tv Worldwide Exchange CNBC August 12, 2015 5:00am-6:01am EDT
welcome to worldwide exchange everyone. i'm seema mody. >> i'm will fred frost. here are your headlines from around the world. >> china devals it's currency for the second day in a row despite claims yesterday's move was a one off. >> european markets see red. luxury groups and stocks fall sharply amid fears about their china exposure after the likes of them suffer the same fate on wall street yesterday. >> shares wave bye bye to baba
ahead of quarterly results. stocks hitting a new all time low on heavy volume in new york. >> crude prices bounce back after world demand for oil is growing at the fastest pace in five years but also warns that the supply overhang will persist. >> and welcome to the second hour of the show. the overnight devaluations of the chinese yuan spooking markets not just here in europe but in the u.s. as well. the dow gaining 230 points on monday but quickly reversed the losses on tuesday. the dow down by 190 points in premarket trade so we could be in for another day of selling here on wall street. the s&p 500 lower by 24 points. this as oil prices hit a multiyear low again yesterday that of course sending energy stocks lower.
this is a very good stage of stocks around the world. they respond negatively to that move to deval it's currency for the second straight day and of course european stocks also trading lower. that's weighing on the index which is down about .6% in today's trade but as i said european stocks selling off for the second straight day. let's get to it and show you where we're seeing the losses we'll get there in just a second but those are the stocks weighing on the major indices. specifically the german markets. right now we're looking at the xetra dax down by 2.6%. a nearly 300 point move to the down side. the cac 40 now at session lows also down 3%. so the selling is continuing to get worse here wage growth not as strong as expected. that's weighing on sentiment
although jobs gains were stable. down by around 1.6% so we got to keep an eye on the equity markets. these moves are definitely notable here, wilfred. >> absolutely also risk off in bond markets. we've seen a relationship over the last couple of days that has seen yields compress noticeably in the two major safe havens of germany and the u.s. below 2.1% on the u.s. ten year today. 2.08 and just above 0.6 on the german ten year, 0.61. also seeing a bit of bond buying in the u. k. a bit of risk off off the back of the disappointing wage data seema just mentioned. 1.76% there. let's look at forex because that effected sterling which is flat today. looks like it is up a little bit but it was up close tore 156 before the data broke. so it's now at 1557.
the aussie dollar suffered off the back of the chinese rmb move. it's only off 20 basis points today but 0.72. the euro strengthening noticeably against the u.s. dollar. this is really a move contrary to what happened yesterday. overall the moves is strong off the back of this. against a basket of currencies although today that move against the euro and japanese yen is slightly unwinding. why? perhaps people wondering whether they might consider easing further to offset what the chinese government is doing and it will have to wait and see for that but overall the u. s. dollar certainly higher over the last couple of days. let's also look quickly at commodities. oil prices stabilize a little bit over the last couple of trading days after the recent sell off and the international energy agency today was positive about global oil demand.
