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tv   Worldwide Exchange  CNBC  February 13, 2018 5:00am-6:00am EST

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buckle up. dow futures are pointing to a triple digit loss following yesterday's 410 point gain what you can expect from the wall street roller coaster rird. and whalgreens is set to mak a buy. and making america work again. new details on president trump's budget and his bet on fixing america's prinfrastructure it's february 13, 2018, and "worldwide exchange" begins right now.
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♪ good morning welcome to "worldwide exchange" on cnbc. i'm dominic chu. >> i'm seema mody in for wilfred frost and sara today >> this morning we are seeing some red after a big green day yesterday. you can see for right now we have an implied open on the dow of down just about 180 points. the s&p indicated to open down by 16 and the nasdaq down by 29, 30 points. a nice 410-point gain for the dow yesterday maybe sets things up for a breather today. we'll see if that selling pressure holds steady or gets exacerbated. the ten-year note yield, a bit of a bid to treasury bonds, so yields are lower this time yesterday we watched and saw the ten-year treasury note yield around 2.88, almost 2.89%. you can see now 2.83% is where we stand on that u.s. ten-year
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treasury note. >> let's look at stocks in asia overnight. asian stocks closing higher with the exception of japan, which closed lower by 0.7% that's due in part to the rising yen. you can see a strong move for the shanghai composite the kospi higher by 0.4% early trade in europe, let's look at the story there. stocks are lower with the dax down by 0.3% we did see a nice move to the upside in european equities, a gain of 1% across the board. different story here one piece of economic data, uk inflation is out, it came in unchanged in january at 3% as we look at inflation around the world, that's one number to keep in mind >> let's check on the commodities. oil prices very much in focus
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after that iea report came out we'll have more on that later on wti lower by 13 cents. $59.17 per barrel for that u.s. benchmark crude price. then ice brent crude futures, $62.59, unchanged so far on the day. let's check on what's happening with gold prices we are seeing a bid there. $1,331 per ounce the last trade there. >> if you look at the dollar, the dollar is retreating after its best week since 2016 the euro at 1.23 look at performance against the yen. lower by 1%. 107.62 the yen trading at a five month high let's look at bitcoin. this has been rebounding in tandem with u.s. equities.
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today we are lower across the board by 5% for bitcoin. >> let's talk more about the wild swings in the market. joining us now is fast money trader guy adami yesterday just saw some of the most -- at least intense price action we've seen bouncing off these lows was it surprising for you? do you think we get more stability in today's trading on friday the s&p traded down to the 200-day moving average, basically within five or six s& points and bounced significantly. for context, if the market opens now, we're down 1600 dow points since that jobs friday two fridays ago. i don't think it's over.
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i think people want it to be over, but i don't think it's over i think you'll think the bottom is in whenyou start to read about some or hear about some huge derivatives books on one of these banks blowing up we have not heard that yet my sense is that it's out there somewhere lying in the weeds >> there seems to be trepidation around inflation concerns, consumer prices. what are you looking for in tomorrow's cpi report? >> it will come in hot i also think that central banks, specifically our federal reserve has inflation in all the places they don't want it their deflation is in other places so they're fighting a two-prong battle and a battle they're probably not suited to combat or win. i don't think you can win. the point is yields will go higher for some of the right reasons, mostly the wrong reasons, forcing the fed to act three times this year, probably
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four and now if they don't move three or four times, the market which usually would give them the benefit of the doubt will say wait a second, what do you see the last seven years, good news has been good news and bad news has been good, we flipped the switch i think that's where we are right now. >> given your state of play, what is your sense about how wall street investors, traders and investors are positioning given the fact we've seen the market action we've seen off the lows of that 200-day average priceline and t line and the cos about the fed, do we think people are dipping their toes in or holding back until they figure out what's happening? >> that's a great question friday empowered people to --
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the buy the dip crowd which has been winning and right for almost the last decade, i think they still basically hold the cards. they will be emboldened by what they saw on friday i think the level of complacency is not where it was 2 1/2 weeks ago. but i think the level of complacency is there, despite the fact that the vix is probably 24 or so. people want this to be over, but i don't think it is over so you will see days where the dow is up 200, down 200. and the negative gamma on the books of derivatives dealers will continue to take hold what does that mean? extended moves to the down side followed by violent moves to the upside in aggregate those moves will be -- will have the market trending lower over the next few
