at a location where she tried to use one of those stolen gift cards police are now offering a $4,000 reward to anyone who can help them lead to their crasher's arrest. a massive crash during the first lap of the abc supply 500 at pocono raceway. it started when one car was sandwiched between two, eventually making contact and sliding into the wall.
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the cars bounced back on to the track sending another flying nose first right towards that fence. dom, back to you >> stunning video for sure phillip mena, we appreciate it. here is how the money that you have in your investments are shaping up right now as we're halfway through the 5:00 a.m. hour in new york stock futures pointing to what should be a solid open for stocks in regular cash trading for equities the dow jones opening up by 235 points the s&p 25 points and nasdaq by around 70 points as well bonds still a very big focus for investors adds interest rates remain center stage. the ten-year 1.61, two-year 1.125% let's get a check on the asian markets as well. they were generally positive stocks rising in china after the pboc announced plans for interest rate reforms in an attempt to support an economy
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hit by a trade war with the united states. you can see the nikkei and japan up .75% to close, shanghai composite up over 2% european markets trading higher on stimulus hopes there. germany's finance minister says his country has the fiscal strength to counter any future economic crisis with, quote unquote, full force. he suggested berlin could free up around 50 to $55 billion of extra spending. is the u.s. economy at risk of a resnegs president trump and his top advisers answering that question yesterday. >> tremendously well our consumers are rich they're buying the walmart numbers were through the roof. >> i sure don't see a recession. we had some block buster retail sales consumer numbers towards the back end of last week. >> we had the strongest economy in the world money is coming here for stock
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markets and also coming here to chase yield in our bond market. >> all right joining me now is chief strategist at principal global investors. i'll ask you the same question we asked our previous guest, does the president and his administration have it right is there no recession pending for the u.s. >> yeah, i think on this occasion i have to agree it feels that risk of recession is somewhat being exaggerated. i think this yield curve inversion has really worried people but actually it doesn't necessarily tend to signal u.s. recession. it's actually bringing in a lot of the weakness from the rest of the world, namely china and europe but the u.s. especially with the consumer so strong it's difficult to predict recession for 2020 at this stage. >> so is it fair to say that the yield curve inversion brief as it was, is it just a non-event, or is there really cause for a concern because it may not pretend for 100% recession but still something that the bond market is signaling to the rest of the economy and the traders
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on wall street about what could happen >> well, i think given the strength of the signal previously, it has managed to predict seven of the last recessions so it's too strong to completely dismiss. we have to be acknowledging the fact that in the past there were different factors. we have quantitative easing from the last ten years and these things are all pushing down the longer end of the yield curve which means inversion is a lot easier to happen than previously if you look at the economic data, which i think is key, that would suggest to us that recession -- the risks have increased, absolutely. but absolutely it's not our main scenario from 2020. >> so what is the main scenario then is this a situation where we can continue to buy dips, risk assets that much more atraiskt given the pull back that we have seen and the volatility? should we buy tech stocks and communication stocks and industrials despite the trade war threat >> no. i think it's a little bit too
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early to buy the dip, still. you look back at since the beginning of this year, it has been very disjointed with the fundamental weakening in the economy. although we don't expect a recession, there is certainly a slow down underway it does feel the equity markets need a bit of a correction to bring that back down to the right levels on top of that, of course; we have the threat of the trade war still hanging over us and that does mean investors need be somewhat cautious. you should have exposure to equities in your portfolios. technology does tend to bounce as soon as there is some good news, but when we think about the trade war over the longer run, it seems to us that technology is really going to be the key area where the trump administration is going to be targeting. >> what is the key focus right now for investors and for traders out there with regard to the next leg, whether it be higher or lower perhaps like you said a correction happening. what will be the thing that matters the most, i guess, in
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most people's minds with regards to how the markets react in the next week or so? >> i think for the next week the key thing could be watching is going to be jackson hole where you'll have fed chairman powell speaking we are expecting him to signal that there will be another rate cut in september we are hoping that he will surprise markets to the upside, showing that he's more likely to cut more than the market is currently expected and that would certainly help the other thing to watch is the strength of the consumer that's what's holding up the u.s. economy we do start to see signs that the consumer is starting to weaken, there will be more forecasts out there for u.s. recession. >> what signs would you look for on that front? president trump does have a point, there are a lot of signs of strength for that u.s. consumer right now however, there could be perhaps flash points or economic data points that signal otherwise if we start to see them roll over what will be the most important economic data to watch on that consumer front in the u.s. >> there's a couple of things.
