tv Worldwide Exchange CNBC May 8, 2018 5:00am-6:00am EDT
it is 5:00 a.m our parent company, comcast, may be ready to make an all-cash bid for 21st century fox. president trump will announce his decision on the iranian nuclear deal at 2:00 eastern time today. eric schneiderman is stepping down, this follows abuse allegations. activist investor value act targeting citi group, building a 1$1.2 billion stake in the bank and hawaii is on high alert as mount kilauea continues to erupt. it's tuesday, may 8, "worldwide exchange" begins right now
hello. good morning or good afternoon and good evening from wherever in the world you may be watching i'm brian sullivan it is a very busy tuesday. we kick things off with some potential big deal news. sources say that comcast, our parent company, is lining up financing to make a $60 billion all-cash bid for 21st century fox. this would top disney's $52 billion deal for most of fox assets, an offer not yet on the table. sources suggest a bid may only come if at&t wins its battle for time warner. a deal would give contrast over fox's movie and cable tv assets but not include the fox news division 21st century fox shares are moving higher in the premarket. stock futures indicating not
a huge move right now, a slide of 40 points, very early trade there. we're slightly in the red. similar story with oil oil has been a big focus and will remain so today the president saying he will announce his decision on whether or not to stay in or leave the iranian nuclear deal this afternoon. michelle caruso-cabrera will join us in moments with more on that let's get now to the news. tracie potts is in washington with more on the iranian deal story. >> good morning. in a matter of hours we could know whether the president is in or out on this he has said repeatedly since the campaign that he thinks it's a bad deal now facing a deadline in a matter of days by may 12th on whether or not to pull out if the president pulls out, we could be looking at sanctions reimposed against iran iran's president says he will continue to comply with the deal, with the five remaining partners, the european partners
if the united states pulls out there. are discrepancies or democrats and republicans on capitol hill who agree we should stay in the deal they, like our ally thies, think this is the best way to prevent iran from developing a nuclear weapon france and germany lobbied trump to stay in great britain's foreign minister said this is the best way to keep iran's hands off a nuclear weapon the president making his announcement sometime this afternoon. he leaned against remaining a part of this deal. >> tracie potts with another busy day for you, thank you very much look what happened to oil after the president announced his iran decision was coming he sent out a tweet at about 2:45 p.m. eastern time yesterday and you can see the oil market reacting it looks like much of the fate
of oil, not all of it may rely on what the president announces this afternoon, angie. >> exactly the oil market is just watching to see if president trump withdraws and what this could mean for importers of iranian oil. and whether or not he forces those buyers to limit their purchases. then what that could mean for the oil market >> what are you hearing about the impact we understand that iran, we do not buy iranian imports in the united states, but iran is a huge exporter. one of the biggest in the world. is there a fear that iran may flood the market if the deal is called off because they want to penalize the world or go the other way? >> i think the question is over who will comply. for example, japan and south korea may be more -- may be more willing to comply as they engage in discussions over north korea
with the trump administration. but there are others such as china that may not be willing to be bullied by the u.s. there are questions about european importers, too. while germany and france might be thinking withdrawal from the idea is a bad idea, if you're a european refiner with u.s. interests you will think carefully. so you may see compliance there, too. when we talk to analysts and other experts, they are talking about 200,000 to 600,000 barrels a day being affected when it comes to iranian imports -- exports, sorry even though that might seem like a small amount, in a tight oil market that can have a huge impact >> we are also dealing with the fact that venezuela continues to bleed crude oil production opec has done something it's been unable to do for years or
decades, which is actually comply with its own production cut mandates so there's a lot of different story lines playing out in the oil world right now, are there not? >> yeah, exactly so you've seen brent crude jump above $75 a barrel wti, the u.s. marker go above 70 a lot of factors come into play here you have robust oil demand at the same time cuts in supply from opec and russia as you say, venezuela is among countries where there's been disruptions to supply as well. the iranian factor just adds into the mix >> thank you so much we appreciate it >> thank you. let's get back to your top money story. that is comcast reportedly planning a $60 billion all-cash offer for 21s century fox's assets sources telling cnbc that
comcast would acquire a 100% stake in satellite broadcaster sky as part of any deal. joining us now on the cnbc news line is m&a correspondent with the financial times, aras arash massoudi comcast coming out a few months ago with an offer. the 21st century fox board decided to go with the disney offer. this would be another grab at 21st century fox, would it not >> absolutely. it's something that clearly that brian roberts has coveted for a while. when i spoke with cnbc in february, you could see in his eyes a sort of desire to continue monitoring the situation at fox in the background we have an important case going on between the u.s. government and time warner/at&t takeover
all eyes are on the outcome of that i think if that deal gets pushed through, you could see a scenario where comcast justifiably argues to fox this deal got through, we think we can get this through the government and concerns about the offer from november and december of last year are no longer relevant. and we want to pursue this that's the situation we're setting up for it will create a real set of dynamics here that will make the next few weeks extremely interesting. we have been covering for a large part in the united states the at&t/time warner thing and that regulatory decision could play a big part in this. how is the sky part of the story with the u.s. cable operator the size of come tast playing out overseas are there regulatory concerns on your end >> no, over here there's no perceived real issue for comcast to acquire sky they don't have a big footprint across europe and the rational
