Skip to main content

tv   Worldwide Exchange  CNBC  August 20, 2019 5:00am-6:00am EDT

5:00 am
it's 5:00 a.m. at cnbc global headquaters here is your 5 at 5:00 now just points away from recooping all of their losses from their big wednesday loss. the tech nigh janet taking on the house of mouse putting a huge chuck of its cash there new economic reforms in china taking hold today as it's batoning down the hatches for extended trade war for the
5:01 am
united states. against a massive misinformation campaign fuelled by chinese state backed twitter and facebook accounts. we're live in hong kong with the latest there and it's a big week for retail coming up tjx, kohl's, many more reporting it is tuesday august 20th and worldwide exchange begins right now. ♪ welcome to the show. futures indicating the dow will open up fractionally higher at this stage the nasdaq up by 11 points heading into this morning's trading session, the dow is now within 145 points of recooping all of it's losses from that big wednesday 800 points sell off in the dow. the s&p is just 3 points away.
5:02 am
the bond market currently in focus as well. the yield of 10 year u.s. treasuries you can about 1.8% 1.52% just about six basis points separating those two. that 210 spread for treasuries yesterday the white house was pushing back against recession rhetoric today it's numerous reports the trump administration is preparing options to help bolster the american economy and help prevent it from falling into a recession including a potential payroll tax cut and possible reversal of some of president trump's tariffs. the former of which the white house is denying in a statement to cnbc as larry kudlow said yesterday, more tax cuts for the american people are certainly on the table but cutting payroll taxes is not something under consideration at this time still the economy is becoming a growing concern for president trump in the 2020 election race. we go to nbc's tracie potts live
5:03 am
from washington d.c. how important is this to president trump and his re-election campaign >> it's very important take a look at the numbers poll after poll continue to show that even when the president has a strong disapproval rating, it's at 55%, people generally like how he is handling the economy. nearly half of americans give him a thumbs up on that. in our latest poll, other polls have echoed that so the strategy seems to be to ride that wave of the economy into re-election in 2020 but if the economy starts to tank that could be a big problem for president trump, thus the reporting from the washington post and the new york times on the back upplans that the whit house is trying to put together. reportedly they haven't reached the president's desk yet so that's why you're seeing him publicly say the economy is fine the economy is doing well. we're not sliding into a recession even though nearly three quarters of economists say
5:04 am
they could be in the next two years. and his advisers in the white house are putting together back up plans here. so what happened if the economy starts to tank and we cut payroll taxes. the white house denies that's actively under consideration other things that they're looking at, the president continues to blame the fed for not cutting rates but what's happening up front or behind the scenes in terms of preparation effects not only the economy and is very much linked to the trump 2020 campaign. >> so tracy, just to put a point on this, what exactly could we expect to hear from president trump and his economic advisers about how to tell the story going forward. it isn't an important one and the u.s. economy does not appear as of yet with the jobs numbers and everything else to be teetering toward recession. >> it doesn't and the story that we're already hearing from them is that the u.s. economy is doing great because of low
5:05 am
unemployment and retail sales and consumer spending remains strong but there's other signs that the economy is starting to slow down and there's a lot of economists out there that think that could be the beginning of the recession. a key question here, timing. are people going to start to feel it before they head to the polls? >> very key. tracie potts live in washington d.c. thank you, we appreciate it. >> joining us now is president mark, it could be moving toward recession. is there a view among financial professionals that that's something that you have to prepare for from an investor standpoint >> i don't think people are looking at this year the economy taking a sudden u-turn into recession. but hopefully they were balanced ahead of what they saw last week with the 800 point drop but more importantly with the whole drop in rates the whole key is to invest in
5:06 am
duration before the stock declines hit or because then the interest rates decline when there's a fear of an economic slow down and that's when you make your money on that non-stop portion of your investment portfolio. when the interest rates drop because of recession fear, that increases prices to investors. so we saw a lot of what recession fear can do already in the bond market and now investors are in a tough spot. interest rates are so low. they're near their cyclical lows and stocks are teetering near their highs. where do they allocate it's a difficult time to see through all the noise and that's why they have to remain not emotional and not headline driven. >> let's assume we're not emotional or headline driven you mention the tough environment with yields at the lows that they're at and stocks near record highs what do you buy to position for the next six to nine months >> let's look at financial
