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tv   Worldwide Exchange  CNBC  August 11, 2017 5:00am-6:00am EDT

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war of words tensions run high as president trump issues a new warning to north korea. the latest on this rapidly developing story. markets on high alert as fear over north korea grips wall street we have full market coverage that's coming your way. plus spooked by snap shares of the tech company plunging after results disappoint the street again. it's friday august 11, 2017. "worldwide exchange" begins right now. ♪ good morning welcome to "worldwide exchange"
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on cnbc. i'm sara eisen >> i'm dominic chu in for wilfred frost this morning sara, i never heard this song before. >> that's because it's new music friday this is not new either i don't know >> escalating tensions between the u.s. and north korea remaining front and center for global markets a big selloff on wall street yesterday. it was the worst day for a lot of stocks since back in may. dow futures are pointing higher, perhaps some stability in today's session. this comes after three back-to-back losses for the major averages in what is a pullback officially. dow futures flat s&p down 3.5 nasdaq fought chorutures down 2. the tech sector has been a big winner this year that's receiving some of the biggest moves down
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>> it maybe makes sense that the stocks that have had the bigger runs higher are selling off the most during the course of the last three days. we made such a big deal that we saw ten straight sessions up for the dow, then it's three in a row. today could be four. as you pointed out, stability now. in asia, saw those losses from wall street spilling over into the continent japan was closed for a holiday hong kong down 2%. shanghai down 1.5. bigger declines. south korea kospi we watch closely, down 1.7% after a resilient and stable all year long this week like the rest of global stocks, it has started to cave lower the cbo index, the vix, the volatility index, hitting the highest level since november we watched the levels there, back up to 17. it wasn't long ago we were below 10 indicating the no-fear market so things have changed this
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week let's get the latest on the growing tensions between the u.s. and north korea chery kang is live in seoul, south korea. eunice yoon is live in beijing, but let's start with tracie potts with the latest from president trump. she's in washington. >> reporter: good morning. so the president says maybe his tough talk against pyongyang wasn't tough enough. president trump saying this is not a dare, but a statement. really doubling down on some of his heated comments against north korea and the possibility that they might now shoot missiles very close to the u.s. territory of guam. he's more of what the president said warning north korea to back off. >> let's see what he does with guam he does something in guam, it will be an event the likes of which nobody has seen before, what will happen in north korea.
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>> when you say that, what do you mean >> you'll see. you'll see, and he'll see. >> reporter: the president did clarify he wants to de-nuke the world, he's not looking for a nuclear conflict here. frankly the b 1 bombers off guam that the u.s. would send possibly to north korea do not have that capablibiliabilitcapae missiles that north korea looks to send to guam. those missiles could hit within 14 minutes the military, general mattis, saying he hopes diplomacy works. >> tracie potts, thank you very much for joining us. let's get the latest on the ground from the korean peninsula. that's chery kang live in seoul. good morning >> reporter: good morning, dom we did not get much reaction out of south korea's top office, at least today. it's been relatively muted in terms of reaction to all this.
