tv Worldwide Exchange CNBC December 12, 2019 5:00am-6:00am EST
5:00 at cnbc global headquarters holding steady, what fed chairman jay powell said to do to the markets on the two-day losing streak. voters head to the polls in the uk pressure from down under feeling the heat from global regulators calling for correction we have an exclusive interview the top business person of the decade the name revealed as "worldwide exchange" begins right now ♪
good thursday morning to you. welcome. i'm contessa brewer in for brian sullivan looking at futures all up about.15% or more in the futures that indicated open. let's look at the treasury yield and look at the 10-year is doing after that big fed decision -- wait a wasn't that big of a fed decision yesterday, was it yielding 1.8%. in asia today, lets look at the hang seng, we are up 1.3%. the nikkei up slightly the shanghai down a third a percentage point in europe, we are paying attention on the big vote. will it be conservatives or labor? we are seeing in the green
across the board up more than half a percentage point except in spain where we are just up 0.4% looking at some of the top stories with rahel >> investors this morning are still digesting the comments from jay powell. the rates are on hold and signaled it doesn't plan to move in either direction in 2020. he said he'd need to see a sustained base of inflation before they hike rates china regulators raised concerns with boeing on reliability and security of the changes to the grounded 737 max. the agency declining comment on when it may let the plane fly again in china dickson said the faa would not let them resume flights before the end of the year.
>> australia says tech giants will have to comply with new rules or the government will impose restrictions on them. prime minister says regulators are creating a code of conduct to address claims that companies have a strong hold on advertising. facebook and google say they support greater competition and will cooperate with regulators president trump is expected to meet with his top trade and economic advisors today to discuss whether to go ahead with the next round of tariffs on chinese goods on december 15 reuters will record the meeting with robert lighthizer, steven mnuchin and white house advisors larry kudlow and navarro a lot to look ahead at the ecb first conference voters in the uk head to the polls this morning
the election will either pave the way or send the country toward another referendum. we'll go now to london what are you seeing? >> reporter: good morning, contessa it is all about brexit look at the headlines. brexit and britain, in your hands. boris johnson looking to get brexit done. that's been his main motto he wants to get the uk out of the eu his option jeremy corbyn want to renegotiate and put it a second referendum and let the public decide if they accept the deal or stay in the eu. two polar opposites there. polls have put the conservatives in the lead. it has narrowed as we got closer to the day boris johnson yesterday saying it is on a knife edge. the polls opened earlier today,
we've seen both casting their vote little doubt who they were voting for polls will be open late this evening. perhaps tomorrow, we'll get an indication which direction this country is heading >> talk to me about the time line here. when do we find out how the outyou outcome of the election. later today, we'll get exit polls and through the night, we'll get a clearer idea if it is a majority conservative, you'll know brexit is most likely to happen withthe agreement that boris johnson has put into place if it is in favor of labor, we know there will be another referendum if it is not a majority either side, it could lead to more uncertainty and we'll have to see if they form any coalitions and what decisions are made in
those coalitions as to how they tackle brexit. >> thank you for setting us up here let's talk more about the market reaction joining me now, senior analyst at fx street getting to what chapman was saying about the polls narrowing. it seems to be the market has priced in a conservative win and clear majority overnight, we saw polls come in that shows the lead has narrowed to 5 points. experts say in 2017, out of the eight eve of election polls, all of them underestimated labor showing. could that happen today? is. >> it certainly could happen the conservatives boris johnson are stressing that this is a very important vote. that people should go out and vote you are right, the markets have completely priced in a tory
victory, at least a functional majority with the tightening polls, i think this election and market reaction turns almost entirely on whether the tories get control of the parliament. that would be a relief more than anything else if that happens. >> if that happens, are you expecting to see the sterling rise >> i think for both equities and sterling, that would be a plus it would shortly go to 1.35, 1.36 where it was a year ago equities will have room to run it will be good for the eu and i think good for britain a lot of business and other spending has been inhibited by indecision, not knowing actually what is going to happen. in order for the british economy to fully prepare, there has to be a fair amount of spending to get ready for it that will actually work to help
the british economy move >> if there is a very slim tory majority >> the lower the tory majority, the worst it is for the markets. the more indecision and uncertainty. if you get a hung parliament where the majority was the way it was in theresa may's last days where two or three small group members could change the policy, uncertainty is huge. >> you are seeing the pound versus the dollar at 1.3, the capital economics predicts, if you have a hung parliament, that could get as low as $1.20. >> that's a long way off i wouldn't say immediately if you get a hung parliament that appears to be leading towards a labor government, absolutely >> when you are looking at global equities and u.s.
