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tv   Worldwide Exchange  CNBC  July 7, 2017 5:00am-6:00am EDT

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good morning a g20 summit, trade security and climate all on the agenda as world leaders gather in germany and in just hours president trump and vladimir putin will meet face-to-face for the first time ever. a live report from hamburg, germany is straight ahead. it's jobs friday we're talking expectations and market implications ahead of that labor department release. and berkshire hathaway striking a multibillion dollar dear to buy a utility company. details coming up. it's friday, july 7, 2017. "worldwide exchange" begins right now. ♪
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good morning welcome to "worldwide exchange" on cnbc. i'm dominic chu in for wilfred frost. >> i'm morgan brennan in for sara eisen it's new music friday, we're getting your weekend started with a brand-new song by zed and liam payne called get low. what do you think? >> i kind of like it it's firing me up for jobs friday also makes me feel like i'm in a club on a saturday night >> i hear get low, i'm thinking lil john >> and the east side boys for sure let's check the global markets there is some stuff going on ahead of this big jobs friday. if you look at the u.s. equities picture, it's generally flat, maybe to be expected after a down day yesterday things are holding steady ahead of that 8:30 a.m. eastern time jobs report. you can see the implied open for the dow, just about one point. the s&p about two points nasdaq up by about five. as we look at the ten-year treasury note yield, a key focus
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for traders and investors over the past week or two, given the bank stock run, global rates all over the place, right now a slight tick higher in yields 3.27%. following global rates higher, but there are some forces at play here elsewhere around the world. we'll get to those parts in a bit. certainly japan playing a big part of the story. >> it's been the big story this week we'll get back to the markets in just a second. first politics, following the major developments out of the g20 summit, world leaders are gathered to discuss crucial issues let's get to eamon javers on the ground in hamburg. i'm happy to see you're safe and sound after following all these protests and being in the thick of them for us yesterday what's the latest? >> good morning from hamburg the president and vladimir putin
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already arrived at the hamburg convention center where most events today will be taking place. they arrived separately. the first face-to-face meeting will be happening later on today. that's highly anticipated. let's show you the cover of the german newspaper, summit and violence a large picture of president trump and the firs this is dominating all coverage around the world here. let's give you a sense of what the president is up to today he woke up in hamburg. he's been tweeting this morning. he's been saying i will represent our country well and fight for its interests. fake news media will never cover me accurately but who cares, we will make america great again. he said i look forward to all meetings today with world leaders including my meeting with vladimir putin. much to discuss. so the president setting the stage here for the meeting what
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he wants americans back home to see. the other images from hamburg are the images you referenced of the protests here last night the welcome to hell protests here did get violent at times. we were out and about in the crowds yesterday a lot of friendly faces, people drinking a lot of beer but some violence police had to use water canons to control some crowds let's give you an update on those protests german police say they're experiencing right now numerous violent actions, including burning vehicles in the street individuals used molotov cocktails to set about ten parked cars on fire. we're not righted a jay saint eo the protests, but we can see thick black smoke rising above the city
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and in hamburg altona, security officials are deploying water c cannons again. it's used to disperse some of that crowd we are seeing some intense protests this morning. they're expecting those to ramp up during the course of the day, particularly as world leader meetings happen in central hamburg. >> eamon, a question here. this is the cover of the "washington post" today. it's a picture basically of the south korean president, the japanese prime minister and donald trump oftentimes the g20 is more about some of these bilateral meetings, off the sideline meetings so take us through some color there. how much more focus will be on some of these individual meetings like with russian president vladimir putin or others on the sidelines and what can we expect to come out of those meetings