for the deal was spelled out they firmed their offer in recent weeks that's a firm offer, superior to the offer that fox has put forward for sky. everyone is waiting for fox's response the key thing on that front is waiting to hear back from the uk government and the culture secretary on their concerns about media plurality. there is an expectation that fox would raise its bid and their mechanism and raise the bid for sky and set up a face-to-face battle with comcast. now comcast is making the situation almost more complicated by putting out the prospects of its own bid for fox in the u.s there's a couple different routes this can go down. >> another route might be let's say comcast secures the financing, likes the outcome of the time warner deal, makes the $60 billion offer, there's nothing from preventing disney from raising its bid from over
52 to over $60 billion the 21st century fox shareholders could find themselves 10, $12 billion richer >> that calculation will come down to the murdoch family it's a bit too hard to define what will happen at this moment. we need to know what will happen with the at&t time warner case that is in the run up to this, there were comments from antitrust officials around reaction to the comcast/nbc universal transaction. the idea of comcast adding more footprint in the u.s. is one the murdoch family will have to weigh carefully before they strike as you know, they took a lower offer given some of those concerns late last year. it's still not clear how this will play out. but we're shaping up for an interesting six weeks. >> it is i know it could be confusing, but this deal would include local fox news if you lived in
chicago or new york, one of their markets, but not the fox news channel >> that's right. yes. exactly. that transaction that disney is contemplating with fox and that comcast is interested in would see fox news, the main entity of fox news, fox sports become a new entity, which the murdochs would control. the rest, movie studios, regional sports, all these other things could go over to the winner of any bid there. >> arash massoudi, thank you very much. >> thanks. in other deal news, takeda pharmaceuticals ending what has been a multi-year journey and striking a deal to acquire shire for $62 billion. the deal is the largest overseas deal ever by a japanese company. shares of takeda and shire are both moving higher on that news.
this is a big one in the world of banks value act taking a 1$1.2 billion stake in citi group. who else to bring in on this than leslie picker billion on citi. this is a big fight. >> it is value act does take these big, concentrated bets. banks have been a focus for them, but this 1$1.2 billion stake in citi group, they've been building that up for about 45 months. it doesn't appear value act is looking to push for major changes at the bank just yet, but believes citi could return more capital to shareholders, that's what they're starting with in their investor letter. value act writes we believe the u.s. banking system has a structurally lower risk profile than any time in our lifetime. the firm points to scale as a key driver of greater profitabilities. value act believes that citi's restructuring has not been adequately priced in by the
market and says citi should generate more than 15% return on tangible common equity by 2020 and deliver eps of double that level from 2017. in a statement to cnbc, a representative for citi writes we have been having constructive conversations with value act and welcome them as investors. citi is part of the hedge fund's bigger push in the financial sector value act took a similar stake in morgan stanley in 2016, a position that has done well for them value act also disclosed a stake in kkr last year sl value act says they will continue to add to their citi position opportunistically >> value act is saying we're not activists here, we're just investing in the company, but we think they could do a better job returning to shareholders. >> that's right. we studied your balance sheet
and your business and we know that you have a bit more cash to work with if you wanted to return to cash to shareholders, that's their whole m.o value act sees themselves as a constructionist in this. >> is that another ist that we have >> what they do, they say we want to work with management, almost like a private equity company and help them operationally better run their business it sounds like based on the citi statement on the record, it's all kumbaya right now, but we'll see. the previous financials that i mentioned, morgan stanley and kkr, value act did not seek a board seat in their letter they did analogize this investment to microsoft in which they did get
a board seat there 2013. it's unclear if they will push for something like that. right now it seems like they're happy with citi being a boring bank >> we'll find out. i know you're going to vegas, safe travels if you hear anything about a fusionist, we know the world of food and money have he merged. do you have a deconstructed s'more i could use one right now. >> i do. >> thank you the cfo of snapchat is out the company saying he's leaving to pursue other opportunities. he's being replaced by tim stone. snap shares down 44% in just 90 days. tesla stockholders, elon musk is trying to help you out regulatory filings show musk bought another 33,000 shares the addition increases his stake to about 20% last week musk promised to burn
those betting against tesla, which has not turned a profit in its 15-year history. investors in hertz are hurting. shares likely to drop today. the car rental company posting a wider than expected loss revenue did beat forecasts helped by higher mileage pricing. we are just getting started on "worldwide exchange." up next, break out your investing passport we are going global finding you some of the hottest opportunities overseas if you care about the price of oil and gas, grab another cup of coffee, we'll walk you through the five big story lines you need to watch in oil right now. and hawaii's big island remaining under a state of emergency. lava continuing to flow from mount kilauea. more on this developing story when "worldwide exchange" returns.