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but the top military official in the country did call for a full readiness for any potential north korean provocation, and also the presidential office did say this morning that the national security adviser of south korea had a 40-minute phone call with his u.s. counterpart, mcmaster, talking about how the country's reaffirmed their promise, to cooperate, highlighting their alliance here. i'm not so sure what that can do when pyongyang's prime audience seems to be the united states. the whole north korean tension clearly shows this dynamic is becoming highly bilateral for the most part bypassing south korean government. i do note that south korea along with guam is the target in this planned preemptive strike in this latest threat by north korea. guys >> what's the economic stake
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here for south korea we know it's a big trading partner with the united states i mentioned the kospi did get hit this week along with global stocks i'm wondering what economists and strategists are expecting as far as the economic impact of all of this on the economy there. >> i would say the latest round of north korea tensions certainly especially in the wake of the new president's term that started back in may this year, a lot of companies have been hurt because of geopolitical issues you mentioned the u.s., yes. but also china as well and i think the thinking here, when it comes to the korean equities market at least, i think the thinking leer, what's spooking investors here is the layer or the new layer of uncertainty for a lot of south korean investors because we are dealing with a different leader in the united states
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certainly unprecedented, a different style of an american leader that they're dealing with here so, when markets hate uncertainties, they are really not familiar with this kind of american leadership when dealing with north korea that can explain the market reaction sara >> okay. chery kang, thank you very much. how is the latest war of words playing out with income's most important ally, china and the u.s.'s most important trading partner. eunice yoon is live in beijing for us what have we heard from the chinese authorities at this point? >> so far there's not an official statement but the chinese state media fired a warning shot against pyongyang and washington over this ongoing war of words. there was an editorial in the global times which reads if north korea launches missiles that threaten u.s. soil first and the u.s. retaliates, china will stay neutral. if the u.s. and south korea
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carry out strikes and try to overthrow the north korean regime and change the political pattern of the korean peninsula, china will prevent them from doing so what's interesting is this is a significant change from the messaging that we've been hearing out of the chinese government as well as the chinese state media. up until now the messaging has mainly been to encourage both sides to have dialogue, and also to try to get both washington and pyongyang to tone down the rhetoric but this commentary -- again, it's not an official statement, seems to be more focused and suggesting that if kim jong-un does do something rash, that he's on his own. and that the chinese will not step in as they did in the 1950s during that korean war also at the same time they're warning donald trump that if the u.s. were to go in and preemptively strike, that the u.s. is not only going to be fighting with north korea, but also with china. that seems to be what this is
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suggesting >> eunice, as we talk about the developments here, we know that there's been at least a little bit of military movement from the south moving towards the border up there. is there a sense that there's concern coming out of the government in china about some of these sabre rattling and how far it has gotten to the point where we are right now is there a sense that that's going to rattle markets over there? >> absolutely. in terms of markets, there maent been hasn't been as much of an impact, but the way it's rattling beijing's leadership and officials here, it's doing that this latest editorial is another version of how nervous beijing has been up until now they've been looking to de-fuse the tensions. and this editorial says beijing is looking for ways to hit home that had escalation of war of words is quite dangerous >> eunice yoon, thank you very much for bringing us the latest
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from beijing let's check on what that means and how those implications are playing out in european trading. we're seeing weakness there across the board the dax off by a half percent. off of the worst levels of the day. the cac in france off by 10.3% we are seeing some ripple effects. more muted than we thought they would be still the european session shows there's more of that risk aversion playing out >> we saw a 2% decline for the nasdaq yesterday, 1.5% for the s&p. reaction overseas to that. as for the broader market picture, the ten-year treasury note yield is lower. still some buying of the safe haven treasury the japanese yen has been the central point of the safe haven buying the ten-year moves lower, below 2.20 we'll see how that cpi report comes out. the iea releasing a new report saying global oil demand will
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grow nor quickly than expected oil prices under pressure to the tune of 0.75%, 48.23 is the wti. buying of yen has been the trade du jour. you're seeing it again with the dollar against the yen, higher by 0.25% as nor the euro/dollar, this has been a mixed bag, but mostly dollar strength. a more fractional move than the yen buying the pound we put first for a change, 1.2965 and we keep watching the korean won, down around the risks of the korean peninsula the won has been hit this week i would say given the kospi's decline, which is pretty much on par with the rest of global markets and the korean won's slight decline, it's mostly a tale of resilience and the