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>> there's no question that the focus today is on the trump/putin meeting. we saw donald trump yesterday in warsaw poland laying down a hard rhetorical line on the russians, talking about their destabilizing activities in the ukraine. that's something vladimir putin won't want to hear putin had an op-ed yesterday in a german newspaper in which he criticized the use of international sanctions. he spoke up for the paris climate accords. both of those things donald trump won't want to hear all of the attention on that one. there's so many other dynamics in play, including the relationship between the german chancellor angela merkel and chinese president xi jinping that relationship is an interesting one. the relationship between the eu and japan is in focus. a lot of those bilateral meetings are happening on the sidelines. the meeting with vladimir putin will be a formal bilateral, not
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where they meet just in a hallway where. this will be in a room with a table, dignitary sitting down. relatively few senior officials in the room for that meeting we should get some pictures of it or pictures of the walk-in. we'll wait and see what kind of access we get later today. >> eamon javers, thank you look forward to hearing more on the coverage of g20 from you on the ground in hamburg as the day goes on. the markets, like we mentioned before, the bnk of japan stepping up plans for its bond buying program. the boj saying it would buy an unlimited number of jjbs at 0.11%. it increased the size of the regular buying of 5 to ten-year jgbs from 50 billion yen to 500 billion yen. the nikkei falling by a third of a percent. the hang seng off by a half
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percent. the kospi off by a third of a percent. we are seeing more of a generally negative picture on the european side of things. trading is still going on there. if you look at the markets overall, we're pretty much negative across the board. fractional losses. the dax off by 0.2%. the cac in france, half a percent. the ibex 35 in spain off by a half percent sterling hitting a session low on weak uk output and trade data the european trade of things, the euro just losing ground marginally against the dollar. the pound, 1.2916. dollar strength across the board. >> that dollar strength is playing out in broader markets to check on oil right now after a modest rally for wti and brent yesterday. we are lower again wti crude back under $45 a barrel 44.34.
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ice brent at 46.98 keep in mind record output from saudi aramco second we turn up the spigots in the u.s. that is putting oil under pressure turning to gold, the strength in the dollar is playing out in terms of pressure on gold right now. at 12.20 an oun-- 1,220 per oune >> we had 23 straight weeks of baker hughes gains in oil rig counts that got broken we saw a drop in rig counts. you wonder whether the current pricing dynamic will affect some of that spigot action on the u.s. fracking side of things >> we get the baker hughes number today it will be also interesting to see if we have continued to see an increase in jobs within mining and within the energy sector as well some key fed speak
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overnight. vice chair stanley fischer has a warning for washington the fed vice chair said gamesmanship by poll signals over the nation's debt ceiling could prove catastrophic he is calling on government policymakers to do more to boost business investment and jump start a dismal productivity rate he did not address monetary policy directly in those comments in other central bank speak, cleveland fed president loretta mester said the fomc should implement the plan to shrink its portfolio of assets sooner rather than later. in an interview, mester suggests it would be "totally appropriate" for the central bank to initiate the plan this year this gets back at the debate we've been hearing for weeks about the central bank -- the fed tightening even as the data that we've seen, the economic data has been potentially weaker than expected. this jobs report so important
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today. >> that jobs report is hard economic data as opposed to the sentiment data something to watch hedge fund investor ray dalio is sounding off on monetary policy. the bridgewater associates founder says the actions of global central bankers suggests the low rate cycle is ending soon dalio adds he did not expect a big debt bubble to burst any time soon. what is interesting about ray dalio, he joins a slew of these bond fund type people, macro managers, bill gross, you have of course stanley druckenmiller, a lot of folks out there echoing some concerns about what's happening in the markets >> yeah. let's get become to jobs friday. the u.s. labor market will be front and center today on wall street the june jobs report is out at 8:30 a.m. eastern. forecasts call for an increase of 174,000 in non-farm payrolls,
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that's up from 138,000 in may. the unemployment rate is expected to hold steady at 4.3%, which is a 16-year low average hourly earnings, this is so closely watched today by the fed is forecast to rise 0.3% >> that wage growth number will be key for sure. in corporate news, berkshire hathaway saying they will purchase oncor electric. the deal is valued at 11.3 billion. the unit of warren buffett's berkshire hathaway has agreed to it texas regulators blocked two earlier attempts to sell oncor to two other utility companies. the argument here is that berkshire will be able to get this deal done because they don't pay a dividend >> yeah. >> according to the speculator