and greens grass, guaranteed. we're experts in connecting your advertising message to welcothe right audience.ight. we can connect to your audiences wherever they are and however they watch whether on their tv, laptop or mobile device. and to make sure they don't miss your message, we give you access to advertise on over fifty networks, sharing it on the hottest shows, digital sites, and mobile destinations. work with some of the best media experts in the business. get started at comcastspotlight.com. oh hi sweetie, i just want to show you something. xfinity mobile: find my phone. [ phone rings ]
look at you. this tech stuff is easy. [ whirring sound ] you want a cookie? it's a drone! i know. find your phone easily with the xfinity voice remote. one more way comcast is working to fit into your life, not the other way around. let's get you set up on this tuesday and for the weeks ahead. joining us is julianeweulian la. good morning thanks for coming in what is the single biggest global risk to our viewers money right now? >> the market is focused on whether the cycle is coming to an end or not. and how long we have before the end of the cycle if you believe the cycle will end next year, that is maybe -- >> the growth cycle. >> exactly the economy profit as well as the company's profit
i think the key market focus and the key risk is the cycle about to end or not. do we have another couple of years maybe of momentum behind us what do you think? >> we believe that we do have at least another 12, maybe 18 or 24 months of growth in front of us. we're not worried at all about a cycle that could end tomorrow. >> is the market do you feel the market, the media, investors are overworried now? >> i think they are probably overworried. you've had an excellent earnings season in the u.s., one of the best, yet the market has not done much. valuation has compressed, investors are telling you we're not ready to pay for this growth because we feel we won't repeat that maybe growth should still be relatively strong in the quarters to come >> if the president today announces that he will pull the
united states out of that iran deal, do you think that's going to change anybody's view on the market will stocks sell off is it a global concern is it another headline in still what is a strong economic story? >> i think it's just another headline i think it may have impact on the oil price. and impacts on the oil sector. for the broader narrative, when it comes to global equity market, it won't change. one big thing with this issue, i feel like it's a u.s. issue. the other members of the group who were signing this deal are not following through with what president trump is saying. i think it's a very specific issue to the oil market. >> so you're optimistic on the economic cycle continuing. does that mean you are optimistic on the equity sectors? a few more percent left in us? >> yeah, a few more percent.
>> stocks have not responded to good earnings. people are getting nervous about this >> it's usually better to invest when the rest of the crowd is nervous. that's where you see the upside. we were probably too optimistic, when i say we, the investor community, expectations have been reset and we can move forward. >> julian, we appreciate it. thank you for your views >> thank you very much still to come on "worldwide exchange," call it the wakanda rally. the one stock up big thanks to black panther. we'll bring you that name ahead when "worldwide exchange" when "worldwide exchange" returns. forgot me goggles. kayak. search one and done.
♪ tired of wrestling with seemingly impossible cleaning tasks? using wipes in the kitchen, and sprays in the bathroom can be ineffective. try mr. clean magic eraser with durafoam. simply add water, and use in your kitchen for burnt on food, in your bathroom to remove soap scum, and on walls to remove scuffs and marks. it erases 4x more permanent marker per swipe. for tough kitchen and bath messes, use mr. clean magic eraser with durafoam. brand power. helping you buy better.