5:07 am
sectors. you would have thought when the ten year was there the banks would have held up they can reprice loans quicker than deposits but on this cycle we did not see that. during the strong economy we have very, very low loan losses. we have markets at all time highs for high asset management fees there's a lot of activity and low credit losses and that's a recipe for huge success for financials and one of the reasons is not only the fear of recession and it's also what happens to deposits here. in the old days deposits did not reprice this quickly and banks were able to get that spread that's gone with online banking and fierce competition and deposit rates have gone up and margin pressures compressed and loan pricing is fierce
5:08 am
if you look at net interest margins for banks, still the core business, you will not see much change in that over the past few years in fact, it's declining and that underscores one of the reasonsk we would stay away especially as banks continue to drop banks have huge opportunities. we have had great asset management fees to these banks how much better can it get than it's been? >> tough environment thank you very much. >> apple preparing to put it's cash to work to take on disney's new streaming service. >> apple will reportedly spend more than $6 billion on original content for its upcoming streaming service apple tv plus. the financial times is reporting apple aims to launch this service by november and that will be before disney service, disney plus debuts on november 12th the first year budget for apple
5:09 am
tv plus has really exploded. it will try to compete in a really crowded market that includes disney, amazon, at&t's warner media and comcast nbc universal. netflix spent $13 billion last year just to give you a sense of how intense this is. apple has not announced a launch date or price for apple tv plus but bloomberg is reporting it's considering whether to charge $9.99 a month. that will be $3 cheaper than disney and will likely offer a free trial period. we're getting our first look at one of the new shows a drama called the morning show which stars jennifer aniston and reese witherspoon and steve carell it cost $15 million per episode. that's more than game of thrones. apple aims to reach $50 billion in annual services revenue next year from streaming as well as apple music and other
5:10 am
subscriptions. >> thank you well, a group of state attorneys general is reportedly preparing to move forward with a joint anti-trust investigation of big technology companies the wall street journal says the effort is expected to formally launch as soon as next month it's a hand full of platforms and use their marketplace to stifle competition a big move there against a big technology. >> social media companies cracking down on a massive misinformation campaign in hong kong details live from the ground coming up next then china takes another step to sure up it's economy as it prepares for an even longer and more drawn out trade war we are live in beijing as well plus, disney on the defensive over new whistleblower allegations. a very busy hour still ahead when worldwide exchange returns after this [leaf blower] you should be mad at leaf blowers.
5:11 am
[beep] you should be mad your neighbor always wants to hang out. and you should be mad your smart fridge is unnecessarily complicated. but you're not mad, because you have e*trade which isn't complicated. their tools make trading quicker and simpler. so you can take on the markets with confidence. don't get mad. get e*trade and start trading today. don't get mad. we all feel, we all love, we all cry. it's part of being human. sonoma county declared a homeless emergency in 2018. you have to know the individuals you're serving to understand their needs. working with ibm watson we can bring together data spread across dozens of departments. that gives us a fuller view of the people we serve. dear tech, dear tech, we need to look after everyone in our community. and we want to help our fellow human beings. ♪ ♪
5:12 am
5:13 am
it's 5:12:00 p.m. out there, social media companies are cracking down on a massive misinformation campaign targeting those demonstrations there. nbc's janice joins us live now
5:14 am
from hong kong what can you tell us about the social media crack down? >> this is the first time social media companies have had to take down accounts linked to disinformation from china. they have taken down hundreds of accounts originating from china and painting them as being radical and in some cases worse. likening the protestors to isis fighters they say that these accounts have been linked to china's government additionally, twitter says it's going to ban state backed media like cgtn and china daily from placing paid ads on its service. now china launched a full propaganda campaign, in particular over the last few weeks as protests have intensified painting the protests here as the handiwork of foreign forces like the united states and the u.k.