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on texas regulators. >> sharing some of those cost savings with the utility customers. stocks to watch, siemens setting up a task force to investigate reports that its turbines had been delivered to crimea for use in russian-built power plants reuters reporting three separate sources had knowledge of the delivery shares of siemens are down about a quarter percent. tesla is building the world's largest lithium-ion battery in southern australia, this is part of a bid to solve an energy crisis that led to ongoing blackouts across the region tesla stock slipping yesterday with the market value falling behind general motors and ford shares are up 2% after it did hit bear market territory yesterday. mondelez saying haven't sret cyberattack will cut into its growth there will be a 3% slice off its
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revenue growth rate for the quarter. a cyberattack in late june impacted that company's ability to ship and invoice during the last four days of the second quarter. multiple companies around the world have reported being attacked on the same day a number of them, maersk, fedex are saying it's too early to tell the financial impact. qualcomm is asking u.s. trade regulators to ban iphone imports in a new lawsuit the company arguing that apple infringed on six patents that improve on iphone battery life qualcomm shares up fractionally. wells fargo creating a new stake holders relationship group. it combines investor relations, corporate communications, government relations and public policy this is the latest of the several organizational changes at the lender following the sales scandal last roar. shares of lg electronics slipping after second quarter
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profits are likely to miss after weakness in its mobile unit. >> still to come, the battle between apple and samsung is heating up why one of those two smartphone makers could make history. stay tuned, you're watching "worldwide exchange" on cnbc (slow jazz music) ♪ fly me to the moon ♪ and let me play (bell ring)
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hey you've gotta see this. cno.n. alright, see you down there. mmm, fine. okay, what do we got? okay, watch this. do the thing we talked about. what do we say? it's going to be great. watch. remember what we were just saying? go irish! see that? yes! i'm gonna just go back to doing what i was doing. find your awesome with the xfinity x1 voice remote. welcome back to "worldwide exchange." if you're just waking up, let's get you up to speed on the market action. all stop for the u.s. equity
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futures. dow jones up by a single point s&p by a point nasdaq up by 8 points. relatively flat given yesterday's losses we'll see if that jobs number plays out later in the morning wti crude, 4 $4.38, down 2.5%. also brent crude futures, 47 theres on the nose, down by 2.25%. to corporate news, samsung unveiling estimates for the second quarter and the results could make history arjun kharpal joins us with more arjun? >> yes, well samsung overnight came in with earnings guidance of 14 trillion, a 72% year-on-year jump. analysts are expecting apple to report an operating profit of 10.9 billion u.s. dollars.
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so samsung could for the first time trump apple's operating profit this is driven by three faektct, the semiconductor division, mobile and the display division. i'll jump into each of those semiconductors seeing great prigs ri price rises because of supply shortage and data center demand because computing. this is the first quarter we will see how well the s8 has done analysts expect about 19 million units to be sold and samsung makes oled displays, next generation displays the apple iphone 8 anniversary edition will have some of these panels in them apple ordered 70 million oled displays from samsung, giving it a huge boost to its business there are challenges for the company. the iphone 8 is coming out later
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this year. samsung will face competition from apple and numerous other smartphonemakers, and investors are waiting to see what happens with the $8 billion acquisition analysts still seeing 16% upside for the stock. back to you. >> arjun, it's a amazing to me what a difference a year or less than a year makes when the end of last year we saw samsung recalling phones that were catching on fire it's just been such an incredible reversal this year. >> it really is unbelievable >> go ahead. >> it really is unbelievable they have done so well to market the new phone, the s8 and pack a punch with technology and getting consumers so excited >> arjun kharpal, thank you very much for that.
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coming up on the show, have you waited in an extra long line at starbucks lately? a new survey has a theory behind why this is happing atenth story coming up.