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weeks. >> guy, for sure all the price action means these derivatives dealers have to rehedge their books for the price action on the markets. >> it doesn't -- dom, seven years of complacency doesn't go away in two weeks. let's keep our eyes open >> appreciate that out there >> overnight walgreens is in talks to buy a drug distributor. landon dowdy has the details >> shares of amerisource bergen is soaring on news that walgreens is in talks to buy the company. amerisource bergen has a specialty drug unit. walgreens is the biggest drugstore chain with 1300 locations worldwide. walgreen's is the source's largest customer representing
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30% of revenues last year. walgreens also owns a 26% stake in amerisource in december cvs signed a deal to buy aetna, and last month amazon linked up with jpmorgan and berkshire hathaway to form a new healthcare company another check on these shares. amerisource bergen up about 15.7%. walgreens unchanged in early trading. >> a lot of interesting activity in this space. healthcare and pharmacy players as well after that cvs/aetna acquisition. >> one company was the driving force behind all of these deals. >> and -- >> amazon. the idea they could possibly get into drug distribution or into pharmacy benefits, that's putting a scare into a lot of these established companies. >> especially after that partnership with jpmorgan and berkshire was announced. that's got people thinking
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some stocks to watch today, you have bhp billiton taking a 1$1.8 billion charge related to the new tax laws over the long term they expect the lower corporate tax rate to have a positive effect on profits. bhp will report half-year results next year. general motors is closing one of its four plants in south korea as it restructures its unprofitable operations in the the automaker will decide the future of the its south korean operations in the coming weeks barnes and noble is laying off staff after a weak holiday shopping season. the company is not specifying the number of cuts exactly last month barnes and noble said holiday sales fell 6%. barnes and noble's market cap is
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below 500 million making it a smaller cap company. shares of vipshop are surging after the chinese e-commerce firm reported better than expected results. revenue jumped 30% the company signed a strategic partnership with tencent during the quarter. molina healthcare posting a wider fourth quarter loss. they also posted their first annual loss in more than 15 years. molina attributes the loss to restrict sur restructuring costs. fmc's fourth quarter results beat forecasts the profit from the lit yurm him business doubled thanks to expansion in china. still ahead, crude realities. oil has tumbled nearly 8% in the course of the past month
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it's holding at $60 a barrel what's next for the energy market ke we'll get an analyst's take straight ahead. and the dow is off 170 points in premarket trade. "worldwide exchange" will be right back
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welcome back to "worldwide exchange." if you're just waking up, let's get you up to speed on the
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market action. we're lower now in premarket trade. dow off triple digits, 156 points to the down side is the implied open nasdaq lower by 18 s&p lower by 14. oil has been an interesting story for markets. a mixed trade here wti crude basically flat on the day. ice brent crude higher by 0.11%. $62.66 let's stick with the oil trade. the iea is out with its monthly report, a very closely watched report jackie deangelis is here with the details. what are some of the highligh s apparently we worked through this global oil glut maybe >> not so sure about that. that's a big question for the oil market the headline out of the iea report is that a surge in global oil supply may overtake demand the thing that had been boosting prices was the fact there was a
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change in how investors looked at demand. they thought it would be there, absorb supply, that's why prices got over $65 a barrel. now folks are starting to question that premise. they're not the only ones. rbc out with a note today saying in our view the market has been overly focused on the race towards rebalance without realizing that transient pockets of oversupply have been emerging in the physical market you can see that the eia reporting u.s. production up to 10.2 million barrels per day. if demand is not there to meet that supply, we won't see that rebalance. oil prices now are trading around $59 a barrel. there's other factors that could take us lower as well. the dollar index had that dramatic drop. it's slowly starting to climb up there's an inverse relationship there. when the dollar index goes up, oil prices go down the biggest factor of all now is what's happening in the equity
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market we look at the futures board every morning to see what stocks are going to do. that's what oil traders are doing. today another swing to the down side could take oil lower. >> thank you very much for that. let's talk more about the oil market and that report joining us now is john kilduff good to see you. what were your big takeaways from the report. opec and russia have sort of done themselves in to a degree this rise in price that they achieved from the relative balancing that's occurring globally in terms of supply enabled the shale producers to come rushing back in to the market, fire up their blue sky mentality and shoot for the moon that's what they've done recently it was news that the u.s. production hit 10 million barrels per day. what's lost in the shuffle here is that was the eia report for november it takes them a couple months to
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compile the data and give an accurate forecast. so we have been at that 10 million barrel a day level for months it didn't just happen. it's been going on for months. >> john, how important -- you, vacky jackie deangelis, folks that track this, always watch the reports and get a sense of the overall trends how much more important these days are the u.s. shale produceproducer s in that global scheme of the oil markets and will they have as much of an effect as we think they will? >> it's been an incredible new dynamic for the market to give an antidotal story for how important u.s. shale has become, we exported cargo to the united arab emirates this week >> we exported something -- >> to the middle east. it's light oil so what the uae and others do is run it through heavier glay eiet
