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tv   Worldwide Exchange  CNBC  April 18, 2018 5:00am-6:00am EDT

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it is 5:00 a.m. in boston. southwest airlines stepping up plane inspections after an engine blew on a flight from new york to dallas yesterday one person died. cia director mike pompeo making a secret trip to north korea earlier this month to meet with kim jong-un good news you tax procrastinators, the irs extending the tax deadline to day following a massive computer breach at the agency. >> big blue investors seeing red. ibm shares sliding after the company offered disappointing guidance. the nation pays attribute to barbara bush the former first lady passing
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away last night at her houston home more on her incredible life coming up. it is wednesday, april 18th, "worldwide exchange" begins right now. good morning and welcome i'm brian sullivan so nice to have you with us here's how your money and the global markets are setting up their day. the dow will open fractionally higher not the kind of morning we had yesterday. the futures up 47 points, on an implied basis, flat. we'll get more on this and your macro markets in a moment. first new details into what may have caused a southwest airlines jet to blow mid flight yesterday killing one person according to a preliminary investigation done by the ntsb, the plane's engine fan blade was missing and apparently broke off. there were also signs of metal
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fatigue where the fan blade would have been attached southwest airlines is stepping up plane inspections after that deadly incident. southwest's ceo, gary kelly, had this to say last night >> i believe in the people of southwest airlines they do a magnificent job. and i know i speak for all of them, it's a somber day. so we will need to make sure that we support the ntsb on this investigation. >> we will continue to follow this developing story throughout the day. it's the first fatal incident on swept since 13 years ago when a 6-year-old was killed when a plane skidded off a runway. back to money and markets. here are the two big things happening now that you need to pay attention according to our next guest, credit and energy. larry, you have some interesting
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views on oil and oil stocks. i want to get to those, but first i know bonds can be wonky, it's earlry in t rryearlryly --e morning, but the credit market seem seems unsure what is it telling you >> on the corporate side you have got things holding up pretty well. in past market disruptions, high yield bonds have spiked in terms of yield much higher it tells you central bankers around the world, draghi in europe, japan, with the bank of japan, are still attracting lots of capital to the united states because yields globally are so low. that's supportive of u.s. corporate debt on the government side, on the front end of the curve, we've
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seen a spectacular move wider. that's putting pressure on some of the inner workings of the u.s. economy and some companies. >> yeah. the curve -- it's 5:03 in the morning. thefact i said curve flattening, i should be sent to a time out the two-year an ten-year spread narrowing. many times that signals the economy is slowing down. forget about getting deep into the bond market. do you believe the bond market is telling us the economy will slow >> no. i think this time it's extremely unique because you're right, the curve is flattened the twos and the tens is the flattest in ten years. it just broke a new level yesterday. so you got a very flat two-year treasury, ten-year treasury, almost the same yield. only 42, 43 basis points apart historically over the last multiple decades, that's led us to believe that a recession is coming
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in this case we don't think the curve will invert because global debt, especially in the u.s. with deficits this coming year, are going to be extremely onerous on bon holddholders so you will see the curve steepen. it's an economic warning sign, but we don't see the curve inverting as we saw in 2007 before the recession and in 2000 before that recession. >> let's figure out how to make some money going forward are oil stocks better investments than big technology names? >> yes in terms of percentages of the s&p, ten years ago today technology was less than 10% of the s&p. now it's near 26 technology was the sector to buy ten years ago. nobody wanted it ten years ago today, energy was 18%, 20% of the s&p.