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you need to be keeping an eye on the consumer confidence side we had retail sales strong for august, i have to say sometimes it can be distorted by the impact from amazon prime so you're really getting discounters performing pretty well and that gives you a somewhat more rosy view of the consumer than it should be you're looking at next month's retail sales numbers and continued retail earnings figures. a couple firms that did report last week with discounters they performed really well but discounter's strength suggest to us that the consumer is starting to pull back a little bit we need to see more impact from there and of course consumer confidence the other thing to consider is the roots to which consumer can be impacted. one way is tariffs on consumer goods. now we know that the last round of tariffs was meant to be focussed on consumer goods we get that hiked from 10% to 25%, that would be a real worry for us the other thing is if investors and companies continue to be scared by the impact of the trade war and they pull back on
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the investment spending decisions, the next step to that is they cut back on the hiring intentions once you have that, then you tend to have wage impact and that's when the consumer starts to weaken. so those are the two roots to weak consumer we'll be watching. >> thank you we appreciate it. the temporary agreement allowing huawei to do business in the u.s. is set to expire today. eunice yoon live from beijing with the latest there. good morning or good evening to you, eunice. >> reporter: thanks so much, dom. well, everyone here is waiting for more clarity on the white house's policy towards chinese tech giant huawei. so, larry kidlow, the economic adviser of the white house had said that he believed that the u.s. was going to grant another 90-day reprieve for huawei and this would be a goodwill gesture as part of the trade negotiations however, it's still quite unclear as to whether or not that's going to go through if true, of course, though that would mean that this is the
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second time that the white house has delayed formalizing a policy towards the chinese telecom's giant, allowing u.s. companies to continue working with huawei. there hasn't been a whole lot of clarity on this policy, even by the president himself. president trump, if you remember, at the g20 had said at one point that the u.s. economies would be able to work with huawei, but this is what he said on sunday >> i'm talking to my people but ultimately we don't want to do business with huawei for national security reasons. we'll see what happens i'm making a decision tomorrow it could be temporary, maybe not, but we're going to make a decision tomorrow. >> and i called huawei they said for now everything is business as usual. they just, as everybody else is, are waiting for word from the white house.
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but to the chinese, this comes after a partial delay of the tariffs from september to december and is being seen as yet more evidence that the trump administration has become a bit gun shy towards its policy towards china. for example, the global times, which is a communist party paper is running an editorial which says u.s. maximum pressure tactics are losing their bite. the people's daily another state paper says the u.s. will feel the composure of china in the face of extreme pressure and dom, just talking to people over here, the feeling is that the chinese are making a gamble, that over the next 6 to 12 months or so they have time to not be in a rush and that the feeling over here is that the trump administration is getting a little bit more nervous about the u.s. economy and about the impact of the trade war on u.s. business. >> so eunice, to be fair, though, it's not just the u.s. that could be hypothetically feeling pressure with regard to
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that trade front the people's bank of china is taking interest rate reforms now in place you only really do that if you're worried about your own economy as well. can you tell me what they're trying to do with interest rates to counter the threat of the u.s./china trade war >> yeah. that was a really interesting announcement on saturday because the people's bank of china has been signaling that they're going to be making this interest rate reform for quite some time. nobody has been believing it because it's been happening -- it's been signaled for so many years, but for now, just from a technical perspective i'll run you through it they have created what's called a new loan prime rate. that will debut on tuesday, what everybody is watching. but the bank lending rates will be linked to this loan prime rate and the loan prime rate is linked to the leading term medium term lending facility
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rate the policy will be matched better with what the banks do and with their interest rates. so they think that could then allow for companies to be able to borrow more by lowering borrowing costs. the big question, though, is exactly how effective it's going to be even though people are really seeing this as you had suggested as a way to try to stimulate the economy but because interest rates here do not move in the same way that interest rates do in more liberalized economies, such as the united states, people are wondering if all the uncertainty is going to push small and medium size companies not to borrow >> another big consideration there. eunice yoon live from beijing. thank you very much. aside from huawei, president trump also weighing in on his talks with apple ceo tim cook and the effects the trade war is having on the iphone maker versus its competition >> it's tough for apple to pay tariffs if they're competing with a very good company that's not. i said how good a competitor