5:15 am
this is what people on the mainland have been hearing in their news reports and social media. now it's unclear the sort of impact that this decision by twitter and facebook might have. the social media services of course are banned on the mainland but they are accessible here. >> janice, i'm curious, how is hong kong chief executive dealing with all of this back in the day it used to be planes dropping praamplets. but now social media can send information so much faster so how are they dealing with this situation with the protestors and potentially the chinese government >> from the outset, hong kong government has dug in and stuck to the party line for beijing. however today she was appearing to soften a bit on at least one of the key demands from the protestors that call for an
5:16 am
independent inquiry into what they call police brutality she suggests today there could be an investigation. the details were very scant but it did signal some softening far off from what the protests were looking for with the five demands which they say they will continue to push ahead with. there's more protests scheduled throughout the weekend. >> thank you live in hong kong with us. we'll hear more about the situation. mike pompeo will join squawk box, 8:40 a.m. eastern time a lot of things to discuss including the situation in hong kong to the trade war and china's efforts to sure up it's economy, eunice joins us from beijing the interest rate picture is becoming clearer for some entities out there, right?
5:17 am
it's in part because of a trade conflict with the united states. the people's bank of china set a new reference rate when banks can price their loans. this is the new prime rate it's set at 4.25% lower than the benchmark one year lending rate and that has really been the guide for banks up until now now this reform is going to make it cheaper for chinese companies to borrow but the fact that the new rate is only 10 lower is sending a signal that policy makers are also cautious officials have been saying they're going to be watching closely what the impact is going to be of this reform, especially when it comes to mortgage rates. there's been a lot of fear here that the property sector could become overheated. it's unclear if companies are going to want to borrow in the end. the authorities here really want to target the help to small and
5:18 am
private firms. and reiterated that point today saying they'll be working with other government departments as well to further lowing borrowing costs with the company they also made it a point to say this new reform is not going to be a replacement with easing monetary policy. that's been leading to more speculation that there could be a proper interest rate cut later this year especially if the federal reserve cuts as well. >> eunice live in beijing, thank you for that still on the deck, disney on the defensive over new whistleblower allegations over questionable accounting practices and $1,000. that's how much more money jp morgan believes the average american household will have to shell out per year because of the te rlastound of tariffs on chinese goods. keep it right here ♪
5:19 am
applebee's handcrafted burgers now starting at $7.99. now that's eatin' good in the neighborhood
5:20 am
5:21 am
bhp posting the best annual profit in five years and record dividends but both came up short of estimates the world's biggest miners is
5:22 am
earning it could hit demand for key commodities, iron ore and copper then we have the second quarter profit falling more than 60% but still beating forecast revenues topping expectation as more people sign up for the chinese search engines video streaming service. that topped 100 million subscribers in june despite stiff competition for rivals including tick to be so the shares up 9.5% shares of sarepta dropping sharply today. the fda declined to approve it's new treatment for muscular dystrophy. citing safety concerns including the risk of infection and kidney to toxcicty a former accountant at disney said she fielded a series of whistleblower reports with the
5:23 am
fcc alleging the company inflated revenue in it's theme parks division she claims they exported weaknesses in disney's accounting software in revenue for things like gift card purchases and other guest promotions she says she brought her concerns to disney management several times and to the fcc itself in 2017 she was fired about a month later. disney says it's reviewed the claims and found that they're quote, unquote, utterly without merit. well, still to come, shaping up for a big week ahead for retail. should you be buying the beaten down sector ahead of earnings reports? we're going to discuss and later on a can't miss interview with legendary investor ron barron coming up 7:30 a.m. steaern time on squawk box right here on cnbc worldwide exchange is back after this
5:24 am
5:25 am
5:26 am
phillip is live with the latest there good morning. >> good morning. jeffrey epstein is dead but the investigation is far from over the u.s. attorney for the southern district of new york is looking to drop the sex trafficking charges since there's no one left in the case to prosecute but in a letter to the court, the attorney said in part his office remains committed to doing it's upmost to stand up for the victims. it comes amid a new report that
5:27 am
epstein signed his will two days before his suicide in a man hat tan jail cell. texas enlisted the help of federal agencies and cyber security experts after 23 towns have been hit by a coordinated attack that's when software is used to hold the system hostage until a ransom is paid a city in florida paid $600,000 to get their network back online it's unclear if texas paid a ransom but governor greg abbott ordered an escalated response to help the 23 local governments that have been impaired. now a truly bizarre site here. it looks like a sharknado trailer. it's being called the great mattress migration of 2019 more than 150 air mattresses were put in the park for movie night under the stars in colorado clearly they were not weighed down because when a storm rolled in and the winds picked up, they went flying through the neighborhood to back to you. >> i don't know what to make of
5:28 am
that stunning video of air mattresses flying through the air i hope they got them all back. >> something cool to see. >> thank you very much when we come back on the show here, the golden ticket, disney honoring a trip to the happiest place on earth 34 years in the making it's trending and coming up. plus what slow down? u.s. stocks are trying for three straight days of gain with the dow and the s&p now points away from recooping all of wednesday's massive losses yifou missed the dip, is it still time to buy? find out when worldwide exchange returns.