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today the xle is 20% lower than it was ten years ago so everybody's favorite stock, the favorite sector ten years ago was 20% lower. the most hated sector ten years ago is up probably 200%. here we are. let's fast forward to today. the energy sector is extremely cheap relative to tech it's beaten down it's hated and in it in particular the mlps are extremely attractive most interesting, the ebita of some of these mlps, the ebita of the average company is the same as it was in 20 15, but the stocks are half the price. >> compelling argument for oil and energy i know we'll get more later on in the show. larry macdonald, have a great day. >> thank you following the outrage over the arrest of two men in a
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philadelphia store, starbucks taking a big step. they will be closing 8,000 stores next month for one day of racial bias training rate r kate rogers has more on this story. >> reporter: the company announced it will close more than 8,000 of its company owned stores on may 29th for an afternoon of training geared towards preventing future discrimination in stores the training will be provided to nearly 175,000 partners or employees across the country and it will become a part of the onboarding process for new hires at starbucks ceo kevin johnson promised the training is to sprepresent discrimination and that everyone inside a starbucks store feels safe and welcome those shaping the crick colue ie eric holder and the president and director of the ncaa legal
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defense and education fund johnson did meet with the two men arrested in philadelphia on monday in a joint statement starbucks and the men's attorney said all three have engaged in constructive discussions about this issue as well as what is happening in communities across the country adding that the conversation continues today about how this painful incident can become a vehicle for positive social change brian? >> big story, kate rogers, see you in a minute for trending stories. you're looking at a live picture of the white house where the flag is lowered to half staff as some have said sad news to report from houston the nation is remembering former first lady barbara bush. she passed away in her texas home last night at the age of 92 jay gray taking a look back at her remarkable life. >> reporter: she was the matriarch of an american political dynasty. barbara brush was the wife of the 41st president and mother of the 43rd another son served as governor of florida and made his own run
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for the white house. her quick whit and no nonsense demeanor made bush a popular first lady >> at last i get a chance to prove i'm more than just a pretty face. >> reporter: she was force for a number of causes including literacy, aids and childrens issues >> did you like that story >> reporter: driven in part by the loss of a daughter to leukemia with her husband, bush raised more than $1 billion for charity after leaving the white house. >> my wife, bar before, the silver fox >> reporter: former president george h.w. bush publicly referred to his wife barb as the reason for his success she was fiercely protective of and loyal to her family. >> at the end of your life you will never regret not having passed one more test, winning one more verdict or not closing one more deal. you will regret time not spent with a husband, a child, a friend, or a parent. >> reporter: she often joked
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that she had been lucky to marry so well. while friends and fans say it's the country that was lucky to have such a gracious and caring woman as first lady and in her later years, affectionately known as america's grandmother >> barbara bush was 92 we are all sending our thoughts and best wishes to the entire bush family toy.da - i love my grandma. - anncr: as you grow older, your brain naturally begins to change which may cause trouble with recall.
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it's either really early or if you're out on rush street last night, it's really late go home. thanks for joining us. coming up later on, from the windy city, a big interview. lloyd blankfein at 8:30 a.m. eastern. from big banks to big blue t may be a tough day for ibm investors. shares are sliding now margins mixing the marks last quarter. cars and trains also in focus. tesla aiming to produce 6,000 model 3 cars per week by the end of june. that's according to an internal e-mail sent by elon musk musk says tesla will halt production at its two main factories for several days to upgrade equipment. things are looking good on the rails. csx reporting first quarter results that topped
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expectations shares are up 5% that's not all sources telling us that carl icahn has bought a stake in vm ware, it's below the 5% limit that requires disclosure but dell has said it may do a reverse merger with the company, so perhaps i can locahn looking in ahead of that. united airlines q1 beats estimates. and elaine wynn in a filing said she would like the board to be declassified. that means each direct we're stand for reelection every year. wynn is the company's largest shareholder. brian blockchain said it received a subpoena from the s.e.c. asking for certain information from the company they plan to fully cooperate
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with that request. riot blockchain was the subject of a cnbc story earlier this year the stock fell roughly 18% the day that story aired the s.e.c. declined to comment much more to do on this very busy morning including an incredible story as reports surface that mike pompeo may have secretly met with kim jong-un in north korea. and shinzo abe's mar-a-lago meeting. we'll tell you what to watch for. as we head to break, here's today's national weather forecast from bill karins. good morning to you, brian on this wednesday we're tracking more snow. can you believe it winter storm warnings continue in iowa. it snowed good overnight in south dakota and nebraska. now that snow is spreading through iowa snowy from ames.
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3 to 6 inches along northern iowa and through southern portions of wisconsin. chicago could get some snow out of this. tomorrow we watch snow in western new york and central new york in higher elevations. the never ending cold from this winter doesn't want to go away at least today in the southeast, we will warm it up nicely today after a chilly start even the northeast rovs toecerin the 50s. more "worldwide exchange" when we come back this is your new name. this is your new house. and a perfectly inconspicuous suv. you must become invisible. [hero] i'll take my chances.