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run through their refineries >> how does that impact relations with russia and saudi arabia, which president trump has been prioritizing? >> president trump also said he wants to make the u.s. energy dominant to that extent we're on our way. harold hamm was on your air a week or so ago saying we will be a net exporter within two years. right now we're producing 10 million barrels a day, we could be at 11 million barrels a day by the nafall one thing about the oil market, there's always a new dynamic emerging it's cyclical to a degree. relative high prices generates new technologies that got us to shale. when prices collapsed in our country it trodrove costs down,n now they can compete now even when it comes to the 40s, 30s,
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maybe lower. >> we know nobody knows how to forecast prices, one of your jobs as an expert in the business is to try to tell clients where you think it's going to go. on balance given everything we know from these reports, where do we think oil will be? brent crude used to push 70, now we're back down to 62, 63 level. where do we find balance >> there's tells in the oil market and commodities, because you have the commitment of traders report so you kind of know where the speculative or hot money is going. the oil money got all balled up. we had a record amount of speculators, betters on the long side with the long position in the market it's racing out now. if you look at the chart, classic bubble formation, wti got to about 66. brent got to 70. now we corrected about 10% there looks to be a zone of congestion of 56, 58 this is a tough time period for the oil industry there's lower demand before we
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get to the summer driving season probably could hit the low 50s before all is said >> john kilduff, thank you for joining us. coming up, steven cohen under fire his investment firm sued by an investment staffer over letis gender discrimination and unequal pay full details when we return. to central new york. and turning the airport into a first-class transportation hub. all while growing urban areas into vibrant places to live and work. across new york state, we're building the new new york. to grow your business with us in new york state, visit esd.ny.gov.
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welcome back to "worldwide exchange." let's get you up to speed on the
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market action. we are looking towards a down open for stocks. right now as things stand the s&p will open down by 15 points. the dow jones off by 163 the nasdaq off by 29 this, of course, after a big rally day yesterday where the dow gained 410 points. no surprise a bit of down side stable in the mility in the mars just yesterday this same hour we were talking about 2.88% ten-year treasury note yields. right now 2.82, 2.83% the last trade there. so a little bit of a bid for treasury prices and a drop in yields that's the story so far across the u.s. treasury curve. >> one story this morning, steven cohen's investment firm is being suzed for sexism in the workplace. leslie picker has that story >> that's right. an employee is suing point72, steve cohen and president
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douglas hanes. the complaint alleges that male executives at point72 engaged in a pattern of discrimination against women and equal pay. it also details a toxic work environment where women were criticized for their appearance, forced to draft powerpoint prez ta presentations after giving birth. the woman accuses cohen and hayes of aiding and abetting the unlawful employment practices and retaliation. she is looking to restrain point72 from engaging in such further unlawful conduct and an undisclosed amount of monetary and punitive damages point72 says the firm emphatically denies these allegations and will defend itself in a more appropriate venue than the media the firm went on to say we stand by our
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record of hiring and developing women. cnbc was unable to independently verify the allegations in the lawsuit. the complaint was filed in the southern district of new york, the same court that charged cohen's prior firm with insider trading. in 2013 they settled for 1$1.8 billion and cohen agreed to convert his firm into an $11 billion family office, point72 on january 1st the u.s. attorney's ban had been lifted preventing cohen from managing outside capital and he had been quietly raising a few billion. >> is there a sense now about the timing of when these acts or allegations occurred was it in just the recent past has it been a pattern of it? i say this only because you told us he's just now started managing outside money recently. has this been a damper on that >> 2014 is when he started
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point72 after closing down s.e.c. capital for those insider trader allegations the plaintiff in this case just started working for point72 in 2016 so it's recent in terms of her experience at the firm and what she details as retaliation against her with regard to her seeking a promotion and being denied that. all the things that took place within her lawsuit took place within the last year and a half or so. >> a big story featuring a big personality on wall street. still ahead on "worldwide exchange," a round up of global market action and all of today's top stories. and big budget backlash. president trump feeling the heat over his proposed spending plan. we have a live report coming up from washington. that's straight ahead. as we head to break, another check on the u.s. equity futures picture. a down move today, 168 points to the down side for the dow as things stand u'ating "worldwide exchange" on cnbc.