. let's check the top headlines. for that we go to phillip mena in new york. a swift downfall for the new york attorney general. eric schneiderman resigning from office hours after being accused of abusing four women, he subjected them to being slapped, choked and spit on snyderman denies the allegations saying in the privacy of intimate relationships i have engaged in role playing and other consensual sexual activity i have not assaulted anyone. i have never engaged in
nonconsensual sex. snydermanid schneiderman saying while these allegations are unrelated to my professional conduct or the operations of the office, they will prevent me from leading the office's work at this critical time. hawaii is being affected by earthquakes, lava flows and toxic gas. officials say the volcanic activity has subsided for now but could resume at any time. the trump white house revealed its proposed funding cuts calling for the claw back of $15 billion in federal spending nearly half would come from the children's health insurance program. more than 30 other programs would be cut overall if congress approves the measure back to you. phillip, thank you very much still ahead on "worldwide exchange," the bidding war heating up it's comcast versusdisney.
minions versus mice. and later on, we'll break down the international markets, where you might think about putting your money "wex" rolls on after this.o evet t and the warehouse crew. give us the data we need. in one place, anywhere we need it. help us do our jobs better. with domo we can run this place together. well that's that's your job i guess. ♪ ♪ most people come to la with big dreams. ♪ we came with big appetites. with expedia, you could book a flight, hotel, car, and activity all in one place.
cash offer for 21st century fox for $60 billion. and a weather report giving new meaning to ranining cats and dogs "worldwide exchange" cruises on right now. ♪ exactly 5:30 on the east coast. thanks for being with us, i'm brian sullivan thank you for joining us we are halfway through the 5:00 a.m. hour. stock futures not giving us a lot of help. slightly in the red. dow indicating a drop of 58 points again, that could swing wildly before the open. seeing the nasdaq and the s&p 500 in a similar state cnbc parent company comcast lining up 60 billion in financing for a potential hostile bid for 2 1st century fox's assets, potentially derailing their $52 billion deal
with disney. oil back below 70 this morning. we'll have more on all of your markets in a second. first to the news that will likely top your global headlines and could also move markets this afternoon. president trump saying he will make an announcement on america's participation on the iran nuclear deal today. let's get to "power lunch" host michelle caruso-cabrera with more on this story >> we learned of this via tweet as we often do from the president. he said yesterday i will announce my decision on the iran deal tomorrow from the white house, 2:00 p.m. the consensus in washington and europe is that the president will "withdraw from the deal." what is not clear is how and in what form. there's really no formal mechanism to withdraw from this well-known 2015 agreement that iran made with six other countries including the u.s. the mechanism the president would likely use say experts is the u.s. law that was imposed as
a result of that 2015 agreement. called the iran nuclear agreement review act of 2015 it's a mouthful. under this law the president has to frequently decide whether to wave still existing sanctions on iran it's important to understand sanctions never went away. instead what happened was waivers have been continuously put in place starting under president obama and continuing under president bush that's why we are where we are right now because the next deadline for the president to decide is this coming saturday may 12th under that u.s. law it's a complicated law the sanctions process is complicated. i could tell you dozens of permutations that are possible experts think the most likely outcome is one that will affect the oil market that the u.s. will demand that foreign countries significantly reduce or end purchases of
iranian youcrude oil, and if thy fail to do so, those banks will be cut off from the u.s. financial system when the sanctions were at their peak, the iranians produced 2 million barrels of oil per day, now it's up to 3.5 million barrels per day. analysts think if the consensus outcome occurs today, about 500,000 barrels of iranian crude will be removed from the market. the biggest buyers are china, india, japan and south korea japan and south korea likely to go along with what the u.s. demands. china and india is more questionable even if the u.s. withdraws, europe will not. the reason the embargoes were so effective in 2012 is that europe had done a full and total embargo on iranian oil that's unlikely to happen this
time around. back to you. >> so, would europe likely be a slack buyer of some of that iranian oil if we do this? that would give the iranians a new market and go around the back of these sanctions. >> oil is fungible and so is money. so if we're not a buy other south korea and japan are no longer buyers, maybe iran drops the price to get a market share somewhere else potentially it could be europe >> i know you have been to iran. how good is iran at getting around sanctions >> it got tougher and tougher for them towards the end in 2012 they had been reduced to bartder. what is crucial about iran now is the economy is once again on the brink of collapse. teetering is what some experts i've talked to have described it as they're in a precarious position the protests that we talked so much about in december, they're