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they said they are a very good competitor so samsung is not paying tariffs because they're based in a different location, mostly south korea. but they're based in south korea. and i thought he made a very compelling argument, so i'm thinking about it. >> joining us now on this and much more, manhattan venture partners head of research whose firm san early investor in names you know, lyft, airbnb, pinterest, space x, many more. good morning and thank you for being with us this morning. >> good morning. >> let's talk about the impact of technology and the overall environment that we're in because of this u.s./china trade war. the huawei situation, is it as dire or severe as the markets would make them out to be? >> yeah. i think it does, it is severe. we don't want any conflict there. we want things to settle in my space, in my universe it does not effect. i don't think they're exposed to huawei and other areas so i think in that sense, but
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overall on the tech environment, i think they need to do it right. huawei is big supplier it's a very good company it helps the u.s. in many areas, but i think they need to play it right and that's what trump administration is doing. but overall, i think it does not affect in the long-term. we don't expect that to impact our universe. >> so this morning we're also expecting to hear from alphabet, facebook, other tech companies as well with regard to how they can operate with the u.s. t.r. about the french government's new digital attacks on big tech companies. this is something the u.s. has called unreasonable. so is there a global war on technology not just here in the u.s. but also elsewhere as well? >> there is. and let's see the tone of the meeting today, how it comes out. it's very important to get it right. the u.s. does notwant this to become the template, the french tax, the template for other countries to follow. i think they're going to fight it out i think the benefits to other countries a lot more than the
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negative impact of these guys. i'm sure there is some compromise in there. okay they have a case to make the taxes they don't pay as much taxes or they pay taxes, taxes in a low environment, low tax environment. so there are some issues there but i think it can be settled. what france is doing is really forcing the hand they want the ball to move forward. i think that's what they're doing. u.s. is not going to give up there will be a backlash trump is going to fight back so i think we will wait and see how the tone of the conversation goes today, but overall i think u.s. needs to fight back, does not want this to be the template for other countries to follow. >> fair enough we want you to pivot to what's happening with lyft. you're a major investor in the company. the company has its first major lockup expiration for selling shareholders today what are you going to be doing at manhattan venture partners? are you going to be selling? >> no, we're not we've been early investors and long-term investors. we believe in the story.
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we believe it's a transformational story you have to wait it's not a one quarter, two quarter story. you have to wait it out. you're talking about a transformation in transportation as a service, so that's going to take some time but what's good about this and what investors can take heart on is the last two quarters coming off the gate lyft executed very well they said their competition is rationalizing, the pricing is rationalizing and they have a more clear path to profitability, which we -- it will take some time, but they have said the profits are -- the losses are coming down, revenues are growing, the network is growing. so they're doing the right thing. so i think overall there's enough to go -- you see some pullback on average our portfolio companies pulled back 3 to 4% and they have come back right away i wouldn't worry about it. there's a lot of supply coming in it's understandable nor a pullback, but nothing to worry about. >> speaking of more supply, i mention because uber has a lockup coming up later on this fall as well from a competitive standpoint,
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the path to profitability, uber versus lyft, in the end, take us through how it weighs on your decisions? >> it did weigh originally we focussed on lyft because of its pure play focus. lyft chose north america, staying here and focussing head on in ride sharing business. now they're adding the micro mobility and all that. their goal is to be an end to end transportation network here. that's what they're doing. they have the resources. uber is more spread out, global model, competition everywhere so they have to face different dynamics it's a great company but it will take a lot more time so you need a lot more patience with uber. we invested here because we thought they had a much clearer path to profitability and their strategy is very good. they're executing very well. >> before we let you go, you have a number of portfolio companies that are still private right now. which are you looking forward to most seeing public in the coming
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say 6 to 9 months? >> airbnb is the big one we like that we've been early that's a great company to go in. then you have the other ones we did not invest in wework. we invested in postmates there's a lot of consolidation going on in the delivery space we think there will be some rationalization there. that's a big business. so there's a long way to go there. there's a good market there. so then you have a big company we like down the road. you'll see the whole range of companies out there and the pipeline is strong, more so on the enterprise software side it's strong. >> thank you very much for all those comments on everything from huawei to lyft to everything thank you. coming up on the show, with rates falling all over the world, is a refinance boom all but inevitable our expert guest will tell you
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what falling mortgage rates means for your homes then the 53 million dollar mistake that took this porsche off the auction block. lddexcng ibas ck right after this ♪ ♪ ♪ ♪