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what goes up must come down. dow futures pointing to a triple digit lost following yesterday's big move higher. we'll tell you what's dragging things down. walgreens is reportedly in talks to buy drug distributor amerisourcebergen. details coming up. and big budget backlash. 4 trillion reasons why president trump's spending plan could face an uphill battle it's tuesday, february 13, 2018. you're watching "worldwide
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exchange" on cnbc. good morning welcome to "worldwide exchange" on cnbc. i'm dominic chu. >> i'm seema mody. wilfred and sara are off today >> yesterday a big market day. futures pointing to potentially a lower open let's get to that board and look at futures yesterday the dow gained 410 points the s&p higher by 36 the nasdaq seeing its best two-day performance since june of 2016. today a different picture. the dow lower by 167 points. nasdaq lower by 28 technology played a big role in the comeback we saw yesterday. the factor is higher by 8% from the lows it hit on friday. so keep an eye on the tech sector bonds have been a big part of the story. yields have been edging higher we got close to 2.9% yesterday
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today we're slightly lower at 2.83% on the ten-year yield. >> let's talk about what happened in global markets asian equities, we closed generally higher across the major markets in the asian side of things. check out what's happening with those markets here we did see a bit of weakness in japan. they're off by a half percent after the first day after it got back from a holiday. the hang seng, shanghai and kospi are up by a half percent and a percent. over to the action in europe we are seeing flaractional losss we saw some more strength early on in their session around their open right now the dax off by a half of a percent the ftse 100 is just about flat. slightly lower so far. so we'll see that general picture of weakness in the us futures playing out right now in the regular trading session. >> check out oil
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the iea report says the u.s. is on track to become the world's largest oil producer on the back of rising shale output oil prices responding positive ice brent crude at 62.66, but i would just point out oil is still more than 11% off its most recent high. look at the dollar that's an interesting story. retreating from its best week since 2016 we saw a stronger dollar last week this week a different story. we're weaker across the board. specifically against the yen lower by 1%. the yen trading at a five-month high against the dollar. one reason we did see that under-performance in japanese equities let's talk more about the day ahead. joining us now is tim seymour from triogem asset management and a f"fast money" trader. what do you make of this premarket trade, dow lower is this in response to the big response on friday and money
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>> yeah.com sa,.co dom says whap must come down and it may bounce around for some time i think today's ingredients to the mix, you talked about the yen. clearly dollar/yen is something you watch if a risk-off mode yen rallying is something you continue to see that these could be carry trades. that's clearly a risk-off indicator. high yield bounce yesterday. but we had been down even on the days when the market was rallying back on friday. looking at credit, despite the fact that credit has not given a ton of ground on the selloff, people are watching high yields. people were starting to see we were getting to 13, 14-month lows there last night in asia, it's a mixed story. the shenzhen closed near its
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lows china had a big move during this pullback there's a lot to watch obviously rates are a big part of this. they do seem like they have settled back into a range. so that's good news for equity markets. >> tim, rates are a big part of the story, not just here in the united states but elsewhere. i think specifically about what's happening with europe especially with the german bund picture. take us through what you're seeing in terms of how markets are reacting outside of the u.s. with this more risk-off feel for many of these markets. we know the dax entered into that correction territory phase, that 10% pullback or more. are there other places where we could see bouncebacks as well or are they tea leaves for more pain ahead >> i think the fact europe has not bounced much at all here is notable. the argument for european equities is better eps growth,