not as strong as they were but they are still ongoing, intermittent but the regime is quite concerned about where they stand right now with the population. and new sanctions could potentially bring out some kind of response from the leadership of the company, which is nervous about the situation. >> michelle, good to see you we'll see you again all day long on cnbc. thank you. of course you can watch the president making his decision live right here on cnbc during "power lunch" at 2:00 eastern time that will be a big deal. just how much will this iran announcement impact your money joining us is jonathan dollop from credit suisse i know you're more of a longer picture guy, this is an important global geopolitical headline how important is it to our viewers money and stock investments? >> there's two issues here first is in terms of the u.s. equity market, geopolitics
always matters way less than we think they do. >> why is that >> because ultimately whether you're going to the store and buying a beverage or clothing o a car, you know, the market and the economy is really robust even the oil market is big and deep that's probably a smaller impact but as far as iran is concerned, there is a larger question on iran's ambitions if you look at what's going on in syria and elsewhere, this is part of a longer term issue on how the world and the united states deals with these mideastern issues. i think this is not a single decision as much as a broad policy decision. >> as michelle laid out, it could impact the oil markets perhaps they decide to dump a bunch of oil on the market or sell on the cheap. lower oil prices, higher or lower oil prices better or worse for the market what do you think the
relationship is between the two? >> it's why oil prices are high that matters if the economy is great and demand is up which has been going on, oil prices have been up over the last couple of years -- >> because things are good we're driving more, flying more, producing more stuff >> 100%. we just did an analysis yesterday that the banks, you think what do banks have to do with ioil prices, when banks go up so do oil prices. if oil prices are going up because there's geopolitical tension, that's a different story. again, is this the key driver of the markets? i don't think so what is the key driver not iran, not oil. what is it >> two issues. the gentleman on before, the economic cycle is likely to continue for longer than we think. that's positive. the second thing, corporate profits are unbelievable ultimately when you buy a stock, what you are buying? a stream of corporate profits. >> profits have been good, i
guess, sort of the big question people are asking why haven't we responded more to these numbers. everyone has their excuses what do you think >> we can almost make together this laundry list of concerns. interest rates are going up. inflation is going up. geopolitics. there's a bunch of little things now that have the market concerned. ultimately i think that we'll blow through these and the market will respond. we had in this quarter 25% year over year growth in the ninth year of a business cycle it can't get better than this. this is not kind of peak in terms of earnings, but the rate of growth is just fantastic. and it's going to slow a bit back to something which is robust but not stellar. >> jonathan, we appreciate your views. thank you very much. watching the headlines at 2:00
today. >> all right zillow's latest results beating forecasts. the firm issuing weak guidance for the second quarter they said their cfo will step down from that role at the end of the month. amc entertainment posting higher than expected first quarter numbers, they credit box office suck social securities o "black panther" and jumangi. mosaic first quarter numbers, sales dropped due to shipping bottlenecks up in canada there's a later start to the spring growing season. north american farmers if you're watching us, let us know if that's true. leslie picker has the top trending stories
>> last night was the met gala a-list celebrities coming out in full force for the annual fund-raising event at the metropolitan museum of art this year's theme, heavenly bodies, fashion and the catholic imaginati imagination. elon musk was there with his new girlfriend spotted on the red carpet, george and amal clooney, migos, katy perry and rihanna i don't know i thought grimes' tesla necklace was a big thing in the business world. brian? >> yeah. that's -- we're watching a video behind you of a -- some kind of a dog? so you're talking about elon musk and this necklace, but i see a dog. i'm trying to see if the dog is wearing a necklace and driving a tesla. why is the dog driving i have a lot of things going on. >> let me answer those questions
for you. a local news station in new hampshire is prepared for the dog days of summer weather forecasts last night was interrupted by a canine visitor. he strolled across the set making his live tv debut no word yet on whether the pup improved the forecast accuracy >> it looks like a mix between a border collie and a burmese mountain dog what was it doing inside there >> emotional support dog, leslie >> emotional support companion >> i have an emotional support bat under my desk. you have never seen it >> given the weather we've seen this spring or lack thereof, it may be necessary >> there's no spring your screen going to all black represented how grim the spring has been thank you very much. do you care about gas prices we have you covered. we'll give you the five big stories playing out in the oil markets now and how much higher will gas likely go over the