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pricing in of a diplomatic resolution to this conflict. >> you pointed out the dollar/yen trade that was much worse earlier on in the session we have seen those yens gains abate a bit here, just to give you an idea of the handicapping that's going on now. so dollar/yen at 108.97. we are seeing dollar weakness and yen strength but not nearly as pronounced as it was. >> yesterday was a much bigger move as for gold prices quickly we've been monitoring this one some guying of gold. and it is higher again by a third of a percent there is the trade, 1,293. we will get the latest snapshot on inflation. the july consumer price index is out at 8:30 a.m. eastern time. both headline and core cpi are forecast to rise 0.2%. we're going to hear from a pair of fed officials we have dallas fed president, rob kaplan and minneapolis fed
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president kneel cash kneel kashg comments and on the earnings front, look for news from jcpenney >> department store results have not been well received. shares of snap are sliding again after the social media company reported a bigger than expected loss. snap lost 16 cents a share last quarter. revenues also came in light, 1 $181 million the company added fewer users than anticipated the results raising concerns about competition which snap's ceo evan spiegel did address on the earnings call. >> we have always been last to market, competing against giant companies, we've been able to grow our mbusiness in markets that are highly competitive because we're focused on innovation that explains why we're willing to take this wait and see approach in markets around the
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world that don't make sense for our business at this point but may make sense in the future. joining us is kathleen smith, principal and co-founder of renaissance capital cramer tweeted i'm thinking the eagles second period play is about as good as the conference call last night. >> the eagles did not do well last night >> yes when the ceo talked about focus on innovation, i think for wall street we're focused on growth and finding out how this company is going to earn money i think that the priorities, we have to get in line -- the company has to get in line with what the public markets are looking for. >> kathleen, how much can we say about the ipo market in total because of what's happening with snap is it a bellwether of sentiment -- and blu
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>> and blue apron. >> yes, and blue apron >> a certain extent snap and blue apron that sets tremors into the market when investors are -- any new company that looks like these companies, start-up companies, they will face much more scrutiny than ever before. investors are not in business to lose money here. that's what's happened with these companies in spades. the overall ipo market is operating fairly well. as we know the overall back drop for the market the past week has been very poor but still year to date the average ipo that's been done is up 8%. so still constructive things happening. i'll point to red fin, the discount real estate broker, they're up from last week. so some very good ipos are happening. >> as far as results and what
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was interpreted negatively, in blue apron and snap, they were different metrics and different indications of slower growth both companies are still growing revenues, i think at double digit clips, but there's other problems with snap, it's user growth. with blue apron costs are rising, becoming more expensive to acquire customers what's the lesson for companies preparing to go public in terms of getting financials in order and figuring out the timing of when to pull the trigger >> clearly if a company is going public, they have to be ready to meet investor expectations these two companies on many levels, including operating level, which is really important. it's not just about growth that's certainly what the market is looking for ultimately growth without showing increases losses that's the issue here. so investors have expected higher growth. these companies have not met investor expectations.
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that's a big no-no for an ipo. in addition i think companies like these come to market thinking possibly they could be worth what they've been valued at privately i think that that is not -- there's not a connection in fact a very big disconnect between private valuation and what the public thinks companies are worth. i would say lastly that, you know, public investors deserve a certain amount of respect in terms of voting shares the lockups. these companies in particular and snap came out with non-voting shares. blue apron has limited voting shares, basically controls the companies. shareholders certainly deserve some seat at the table >> got you kathleen smith, thank you very much for joining us. snap one of the stories we'll be watching in trading today. one of uber's earliest investors is suing the co-founder and ex-ceo, travis
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kalanick claiming fraud, breach of duty and breach of contract ben mark wa benchmark wants to boot kalanick from the company totally >> when is the last time a board member sued another board member at the company >> a controversy that cost the ceo their job, potentially other executives their job >> this is ugly. >> certainly a drama. google's ceo canceled a company-wide town hall meeting that was organized after one of the google employees was fired the engineer let go after writing that controversial memo on women and technology and diversity issues at google in an e-mail he said some employees were worried they would be outed for asking questions after he revealed some preselected questions were leaked naming google executives.
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is amazon one step closer to global domination? details of the newest business idea next. stay tuned "worldwide exchange" will be right back thanks for loading, sweetie. ...oh, burnt-on gravy? ...gotta rinse that. nope. no way. nada. really? dish issues? throw it all in. new cascade platinum powers through... even burnt-on gravy. nice. cascade.