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it's cheaper valuations to cement or put some kind of a back stop on the pullback. it gets back to where we are at the cross currents of central bank activity here and i don't believe this -- i think i said this a couple times last week. i don't think this is as simple as talking about vix etfs and volatility spasms and then finding their way out of the market this is truly where we have central banks that are normalizing, and if you go back to europe, we have not seen signs that they are ready to begin tightening that's good news and bad news. i think it's good news now, especially for those folk waiting for central banks to bail them out. europe has a long way to go here and if anything, a 73 basis point buchpd bund yield this moi
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going to put pressure on rates here >> we have the central bank meeting in about four weeks. tim seymour, thank you >> politics driving a lot of things the senate budget committee will hold a hearing today on president trump's new budget plan and the focus will once again be centered around taxes ylan mui has the details this budget has gotten a lot of heat just in the initial hours and days take us through the latest >> the trump administration facing flack from the left and the right over the big deficits in that budget, which are partly the result of the big tax cuts the white house projects deficits will actually grow over the next couple of years, and even after a decade the deficit will still be at 3$363 billion, or about 1.1% of gdp
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during that time the u.s. government is taking in roughly $4 trillion less than what the white house projected last year, even though the tax cuts were supposed to pay for themselves with growth. democrat john yarmuth said he is not surprised that the math is not working out. >> i think the headline for many of us is this budget confirms what we were saying last year, that is that the tax bill that was passed with only republican votes last year was really a scam it doesn't pay for itself, it will increase the deficit. and this budget admits that. >> the white house actually included more tax cuts in its budget, those individual cuts that are supposed to experi after 2025, the white house proposing extending them three years at a cost of 5$569 billion that's another reason why this budget never balances, that
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doesn't sit well with republicans who have campaigned on fiscal prundence in the past. so mick mulvaney will be testifying today on capitol hill and we'll see how he navigates this political tightrope >> that will be something we watch closely in the coming days especially given the data coming out on inflation and economic health thank you very much for that >> no problem. healthcare seeing a lot of deal activity. walgreens is reportedly in talks to buy amerisourcebergen landon dowdy has that story. good morning again >> shares of amerisourcebergen soaring on a report that walgreens is set to buy the company. the talks are in the early stages walgreens is the world's biggest drugstore chain with more than 1300 locations worldwide the two companies are hardly
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strangers. walgreens is amerisourcamerisou largest customer a takeover would protect amerisource from a highly competitive and changing landscape. in december, cvs signed a deal to buy aetna and last month amazon linked up with jpmorgan and berkshire hathaway to form a new healthcare company another check on these shares. amercy sourcebergen up 19% walgreens sill unchanged inn e early trading. back over to you >> this whole idea that the supply chain is changing because of people like amazon.com is really going to be -- especially in the healthcare space, that's something to watch. the 2018 winter olympics are under way and making headlines, a live report from pyeongchang is straight ahead. and as we head to break a
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check on u.s. equity futures we're poised to open lower the dow is off by 157 points in premarket trade. you're watching orwi"wldde exchange" on cnbc. that you're idling in your car, you're sending about half a gallon of gasoline up in the air. that amounts to about 10 pounds of carbon dioxide every week. (malo hutson) growth is good, but when it starts impacting our quality of air and quality of life, that's a problem. so forward-thinking cities like sacramento are investing in streets that are smarter and greener. the solution was right under our feet. asphalt. or to be more precise, intelligent asphalt. by embedding sensors into the pavement, as well as installing cameras on traffic lights, we will be able to analyze the flow of traffic. then that data runs across our network, and we use it to optimize the timing of lights, so that travel times are shorter. who knew asphalt could help save the environment?