that helped sentiment today but clearly not that strongly and they did say inventories remain very high. >> let's talk about china. the people's bank of china devaled the yuan for a second straight day sending the chinese currency to the lowest level in four years. despite the move, there's no basis for sustained currency depreciation. our reporter from asia has all the details. >> china's yuan continues to trade weaker for a second day after the pboc devalued it's currency. they expect the u.s. to stabilize after a brief adjustment but it pledges to maintain the yuan at a stable and reasonable level. the midpoint was set this morning weaker than monday's close. the u.n. is at the weakest trading around 642. the central bank has been
intervening. a currency trader at a domestic bank said banks are defending the yuan against the dollar around the 643 level. adding without the intervention the currency would have gone lower for sure. we have more activity indicators coming from china today and a weak yuan potentially helps the chinese economy and exporters but it also comes with risks like capital flight. it's on no basis for continued depreciation. back to you. >> let's talk more about this move by china. joining us now, boris, the managing director at bk asset management. good morning to you. how major a move is this by china in your eyes? >> it's very big and definitely tells the market that the pboc is worried about the chinese economy. overnight data showing softness in the industrial sector. the chinese authorities are
worried about the chinese economy and trying to do everything in their power to stimulate demand. >> originally this was meant to be a one off move. that's not the case. we've had a further move today. do you think it will be a two off move or is this the start of more meaningful qe-like type easing in china that's going to follow to the same extent we've seen in europe and japan rekently? >> whenever the central banks say it's a one off move it's almost never a one off move. the market clearly wants to see the yuan lower. they're going to try to obviously manage it in an orderly fashion but i do not think this is the final low that you've seen so far. i think we're going to go lower as we go forward. >> it's seema, good morning to you. should currency devaluations be seen as a desperate move by beijing to stimulate it's
economy and it's exports or perhaps this was a sensible move because the moves we have been taking so far haven't really helped the economy. >> well, they needed adjust lt and clearly because the economy was slowing and the yuan was overvalued. they're acting very reactively at this point. they were caught off guard because it didn't anticipate the economy to slow down this much. there's been so much investment in the chinese economy that finally the case they have been making the last three or four years may finally be coming true and a lot of the unwind of the bad nonperforming loans is going to hit china harder than everybody thinks. >> we've seen massive risk off reaction to this off the back of the chinese move. is there a bigger effect to come? will this effect the u.s. economy as well as the stock markets? and is it something therefore that the fed should be taking into consideration ahead of potentially it's first rate
hike? >> in my opinion no doubt the fed is very focused on what's going on here. the euro is up today primarily because the market is feeling that the fed is not going to raise rates in september. china is the second largest economy in the world and if they start to contract, it's like jupiter. it has such a huge graduational pull. it's going to be hard for the fed to justify a tightening policy. it's very likely to decline given the conditions out of china. so it's very difficult to see how the fed wants to tighten in these kind of conditions. >> a lot of the big exporters reacting to the this move to deval their currency. would you recommend clients at this point to sell the stocks that have high chinese exposure? >> yes, it's clearly a little
bit too late but there's much more to come. apple has certainly suffered bmw and all the german auto makers and it's likely they're going to suffer further. i don't think this is a tiny one off event. this is the beginning of a decline in chinese demand as they have to correct the economy and the pain is probably going to last more than a couple of months. >> great stuff for now. stay with us. we'll be back after the next break. we do want to hear from you of course throughout the show as well. do let us know what you think relating to this china change. should the fed take note of china and delay it's rate hike or are domestic issues more relevant. >> we have been getting your tweets this morning. tom tweeted in and said yes the fed needs to take this into account as they don't want a king dollar. which will effect the u.s. economy growth and jobs. we've already see the negative impact of the stronger dollar
and the impact it's had on exports. you can e-mail us as firstname.lastname@example.org. our personal handles on the bottom of the screen. >> let's give you a run down of what to watch this trading day state side. that's out this morning. it tracks a new job listing and the number of people willing to leave for other positions. also out today, the monthly budget statement. dud d dudley speaks before the opening bell indeed on the earnings front, second quarter earnings are just hitting the wires as we speak. >> yes, reporting earnings q-2 net income of 7.32 billion. q-2 revenue estimate was 24.17.
delivering q-2 revenue of 23.43 billion versus the expectation of 19.75. of course focused on gaming. a big part of the revenue has been coming in from mobile. reporting a q-2 net profit of 7.31 billion versus a rnb of 5.84 billion in the previous quarter. you can see the stock down about 4.2% in today's trade. >> suffering along side the rest of the chinese market. big day of course for chinese internet names and more focus on alibaba throughout the show. still to come, trump not stumped. can the donald continue his surge in the polls. we bring you the latest from washington after this short break. bhap
finance business and loan portfolio to capital one for about 9 billion. >> u.s. secretary of state john kerry says that under the terms of the recent nuclear deal a violation of the arms embargo by iran would not force an automatic reinstatement of u.n. sanctions. also that the u.s. dollar could seize to be the reserve currency if america walks away from the iran deal and kerry has come under fire from analysts that questioned that particular comment. mr. secretary if you're watching join us on worldwide exchange and explain your rational to us. let's also move back to oil prices which have been effected by that iran deal over the last few weeks. they have recovered a little bit today off of the back of the iea report that in particular pointed to strong demand for oil all be it quite heavily offset by very high supplies. brent 49.5.