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stocks to watch in today's session. nvidia's second quarter results beating estimates thanks to strong demand for gaming chips, but revenue from the data center
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and automobile businesses did fall short. nordstrom reported better than expected second quarter results. same-store sales rose 1.7% analysts were expecting a decline. the company said more people shopped at its online stores news corp.'s siwinging to a loss in the fourth quarter thanks to a writedown in uk earnings revenue missed on estimates, on continued weak demand for print ads. more stocks to watch, pet probass says revenue fell 6% on lower domestic fuel sales. demand remains subdued amid the country's recession. amazon in talks with major u.s. venues to offer tickets to concerts and sporting events the move could loosen ticket master's grip in this country. ticket master is owned by live
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nation amazon said some success in business where it sold tickets to shows may have been behind this. and boeing naming caroline kennedy to its board of directors. china's cyberregulators investigating the top social media sites for breaching laws banning content that's violent or offensive to the communist party. tencent, baidu and weibo are the points of the probe. the government has shut live streaming services and sites, tightened regulations on internet access and issued warnings about cleaning up web content. still ahead on the show, the public spat between president trump and mitch mcconnell heats up and we may he w taavnedeils on a
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welcome back to "worldwide exchange." in political news, the white house will reportedly release a brief document next month outlining a framework for tax reform the 3 to 5 page document will not be accompanied by tax legislation but could provide a starting point on areas where the trump administration and republicans can agree.
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it could also include some input from democrats. >> we'll see now that the president is picking a fight with mitch mcconnell what does that mean for the legislative agenda. et> still to come, what the slew of rail reports means for the economy. "worldwide exchange" will be right back
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global markets an high alert as fear over north korea grips wall street.
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snap drops the social media company under serious pressure following results. we're digging in on snap's quarter straight ahead. silence is golden. people are so desperate for a little peace and quiet they're willing to pay for it. we'll explain that one it's friday august 11, 2017. you're watching "worldwide exchange" on cnbc. good morning welcome back to "worldwide exchange" on cnbc. i'm sara eisen >> i'm dom donl sinic chu sitti for wilfred frost. president trump issues a new stark warning. >> let's see what he does with guam he does something in guam, it will be an event the likes of which nobody has seen before what will happen in incomnorth .
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>> when you say that, what do you mean >> you'll see and he'll see. >> that after the president met with his national security detail yesterday at his new jersey home. the preside in the wake of those comments, let's check in on the global markets, we are seeing stability right now in the u.s. futures market after that down day yesterday. s&p looks like it could open down by 3 points the dow may be marginally positive, up by 4, indicated forever right n for right now. the nasdaq off by 18 points. a lot of volatility yesterday after the latest out of north korea. the hang seng off by 2%. the shanghai up a by 2%. the kospi down by 1.7% >> the big question for everyone, what we saw yesterday,
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2% move in the nasdaq, 1.5% in the s&p. one of the worst days of the year, is that a preview of what's to come in we see spiraling tensions in north korea? is it driven by north korea or is north korea just providing an excuse for investors to sell after a stunning -- >> blistering run. >> resilient run for u.s. stocks, more than 20% since november >> i would say this the point was brought up by many people yesterday and the last couple of days, if we were pricing in a nuclear issue, the markets would be down a lot more they're holding resilient for the most part. the "usa today" front page is trump and kim could find a way back to diplomacy. we'll talk more about that later on in the show but that idea that maybe things could be walked back from the brink giving some traders a sense of calm today. >> let's show you what's happening in the early trade in europe right now the german dax off the lows.