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good morning 5:18 thank you for being with us. if you have money in asia, good news those markets all rose last night. china, japan all higher across the board. a similar story in europe. stocks are higher in the fairly early trade there. germany down 0.01% in political news, president trump hosting japanese prime minister shinzo abe at his mar larg mar-a-lago home in florida joining us more with insight is rob hardy do you feel like the president may have flip-flopped or changed his views on the tpp yet again >> well, he certainly flip-flopped he said last week he was
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interested, now he's not interested whether he's changed his views, i'm not so sure. we know he's not keen on the tpp. what do you think will be the key outcome of this meeting today? we focus so much in the u.s. on china, but japan could be a big victim of any kind of trade war as well. what do you think shinzo abe is looking to get and what do you think president trump is looking to get >> for japan, today's meeting, this summit is all about north korea. japan wants to make sure that when president trump meets the north koreans, that japan's interesting don't get forgotten. i think president trump wants to talk about trade i don't think shinzo abe is keen to do that, but particularly in today's sessions of the summit, there's going to be a lot of trade talk
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>> what is japan's position on north korea? what do they want to see happen on the korean peninsula? >> so japan has always been very strong on north korea. their big concern is if president trump goes and does a deal with the north koreans, that he'll forget the things that matter to japan for example if the u.s. were do a deal with the north koreans to get rid of icbms, the missiles that could hit the u.s., but leave the missiles that could hit japan, that would be seriously bad news for the japanese what prime minister abe wants do is put those ideas into the top of president trump's mind ahead of his meeting with the north koreans. >> separately with regard to north korea, an incredible story being reported on here in the united states as well as around the world, which is that
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reportedly cia director mike pompeo may have met with kim jong-un in north korea what are you hearing >> so i don't have any particular insight on whether cia director pompeo who hhas be north korea. wouldn't surprise me they're in the preparation mode for a summit between president trump and kim jong-un, but we're hearing possible venues for that summit that's the kind of thing that needs to be negotiated at high level between the u.s. and the north korean side. it wouldn't surprise me if those kind of discussions are going on >> would be a groundbreaking and stunning meeting between the united states and north korea. do you think it would, robin, happen in north korea? are you hearing it could be at a neutral site perhaps tokyo?
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>> definitely not tokyo. definitely not in north korea. the kind of sites we're hearing are on the border between north korea and south korea, on the border between north korea and china. there could be a site just into china. maybe some possibility of beijing. we're also hearing the mention of some possible venues in europe, like sweden or switzerland. i think those are looking less likely >> robin hardy "the financial times," appreciate it. thank you very much. staying with north korea, cia director mike pompeo reportedly making that secret trip to north korea, apparently earlier this month tracie potts joining us with more from d.c. we don't know a whole lot, but the fact that a cia director would go to pyongyang is big news >> it is big news and it's significant because of the timing it reportedly happened right after president trump nominated him as secretary of state. there has been this concern
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about what would be the level of diplomacy versus threats of military action in dealing with north korea and the sit down, now we have the man who the president wants to be secretary of state making this meeting the summit with kim jong-un, the president says is likely to happen in may, by early june or maybe even he suggests not at all if these high-level talks that he's confirmed do not go well so he's leaving the door open to shut the whole thing down in case the talks in advance don't go well. so we know some sense of the timing we don't know where this would happen and we don't yet know the outcome of this reported meeting between pompeo and kim jong-un brian? >> i'll ask you the same thing i asked robin hardy. do we believe this was in
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pyongyang, in the capitol al of north korea? >> reportedly it happened in north korea, he got in and out of there over easter weekend without anyone knowing the details. >> we had past politicians go to north korea. but this is a big, big deal. tracie potts, thank you very much. let's check on other top stories outside of the world of business with phillip mena in new york good morning stormy daniels spoke out about her alleged affair with president trump on "the view." daniels telling the host that she's tired of being threatened and intimidated. her lawyer also released a sketches of the man that daniels said threatened her and her daughter as she spoke out about the alleged affair roger goodell has been deposed in colin kaepernick's
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collusion case against the league colin kaepernick filed the grievance in october after he went unsigned by all 32 teams as a free agent. president trump filed for an extension on his 2017 tax returns. now the rest of us are getting extra time, too. the irs delayed the deadline by one day after its website crashed tuesday. individuals and businesses now have until midnight tonight to file their taxes >> get it n in, get it done. thank you. still ahead on "worldwide exchange," 35 years in the making what's happening today in saudi arabia that you may not believe took decades to achieve. and a major milestone at youtube and why google may need to send a big thanks or maybe a big check to beyonce
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you know what's not awesome? gig-speed internet. when only certain people can get it. let's fix that. let's give this guy gig- really? and these kids, and these guys, him, ah. oh hello. that lady, these houses! yes, yes and yes. and don't forget about them. uh huh, sure. still yes! xfinity delivers gig speed to more homes than anyone. now you can get it, too. welcome to the party.