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welcome back to "worldwide exchange." i'm for our morning must-reads, stories catching our attention in the op-ed columns my pick is in the "usa today." it's titled don't dismiss
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infrastructure proposal. here's what we're talking about. the editorial board writes anyone who has spent hours in traffic or been embarrassed by how u.s. infrastructure systems stack up against abroad knows america is doing harm by not maintaining let alone expanding roads and rails. what to make of the long awaited 1$1.5 trillion infrastructure plan that president trump released on monday it's not such a crazy idea say what you will about the president, he has a track record of knowing how to get stuff built. it goes to the idea that there are things that you can do to fix infrastructure but that maybe you shouldn't just dismiss it right away because of the size of it or the idea that there's a public private partnership element to it also remember it's fair to say there have been no shortage of editorial boards across this country who have been critical of president trump for various things along the way when it comes to infrastructure
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this might be an interesting way to tackle a problem that america needs to fix >> there's been no shortage of stories or examples of how the u.s. is lacking on it. >> failing roads, falling bridges. >> train accidents, take a ride on the subway. >> interesting it comes from an editorial board at "usa today" saying give it a shot. >> this may be a good thing. it's a good op-ed to read. >> my pick is in the "wall street journal," kim yo jong's shattered olympic dream. by the time the buzzer sounded it was mr. moon who had won the diplomatic gold medal while ms. kim went home empty handed mr. moon got a political boost from miss kim's visit and the appearance of a thaw between the koreas but avoided the backlash of appearing naive other overeager. he also stressed south korea cannot be taken for granted. that was an epic shot watching
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the opening ceremonies and seeing kim jong-un's sister sitting behind mr. moon and three seats to the right was vp mike pence they did not interact. >> this is very much about propaganda, that will always play out and play a part in these things i understand the critical element of it. but you kind of expected it, right, for them to make this splash >> according to op-ed, it wasn't as successful. >> speaking of those olympics and south and north korea, day four of the winter games are under way. let's get to carl quintanilla live in south korea. it's been a great day on the medal front for one american out there. maybe a couple absolutely politics aside, sports we're doing well in is snowboard the name you will hear all day long today is chloe kim. 17 years old
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gold in the women's halfpipe, making her olympic debut she affirms her status as the most dominant female halfpipe artist in the world. she is the youngest woman to be an olympic champion on snow ever this is the third straight day that the u.s. won gold in snowboard after red gerard and jamie anderson early in the week chloe started yesterday with 15,000 twitter followers, i just checked she's closing in on ten times that now, up to nearly 150,000. the u.s. has about 99 golds right now. the most have come from speed skating over the years along with alpine ski, figure skating, snowboarding and freestyle skiing the u.s. is number two in all-time golds coming in behind norway which has about 118 coming into the games. medal count, still not in front. norway had a good start to these games. by the way, we have never won gold in luge, curling, cross
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country, biathlon and the ski jump there's still room for progress. we are hanging on to three golds now, six total as day four gets under way. >> carl, my question for you is this, you're neck deep in it what what you the most excited about the coming days? what events will you be watching if what else will you be keying in on? i know we're watching curling quite closely here we have a curling setup in the lobby now. what what you excited? what is it you'll be doing here? where will your eyes be focused? >> everybody is talking about snowboarding, u.s. snowboarding because we're so dominant. the other area you could argue the u.s. is similarly dominant is in alpine skiing, because mikhac micaylay shiffrin has not skied yet because of the winds, beis
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scheduled to go on thursday. so another race where the u.s. could dominate, but weather-wise it's been a bit of a delay >> in terms of medal down, the u.s. has been doing well but south korea have not been getting too many golds so far. >> that's true interestingly if you go back and look at history of the games for south korea, the most they ever won in an owe limb peck galympie summer games in seoul in '88, where they got 33 medals they tend to dominate on ice sports they have done well in speed skating, but i'm sure as the host country they want to make as big a mark as they can. >> it's pretty amazing just to watch exactly what's happening right now. >> guys, before i let you go, we hope to talk to chloe kim later
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on in the morning. she will make the rounds, having received her gold. we'll see if she can make her way up to this set so many questions for this young lady, 17 years old, olympic debut, now a gold medal. amazing. >> her influence is growing. it's an interview we'll tune in for. carl quintanilla live for us on "worldwide exchange." the dow closing more than 400 points higher yesterday after another day of wild swings on wall street it may not be over because we are looking at futures now pointing to a lower open the dow off by 152 points in orwi ehat trade. "wlddexcnge" will be right back experience the 2018 lexus nx