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down about 0.4%. everywhere else is getting hit harder france down 1.2. italy and spain also down sharply. as for the broader markets overall, let's check out the currency side of things. we mentioned dollar/yen before, 108.96, holding where it was a half hour ago. we have been seeing dollar weakness and yen strength. the pound at 1.2969. the euro at 1.1748 dollar strength against the cree onw korean won, no surprise there. we are ticking down below 2.19% for ten-year government bond yields. as for the oil trade, we got information out on demand for
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oil, wti crude down by 1%. $48.12 the last trade there. ice brent crude, 51.44 a check check on gold, another safety haven gold prices have been seeing short-term strength on the heels of that pressure in north korea. gold prices 1,it294.20 >> of all the popular safety trades, the biggest one this week is the yen. strengthened against all the currencies those moves were exaggerated, even though japan stands to lose given what's happening in the korean peninsula. snap shares are under pressure after the company reported a bigger than expected loss revenues also missed user drogrowth fell short of wa street estimates the disappointing results have raised concerns about
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competition which evan spiegel addressed on the earnings call >> we have always been last to market, competing against giant companies, we've been able to grow our business in markets that are highly competitive because we're focused on innovation that explains why we're willing to take this wait and see approach in markets around the world that don't make sense for our business at this point but may make sense in the future. >> he added neither he or his co-founder will be selling snap shares this year because they believe in the long-term success of the company, though investors have their doubts. the stock is down almost 15% it's a long way from that $17 ipo police the conference call, they did take some tough questions. >> they did. >> they also took a mishap from the bgit crew. there was a hot mike, one of his assistant analysts, i guess. >> we'll talk about that later on in the show >> didn't understand the growth hacking response, which is the
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way a lot of investors felt. >> they are saying that -- >> what is growth hacking? >> about this idea you're trying to get people to tune in to you, so you send alerts to their phone, to get them to engage to you. >> which is what snap is trying to do. >> yes >> it's been a big week for retail names jcpenney will report quarterly earnings before the bell let's bring in the president of sw retail advisers, also a cnbc contributor, stacey, it's been mixed so far kohl's, macy's not as positive normal strom maybe a joining us is kathleen smith, principal and co-foundno light. so what's going on >> it's less bad, but less bad may not be enough to drive stocks dillards yesterday was not better, the traffic was less bad. the stocks were up initially, and just rolled over to the
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open and certainly you lock at it and say investor s remain concerned about store closures jcpenney reporting today, they're liquidating stores now that will add to gross mar kin pressure i think we'll see more store closings than the street is assuming >> but aernt storen't store clos good for profitability and what the retailers need to be doing >> at the end of the day we need to close a huge chunk of stores. i'm looking for about 40% of malls to close eventually. you look at the transfer sales, we close stores, all the sales transfer online. if you look at macy's yesterday, they are talking about 12% of those sales from closed stores transferring to other stores that's not significant which shows you just how overstored we are. >> is there anything we can tell about the overall spending picture among american consumers?
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can we get a sense that things are holding up decently well or is this a cause for concern we know consumer spending makes up a bulk of the u.s. economy. >> absolutely. i think, again, last quarter traffic, you know, if you look at macy's, down almost 8% this quarter down 5%. it is less bad the consumer is out there. we've talked so much about their spending on other things like experience at the end of the day, you look at the brick and mortar retailers, they are losing share. you look at amazon and the fact that alexa, the echo is in peoples home they're continuing to move their wallet spend on to amazon that gets more pain as it gets more painful brands are giving in saying now we have to sell our product on amazon. we wave the white flag >> we have seen that with nike and others stacy, thanks for checking in on a big week for retail.
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hopefully we can talk to you next week as well. that parade continues. i think the takeaway is investor s have more confidence in the brands to do business online and less confidence in the macy's and dillards of the world to move their businesses online >> you talk about those brands, those brands are sold throughout many different channels, they're just choosing a different distribution point. rv retailer camping world posting solid second quarter results. landon dowdy has the results bucking the retail trend >> that's right. they're doing well shares of kamcamping world doin well after better than expected results. revenue topping estimates at 3 $1.3 billion what's driving growth? the rv sales are full speed ahead with new units increasing 38.2% year over year marcus lemonis said on the
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earnings call that the strategy ofacquisitions is paying off. they recently purchased gander mountain to expand their online presence and their outdoor life tile beyond lifestyl >> rv sales have been strong the last year or so. can that trend continue? >> they are incredibly strong. at post recession highs. that's what analysts were asking on the call. marcus said there's no sign of headwinds. third quarter looks good the big question is, yes, younger buyers are showing interest, but can those millennials drive the industry the way the baby boomers did >> bull market in camping, who new. >> we should try it.
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>> sara is all about glamping. >> no, i was reading a recent -- i forget which magazine ranked the top ice cream parlors, i thought for the first time ever maybe i'll rent an rv and drive across the country and judge myself >> you behind the wheel of an rv i would pay big money. >> i would be sitting right in the back >> a lot of room, right? >> yeah. and there's some fancy ones. >> thank you time for our top trending stories of the day that giant inflatable chicken modeled after president trump that we told you about yesterday, yes, it can be yours for 500 bucks. ebay is selling a version of the giant inflatable chicken on their website. the chicken was set up near the white house this week as part of the protest. the seller is also providing air blower, ropes and sandbags for setting that thing up. that went viral.