equities, how important is that that a brexit deal gets done next year? from the leaked reporting, we know the chief negotiator said, it is not a possibility. you are looking at at least 2021 >> i'm not you too sure that it matters what the actual time line is for the execution of the details for the departure. what is extremely important now and the next couple of months, is that there is a decision on where they are going to lead that is more important value knows where the end game is it is not that important right now. >> the uk polling seems to indicate more important than party alliance and loyalty is remain or go that seems to be what is driving the vote and driving expected turn out today >> that is true. >> thank you for coming in early on a thursday.
>> when we come back, two trillion and beyond. a stellar day after saudi aramco becoming the largest ipo in history but is it real the wework saga gets the hollywood trooemt and how elizabeth warren views the wealth tax may fall short. more when we return. ♪oh there's no place like home for the holidays.♪
windy city, chicago, illinois. you are seeing the bright lights of the big city. good morning, shares of saudi aramco on the second day of trading pushing the ipo to that lofty $2 trillion valuation. dan murphy joins us live from dubai. what are you seeing there, dan >> reporter: hey there, good morning. trading for the world's most profitable company yes, for the saudi prince who achieved that long awaited and long wanted $2 trillion valuation. in terms of the trading activity, shares went limit up for a second day, that's 10% touching just over $10 u.s. dollars that did give them the $2 trillion price tag.
this is six times exon, it is bigger than apple as well with a market cap of about $1.2 trillion. huge activity on the market as well we have seen trading volume surging by about 500%. in terms of the stock right now, we have seen it slap back to 38 reals showing a strong advance this is really calling into question the dividend on the stock which is likely to yield less relative to its peers like exon and shell for example officials are saying there is jub lags and pride within the halls of saudi aramco and the minister really describing this vindication for the saudi crowned prince who really wanted to see this valuation and has been achieved today at least for a short time with that golden well as well,
the confetti and the laser lights, this is going to bring about a step change in their economic maturity. very significant for the kingdom as it will use the proceeds to embark on the vision 2020 campaign >> the crowned prince probably wants us to think of aramco as the most profitable company but really at this point, it is just the most valuable company. there is so much skepticism if it is really worth a trillion dollars more than microsoft, more than apple. what does this stock really look like >> that's a good question. as i pointed out, the saudi crowned prince was looking for that $2 trillion valuation it is estimated it could be worth $1.8 to $1.2
we have seen a push to bring about wealthy families to invest in the ipo it has been suggested this optimism and price performance may have been engineered what we will have to do is look at the performance of the stock over a longer period of time and look at the company to determine whether they will embark on the listing to get a real gauge of the demand and interest in this company particularly at a time when oil price fundamentals are showing oil price constraint >> thank you still on deck, hitting the slopes with uber it is trending and coming up when "worldwide exchange" returns. >> announcer: today's big number, 192.5 million. that's how many people flew on delta airlines in 2018 making it the second largest airline in the world pabysseningers
carried. second only to american airlines i started a tiny investment business, and over 27 years, grew it successfully to 36 billion dollars. i'm tom steyer and i approve this message. i'm running for president because unlike other candidates, i can go head to head with donald trump on the economy, and expose him fo what he is: a fraud and a failure. ♪ yes i'm stuck in the middle with you, ♪ no one likes to feel stuck, boxed in, or held back. especially by something like your cloud. it's a problem. but the ibm cloud is different. it's open and flexible enough to manage all your apps and data securely, anywhere, across all your clouds. so it can help take on anything from rebooking flights on the fly, to restocking shelves on demand, without getting in your way. ♪ ♪
doprevagen is the number oneild mempharmacist-recommendeding? memory support brand. you can find it in the vitamin aisle in stores everywhere. prevagen. healthier brain. better life. continental resources says the founder harold hamm is stepping down to be replaced by kormer conocophillips executive. says his long history of buying and not selling shares won't