5:29 am
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.
5:30 am
5:31 am
shopping or dropping, the strength of the consumer in focus as some of the nation's biggest retailers ring up their quarterly results and little nas x can't ride no more old town road dethroned. we'll tell you who just took the top spot from them it's august 20th, 2019 you're watching worldwide exchange right here on cnbc. ♪ >> thanks for being with us.
5:32 am
here is how your money and investments look right now as we are halfway through the 5:00 a.m. hour in new york stock futures pointing to a flat open today we lost a little bit of steam in the last half hour so right now the dow jones open down by about 17 points if these futures gain/losses hold into the opening bell just about flat on the day and the nasdaq 7 points right now. the dow jones industrial average, 145 points away from notching back all the losses from the big stock market sell off. on the bond side of things, 1.576% and the two year note yield. let's check on the asian markets right now. japan, hong kong, shanghai, japan about .5% of the upside. the shanghai composite up. european marks have been relatively calm so far this morning. just up and down and it's up 1%
5:33 am
and the ftse 100 up about .1%. and up one quarter of one third% and stronger euro, weaker dollar and then the last trade there just about flat on the day a huge week ahead for retail earnings you have home depot and kohl's reporting all before the bell today. and you can see throughout the course of this weekend and massive week for the consumer. joining me now is the ceo and chief research officer and thank you for joining me this morning can you tell us which of these stocks or companies are going to tell us the most about t consum. >> in terms of what's happening with the american consumer,
5:34 am
today with home depot we're going to have tjx report at that price today. so we certainly saw value and convenience means something last week atwal mart. we're going to get the similar reading at tjx this morning. we're going to get that this morning also they put in amazon returns and right before amazon prime day so they are getting that increase in traffic that's boosting attachment sales is what we'll see. and then we're going to get urban outfitters, gap, l brands that all have work to do in terms of managing margins and do they have the right product that's going to attract the consumer we have a very ify time with second quarter earnings and i think they'll be adjusted lower if not higher. >> let's talk about the cross currents that you spoke about. there was a time that i remember in the past that used to say if you saw strength in retailers like walmart and dollar general,
5:35 am
family dollar, dollar tree, those types of stores back in the day that that told you a certain economic narrative is that something that you're seeing playing out right now that people are moving toward the off price/value categories and less away from the top >> i am. that is exactly what i'm seeing. i'm definitely seeing value, convenience means something to the consumer today that's even more and it's how consumers are doing discretionary shopping and traditional boxes like department stores are getting into new businesses while specialty stores are fighting for the newness and innovation personalization efforts, figuring out a way to differentiate. >> analysts at jp morgan say the latest round of tariffs and certainly ones that have been postponed until december 15th are going to hit the consumer
5:36 am
harder than the previous ones have how important are these tariffs and what relative effect will they have on certain parts of the spectrum who is going to be impacted the most among the retailers that you cover? >> when i think about the tariff coming into play, it could be some of the dollar stores given that they import a lot of goods from china it could be some of the apparel companies and footwear companies given that 70% of some of their goods come over from china and companies have three things they can do diversify their sourcing which they're all in the midst of doing. sharing the cost with the manufacturers in china and that's passed on a price increase to consumers. we heard that macy's tried to pass on the price increase in the furniture category last week and it didn't take hold as much. and off prices for value because they're typically at least 50 to
5:37 am
60% price d below what departmen stores might be. >> so let's talk a little bit about that consumer. the main crux. if not the main crux one of the main legs that the economy stands on is the american consumer. the retail data right now still says the consumer is strong. it's one of the main reasons why the trump administration is saying the economy is healthy. the consumer is there. do you see signs that would justify that claim or are there spending signs of weakness that might lead to a recession down the line. >> think about what you have with tourism. >> it's a 9% drop in tourism we heard about ralph lauren talking about weak tourist trade. a build in inventory will lead to more promotions with low unemployment and wages