wti, 43.4. let's get back to the managing director at b.k. asset management and talk about the oil price. boris, we did see a little bit of a recovery earlier in the week and on monday that helped u.s. stocks but once again, of course, stocks in the red much more so reacting to china. do you think we have started to see a bottom once again in the oil price or is this something that's going to go on for the rest of the year? >> it's really hard to say. a huge part of the oil price is contingent on the dollar price. you see it stopping out a little bit here, basically plateauing as the oil prices begins to bottom. it's probably likely going to continue. at this point i think oil is trading far less on the fundamentals of the oil market and much more on the dollar and crude. >> beijing's move to devalue it's currency makes imports of
commodities including crude more expensive. if beijing continues to use currency as a way to jump start growth what does that mean for oil prices going forward? >> good question. you're going to have some decline in demand for oil. we're far closer to a bottom in oil prices at this point than we are even a couple of months ago but at the same time when you look at all of the bear markets in the oil prices they tend to stay there much longer than people think. i think we see 40 or $50 oil for quite a long time. that's probably, for us, at least in the u.s. economy is relatively good news. for oil exporting nations it's going to be bad news going forward. >> the other story is iran. it's planning to increase it's output the minute they can but my question to you is iran's supply for oil already priced into oil right now? >> it may be. it is also contingent on how
much oil they can actually put on a global market. there's a lot of controversy as to their ability to pump stuff out at this point. they delayed a lot of their capital investments so much that it's a question of how much oil they can produce and distribute to the global market. iran is is a factor but minor one at this point. do you see this as a buying opportunity in the equity space or are we due a bigger direction before you want to be long risk assets again? >> it's inevitable, august, september tends to be always a risk averse time in the markets but i looked back at the last ten years of trade in the equity markets and with the exception of 2008, september, august, october. if you had sort of bought around august or september, by october you were higher in the equity markets so i think you do have turbulence but you probably come out of this okay.
it was a surprising factor. i thought there would be much more turbulence around this but it shows you have a hot of sell offs but the markets begin to correct as we go into october and november. >> i want to draw your attention to futures indicating that we could be in for a rough day on wall street. the dow down triple digits in remarket trade. what do you think the investors are responding to? the second move to deval their currency or the slew of data we're getting in the u.s.? >> china is a primary factor now. all of that labor growth has transferred into consumer spending. retail sales have missed expectations two or three months in a row. we're looking at a big snap back from next month. if we can see that it reinforces the dollar bullish case. if we have a miserable retail
sales number and i understand that the bull argument is that a lot of the money is being spent on higher ticket items but if the u.s. consumer is not picking up on the retail side it's difficult to make a case for strong u.s. growth going forward in the next quarter or two. >> retail sales number very important. also a read on inflation. that will be something that investors will be watching. ahead of that potential fed rate hike coming in september. although i can't see that happening especially with this big move from china. boris -- >> it's amazing how everybody was convinced it's a done deal and now it's probably going to be off. >> absolutely. boris, thank you for getting us early with us. have your coffee and enjoy it. managing director at bk asset management. now let's talk politics. democratic presidential candidate hillary clinton turning her private e-mail server over to the justice department according to a spokesperson for her campaign. her use of her private e-mail while secretary of state has
drawn fire from republicans that accused her of skirting transparency laws. several. >> found that more than half of voters find clinton untrustworthy. >> meanwhile, gop front runner donald trump's clash with fox news host megyn kelly have not hurt him in the latest polls. in fact, a survey shows trump leading in iowa for the first time. also 41% of respondents agreed with trump that he was treated unfairly during the debate. let's get out to nbc's brian moore that has the latest from washington. >> well, wilfred and seema, we have been talking for days about donald trump. that has not changed today. those poll numbers show that he is weakening a bit among some supporters and four candidates in particular, some of the sort of lesser known, less popular candidates, carly fiorina among