happy anniversary dinner, darlin'. can this much love be cleaned by a little bit of dawn ultra? oh yeah one bottle has the grease cleaning power of three bottles of this other liquid. a drop of dawn and grease is gone. welcome back if it seems like there's a bunch of different story lines swirling around the oil market now, you're right. it can be confusing. don't worry, we have you covered. here's the five big story lines to keep an eye on. number one, the coming announcement today about the fate of that iran nuclear deal,
that's creating tension. oil up about 10% since the president suggested that the u.s. could withdraw from that deal. number two, you have to watch the calendar and whether or not those opec output cuts will be extended past the current program for a few months the famously cheating opec has held to their previously agreed to cuts. the saudis there are more reports that they're looking to push prices higher, maybe to 80 bucks, because they want 80 to finance their plan called vision 2030. all of that may be countered by this, america's continued shale renaissance. the u.s. is at 10.5 million barrels a day and the rig downs keep going up and there are whispers from texas that we may hit 11 million barrels by year's end. could that boom that we just talked about be impacted by sand
and water? yes. here's why frac sand and wastewater for disposal both are needed to frac, both are in shorter supply prices are rising all across texas permian basin and elsewhere, that has more wondering how much more oil we can pump in the united states. there you go those are the five big things to watch in oil and gas now certainly lots to come in the weeks and months ahead as always, we'll have you covered on cnbc. let's talk more now even if you don't care about oil, you probably care about gasoline and prices at the pump joining us is dan mcteague from gasbuddy.com how much higher is gasoline in the states higher now than it was at this time last year >> about 51 cents this morning, according to the gasbuddy live ticking average. yet it was 53 cents.
we're still about 50 cents higher than 2017 at this time. the real question is is it too high will people turn away from their vehicles at this point the suggestion is not, but we have not even hit the dog days of summer yet >> i want to be clear, we are up 50 cents or so higher from last year, but not on an absolute basis high, are we >> no. absolutely not if you look at where we were in '08, you know, when you were looking at averages of 4.10 a gall gallon, in terms of 2012, 2013, all those times were much higher average prices across america today were about 2.81 a gallon we still have a long way to go that time is just before opec and others decided that they were going to in fact flood the world with oil, a strategy which they are now reversing but the reality is we have not seen prices since that time. and depending not just on
geopolitical issues, but venezuela, will it continue to produce oil. is there too much light shale in the world among american refiners, are we looking at greater exports coming out of the united states? all of those are big factors in terms of where prices go we don't have to go that far, we just have to wait for the api report the wednesday weekly petroleum inventory report all of these things are indicators of where we can best expect prices to go especially starting the launch of the official driving season. >> do you think they will be higher >> i get the sense if we can get this high, yes, we could see prices go higher right now i think we've hit as high as we can go. again, it's a wait and see thing. refineries are coming back online last he would we saw an increase of 6.2 million barrels for crude. a slight increase for gasoline
again, i think we have to look at almost week to week no one except a handful would have thought we would be this high at the beginning of the year we suggested 2018 would be the most expensive at the pumps going back to 2014 i don't think we're out of the woods yet. there is still movement upwards for gas prices i wouldn't be surprised to see 5 or 6 cents more per gallon as we head towards the summer. >> dan, we are watching it appreciate your views. thank you. still to come on "worldwide exchange," including your top global hot spots, the international markets, where you might want to think about putting your money. and a morning rbi that is anything but plain vilanla anything but plain vilanla we'll explain when we come back. people who rely on us every day we'llto deliver their dreamsack. they're handing us more than mail they're handing us their business and while we make more e-commerce deliveries
yourbut as you get older,thing. it naturally begins to change, causing a lack of sharpness, or even trouble with recall. thankfully, the breakthrough in prevagen helps your brain and actually improves memory. the secret is an ingredient originally discovered... in jellyfish. in clinical trials, prevagen has been shown to improve short-term memory. prevagen. the name to remember. jay powell talking about meaning markets overnight. in a speech in switzerland powell saying tighter policy should be more manageable for
emerging economies and while emerging markets have had an incredible run recently they have hit a bit of a stumbling block. let's get more from seema mody >> emerging markets have come under pressure as of late. the main reason is the strength of the dollar which appreciated about 3% just in the past four weeks as we look to rising rates for more answers around tightening monetary policy a stronger dollar means emerging market debt becomes more expensive as emerging market debt is dollar denominated the sudden reversal in the dollar sent the argentinean peso to a record low pushing the central bank there to raise the rate to 40% there 27%. that's a dlramatic move experts say the pain may not be over it's not just the peso we've seen weakness in the brazilian real, the turkish lira and the indian rupe.