change william berry will be on live at 10:00 eastern. jack in the box begins a search for new ceo hasn't sette specific date to step down but believes now is the perfect time for the chain to move forward with a plan under his 10-year, jack in the box sold the struggling qdoba brand and came under pressure from partners. shares of oxford industries are lower today. reporting results roughly in line with estimates. that stock is up 3.5% this year. straight ahead, the case for lulu after already a stellar run for 2019 our next guest says there is more room to ruin. first, more speculation of another eruption at that new
two days ago is about to wrap its work this morning. no more hearings no more witnesses after today. impeachment is headed for a final vote >> the future of our democracy and constitutional order require it >> expected to recommend two articles of impeachment against president trump. abuse of power for pressing ukraine to invest gaigate joe be and the blocking of testimony. >> if we do not respond to this abuse of power, the abuses will continue >> republicans are saying the democrats are rushing. most americans are saying, i wish we could impeachment. you can next november. >> if folks want to turn this into a carnival, there will be hell to pay for that at the
ballot box >> a trial in january. >> the sooner we can get this behind us, the better. >> the tables turned republicans concerned it was moving too fast want to quickly end it >> president trump wants to slow it down and get his day in court. in fact, he's determined to get adam schiff in front of the senate during that trial as a witness. >> you know, it is interesting it seems to me the markets have priced in an end to all of this in the senate. they are not paying attention to impeachment because they don't think anything will become of it how much pressure is on the senate when it comes to following up with the house? are they feeling any pressure? >> i'm not sure pressure would be the right word. they are required to do something. they have to do something when impeachment lands in their lap is that going to be a weeks long
trial with dozens of witnesses or a couple of days with each side presenting their case and moving on, which is what we are hearing now. i was listening to an interview with one lawmaker who said look, we have not been paying attention. other work has been going on in the senate it is not like the senate is consumed with this, at least not for now. >> thank you for keeping an eye on it. when we come back, a "worldwide exchange" exclusive of the world's largest education only pension fund stay with us
the fed staying the course and the markets are cheering a future with low interest rates shares of lulu lemon taking a look at disappointing outlook. looking at whether the apparel giant is doing >> adam neumann casting an actor for the next series. >> we want to get a check on the morning stories outside the
world of business, phillip mena is in new york with the latest good morning >> good morning. police in new zealand say they are finalizing plans to return to white island despite the steadily increasing risk of a second eruption there. the plan is in the works to recover the bodies of the missing. the official death toll has climbed to eight after two more people who were hospitalized died two americans are among the dead harvey weinstein has reached a tentative deal he was seen hobbling into court for his rile a report of $27 million settlement new outrage after a report that he would not have to pay the settlement himself and will not have to pay for the wrongdoing instead, the insurance for his
companies will pay out he's pled not gimuilty of the charges. in the mlb, every team in the league will expand the netting to protect people from foul balls between 2012 and 2019, more than 800 fans were injured by baseballs, so less opportunity for fans to catch foul balls there but will also be a lot safer. >> there is a trade off but kind of seems like a no brainer especially if you are taking kids turning back to the markets now, here is how your money and investments look stock futures all in the green the dow jones implied opening up 26 points. let's check the bond market and treasury yields. we've seen the 10-year, it looks like we are up to 1.8% the two-year lower 1.6% is the yield there. president trump expected to meet
with his top trade and economic advisors today to discuss whether to go ahead with the next round of tariffs. sunday, that is december 15. the meeting will include robert lighthizer, steven mnuchin, larry kudlow and peter navarro the largest education only pension fund with $246 million under management catching up with the man in charge to ask what he expects in the he can withiequity market iw year >> this is a good year, which really shocks people i find certainly on the west coast. people are angry at this bull market mostly because somebody keeps taking credit. beyond that, you are looking at a low right at christmas eve last year, which was a real big