them got a huge bump off of that debate last week. ben carson, marco rubio, john kasich, the governor of ohio all fairing quite well. someone that underperformed in that debate and is coming out swinging in a much more aggressive fashion is jeb bush, the former florida governor. the son and brother of former u.s. presidents. he was on the attack overnight in california. he was speaking out against hillary clinton in particular. hillary clinton is the target of the day, especially after the news that she is turning her e-mail servers over to the u.s. justice department for further investigation. brian, thanks very much for joining us this morning. >> coming up on worldwide exchange, will investors go gaga for alibaba? we'll discuss the report due at 7:30 a.m. eastern. that's coming up next. re earnink
from bank of america to buy a new gym bag. before earning 1% cash back everywhere, every time and 2% back at the grocery store. even before he got 3% back on gas. kenny used his bankamericard cash rewards credit card to join the wednesday night league. because he loves to play hoops. not jump through them. that's the excitement of rewarding connections. apply online or at a bank of america near you.
u.s. and asian e-commerce companies. >> absolutely. disappointment has gained a little bit of headlines because it's clearly a u.s. former goldman sachs. does that mean they're focussing more on the u.s.? i don't think it does. that's part of the strategy. i don't think it makes a difference. if we look at the last year it's much more their listing in the u.s. and their move into some of the cloud space. it's a clear indication of that. >> but if china is slowing down, even more pressure from alibaba to expand into other markets like india which is expected to surpass china in terms of mobile users in the next couple of yea years. they have been ineffectively putting together these measures that haven't still you lated the economy. there's more pressure to diversify and expand. can they? do they have a brand name that
resinate with customers in the western world and even in countries like india? >> they're techbtly trying to expand that brand name. i went to see the latest mission impossible movie on monday evening, do you know who co-produced that? alibaba pictures. i didn't even though it existed. >> what a big name to get their production company on. >> clearly they wanted to get behind it. they're definitely trying. we'll see if it works. >> i wanted to point out ahead of alibaba's numbers we did hear from china's biggest social network and gaming company. they reported q-2 revenue up 19% but that was slightly below estimates. shares which trade in hong kong down 4% in today's trade. >> stay tuned throughout today on cnbc. alibaba ceo will be on cnbc at 9:00 a.m. eastern time. >> you have to take a look at
china devalues it's currency for the second day in a row despite claims yesterday that it's move was one off. >> european markets see red. luxury groups, miners and auto stocks fall sharply amid fears after the likes of wynn yum and chip makers see the same yesterday. >> bye bye to baba ahead of its results. stocks hitting a new all time low on heavy volume in new york. >> crude prices bounce back as world demand for oil is growing at the fastest pace in five years but it also warns that the supply overhang will persist. >> it was a conversation around the fundamentals and technicals. a negative sign appeared in the chart after it's 50 day moving
average crossed below it's 2 hyundai moving average. known as the death cross and futures pointing to a lower open. down triple digits on the dow. 170 point move to the down side in remarket. lower by 21 while the nasdaq down 46. this as the pboc, the chinese central bank once again devalued it's currency and that's sending many of the exports lower here in europe. you're looking at the german markets which of course seen as the export power house. houses a lot of the autos and luxury names moving lower by 2.4% but it's not just germany. take a look at the french stock market. the cac 40 significantly lower in today's trade. liquor brands moving to the downside resulting in the french markets seeing a loss of 2.7%. a similar move for italy down by 2.25%. also i want to point out a dose of economic data we got out
today. wage growth coming in slightly below expectations here in the united kingdom. that perhaps one of the reasons we're looking at the ftse 100 lower by 1.4%. trading at 6,000, 568. so wilfred, it seems like markets are responding not only to the pboc currency devaluations but also to economic data. on that point, i want to bring in commodities and give you a look at what we're seeing across the board. interestingly enough after crude hit a six year low yesterday we're slightly higher in today's trade. brent crude still below $50 barrel but it's higher in today's trade by 33 cents. wti crude up by .8%. this after the iea said that oil rebalancing will take time and that it sees the oil glut persisting. investors will look to more safe