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crest's three dimensional whitening... ...removes stains,... ...whitens in-between teeth... ...and protects from future stains. crest. healthy, beautiful smiles for life. ♪ 30-year mortgage rates as you see there have fallen substantially over thecourse o this year and this treasury yields have dropped, so have those mortgage rates that means a rush of people trying to refinance their mortgages. joining me now, mark flemming, chief economist at first american mark, this is a pretty decent low cycle wise we haven't seen this for years now. so is this the time to be refinancing that mortgage? >> yeah, absolutely. it's an amazing difference mortgage was 4.5%, only 3 million people was it worthwhile to refinance now rate at 3.5, you have 11 million people quote in the money to refinance
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we expect a big refinance boom >> mark, let's talk about what in the money means. >> sure. >> at what point, how many bases points, how much percentage wise do you have to fall on say a 30-year fixed rate mortage for it to be worth your while to refinance that mortage >> it's different for everybody. the typical rule of thumb is three quarters of a percent. the bigger your loan, the less it needs to be to be beneficial, but when you're at 3, 3.75 or 4, now that's practically free money. >> so let's talk about free money or that relative term. the idea of a cash out refinance, when you're able to lock in rates like this, maybe you're not 75 bases points below, but let's say you wanted to cash out some of that equity in your house s that something you're seeing more of happening right now, mark? >> yeah. i'm sure that it hasn't happened yet necessarily in large
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numbers. it's beginning to but will in the coming months because the expense of borrowing that extra money is so low, and we have more equity in our homes today than we ever historically have before trillions of dollars of equity can be tapped that haven't been there. even more than at the height of the housing boom. >> let's talk about that housing boom that we have been seeing. >> uh-huh. >> is it likely to continue? we heard some anecdotes around major markets that perhaps there are signs of topping out what is the future of the real estate market in the coming 18 months >> well, you have to remember that the vast majority of the housing market is basically existing homeowners making the decision to sell and then buy. if you're locking in a 3 1/2 percent mortgage, cashing out equity to renovate your kitchen, you're not going to want to move while financing your housing is inexpensive, it's actually creating a lock-in effect and increasing the amount of time people stay in their homes which ultimately slows the pace of
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sales. it's hard to buy what's not for sale >> that's a tough dynamic right now for sure mark flemming, thank you very much for those thoughts on real estate we appreciate it. >> thank you. let's find out what else you'll be talking about today. top trending stories rahel solomon is here with those. it's kind of a portia and kind of not a portia. >> certainly not something you hear everyday. so a portia expected to sell for more than $20 million at an auction fell victim to a comedy of errors. the auctioneers started the bidding at 13 million, one, three but the screen display said 30 million. by the time be bidding hit 17 million, the display said 70 million. just a mere discrepancy of $53 million. some attendees said the confusion was in part based on the dutch auctioneers accent the bidding was stopped at 17 million due to the error the car was pulled from the auction block of not meeting the minimum of $20 million porsche, portia did not sell. >> back in my wall street days
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the teen numbers came up you had so say something to clarify, 17 half 34, right 18 half 36. >> or just hit those consonants, 17. >> but the accent played a factor, right? >> yeah, which makes me feel bad. they pulled it. tesla is relaunching its solar panel business by letting customers rent a rooftop system. homeowners in california, arizona, connecticut, massachusetts, new jersey and new mexico will rent the solar power systems for between 50 and $65 per month. if you ultimately decide against keeping the system, well, that could be costly because it will cost $1,500 to remove the panels and restore your roof. >> are you a solar power fan >> i'm not i grew up with a house next door that i thought was so cool and new age. >> and environmentally friendly as well. >> of course, of course. >> that's the big thing. >> always a big thing. curious about your thoughts on this traders in europe might be in for a shorter work day
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so a bank -- >> i'm in. >> already that's europe. so a bank lobby group and the uk investment association that represents the asset management industry, so they're leading talks to negotiate shorter trading hours across europe. the plan would open equity markets an hour later and close them an hour earlier in an attempt to improve quality of life for traders now the talks are still in the early stages it's not just the quality of life concern but according to the article that i read, it's also, you know, about attracting more women who are maybe discouraged by the long hours, you know, when you're also dealing with child care and thing like that. >> these days so much happens electronically the off hour is getting bigger maybe that is the next step to be able to have people do it from home or remotely as opposed to anything else. >> if it happens there, maybe it will also happen a little bit closer. >> one can dream. >> exactly. >> thank you very much for those trending stories. on deck for the show here, facebook still looking to improve user trust
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what the social media giant is planning across the pond to help with privacy concerns. that's coming up next. plus, is there more market mayhem ahead what you should be watching leading up to the opening bell when "worldwide exchange" returns after this memory loss related to aging?d prevagen is the number one pharmacist-recommended memory support brand. you can find it in the vitamin aisle in stores everywhere. prevagen. healthier brain. better life.