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welcome back to "worldwide exchange." starbucks may have a big problem on its hands a recent study finds nearly 9 out of 10 employees say the coffee chain is understaffed. nearly two-thirds say that's
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hurting their ability to deliver the best customer experience one starbucks staffer says mobile ordering has added to the workload immensely in january some of the busiest locations were dealing with bottlenecks at drink pickup stations starbucks having some traffic problems maybe a good problem to have in global news, the qatar crisis continues four arab states said late yesterday that qatar's refusal to meet their demands is proof of its connection to terror groups willem marx joins us from doha with the latest. this seems like this whole situation in the middle east keeps dragging on. what can we expect to see now given the latest developments? >> you're right. we've heard from the u.s. state department overnight, they said they expect this to continue in the current set of circumstances for a few more weeks if not months rex tillerson will be traveling to kuwait next week, where the
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mediation efforts are ongoing. businesses here have said ultimately they've not seen such an impact on their bottom line i spoke to the ceo of the qatar financial center, which encourages foreign businesses here in qatar. he said they had not been reacting that strongly let's take a listen. >> i think initially there's a sense of shock because of what happened there's obviously an aggression upon the state of qatar. and again, business people don't like mixing with politics. and interfering with their businesses so i think hopefully the message i would like to send is that post-crisis qatar will be stronger, more open, and will basically become a destination
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of choice and a lot more stronger for the rest of the globe to consider. >> another person i spoke to yesterday said though he had to hold the hands of expats assuring them this is a viable place for business, he thinks new businesses here are seeing opportunities because of this set of circumstances >> how should we understand the u.s. role in this? on one hand we're seeing the trump administration basically fortify its alliance with the saudis with all the major deals that have been announced. on the other we're moving forward to sell more fighter jets to qatar. how are the qataris looking at that sort of go-between with the u.s. >> yesterday senator bob corker back in d.c. said he doesn't
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want to sell any weapons to either side until this is resolved clearly rex tillerson has a relationship here with a lot of these leaders from his time at exxonmobil a lot of them are not reacting angrierily angrily, they say they're unrealistic. >> thank you willem marx. still to come, the sttop stories and a round up of the global pringles is out with a w flavor that's sure to bring you back to your college days. the reveal coming up on cnbc
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good morning we're talking high stakes. leaders from the world's largest economies gather for the g20 summit as attention turns to president trump's first face-to-face meeting with vladimir putin. jobs in america. wall street waits on that key employment data release. we'll talk expectations straight ahead. and hey alexa, amazon's hands-free assistant has a new feature. that reveal coming up. it's friday, july 7, 2017, you're watching "worldwide exchange" on cnbc. ♪ >> i know that song. good morning welcome to "worldwide exchange" on cnbc. i'm dominic chu.
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>> i'm morgan brennan. >> let's check what's happening so far with the global markets lots to talk about on the geopolitical front and on the economic front in the u.s. markets are stable ahead of that big jobs report happening at 8:30 a.m. eastern time later on this morning. you can see s&p futures indicated to open up by a full two points the dow jones open by five points to the upside the nasdaq up by one to two points if you look at the ten-year treasury note yield, a huge foe cut on rates given the fomc minutes, 2.382, a slight uptick in yields for the ten-year u.s. treasury note. we've been seeing that shorter term uptrend higher. that will be a huge key for investors out there. the reason why we're looking at rates is the bank of japan stepping up plans for the bond buying program today the boj saying it would buy an
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unlimited number of jgbs at 0.11%. an increased five to ten-year jgbs by 50 billion yen to 500 billion total.equity picture was generally weaker the hang seng off by a half percent. the kospi off by a third of a percent. let's look at trading in europe. still going on right now those trades were negative in the last half hour and they remain that way. the dax off by 0.2%. the cac in france off by 0.50% the ftse 100 off by a quarter of a percent. pound sterling hitting a session low on weak uk output and trade data
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your euro 1.1414 the yen 113.72 >> before we get to broader markets, something i find interesting this week, that's the fact that transports have been the big outperformer when you look at u.s. equities this week because if you're into dow theory it potentially signals another buying signal. >> transportation stock force sure and small capitalization stocks thighirying to play catc. if those trends continue t could be more fuel for the run higher. >> turning now to oil and to the broader market looking at oil after a modest rally yesterday, we are lower today. wti crude under 45 bucks a barrel at 44.36 ice brent, the world benchmark just under 47 bucks a barrel each off about 2.5%. we saw record output numbers from saudi aramco and stronger production numbers out of the