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stocks pointing to a slightly higher open as wall street kicks into high gear. how will you make money this year we have the one group of stocks that our guest says you have to be invested in now it is show time in saudi arabia for the first time in decades people there can head to the movies silence your phones and grab the popcorn or maybe a coffee and a breakfast smoothie as the second half of the show begins right now. ♪
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thank you for being with us. i'm brian sullivan we have an interesting rbi for you today that will help you amaze your friends and co-workers with deep historical knowledge. let's get to your markets and money setup. here's how things look now the markets -- the dow at least appears to be flat at the open you can blame ibm. ibm coming in with disappoint numbers last night stock down a couple percent now. you care because ibm would be responsible for about a50 poin drop on the dow if we opened up now. we may be flat on the futures, but much of that is ibm. so expect more green with dow stocks, except for ibm which is dragging things down >> in the bond market -- i know it's boring, it's early. watch that two-year and ten-year yield. the two-year at 2.4%
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the yield difference between the two and the ten gets tighter and tighter. the tightest it's been since september of 2007. don't sweat the 2007 reference, it's not that scary yet, but it may indicate slowdowns in growth are ahead. boring but important and checking the oil markets, not a big move for the oil markets. wti crude at 67.10 your next guest says there is real opportunity now in some of the energy names joining us is matt maley, equity strategist we had larry mcdonald on earlier. tell our audience why energy names look good, because they tend to lag oil prices, correct? >> it's funny. they tend to lag time-wise, but they do trade together over the
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longer period of time. so the fact that a big divergence developed over the last couple of months should be bullish. of course on the side of what's going on with crude oil, it's been above $60 and held. there it only traded three days all year below $60 then things like -- a year ago everybody was saying no way opec could stay with their production cuts they have. saudi arabia talking about $80 oil. we have seen the eei recently talking about a pick up in demand -- sorry, demand growth that's another positive for crude oil. with crude oil staying higher, the divergence that developed has to change. we're seeing that with the xle breaking out to the upside it's not just a few stocks it's a broad based number of names. if we can get exxon, which has been lagging, 22% of the xle, if that can move higher, the whole
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thing should accelerate quickly. >> you know, matt, here's the problem. i wonder if psychologically we can handle it. every mutual fund and hedge fund manager in the world has been buying the same 5 or 10 stocks for five years do you think the collective wisdom of the market and the functionally fixed managers can shift their thinking from f.a.n.g. to f.a.n.g. diamondback energy as such >> i think they'll have to for performance reasons. we have seen the f.a.n.g.s we saw a nice rally yesterday with them. the group overall, it's not underperforming, but it's performing in line with the market and with the rest of the technology group so it's not getting that big goose that you used to see before so people in the technology area will have to be a rotation out of it. not only are they overweight the group, but they're also going to see a rotation within the group. be more defensive in these times
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of uncertainty there's more levels of uncertainty that picked up i see them for performance reasons having to rotate out to other groups what i call technology value names, like intel and micron and give you more protection if the market continues to be volatile. >> from a macro market perspective, i feel earnings are a bit like the red sox, home of chowder, everybody expected them to be pretty good. i don't know if anyone expected them to be this good corporate earnings, high extations, they' expec expectati expectations, they're beating them on nearly every level if we don't see the overall market react positively, do we need to start worrying >> we do back in january the market was priced for perfection. everything looked good everybody was expecting positive earnings but things have changed. during the february decline,
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everybody was saying nothing changed. i said just the opposite because one thing changed. long-term interest rates had risen above the multi decade trend line now they have not broken back above 3%, some people say they have kind of stopped going up. but they have not gone back down either people have to remember the ten-year bottomed almost two years ago, the summer of 2016. there's usually a delay between when the markets react and rising interest rates. we're seeing that now. since that february decline, we've seen other situations pick up that have created big uncertainties. we have the skyrocketing libor is there going to be a trade war? regulation on technology companies and we'll see the fed starting to shrink the balance sheet in a more aggressive way and they will continue to be more aggressive as the year goes on >> i know it's early, in plain english, because libor, as i said earlier is li-boring.