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>> was so big, it was actually in the white house shots good news for fans of "the crown. the premiere date and a first look at the show's second season the next season is launching on december 8h of this year, it will tell the story of princess market and lord snowden. we love this show, not just because of wilfred -- >> you are a fan >> i'm a fan >> took me a while to get on board. it starts slow, but so good. >> i have to do it then. the hottest new single on itunes now is making waves on social media the song called "a very good song" it's a ten-minute long silent track >> i don't get this. >> since itunes lists songs alphabetically, all the a's jump to the top of the play list, that way when you turn your music on, silence will play
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rather than the first song in your play list library the song is climbing the charts. i don't know it's a phonebook approach, i guess. >> i guess when i want to listen to music, i don't want to hear a ten-minute version of silence. >> mine just goes to shuffle. coming up, the rift between president trump and mitch mcconnell is deepening why the "wall street journal" says the gop needs them to hug it out upe must-reads are coming straight ahead you're watching "worldwide exchange" on cnbc.
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because the things you love can stink. welcome back to "worldwide exchange." i'm safer sar he i'm sara eisen here with dominic chu. my pick in the "wall street journal" titled the trump mcconnell pat. they say they both have a point in criticizing each other. at least president trump has a point in criticizing mitch mcconnell over the lack of obama care vote. ultimately the journal says they need each other to pass a budget, tax reform and deregulation failure on that agenda after the healthcare fiasco will open up the door to a democratic house which means nonstop anti-trump investigations and perhaps
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impeachment. they look at the risk of president trump going over more to the democrats and changes the way the republican party postures itself. they say, nope, this is a win-win, they need each other. this fall sets up next fall, right? mi midterm elections, these races are heating up as we talk about the way these guys are approaching all of this, the debt ceiling will be key. >> see where this goes >> will go somewhere hopefully >> president trump lightened up the rhetoric yesterday he did call him mitch a few times. people were all over that. he said let's see what happens with tax reform, infrastructure spending, then what happens with his job. we're approaching the top of the hour the team on "squawk box" is getting ready. becky quick has a look at what's coming up. i have to think north korea and politics will be big topics for you guys >> north korea is a huge topic we'll talk about that from not only the market perspective but
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from the politics perspective. kevin rudd, former prime minister of australia will join us today to talk throughthese issues plenty of market guests will be talking through what's happening. we will be all over that story we also have some other stories we'll be talkaling one thing that donald trump mentioned yesterday in his comments was the opioid crisis in the united states we'll be talking to the suffolk county new york police department commissioner who has seen this run rampant. this is one of the areas in the country that has seen massive problems with that he will talk to us about how bad the problem is, and how he thinks we can tackle it. what we need to do to stop it. it's friday. we have three different authors showing up today to talk to us about things that can be interesting beach reading. the calculus of happiness. everything you need to be happy
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you can find in calculus and math we'll talk to a professor about th that we also have jeffrey clug klugee will be here, he's an editor at large, times science editor. he will talk about the eclipse what you can expect from that. and the space program. and finally james matt patersons here he has a new book out called "store." it's about an online store that delivers everything to your doorstep, but it has a twist to it it's a step foford wives twist sound like any company you know? >> sounds like a company i know. james pat terson, one of the mos prolific writers of our time >> thank you coming up, fear is back on wall street. we saw the vix hitting the highest level since the november
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election what does it mean for your money? we'll get an eers kexpt'ta straight ahead you're watching "worldwide exchange."