haven buying. perhaps that's why it's slightly higher today. it's a psychological level for traders. now back to our top story with china. the people's bank of china devalued the yuan for a second straight day sending the chinese currency to the lowest level in four years. markets have once again by hit by the move. how should investors react? well, we have been getting expert opinion all day. listen in. >> i don't see why you need to go any further. ultimately they already moved. this is china catching up. >> most overvalued currencies now are those that are pegged for the u.s. dollar. like the hong kong dollar and the big losers from what happened is the u. s. dollar. whether that's middle eastern markets or hong kong markets and
that's an interesting trade. >> when you don't like commodities, south africa, when you have politics in turkey, you're ending up in hungary. these are countries not getting hit by this commodity. getting smacked as a result of china. >> and wilfred this move by china has reignited the debate as to whether beijing is moving away from a free market model and what this means for beijing central bank policy going forward and if this will spark a global currency war. will we see other central banks do more to weaken their currency to essentially boost their exports. >> well, very long-term of course people that want to see more financial liberalization in china would have liked to have seen a free floating currency so this devaluing it to more of what it's natural rate would be is akined to that. i agree with your point, the last couple of months of actions
from the central bank and government have meant they have lost credibility in financial investors eyes. particularly international investors. particularly that this was a one off move and they have backed it up and done it again today. interestingly in that trade listening to them talk about the hong kong dollar as well. yes this will help exporters but so many corporates are overleveraged and borrowed in hong kong dollars or u.s. dollars directly and they'll be suffering by this. their interest payments are going to go up and there's other parts of the economy. this is the trouble china has now. if it helps one area of the economy there's going to be other issues off the back of that that are going to suffer. >> you have to wonder what this means going forward. does this decrease beijing's chance of getting the yuan added to the imf's basket of currencies which there was speculation it would happen in the future but clearly these moves decrease the chance of
that actually happening. >> the imf did actually applaud through cautious tones this move initially yesterday. we haven't heard from them again today but i wouldn't say this makes a huge difference to that and of course china wanted to be a reserve currency of choice but overall this is a massive move. for me the big moves we've seen in equity markets, huge risk off responses is more than just simply the translation effect of these companies earnings. yes the likes of bmw, heavily reliant on exports to china but overall for me the reason we've seen such big risk off moves, also in the bond markets is because it underlies the potential that china is facing a heavier, sharper slow down than expected. >> all eyes on the next dose of export data out of cha china. despite the moves taken by the central bank to devalue the currency markets could be in for
another shake down. that suggests that central bank policy at this point is ineffective. >> absolutely. >> we have also been wanting to hear from you on this. what does this mean for the fed? should the fed take note of china and delay it's rate hike or are domestic issues more relevant. get in touch with us here on worldwide exchange. tom tweeting in and saying, yes, the fed needs to take this move into account. they don't want a king dollar which will effect the u.s. economy, growth and jobs. you can get in touch with us here on worldwide exchange, e-mail us at email@example.com. our personal handles on the bottom of the screen. >> u. s. prosecutors charged nine people in connection with a trading hacking ring. it illegally generated $100 million in profit. cyber criminals from the ukraine hacked services and helped traders state side get their hands on press releases before they bail public. >> now symantec reported quarterly results on tuesday
along with it announcing it sold it's data management segment to the carlyle group for a billion dollars. it's the news many shareholders were waiting for as they hope the company will now focus it's attention on its cyber security business. some investors will be looking for them beef up the platform to make fresh acquisitions. joining us from cnbc headquaters is the managing director at fbr capital markets. was this a good move? >> this is long overdue. the dna is really around security. it's been a legacy storage platform that removes an overhang, a black cloud. now the key question is what do they do in terms of cyber security? do they get aggressive on m&a? that's the next step here and it's a big move me story in the eyes of investors.