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but it's important tell us why this move in this little interest rate matters to their stock investments. >> two reasons number one, we carry -- libor rate is tied to a lot of mortgage rates in the u.s. especially high-end mortgage rates. as interest rates have been going up, in has had an impact people have said this has not affected housing if you look at itp housing etf, it's rolling over here the housing data has been mixed. but a bit to the negative side over the last few months housing is very, very important to the economy the other thing is libor is also a measurement of stress in the european banking system. the european banks have not deleveraged to the degree we saw in the u.s. here we see barclays debt lowered to one notch above junk there's all sorts of implications for future economic growth that may not be as good
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as people hoped for. >> i don't do dinners anymore on this schedule. i do lufrnches. i'll make a lunch bet that my angels will beat your red sox in the a.l. pen net to nant to go world series >> we have a deal. ail take you on that one >> maybe a late breakfast on this schedule. matt, thank you very much. student activist david hogg calling out gun investors. hogg is a survivor of the parkland, florida shooting he is asking people to boycott blackrock and vanguard because their funds own gun stocks he tweeted they are the two biggest investors in gun manufacturers. he said if you use them, feel free to let them know. blackrock and vanguard are the biggest institutional share holders of ruger last month blackrock did announce two new etfs will exclude gunmakers and gun
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retailers. vanguard telling cnn last night that the majority of its funds do not directly invest in gunmakers. time for the other top trending stories kate rogers back with those. >> tributes continue to pour in after the passing of barbara bush yesterday former first lady was beloved inside and outside of the political world. the houston texans defensive lineman j.j. watt called her a beautiful wligt in the world and tweeted four photos of them together barbra streisand tweeted condolences and prayers. lo nasa tweeted a picture of barbara bush talking to astronauts in space in 2007. the texas rangers shared a photo of the former first lady throwing out the first pitch in 1989 tweeting she will forever be in our hearts switching gears, the coachella tallies are in, and to no one's surprise beyonce came out on top
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beyonce's performance was live streamed by more fans than any other set over the festival's first weekend. more than 458,000 viewers tuned in for the youtube live stream if you woke up this morning and wanted to go back to bed, you're in good company the toronto zoo in sydney, australia shared video of its baby tree kangaroo emerging for from mom's pouch for the first time, but after a few steps and a tumble this still to be named baby decided it might be better off in the pouch afterward and returned to mom. he can with all relate to that feeling. >> that's everybody at 5:40 in the morning. just run back into the bed number two, i had no idea there were such things as a tree a kangaroo >> who knew. pretty cute. cuter than us early in the morning. >> by far. that should have been our rbi today. you stole it. to puerto rico and the world of sports.