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welcome back to "worldwide exchange." i'm sara eisen here with dominic chu. u.s. equity futures are pointing to another lower start for wall street at least for the nasdaq and s&p. it is calmer than the last few days yesterday the s&p, dow and nasdaq having their worst day sense may. >> three-day losing streak >> 2% decline yesterday on the nasdaq fou dut cho futures are higher here are some of the biggest power players on wall street they've been on air, given us their take here's a quick recap >> we're in a risk tolerant market buffett says when other people are greedy, we should be afraid. when other people are afraid, we should be greedy i think people should be
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balanced greedy. >> i believe the market will drop 3% at a minimum sometime between now and december from what is a grindingly higher level. and when it does, i think the vix will not be a 10 >> i think the market is fully valued on a fundamental basis. how i get there is i think we're heading to normalization normalization to me is maybe 2% real gdp growth, 2% inflation, 4% nominal the 4% nominal growth world, the fed funds rate would be 2, not 1. >> because the markets may be fully priced, overpriced, does not mean you can't find mispriced opportunities within those asset classes. james lu joins us now. a lot of big-name bears getting outspoken on cnbc. are they right >> i'm not bearish on u.s. equities what kept the market high at these levels is that we have strong economic froth and solid earnings that could allow the markets to
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continue to go higher. the problem with u.s. equities is that it's probably already baked in the vix is still at low levels, if you're looking for opportunities around the world, you are probably looking internationally. right now we tend to favor emerging markets that's where the cheapness is across the world so if you have an extra dollar to invest today, that's where you should be looking. >> from a global strategy standpoint you're paid to help clients navigate through the macro and micro issues north korea, is it a big deal? people say if you're pricing in a nuclear event, stocks would be down worse than they are now how you are advising clients on how to deal with north korea >> i think the problem with north korea is this. the president's m.o. has been to be unpredictable when it comes to military engagement the goal is to throw off the
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ene enemy, but it has thrown off the markets as well. if there's a conflict, we would see market correction for sure we don't think that's the case we think there's a lot of chest trumping around both governments. so likely what we should focus on instead is what will happen with the fed, what's happening with fundamentals and earnings that's the main back drop. you look at the geopolitical risk over the last several years, russia and crimea, other eurozone risks, brexit, french elections, they go both directions so it's hard from a tactical perspective to make a call on these issues so on this issue we would say it's a lot of incendiary language >> looking at the big retailers now, what are your takeaways on which sectors you want to be in and the price action we've seen? >> the sectors we tend to favor
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still are based on where we are in the economic cycle. we think the economy is still strong we probably have another two, three years left in the cycle before we get to serious issues. the sectors we focus on is consumer discretionary none of the sectors in the s&p are cheap. >> you're buying tech? >> we do like tech here. the problem can tech is the concentration in specific names. despite that we think margins will still remain high and if we can get some sort of tax reform package through, if we can do something about repatriating cash from abroad, that will benefit the sector >> not buying snap and blue apron? >> not from a macro perspective, no >> james liu, thank you. >> chart of the week >> mine is what's happening with high yield debt. not a lot attention paid there but a nice selloff there something to watch out for
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>> mine is the dollar/yen, we've seen the fear trade play out in buying of yen assen in an indic for stocks s his wine. this is the new guy? hello, my name is watson. you know wine, huh? i know that you should check vineyard block 12. block 12? my analysis of satellite imagery shows it would benefit from decreased irrigation. i was wondering about that. easy boy. nice doggy. what do you think? not bad.
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war of words tensions running high as president trump issues a new warning to north korea the latest straight ahead. markets on alert as wall street works to understand the real risk here, we have full market coverage here coming your way. and snap shares plummeting, this after the social media company missed quarterly results. it's friday, august 11, 2017 "squawk box" begins right now. ♪ live from new york where business never sleeps, this is "squawk box.
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good morning, everybody. welcome to "squawk box" on cnbc. we are live from the nasdaq market site in times square. i'm becky quick along with mra li melissa lee and brian sullivan. andrew is out today. if this is three's company, am i john or mr. roper? >> that's what i asked before. >> you get to be john. >> that's how we'll start the day? >> it is >> a look at u.s. equity futures. the dow was down by over 200 points that's the biggest decline for markets since may 17th this morning dow futures are indicated up by 10 points. modest declines for the s&p and the nasdaq down by 14 points s&p off by just over two all of this coming over concerns about north korea. the nikkei was closed for a

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