drop in the market for me, 2019 was a great year. it averages out as part of this bull market. i don't think we have a recession near term. next year, we'll have 2% gdp we should have a reasonable equity market. maybe not double digit at least a positive returning-type year. >> the average return is something like, what, 7% or 8% annualized let's sound like what you expect >> right let's start from the 1860s and come forward you are going to average around seven with that income being a good chunk of it now >> that's why your money tends to dive, every eight or nine years, you double your money that is good to hear to your point, there are people that are worried the market has come too far too
fast you don't see much risk of a major or even minor market decline next year. >> i see risk everywhere, that's for sure you are right. i think we are due for a good 5% correction here. the pe ratio isn't at extreme levels the earnings are coming in strong sometimes they are disappointing but look at the last quarter you had over half of the positive reports you are still seeing some compassion for companies and challenges generally, positive earnings and a positive market. it will be choppy. this is an election year remember 2016, that was a really hard year. we may have that kind of year because of all the rhetoric we are going to hear. >> it has been a weird year.
do you think that is because last december, we had this major market to the tune of 15%. the worst december since 1931, did we take all the healthy correction and put it into an unhealthy period >> we might have that correction surprised me christmas eve shocked me i still think the machines were involved there without question and the lack of traders around i am surprised at last year we had very few weaeks of lower returns with all the trade problems and difficulties we've faced. but it is back to the base corporate earnings the u.s. consumer is some what optimistic look at the jobs report. constantly good news on jobs that helped fuel this market >> i'll ask you about something
else i know you are in new york is there anybody you are talking to or in your own mind worried about this issue of the repo issue in new york city >> i've seen it before i've seen the year-end compression. it happened years ago where we had that strange compression in september. the answer is yes, i'm talking to people about it we run over $3 billion in short-term cash. we are worried about it at calstrs. talking about the liquidity market i think john williams and the new york fed will get a handle on this. there are fewer banks providing that liquidity, which is a concern. the world is a wash. we might have a few blips but the fed will come in and provide
liquidity and keep that rate in line it is like the blood pressure. if it is within good range and healthy, the cash system the consumer needs to know, if the repo rate is flukt rating, that means the basic cash flow in the system is seeing challenges >> it is wbi wonky but it doesn't sound like you or people you are talking to don't believe this could be systemic of a bigger issue or a spark that could signal a bigger sell off >> i think september was a gotcha you had three different events within a week of each other. a lot of people have been planning for this year end and buying cash alternatives that will take them over. i think people will manage this cash period well and it will be
fine i do not believe it will lead to a problem in the equity market >> for more of brian's exclusive interview including his take of record exit numbers for ceos in 2019, head to cnbc.com some early morning analysts calls to tell you about. general electric upgraded to a guy. analysts argue it will be a turning point for the stock. as you can see there in early trading, the stock up more than a percent. >> starbucks upgraded to overweight with a $94 price target right now up almost 2% the analyst met with management that said there is a high degree of confidence in their growth. shares of lulu lemon under pressure despite a top and
bottom line deeper investors are focusing on the company's q 4 outlook which came below expectation. you can see the stock off 4% the company has been a story all about growth the stock outperforming peers by a wide margin year to date here to talk to analysts, brian joins me >> first of all, you have a price target on this talk about what that is and whether you see shares being down 4% as a buying opportunity. >> good morning. i recently lifted the price on lululemon to $60 in our rating equal to a buy this will work well to the point you are making, given the massive move in lulu lemon and prospects now, we have told our
clients, yes, we continue to like them and the stock continues to grind up from here. that stock is less linear than it has been. i didn't wa i don't want to make too much of this. the market is saying, yes, third quarter results are really strong a today soft the stock is now down 4% pre-market >> what does that tell you about expectations if they just barely mod rate their 0 outlook and you see the stock at 4%? >> this is a name -- lululemon is performing fundamentally well there is a lot of momentum behind this brand. they are pushing into men's and internationally. fundamentally, they are