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they came together because the twins and the indians are playing a two-game series in puerto rico. and puerto rico native francisco lindor broke a scoreless tie in the fifth inning with a home run. the indians may be the away team for scoring purposes, but lindor got a hometown hero's treatment and a standing ovation they could use a lit gl news in puerto rico. catch an ul new all new epif "staten island hustle" tonight at 10:00 p.m the show following a group of animated friends from staten island who have yet to come up with an idea or product too farfetched for them to want to invest in. on deck, why it's a huge day for people in saudi arabia what they get to do for the first time that all of us take for granted. and later lloyd blankfein sitting down with cnbc, 7:30 central, 8:30 eastern on "squawk
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welcome back let's check on the cryptocurrencies they've been so volatile lately. today they're up again up one day, down the next. now all the major cryptocurrencies are 2% to 3% to the upside bitcoin at 8,097 on the coinbase
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exchange. it's also a big day in saudi arabia amc theaters opening the first movie theater there in 35 years. hadley gamble has the details. >> good morning. basically what's happening in saudi arabia for the very first time they are creating an industry for entertainment they think they could spend as much as $64 billion over the next several years, and i had the chance to ask the man who is opening the first theater in that country about it. take a listen. >> we think demand will be staggering we are expecting this will be quite a lucrative opportunity for shareholders of amc entertainment. our plan is to open at least 40 theaters here over the next five years in about 15 cities across the country. >> the saudi government projected they could spend 64
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billion over the next severa years in the entertainment industry alone how much of a slice of that pie do you think amc will take >> there are estimates that this market will have a box office approaching $1 billion several years from now as theaters open across the country we would like to get a 50% share of that. it's not just theaters, but other entertainment as well, concerts, opera, we're talking cirque du soleil we're talking about everything that the crown prince of saudi arabia, mohammad bin salman thinks his country needs to move forward economically and socially a big day for saudi arabia and a big question was what movie will they show, and it is going to be "black panther." >> fair to say with this and all the changes in women's rights, we've seen more changes in two to three years in saudi arabia than in the previous 30
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combined, fair statement >> not just -- definitely. not just the previous 30 years, the entire history of modern saudi arabia this is something that, you know, not just here in the uae and other gulf countries that we're watching but also something globally that is exciting, not just for the entertainment industry but the knock-on effect to other industries as well >> hadley gamble, see you soon thank you. joining us now is eric handler from mkm partners with more on this story it's a good story for the people of saudi arabia. you heard the ceo there speaking with hadley gamble i do believe this is a one-off gimmick or a huge opportunity for true expansion in a populist nation >> on the surface it seems like a great opportunity. the average median age in saudi
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arabia is about 30 years old so it looks -- the direction that the government wants to go in terms of becoming more of a service economy, it's a great opportunity for amc. >> how big you have been able to run numbers? i know it's one theater now. we talk about the expansion opportunities. what could this mean to amc's bottom line? >> you heard adam talk about this possibly being a billion dollar market. that would make it a top ten international market >> yeah. >> movie theaters are fairly common throughout the region saudi arabia being more fundamentalist in certain ways, it has been a harder market to breach do you think once this is in, this would signal a more macro growth opportunity across the middle eastern landscape >> i'm not a middle eastern
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expert, but look, here's what i say. a lot of people in saudi arabia are already going on weekends to dubai, to bahrain, so this is a way to keep the people in saudi arabia in saudi arabia during the weekends and providing them entertainment. >> eric handler from mkm partners, a big story for the people of saudi arabia, getting to go to the movies for the first time in more than three decades. it's been a pleasure. much more ahead. we're setting you up for the trading day. bruce kasman will join us. find out what is in his radar. and your morning rbi is on deck, it will be the most random but interesting thing that you will hear all day it shows you the power of being first. you will wanto ht ear the rbi. that's coming up daddy." [ evil laugh ] but then cdw orchestrated a network transformation using
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are you in an empire state of mind? it's 5:50 in the morning new york city is already busy. perhaps still busy given that it's new york. welcome. thanks for joining us. ibm could drag the dow down. margins missing the mark last quarter. ibm right now in extended hours trading down nearly 5% again, this could be a 50-point drag on the dow. futures are flat but ibm could be a part of that. grubhub downgraded to equal weight from overweight at morgan stanley. the firm citing valuation. the target is $100, $5 below where the stock is now joining us to talk about more macro issues is bruce kasman we talked about movie theaters coming to saudi arabia for the first time in 35 years