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♪ time for the executive recap the headlines you need in 60 seconds. universal comedy "good boys request t "winning the weekend's box office they took in $21 million during its opening weekend the first
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r-rated comedy to debut at number one in three years. facebook is going the extra mile to out the its privacy options across the pond. the company will open popup cafes around the united kingdom at the end of this month they will be able to drink free coffee and talk about privacy settings with experts. china stocks, best session since early july this came after the china's central bank unveiled interest rate reforms aimed at lowering borrowing costs for some companies in business there and supporting the economy as well, which has been hit by a trade war with the united states well, back to the markets. futures right now pointing to a solidly higher open. you can see the dow would open up just by about 240 points. let's bring in chief equity and derivative strategist at btie. is this market poised for a next leg hire >> we think eventually it is obviously -- >> eventually is how long is the
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question >> into the fall you know, from our point of view, there was a lot of selling last week. and what we think is important about last week is we think when the fed meets in september, they're going to cut 50 bases points because they really understood the message of the importance of confidence when we had that momentary yield curve inversion last week and the dow dropped 800 points it's a big deal and the psychology needs to be maintained and actually improved. >> from your perspective, how big of a deal was that yield curve inversion, as brief as it was, it was just by a basis point here or two there and it didn't last long is this something that we should be noting as a possible indicator for a recession? >> so, it has been a good indicator of a recession with a persistent inverted yield curve. obviously this was very momentary. but we think about sort of the self re-enforcing aspect of it and think about in the last hour how many people you have had on discussing the potential of a
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recession. that's the kind of thing and we don't think that the elements are there for a recession because if you look at the numbers over the last several weeks, even confidence has started to stabilize somewhat. mortage refinancing are absolutely going through the roof that puts more money in the hands of consumers you know, productivity is nowhere near the kind of levels. it's actually been quite strong, that we typically see falling off before recessions. there isn't going to be a recession. >> on the interest rate side of things, i know that you and many of your peers and colleagues are watching it closely, do you feel as though we're in an environment right now where interest rates could fall substantially further from where they are >> no. we believe in a lot of ways you could call the interest rate environment, you know, one of the greatest bond bubbles of all time from our point of view, negative interest rates, there is an intellectual rational around them, but in the end, paying a
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borrower to lend them money just really doesn't have long-term sense. and what we're seeing now over the last several days is the initial policy responses, the fact that the treasury is talking about 50 and 100-year mortgages potentially. the fact that germany is now talking about fiscal stimulus. we think that if people have an opportunity, the numbers make sense, to refinance their mortgage and they don't do it now, they're going to look back in six months and wonder why they didn't. >> how quickly could an unwind happen of haven assets to the downside we have seen a surge in gold prices, treasury prices, government bond prices in europe, so how quickly would that fall off? how fast could they fall in price if things were to go back towards risk taking? >> well, clearly a lot of it is dependent on, you know, we're going to get an announcement on huawei today we have a september 1st deadline for potentially more tariffs
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if you look at the opposite, you plunge 50 bases points in a matter of weeks it could happen that fast or faster. >> thank you very much appreciate it. >> my pleasure. >> that does it for "worldwide exchange" this morning futures pointing to a solidly higher open. "squawk box" will pick up all that market coverage and it begins right now good morning. u.s. is looking to extend friday's gains and thursday's gains were started after wednesday. stocks also pushing higher in europe and asia. we'll get you ready for a busy trading week ahead. president trump sounding off on everything from the trade war in the economy to his meeting with apple ceo tim cook. and elon musk tweeteding about a new tesla offering, not a car but the relaunch of the company's solar panel program. it is monday, august 19th, 2019. "squawk box" begins right now.
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♪ >> announcer: live from new york, where business never sleeps, this is "squawk box. ♪ good morning, everybody welcome to "squawk box" here on cnbc we are live from the nasdaq market site in times square i'm becky quick along with joe kernen and andrew ross sorkin. if you look at the u.s. equity futures at this hour, joe said it, we're looking to open up by 260 points for the dow s&p futures up by 27 the nasdaq up by 75. if you looked at last week, even with the massive declines you saw on wednesday, by the end of the week, the dow was only down by 1.5%. the s&p was down by 1% the nasdaq was down by about .8%. right now the dow is down by 400 points from where we were. it would need 400 points to make up the ground lost on wednesday, it's already more than half of the way there if it gains this 254 points we're showing in the premarket. pp you want to look at what


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