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u.s. that is overshadowing the inventory draw downs that were better than expected in the u.s. turning to gold on the back of that dollar strength that we've seen all of these signs that the fed is tightening. gold coming off at 1,220 an ounce. we're in our sixth straight week of declines in gold. investors have soured on u.s.ingi iequities again there are 3.3 billion in outflows the past week while money poured into nondomestic funds. investors appear to be tentative about putting money into u.s. bond funds taxable and high-yield funds posted moor than $1 billion in outflows last week. today's top story, the g20 summit in hamburg, germany in just a few hours president trump will have his first meeting with his russian counterpart. joining us is ben white from
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politico and a cnbc contributor. thanks for joining us. >> pleasure to be here >> what can we expect from this meeting between president trump and vladimir putin >> it's 30 minutes long, we're told i don't know how much fireworks you will get out of that for the trump administration it's sort of important for them at some point to chal plenge pui over the allegations of election tampering. trump has thrown questions on that, there whether it happenwh, whether it was the chinese he has to say to putin, i want to address these allegations if he doesn't, he plays into the narrative that he's putin and in the back pocket of the russian president. he has to make headway on that issue. we'll look at that from the readout of the meeting >> there are certain observers who look at the background of president trump, a dealmaker type person, the brack grouackgf
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vladimir putin who used to run the secret police in russia. maybe putin could be a better strategist and negotiator in these types of situations because he knows how to set things up. give us the context of how the battle of personalities plays ou out. >> they are very different temperamentally. trump is a big headlines guy he's not a details guy he will want to come out of there with some positive headline he can talk to the media about. putin is very good at running out the clock another these meetings, speaking at length about russia's grievances with the west, with the u.s if trump can't be on the front foot and bring up topics he wants to say he talked about, he could be in trouble with put wh putin who is very good at
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setting the agenda and making it all about russia's problems. trump has to be a little aggressive and not let him run out the clock. >> we're so focused when it comes to north korea and this icbm test, russia has decisibeen strengthening economic ties with north korea. we saw putin step in on the g20 move to condemn this recent missile launch how important is it in terms of getting russia on board to stymy north korea? >> it's very important you obviously don't want russia aiding north korea in any way. trump has a difficult road there in north korea not a lot of good options for putting more pressure on that regime to reduce its nuclear program. the extent to which he can engage putin on that topic, we
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have a hart period short period get to a lot of important topics, but it's an issue the trump administration has trouha trouble with they thought they could work with china on this so far no luck on that so trump looks a little powerless at this point. the extent he can get putin to help him would be great. i don't see that happening >> there's so much to talk about. >> we could talk about trump being on foreign soil, trashing the u.s. media and basically play nothingiing into putin's hs you could argue that putin has already won this by saying i don't believe the reports saying what russia is doing that has to put a smile on putin's face >> ben white, thank you for joining us. eu officials started making a list of u.s. goods to target
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for president trump's plan to impose new tariffs on steel imports. this includes kentucky bourbon, orange juice and dairy products. the final tianalyst says this c spark a new trade war. the eu is focusing on agriculture and other politically sensitive products bourbon is a main export of kentucky. alphabet is spinning off its geothermal start of dandelion. dandelion was previously a division of google's moon shot ideas. campbell is buying park foods for 7$700 million toshiba reportedly secured a
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$6 billion credit line from several major banks. the company is using shares in its flash memory unit which it is selling as collateral for borrowing all of that cash nike is stepping up its sneaker sale game. the retailer is planning to seamlessly offer sneakers to customers on instagram this comes shortly after the xha company announced it is teaming up with amazon to combat the sale of counterfeit items. nike has yet to disclose the full details of either partnership. >> they hinted at it in the earnings call. looks like we're getting some headlines now on it. >> exactly amazon's alek is a xa is ma easier to track packages now amazon is lighting up a different color when it's actually delivery day.