5:38 am
rising they're in a solid position they're choosing to spend their dollars on experiences and activities rather than goods and if there is going to be higher prices coming, the ability remains in question. especially since we had six fewer days this year between thanksgiving and christmas i think the second half of a year is more of a push than it's been in the past. >> are there certain companies that you gravitate toward in terms of stock returns and ones that you stay away from knowing that you have the outlook for the u.s. consumer. >> i want to be defensive. i want to be defensive because i want to have companies that can price competitively and offer that convenience in value. that is the highest end luxury goods and then the value offering like what you see in the off pricers and that is companies like the tjx's of the world and the walmarts of the world will continue to play and
5:39 am
look at the traffic that they're gaining and that's appealing and then you have companies beaten down like an american eagle outfitters that have been down over 20% in the past three months and we think their concepts have value. so looking very carefully at specific company factors that will lead to growth in the back half of the year in 2020. >> thanks for your thoughts on retail it's a great moment for that thank you very much for that. >> thank you. >> well, apple looking to put some of that cash to work in it's fight on disney elizabeth. >> that's right. they're getting more heated as apple pours this money into original content apple committed more than $6 billion for original shows and movies ahead of the launch this show amid it's new streaming
5:40 am
service apple tv plus. the price per episode of one of apple's neg show that features jennifer aniston and steve carell exceeds the cost of game of thrones it did leave out key details like pricing and launch date apple is considering a free trial and then a monthly fee of $9.99. that's $3 more per month than disney's new streaming service which is also launching in the fall now apple declined to comment. what we're seeing here is this intense competition to win over viewers in an increasingly crowded streaming market as apple and disney are racing to unveil their new services. netflix is spending an estimated $15 billion on its own original content this year. the question for investors continues to be how many services consumers are willing to pay for and just how much they're willing to spend, dom. >> elizabeth, stay right there we have another story we want to get to as well we are learning that a group of
5:41 am
u.s. attorneys general are turning up the heat with a possible big tech probe of their own as well. so what can you tell us about this latest assault on big technology and com services companies? >> so several state attorneys general have been preparing their own anti-trust investigations into big tech companies, specifically facebook, apple, and google. the wall street journal now saying some of the investigations could be launched as soon as next month but not specifying the number of states involved quite yet this would be on top of the justice department's bro broad anti-trust review of big tech which is looking at whether market leading online platforms in search, social media and retail services stifled competition and harmed consumers. meanwhile, the ftc is conducting it's own anti-trust investigation into facebook and the house judiciary is conducting an investigation into big tech and the market power. so clearly the regulatory pressure is mounting on all fronts particularly for amazon,
5:42 am
facebook, google and apple that all deny anti-competitive behavior so far not a huge impact on their share prices yet. >> elizabeth, thank you very much for that. well, coming up on the show, this could be the best investment of 1985, a 34-year-old freebie that increased in value by 500% and landed one woman in the happiest place on earth we'll tell you what that is still ahead and first diana is down in georgia with the newest and latest trend in storage. >> you find hidden treasures in the attic. what about hidden profit i'll explain coming up next on worldwide exchange you can find it in the vitamin aisle in stores everywhere. prevagen. healthier brain. better life.
5:43 am
i had a few good tricks to help hide my bladder leak pad. like the old "tunic tug". but always discreet is less bulky. and it really protects. 'cause it turns liquid to gel. so i have nothing to hide. always discreet. they use all the services of the post office only cheaper get a 4-week trial plus postage and a digital scale go to and never go to the post office again.