the broader msci continues to underperform the u.s. market in 2018 after gaining over 30% last year but there are other headwinds. we look at political uncertainty, trade uncertainty around u.s. tariffs and the impact on exports out of emerging market nations, and key elections in turkey, mexico and india. another challenge we tend not to focus on is higher oil prices. good for nations like russia and saudi arabia that produce oil, but it's bad for those net oil importers like japan, south korea and india. that's why this iranian nuclear deal, the announcement from the trump administration will be watched really closely brian? >> seema mody, pleasure as always see you soon let's get more on the investing ideas around the news that seema brought you with tim seymour, a cnbc "fast money" trader there >> good morning. >> good to see you you heard seema's excellent
report there where can we invest? what kind of themes are you seeing around the world? >> emerging markets, they're selling in may, happening in april. down about 5% relative to the s&p. so investors that are used to seeing this dollar strength story, as eluded to by fed powell, em currencies have made significant fiscal adjustments, it does not mean a number of the historically difficult parts around the world and in emerging you heard maybe of the fragile five or some of these big account companies like a turkey or south africa, they have been under pressure if you look around the world right now, the countries to me that seem the most resilient in the face of what still could be a little more dollar strength, though i think the dollar now is overbought i think if anything tactically em investors may look at this as an opportunity in may to see outperformance i think 93 or 94 on the dixie is
where it settles in. >> you think so? i'm trying to figure out what's going on here. i see egypt, the best performing emerging market this year, then italy? i would not necessarily call that an emerging market. >> that's not fair >> one could debate that, but we will not do that to our valuable italian viewers. i'm trying to find a trend or pattern but it's hard. if you're investing in emerging markets and you look at the components of the msci, this is much a tech story as it is a commodity story. the top weightings in the msci are somewhere tilted towards china tech and some global tech stories including korea and india. asia makes up 60% of that index. if you want to look -- if you beli believe in the u.s. nasdaq story and you believe tech has growth, you can listen to that argument.
those include tencent, alibaba, if you want to follow that other global commercial trade story, you hahave mercada libre if you look at the places where you get the benefit of the weaker currencies, you go back to the old playbook, that means some of these stories, definitely in russia and definitely in brazil, they benefit from the weaker currency i think there's a new religion in terms of a capital discipline and balance sheet discipline so petrobras, which is not an exciting or novel story is one of the best performing stocks in the emerging markets sphere, not just because oil prices are better but because there's been an asset divestiture story while you look at the headline price in oil and you say this is a middle east tension story, the commodities landscape across american markets have provided a
great opportunity. >> tim, always spectacular see you at 5:00 eastern. thanks for watching white sox. "squawk box" is next ♪ we came with big appetites. with expedia, you could book a flight, hotel, car, and activity all in one place. ♪ mr. elliot, what's your wiwifi?ssword? wifi's ordinary. basic. do i look basic? nope! which is why i have xfinity xfi. it's super fast and you can control every device in the house. [ child offscreen ] hey! let's basement. and thanks to these xfi pods, the signal reaches down here, too. so sophie, i have an xfi password, and it's "daditude".
. comcast reportedly set to make an all-cash offer for 21st century fox. there's one big caveat. the world awaits president trump's decision on the iran nuclear deal that's due at 2:00 p.m. today. oil falling back below $70 a barrel is that what happens sell on the news and value act building a 2 $1.2 billion stake in citi group but it reportedly does not have a beef with citi's management. it's tuesday, may 8, 2018.
"squawk box" begins right now. ♪ >> live from new york where business never sleeps, this is "squawk box. good morning we're live at the nasdaq market site in times square i'm andrew ross sorkin along with joe kernen. melissa lee is in today. becky quick is making her way back from omaha. we are in the red. the dow looking like it would open down 56 points. nasdaq looking to open off as well down by 14 points. if the market opened right now, the s&p would be off about 7.5 points we have new trade data from china. imports grew 21.5% exports grew 13% the trade plus with the u.s. surging to $22 billion to 1$1