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the new feature's launch comes days before the annual prime day shopping event on july 11th. >> i don't know that anybody needs that alert if you're getting amazon prime delivered, youalready know wha day it will be there >> two days, sometimes one >> yeah. >> i guess you could -- if you are an alexa user, the whole idea of having that column on your desk is to facilitate all of that interaction with amazon. in some ways amazon is just making it easier for you to be more intertwined with amazon than you ever have been in the past >> because i'm so not intertwined with amazon. i buy everything on amazon >> i think a lot of people do. >> we've seen it with the retail stocks just this week again. pringles just combined two of your favorite junk foods. the company teaming up with top ramen to bring you a chicken flavored top ramen pringles.
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they will be sold exclusively at dollar general there are so many places i could take this right now, but it does seem like the perfect munchie food after midnight if you're a college student and you don't feel like looking the noodles. >> like the opposite of what campbells soup did >> my gosh, definitely also interesting, they're only selling it at dollar general. >> apparently reviews are good so far >> i would rtry it just once sfl coming up what trump has to win and lose from the g20 summit first as we head to break, check out the european markets at this hour it's a lot of red out there. the cac in france off by a half percent. stay tuned, u'yore watching "worldwide exchange" on cnbc
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welcome to "worldwide exchange." time for our morning must-reads. my pick is in the "washington post." it's titled trump has the most to win or lose from the g20 summit this says trump's erratic tweets and public statements make it hard to predict his diplomatic strategy in hamburg. trump thinks he gains leverage by making others uncertain this president may be a dealmaker but he's not a
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strategist trump may say he won the hamburg game no matter what, the question is whether this dampens some of the fires burning all over trump has a lot to gain or a lot to lose as the title says given some of these developments and like ben white said and eamon javers said, it will all come down to those bilateral sideline in the hallway behind closed door meetings that happen at the g20 event, not necessarily the g20 event itself >> i still maintain that the u.s. as the world's biggest economy and really as the leader of the free world, at least from a defense standpoint, that he still has the most leverage. we still have the most leverage. there was a lot of talk about paris climate accord and us pulling out of it, how it was us against the rest of the world. now you're starting ing ting tr countries also not potentially agree. i think we have more leverage than we give ourselves credit for on the world stage my pick is also in the
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"washington post." this is titled we think north korea is crazy what if we're wrong. so the north korean regime has tried to buy insurance, in the realm of international affairs the best insurance is having a nuclear capacity pyongyang knows that it has a large enough army and the korean theater of war is so small and dense that a conventional war would be unthinkable producing hundreds of thousands of casualties and millions of refugees pouring into china and south korea making the point here that we have seen this dictator regime in place for three generations now. we like to talk about the leader being unhinged, erratic, and irration irrational, maybe he's not the truth of the matter is having that nuclear capability
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is what gives him leverage on the world stage. because we're never going to go to nuclear war with north korea. the truth of the matter is, even targeted strikes on north korea would be a huge issue right now. >> many traders i talk to say it's probably the most important geopolitical concern out there, north korea certainly front and center for a lot of traders out there. we're approaching the top of the hour that means, yes, the team at "squawk box" is getting ready. joe kernen is in new york with a look at what's coming up joe, as always, you have a lot of good stuff coming up. a lot of great guests. what do you have your eyes on specifically this morning? >> actually -- i'm with morgan on that -- about the paris thing. it's not just saudi arabia, you saw theresa may had -- >> yes >> four big priorities on what she wanted to accomplish, and sadly climate change was not on one of them. we'll see. i'm looking at these -- i'm looking at the "new york times,"
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glenn thrush, but just looking at what -- his characterization of the speech yesterday. about how trump broke with tradition by attacking american leaders, like we have not seen that before. one guy said yesterday that just making the point that politics never stops at the waters. it never stops at the edge of the ocean. do you remember president obama? he said all kinds of stuff the past few years then i look at the "washington post" -- this is like a -- >> joe, here's my question >> listen to this, president trump brought a starkly populist and nationalistic message to europe yesterday i was watching some other -- another channel saying this was like the anti-inaugural speech that that was populist, america first. this one was much broader in bringing in europe and poland and that we're altogether on