5:44 am
welcome back to the show bayer is set to buy the animal
5:45 am
health unit from elanco. the price tag is $7.6 billion in tax. trying to buy bayer's animal health unit in that $7.6 billion so that's a huge deal now in pets, animals, everything vet related. we'll watch that throughout the course of the day. do you have too much stuff if so, you are not alone and now there's a company that can connect you with a solution that's cheaper than a traditional storage unit call it airbnb for your stuff. diana joins us now with more on that story and diana i was always wondering if this was going to happen. i have too much stuff. i have to find a place to put it all. >> well, come here your average suburban attic. this looks regular like an attic but it's a cash cow and helping people connect online through the shared economy people that have extra space with people that have extra stuff. it's a brand new company called
5:46 am and it's growing off the charts. it's 500% year over year growth the past two years it's now in 48 states and quickly going international. >> it's not just garages and basements and driveways, we'll have people put up barns, their old barn and they'll store classic cars in their barn we have people put up even small spaces in university towns we'll have people put up a closet and students will come store 2 or 3 boxes in their closet. >> now it's exactly what the cohen family did here in atlanta. they rented out their attic space to a college student nearby that brought all of her stuff here now they were protected because they're allowed to inspect any of the stuff that they decide to store and they're also ensured up to $2 million should any of the stuff that they take in hurt the house, they get a certain
5:47 am
amount of insurance too. they also get a much cheaper dig than the public storage places because the cohen family doesn't have the overhead and they also want to keep their prices competitive. >> look around the u-haul and one of the bigger self-storage places and charging and wanted to keep it some what comparable. >> now there's currently six self-storage reads it's strong at 21% year to date but you have to wonder if something like this is going to take a bite out of the self-storage sector. it could it seems pretty good so we're talking about an upstart here that might be disruptive but are there certain key markets where this will workout better than others is it large metro? is it other places that are mid markets in the united states
5:48 am
where is there the most demand for this service >> anywhere. especially places where there's a lot of colleges and universities where atlanta has a lot. any big cities where people were looking for storage. i was shocked to find out 1 in 10 americans has a storage space that they rent out and there's thousands of storage places all over the country and it's going international. people just have too much stuff. >> we all have too much stuff. thank you very much for that and we appreciate that story and those updates from atlanta down there. let's find out what else you're going to be talking about today for this morning's top trending story. what should we be talking about at the water cooler today? >> one of your favorite songs, this day might be over after 19 weeks at number one, little nas x has been banished from the top 100 charts.
5:49 am
the new number one spot is billie eilish. she's the first artist born in the century to have a number one hit. >> how old is she? >> 19 or younger. >> i was shocked by that. >> i know you were worried about this, hot girl summer, that's at 11 i know you were worried about that. >> i'll go listen to that now. whatever that is. >> well, there may be no such thing as a free lunch but a woman did cash in on a free trip to disney land she took a trip to the california theme park in 1985 when the tickets were $16.50 she received a free promotional ticket to return for another day in the future. that ticket did not have another expiration date. she returned this summer and disn disneyland honored that past the cheapest admission ticket now is $90. >> good for them. >> got a day pass worth almost $200 she got a great deal.
5:50 am
>> this is also good business. can you imagine the bad press on social media if you took a picture of this pass with no expiration date and said disney would not let me in? >> she also bought two other tickets so they got extra revenue as well. but a great story about them keeping their word and honoring that ticket. >> that's why we always have so much stuff. >> exactly here's a warning, we don't have to make an announcement like this but please don't try this at home. a british daredevil set the record for the fastest headstand on a motorbike it was 76 miles per hour he stopped at 76 because this is the most that his core could take. >> i don't know -- i don't even know how to respond to that. >> i think my core is at like $1 million. >> all right thank you very much for those. coming up on deck, it's not parades and mickey mouse ice
5:51 am
cream treats for disney. one former employee is making serious allegations. those details are coming up next later on on squawk box don't miss this interview, exclusive interview with legendary investor ron barron. stick around, worldwide exchange is back right after this and that for me is what teamwork is all about. you can't do everything yourself. you need someone to guide you and help you make those tough decisions, that's morgan stanley. they're industry leaders, but the most important thing is they want to do it the right way. i'm really excited to be part of the morgan stanley team. i'm justin rose. we are morgan stanley.