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it hasn't been quite that long but it feels that long since we had real inflationary worries in the united states. how severe do you think they are? >> i don't think they're severe at all we're seeing signs that inflation is starting to normalize from what has been such a low period. that's good news overall however that does mean that the fed needs to keep adjusting, normalize and rates will go higher this year >> do you think the fed has a good handle on it? >> i think the fed is moving cautiously we're sitting with policy rates below the level of inflation, over a percentage point below where the fed thinks neutral is. they're moving gradually there's always risks here when we adjust from a long period of low interest rates to something more normal. but i think the fed is doing the right thing and moving cautiously here. >> rather untested fed you have a new fed chairman but
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also a number of new members on the fed. it's a 50% team that is untested and a little bit unknown are you growing more confident in them, bruce have you been confident in them? >> i think they still need to be tested, as you say, but the appointments we're seeing i think are a sigh of relief in the sense that it wouuld gettin well qualified people, in line with where the fed has been over the last few years >> i don't want to make too much of it, when i hear things like the yield curve is the flattest since september of 2007. any september of 2007 reference sort of gets the antenna up. that was not exactly an ideal moment in u.s. economic history. do we need to worry about this bond market move do you think, again, it's manageable, it's okay, it's normal >> we believe there's a number of things that have changed over the last decade that keep the yield curve structurally flat,
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including how large the fed balance sheet is we don't see in the pricing of the market the kind of dynamic that would suggest weakness ahead. certainly at some point if the yield curve inverts, we'll have a signal that will be negative i don't think it is the signal we're seeing now >> so what is the next big thing, bruce, on your radar. what's the most important thing for our viewers to watch around their investments and money? >> i'm an economist. i will stay in the economic space what we're seeing as we turn into the new year is a challenge to certainly our view and the market view that there is going to be strong growth in 2018 what we need to see in the near-term is signs that that growth is coming it starts with the u.s. consumer picking up after a weak start of the year the good news is we got some of that news this week with the retail sales report. i'm looking to see more of it as we make our way through the
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springtime nks aga >> here's the thing about the consumer and retail. it's been so cold here minneapolis has six feet of snow or something like this again, how do you read the consumer there's so many things that retailers in particular can say it was the weather, too good how do you see the u.s. consumer now? >> we have gone into a weak patch. we're starting to come out of it the fundamentals are very strong not only do we have a strong labor market, we have signs that wages are picking up and we think the rise in inflation from energy prices in the last six months is cooling off. >> throwing out an easy one to end it will we end the year with greater than 3% growth annualized for the u.s. economy? >> our forecast is we'll fall a bit short but have a good year certainly a risk we can do that. there's a lot of good things
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coming through that could give us that growth that's not our baseline forecast >> all right bruce kasman, thank you for joining us bright and early. let's wrap it up with your morning rbi. today it's history all of you know who paul revere is on this day in 1775 he made his famous late night ride warning that the british were coming and about to march through massachusetts and arrest john adams. but do you know who william daws is guess what william daws made the same ride as paul revere doing the same thing. he made a longer ride, but arrived in lexington, massachusetts after paul revere and is now forgotten to history. why do we bring this up? revere shows the power of being first. that's why you get up early to watch "worldwide exchange. we appreciate it paul revere, appreciate you getting up with us and watching wherever in the world you may be i'm brian sullivan
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you know what's not awesome? gig-speed internet. when only certain people can get it. let's fix that. let's give this guy gig- really? and these kids, and these guys, him, ah. oh hello. that lady, these houses! yes, yes and yes. and don't forget about them. uh huh, sure. still yes! xfinity delivers gig speed to more homes than anyone. now you can get it, too. welcome to the party.
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good morning nightmare in the sky a woman died after an engine failed on a southwest flight we'll tell you how the airline is responding. cia director mike pompeo reportedly visited kim jong-un in north korea to help pave the way for president trump and his meeting next month. in corporate news, ibm beat expectations on the bottom line, but the stock is down sharply on weaker than expected margins and guidance it's april 18, 2018, "squawk box" begins right now.
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♪ >> live from new york where business never sleeps this is "squawk box." >> good morning. welcome to "squawk box" on cnbc. we're live from the nasdaq market site in times square. i'm becky quick along with joe kernen and mike santoli. you will see a mixed picture this morning the dow is down by 14 points you can thank ibm for that the s&p 500 up by just over 4 points the nasdaq up by 17. ibm has a negative effect of over 50 points on the dow. without that the dow would be in positive territory again this comes after disappointing results last night for earnings. we'll talk more about that in a moment overnight in asia, stocks were higher china's gdp growing sharply, and the nikkei was up

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