>> making about $8 million on the sell. where do you expect the company to allocate this capital? what type of m&a could they be involved in? >> it's next generation cyber security. we're seeing that grow 30 or 40% at 2 to 3% spending environment. >> i see this getting into the end point. some of these areas where companies really need to put fuel back in the engine here. it's been a rough ride for investors. this is a glimmer of hope but they need to walk the walk. >> players are entering the security space. is this making it harder to remain a leader in security going forward? >> oh, yeah and symantec had a huge window of opportunity that they missed.
part of that is with the acquisition. for them it's climbing on mount everest but it's a 30 to $40 million opportunity. that's where companies really hit that white hot growth so now symantec will need to make acquisitions in the space to start to see growth here and i see it in some of those areas through m&a and even on cloud security that could be an area they could get into. generate a ton of cash, but investors continue to be disappointed. this is a glimmer of hope and now it's moving they can make the right acquisitions. >> all right. thank you for joining us on word wide exchange. managing director at fbr capital markets. still to come, ge shrilling down. the company locks in another big deal to meet a goal to sell up to $200 billion in assets from
it's in early testing. wruzers would download the mobile app and choose which news publications and topics they want to follow. of course facebook stepping up it's competition with twitter. price action over the last one month up by around 6.5%. >> indeed, seema. so facebook potentially moving away from one area of expertise and going into another. let's talk now about a company doing the opposite and refocussing on its traditional business. that company is general electric. for the full story let's get out to landon live from cnbchq. >> good morning. ge continues shedding assets to reduce exposure to its ge capital finance business. it reached a deal to sell it's health care lending unit along with a large portfolio of loans for about $9 billion. it helps ge meet the goal of selling $200 million in assets from ge capital as it returns to its industrial roots. it provides loans to hospital,
drug and medical device makers it's among a group of lenders that bulbed up significantly. since the end of june boosted by deals such as acquisitions of ing's u.s. online banking business in 2012. regulations in the wake of the financial crisis made it less profitable to run ge capital on top of the latest deal the company sold it's private equity lending unit to the canada pension plan investment board for $12 billion in june. it also sold the majority of its real estate portfolio to black stone and wells fargo for $26 billion. in europe ge is down about 1% while capital one is is off about 3%. wells fargo is reportedly exploring the sell of its insurance business. one of the biggest in the u.s. regulatory restrictions are forcing banks to reconsider the types of policies they underwrite. reports say they have launched an auction for the yuunit that
rate but of course the currency weakening once again and you can feel markets moving around specifically here in europe. >> both the u.s. and europe was effected by this move and more of the same again today. let's have a look at jurors peu markets. we were looking just there at individual european markets. the dax was off almost 2.5% for the second day in a row. but there we go. we've got them back again. the dax off 2.4%. ftse 100 down 1.4%. let's now have a look at the sectors that are effected most of all of course it's the heavy export sectors. autos, one of the reasons where germany has been underperforming the last couple of days. bmw, diamler all off sharply. let's have a look now at basic resources. of course commodities in general affected by china slow down and the likes of bhp off sharply.
off some 5.2% today now other sectors worth pointing out, swatch group, 37% sales exposure to china. that's off 2.8% today. it's not just the luxury end of the curve in the consumer space with some of the staples names. also off today. >> the other big story is alibaba. quarter quarter results at 7:00 a.m. eastern. they're expected to drop 57% likely due to a decline in investments and mobile internet businesses and taxi sharing and food delivery and the impact of employee stock compensation. revenue is expected to rise by $2.34 billion.