performing very well this stock, the move up and the multiple for which it trades if and this is a stock if anything were to crack or break, that multiple could come under pressure i don't think that's happening the momentum of the business is very strong. >> this is a business that really innovated for retail. it shows, stock is up 90% this year way outperforming the overretailers. when you look at what is going to be required you said, you don't think it will keep going in this linear move what are the challenges to stay ahead to the stiff competition to the nikes and the underarmors of the world >> that is a key question and speaks to the power of lululemon is their product i spent time in their store over
the holiday. their product is phenomenal. the feel, the wear ability that allows them to charge a higher price their items are not inexpensive but they are so high quality, the consumer is willing to pay up i think that is the real key that allows them to push into these markets like mens which would historically not be something a yoga company, historically been a yoga company would do >> are you surprised by the appeal across generations? >> i am. i have two younger daughters they love it >> so you are shopping at this store with your daughters? >> they love it. especially when i'm paying for it that really says something >> great to talk to you. price target hereof $2.60, $40
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one of my favorite times of the year in new york city. there is the tree. the lights aren't on what's going on? >> we need to get to the bottom of this. what else might you be talking about this morning here are top trending stories. >> i am here i was speaking but not on camera that mysterious voice of god amazon founder is getting praise from global business leaders
chief financial officers around the world named bezos the top business person of the decade. beating out ali baba founder and elon musk for the title. considering he did grow amazon from an online book store to the largest marketplace, perhaps the honor isn't that surprising. >> now we are talking about jeff bezos in the same sentence with mo microsoft and apple ceo, amazon has really infiltrated our lives. >> a lot of people would agree, he's certainly a visionary >> all right he can move forward with that. >> speaking of another person, the upcoming wework television series has cast its lead best known for playing cousin greg will take on the role of
ad neumann. countrily working on a movie script both of them are 6'5". >> they have matching heights and a matching look. cousin greg does not look anything like this he doesn't play into that. the interesting thing is the time of this it seems so soon after we saw the fall of wework to be turning out a series on it >> to be fair, they don't have a rollout date or a network, apparently these things take time and they are already jumping on the rights to the story. >> if all you need is a ch charismatic ceo who is driven and driving it to the ipo market
and to see those dreams dashed >> and a lot happened after that >> interesting, we could see a lot of these television series based on what we see i cover casinos. what we see with wynne resorts would make an incredible series. >> you are a little busy here at cnbc >> that's my idea. >> uber. this doesn't really apply to me. uber wants to make the skiing season easier for you. it is launching uber ski starting next week, riders in seattle, denver and upstate new york and other states will be able to request a roof rack. those rides will cost a little more drivers that opt to participate will receive a little bonus.
>> i used to be a reporter in denver everyone skied except me >> when in rome, you have to do as the romans. >> i was planning to and then got snachd up by another network. >> you would order up an suv, you think there would be room but some drivers bauk. >> they do that makes me wonder where you may have uber where if you have furniture to move or delivery. >> there is uber freight you know what i would like, uber pets there is so many places i need to get around in the city especially taking my dog to the groomer. >> are you finding that driver's
balk >> yes they can say no. you work on the screen play and i'm going to work on uber pets >> there we go woman power right here thank you. on deck, one of germany's top mobil companies strikes on the deal with huawei and chairman fed locks in the rate for the for seeable future. what does that mean for the markets in the long term we'll in a moment. do you have concerns about mild memory loss related to aging? 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. here, it all starts withello! hi!...