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today, the new new york is ready for take-off. we're invested in creating the world's first state-of-the-art drone testing facility in central new york and the mohawk valley, which marks the start of our nation's first 50-mile unmanned flight corridor. and allows us to attract the world's top drone talent. all across new york state, we're building the new new york. to grow your business with us in new york state, visit esd.ny.gov. welcome back to "worldwide exchange." let's check the futures market we are seeing a bit of an improvement here the s&p 500 as things stand currently will open up by 14
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points to the down side. the dow off by 147 points. that's about a 20 point to 30 point improvement over the last 10, 15 minutes the nasdaq opening up by 27, 28 points to the down side. let's bring in michael gapen chief u.s. economist at barclays let's talk about whether or not we do think that the economy overall in the united states is still constructive in terms of a back drop for a possible market rally. what's your take >> broadly speaking yes. the question is how much and how far. i think what markets are looking at is repricing a more positive macro outlook. it's not characterized by risk-off sentiment, in the past when we had this volatility equities have fallen, but yields have come down and the dollar rallied. we don't have that we havekets trying to figure out tax cuts and a budget
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deal that is putting upward pressure on interest rates, but we should have solid above-tren grow trend growth for the next few years. >> if we are looking to the economy for direction, shouldn't we look abroad they're in the midst of easing isn't it better to invest in those markets? >> on balance, yes, we would agree with that. we would be exposed to equities in terms of average or slightly above average exposure with you but we would take most of that risk outside of the u.s. for those reasons. the business cycles are not quite as pronounced. monetary policy there on balance is more accommodative. we do like the protection from evaluations outside the u.s. more than inside the u.s >> michael, let's talk about the impact of some of that policy out of washington like you were saying at the same time that we have a fed trying to normalize its
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interest rate operations, that is to say get out of the money of buying bonds and putting money in the economy, we also got a rising possible inflation picture. we have a number of things on that front is there a concern or a worry out there that the interest rate picture will be too volatile given the fact we have so much upward pressure on rates now >> i'm not sure about too volatile i think the point is direction whether it's the front end of the curve and the market pricing in anticipated fed rate hikes or longer end of the curve responding to fiscal stimulus and potentially more inflation and wage growth, we have the entire treasury curve moving higher i do think that's inducing volatility and equity markets. that's certainly clear >> michael, what do you expect in tomorrow's inflation report it was those concerns over rising inflation that sent stocks lower what do you expect in tomorrow's report >> i actually think in terms of
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year-on-year rates at core, which is where people will take their signal, you are likely to see slippage that's mainly because of we had a strong reading on the cpi a year ago so we have some negative base effects that are still with us at least through january and february but when that march cpi report hits, which will be in the middle of april, we'll get a clear gauge about what we should see for the rest of the year so we think 0.2% rise month on month at the core, 0.4% rise at the headline the year rate on core should come down due to base effect i would be surprised to see an upside surprise from this one. >> that will be something we watch closely, that inflation data for the rest of this week let's talk about the markets overall. we are seeing improvement in the dow picture. right now opening down by 140 points we have pepsico and under armour
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earnings coming out today. >> and asia for the most part at ied higher. th'st for "worldwide exchange." "squawk box" will take us forward. see you tomorrow so you're looking for male customers, ages 25-54, who live within five miles of your business? like these two... and that guy. or maybe you want to reach women, ages 18 to 34, who are interested in fitness... namaste. whichever audience you're looking for, we'll find them we're the finders. we work here at comcast spotlight, and we have the best tools for getting your advertising message out there. anywhere, any way your audience watches. consider them found.
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red arrows again this morning, but what's 150 points at this point. breaking deal news, walgreens reportedly in early talks to buy drug distributor amerisourcebergen. plus steve cohen's investment firm sued for discrimination by a female staffer us tuesday february 13th "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'mlong with joe kernen and andrew ross sorkin. joe mentioned we're starting things off with red arrows looks like the dow will open down by 138 points this comes after a gain of 410 points yesterday. if you went back to friday's session low, the major averages were all up by 5% through the close yesterday. they recovered nearly half of their peak losses. so, we are well out of correction territory for every one of the major averages. >> the bill bottom remember, he came on and the market immediately -- >> bill mur ri >> it went up 800 points >> nasdaq off by

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