5:52 am
5:53 am
welcome back time for your executive recap. the headlines you need in 60 seconds. a former disney accountant alleges the company's parks and resorts business overstated revenue for years. she has filed for whistleblowers status with the security and exchange commission. she says it let employees do things like report revenue twice for gift cards, once when they were purchased and again when they were used
5:54 am
a disney spokesperson said the company reviewed the claims and found they were without merit. >> a white house official is denying a washington post report that says the trump administration is looking at a payroll tax cut. this comes amid political debate about whether the u.s. economy is at risk of a recession. and hong kong leader is warning the city's economy faces a risk of downturn amid protests. she is willing to talk to peaceful protestors and hopes that dialogue can provide a way out. well, stocks are close to recooping all of last wednesday's big losses which were partly fuelled by the yield curve inverting. that means longer term rates dropping below short-term rates. the dow was to 144 points away the s&p 500 was away from recooping the losses let's bring in the founder and ceo of strategic wealth partners also a cnbc contributor. good morning to both of you
5:55 am
gentlemen. mark, we'll start with you 800 points in the dow gone and then recovered fully is this the all safe signal for investors? >> i wouldn't say it's all safe. there's always the possibility of a recession next year i think that possibility is low. i put it at maybe about 30%. really right now i think it makes more sense to be selective, be defensive, i wouldn't just jump in and invest in the s&p 500. >> so mark, what does that mean? selective about things where exactly are you looking? what types of stocks what types of industries >> yeah, so, i think what you really need to do is you need to come up with your list of your favorite stocks, right so good quality balance sheets, strong cash flow, and a lot of the stocks that we're interested in right now would be in sectors like tech, right so when you look at tech we prefer software because it's more defensive
5:56 am
when you look at health care, med tech is an area we love. and then even when you look at consumer stocks, we're more interested in the off price names like tj maxx. >> so the move that we saw, is this an indication right now that with stocks near record highs, with interest rates right now near historic lows, at least for some parts of the yield curve, with all of those in play, is this now a market that people can feel comfortable investing in >> well, listen, it's like, it depends on where you're investing, right so in my view you have to be looking at value names and strong dividend players and stocks that have gotten unnecessarily beaten up, you know, in this environment. you shouldn't necessarily at the moment at least the way i feel be -- put all of your money in here because we have all seen it the minute the sentiment turns and the market turns they get absolutely crushed, right? so as we go into this
5:57 am
environment where yields are plunging and stocks are near their highs and you're concerned about the next six months or eight months or a year you want to be defensive but in more value than growth. but that goes to my personality. >> so kenny, you spoke about high flyers do you know what is flying high these days gold, the u.s. dollar, are all of those assets that could fall if things go the other way for risk >> well, gold for sure has always been the safe haven asset. do you mean if the economy is great and everything goes wrong there's no recession could gold back off? of course but gold is gold the same way that stocks could back off if we do go into a recession. so yeah, once again, you have to pick your spot you shouldn't go all in. it should be part of your portfolio and then you might do
5:58 am
it dollar cost averaging so you take the same amount of money that you're investing so prices are high and you're buying less of it but you can buy more of it so you maintain that you buy what you like and you take advantage of those price swings b -- swings but i wouldn't create the sense that the end of the world was coming and everybody shoud get out. not at all you need to create a portfolio that's going to mimic or take advantage of the environment that we're in. investing is dynamic it's not static. you're constantly assessing and changing and tweaking the portfolio. >> mark, just a few moments left here it's a big week for retail and the american consumer. any stocks on your radar because of earnings this week? >> the biggest names in retail would be tj maxx they end up at a company like tj maxx and the consumer loves that treasure hunt of going in
5:59 am
there and trying to find the diamond in the rough that's where we would be in retail. >> all right great thoughts this morning in the markets. we appreciate it gentlemen, that does it for worldwide exchange this morning. squawk box will pick up coverage next but stocks right now are showing they could have just about fractional, maybe gains and losses, squawk box begins right now. >> good morning. we'll show you the premarket moves and bring you results from home depot expected any minute now. >> new economic reforms are taking effect in china today they could help beijing weather an extended trade war with the united states and the streaming wars are heating up. a new report says apple is ramping up it's spending on original content, that's good. and working to beat disney's new streaming service to market. it's tuesday, august 20th, 2019, and squawk box begins right now. ♪
6:00 am
good morning, everybody, welcome to squawk box here on cnbc we're live from the nasdaq market site in times square. take a look at the u.s. equity futures this morning you can see a little bit of a future s&p futures up by less than a point. this is all coming as stocks are trying to feel their way around and see if they can extend that three day rally. you're now looking at the markets back to where they were basically before that 800 point loss yesterday the dow was up by 1% the nasdaq was up by 1.4%. across the board, they'r


info Stream Only

Uploaded by TV Archive on