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this the west is together so i -- it may not be fake news, what i read, but i read interpretations that might as well be fake news. when i hear even opining, i don't know i get tired of it. i will say one thing, just because you can do something, just because you develop the technology to do something doesn't mean you should do it. like the top ramen potato chips? they developed technology for oyster ice cream >> no. >> i wouldn't want it. >> no. >> should you -- >> i would eat the chips >> should you genetically engineer children to be more successful and havecertain color hair some things you have the technology to do, you don't just do it. you don't make top ramen tasting pringles they smash the potatoes, glue them back together disgusting they have the strange little shape. now they're going to be top
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ramen? >> i can't wait to bring one of those. >> i'm not eating it i'm bringing you oyster ice cream. tuna ice cream tuna sundae. less than three hours away from the release of the june jobs report. ge urey.senberg tss ad that's coming next
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welcome back the june jobs report out at 8:30 a.m. eastern time. non-farm payrolls are forecast to rise by 174,000 joining us now to break it down, david rosenberg chief economist from gluskin schiff. let's talk about what we're looking for this time around is wage growth all we're really focused on this time around? >> i would say it's not the only thing. i would say fade the headline number because the fed is clearly looking through it
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we got the main number a month ago, they didn't stop the fed from stepping up its hawkish rhetoric so they're focused on the unemployment rate. and the big news last month was that even with a soggy employment increase, the unemployment rate still went down for the fed it's the tightness in the labor market that matters most and i would say followed by that the wage number will be important. when you read through the latest rhetoric from janet yellen and stanley fischer and bill dudley, the big three, and the tone of the fomc minutes which was tortured and disagreement, but i think thefolks running monetar policy are focused back on the u3 unemployment rate that's probably the first thing to focus on. >> is there anything at this point that is going to derail the fed from continuing to tighten into the end of this
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year >> well, i don't know if it will be so much about the economy or core inflation we're in unchartered territory because historically we never had the fed tightening from any level of the funds rate in a period when the run rate on real gdp is 2% or lower, and when core inflation is below 2% this is something brand-new. the fed spending quite a bit of time talking about excesses in valuation across several asset classes. that much is true. they seem to be focused on the labor market hitting a wall. they're talking more about the headline unemployment rate which, let's face it, 6, 12 months ago janet yellen wasn't nearly focused as much on the headline unemployment rate as she is now the economy this year has been weak i think that if the fed is going to be pushed off course, it will be more of a financial event than it will be necessarily an economic event i mean, we just came off a soggy first quarter gdp.
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we came off a very weak non-farm number a month ago that has not stopped the fed from signalling that they'll raise rates at least one more time this year and tinker with the balance sheet. it's not about the economy but like every other time when you had the fed cease and desist, it wasn't an economic event that pushed it to the sidelines, it was a financial event. the question is what will the financial event this time that pushes the fed off course. >> just a couple seconds left. how you are positioned bullish or bearish going into the second half of the year? >> i think the economy is going to disappoint. earnings will disappoint so i would say that very cautious heading into the second half >> david rosenberg, thank you very much for joining us all of that outlook on the ons number that does it for "worldwide exchange." morgan, thank you very much. we've had a great time this morning on this friday "squawk box" is coming up next
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keep it here have a great weekend ♪
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good morning world leaders gathers in germany to tackle trade and security president trump and vladimir putin will meet face-to-face later this morning a live report from hamburg is straight ahead. berkshire hathaway striking a multibillion dollar deal to buy a utility firm and it's jobs friday and we've got predictions and what the number could mean for the markets and your money after a rough session yesterday. it's friday july 7, 2017 "squawk box" begins right now. ♪ >> live from new york where
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business never sleeps, this is "squawk box. good morning, everybody. welcome to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen and steve liesman andrew is off today. the u.s. labor market will be front and center today on wall street it's the june jobs report which hits at 8:30 a.m. eastern time forecasters are calling for an increase in 174,000 in non-farm payrolls, up from 138,000 in may. the unemployment rate is expected to hold steady at 4.3%. that's a 16-year low average hourly earnings, which are closely watched by the fed, those are forecast to rise, 0.3% we'll have more on jobs in a moment luckily steve is with us today to talk about it look at u.s. equity futures. they're flat after a big down day for the markets yesterday. the nasdaq and the s&p both had their bigges

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