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president of the central bank. we are not expecting any dramatic changes here. the decision out at 7:45 eastern. she will speak at 8:30 we'll be watching for that one of germany's top mobil carriers has tapped huawei to help build out its 5 g network seen as a snub to the trump administration a new study throws some cold water on elizabeth warren's wealth tax plan. the findings show the senator's proposed tax will generate at least $1 trillion less than what the campaign claims. her campaign is disputing saying the finding makes unsupportable assumptions. >> after the federal reserve
announcement, won't be moving. scl explaining the decision. >> my total focus is on right now and getting policy right and thinking about next year, thinking about what's the economy going to be doing. i like where we are on polly i'm like to remain so. >> joining me now, equity strategist good to see you today. does what jay powell said yesterday change in any way how you see today? >> no. he was wonderfully boring yesterday. we've been waiting for a boring jay powell for the better part of a year and a half the fed has been remarkable. the market thought we were headed to a recession and we needed rate cuts to zero the fed was able to pivot and state that it doesn't need
anymore. the market may be stabilizing. >> how are you positioning then for a fed in a wait and watch mode for 2020? >> we've taken them off the table. that is the key thing. rather than worrying about the fed being overly aggressive, we are focused on the fact that earnings growth looks like it is going to re5:0 seaccelerate >> instead, you are worried about trade? >> i don't know if we are worried. we are hopeful on trade that it doesn't get worse. >> what would worse look like to you? >> if we wake up on monday and it turns out we've gone forward with these tariffs and the rhetoric has heated up, that represents a risk to next year's earnings numbers
if it works out, we may get a temporary delay in december. >> some are reporting that peter navarro is moving back to a hawkish territory. that he's going into the meeting with president trump pushing for more of a firm hand. >> trying to predict how the president is going to listen to his advisors is something we've all tried to do and gotten egg on our face. let's just see what the day brings >> we know at 7:45, we are expecting the results of the ecb meeting, we are going to hear from christine lagarde there has been speculation because she's been more of a talker than her predecessor that she might give hints of the direction for the economy. what are you expecting to hear from her >> in terms of rates and the policy, if this meeting goes
well, it will mirror yesterday where it is boring i do think everyone will want to understand what she's doing with a strategic review and any insights she'll let trickle out and getting a sense of her administration style. >> on trade, do you think we'll see a movement of more reconciliation between europe and the united states? >> between europe and the united states i think where we are headed in terms of trade, i don't think the president is looking to really ratchet things up in terms of a new front in an election year. i think he'll put pressure where it needs to be this financial services is an area he needs to address i expect him to be more agressive post election if that happens than over the next 12 months >> i got to ask you, we have the
articles of impeachment in the house. does this in any way inform how you see 2020, the back and forth we are seeing on capitol hill? >> no. the reason why, impeachment has not exited the realm of politics to become policy it becomes policy if there is any chance that president can be removed. there is no sense that that's the case right now, this is really opening salvos in the 2020 campaign there is a lot of shoes to be worn out between now and november >> i want to get your picks for 2020 before that, back to the fed which is wherewith we started, one of the big wait and watch for investors was to see what jerome powell would say about the repo market. are you expecting some pressures for the end of the year regulations? >> it is another one of those tax paying events. it is not like deficits are
going away i think those dynamics are in place. we are expecting more of the same until we get a permanent facility next year >> your pick for stocks. >> small caps are the nonc nonconsensus play. >> don't forget, christine lagarde's first meeting today. now "squawk box. good morning, the case for patience what investors should take away for jay powell's final press conference of the year >> ron vara, we'll get you ready for the high stakes trade meeting expected today saudi aramco briefly capping $2 trillion. we'll bring you the news from this enormous ipo ahead. it is thursday, december 12, 2019 "squawk box" begins right now.
good morning, everybody. welcome sto "squawk box" on s cnbc we are live on the marketsite in times square u.s. futures are indicated up. s&p 500 up by 3.5. nasdaq up by just over 11 of a modest day of gains yesterday after the feds decided not to move take a look at treasury yields, you'll see the 10-year looks like it is yielding just above 1.8% a little below where we were yesterday morning. >> some big news, shares of saud