interestingly enough they're hitting an all time low going back to its ipo last september he will be on squawk on the street another at 9:00 a.m. eastern. >> q-2 earnings within the last hour and showed a 19% rise in revenue. however that was slightly below analyst estimates. analysts looked for just over 24 billion with a slow down in the firm's gaming business. the main driving factor. however on a positive note users of the wi chat app surpass the 600 million market at the end of june. >> let's talk more about chinese e-commerce. great to see you this morning. will investors give alibaba a pass if profits come in light because of their focus on growth and expansion? >> yes, the company is hedging it's bets. it's investing in off line and
online businesses. they'll get a pass. i expect this quarter to be inline to slightly better. all of this turmoil i don't think show up in the numbers in this quarter. maybe down the road but overall i think e-commerce sales are pretty robust in china and overall retail sales may be slightly slowing on the edges but still strong. >> the stock hitting an all time low ahead of this highly anticipated earnings report. if the company beats expectations would you be a buyer of the stock? >> yes. it's still a great company. it's the biggest e-commerce company in china and they have more than 80% of the market and e-commerce is part of the overall in china. so this is the best play in china for e-commerce and you need to be in this. a little bit of momentum came
off. there's a direction going on but that's fine. at the end of the day this is the best way to play the e-commerce. >> the biggest e-commerce player in china. will today's results for the company be an important read through for the country as a whole? >> yes. it will give us some indication of what the sentiment is and where the market is going but not overall. i think e-commerce has such has not been impacted overall and the foreign exchange is really -- and this is a company that has 90% of its sales in china. i don't think the exchange rate should impact them that much. maybe in alibaba.com where you have the international sales. but that should help when the currency is devalued. that should make it cheaper to sell more but overall, 90% of the sales come in china. it's a very china sen trick company. you will get some indication, i think more than the numbers i think the commentary should give some idea as to what's really coming down the pipe for alibaba and the chinese e-commerce
sector. >> if beijing continues to use currency manipulation as a way to stimulate the economy is that good or bad news for alibaba going forward? >> i think overall, i would think it's not very good you don't want any feeling of manipulation anywhere but i think in the near term i don't see any impact for china, for alibaba in particular because of the nature of its business and how focused it is just on china, on just the consumption market in china and consumption is such a small part of the overall chinese economy. it's only 30% of the overall gdp so it's a long run way ahead for them so i don't think they will see an ill pact overall in the currency manipulation. >> we'll see if you're right. thank you for getting up early with us. head of research at manhattan venture partners. >> u.s. futures lower. that's all we have time for today on worldwide exchange. >> we'll see you tomorrow on worldwide exchange.
good morning, happening right now global markets under pressure. china sparks fear of a currency war devaluing the yuan for the second straight day. donald trump says the polls move he hasn't crossed the line and now the gop presidential candidate is calling on carl icahn for his help. we'll tell you why and what carl thinks about that. plus let's get ready for football. patriot's star tom brady and nfl return to court today in the deflategate saga. here in new york, the jets will be without their starting quarterback for up to ten weeks after geno smith was sucker punched by a fellow teammate.
we'll tell you about that. it's wednesday, august 12th, 2015. squawk box begins right now. >> live from new york where business never sleeps, this is squawk box. good morning, everybody. and welcome to squawk box here on cnbc. i'm becky quick with andrew rosssor kin and kelly evans. >> welcome. >> great to see you this morning. >> joe is on vacation. we have been talking about investors walking a tightrope lately but check this out, this is nick wallenda completing the longest tightrope walk ever last night. he travelled nearly 1600 feet. that's more than a quarter mile folks. this was ten stories high above the speedway. he was carrying a 45 pound bar for stability and that wire looks a little thick but it's no wider than a nickel. folks don't try this at home.