Skip to main content

tv   Worldwide Exchange  CNBC  February 26, 2019 5:00am-6:00am EST

5:00 am
zbloots 5:00 a.m. here on cnbc, 5:00 p.m. at hanoi, vietnam, where we are waiting for president trump to arrive in what is a high stakes sitdown with north korea's kim jong un we will take you live in moments to vietnam's capital tesla shares falling this morning. the s.e.c. going after elan musk they want to hold him in contempt we've got some breaking brexit news as well theresa may reportedly considering pushing back next month's brexit deadline. will the doves fly today on capitol hill fed chair jay powell testifying before congress and the markets may be on the line it's mystery chart time. there's the chart. shares sinking this year
5:01 am
it's a name you know, but one that your guess says might be a good deal for your money long-term. the name ahead on this tuesday, february 26th, as worldwide exchange ginds right now. welcome from wherever in the world you may be -- you are looking live at a picture of hanoi, vietnam, where president trump is about to touch down for a very highly anticipated meeting with north korea's kim jong un. trump will press for an end to north korea's nuclear program while north korea seeks to grow its ties to the west, albeit cautiously aemon has more and we'll get to him in just a minute first, we are following a major developing story on tesla.
5:02 am
frank holland has the details that is moving the stock frank. >> the s.e.c. said that musk violated thefraud settlement they agreed to last year by tweeting material information from tesla that move sent shares down as much as 5%, and they are still down lower this morning. in a court filing the s.e.c. pointed a tweet from last tuesday. it read, "tesla made zero cars in 2011, but will make around $500,000 in 2019 musk later clarified that he meant to say the company's annual production rate could be around 500,000 vehicles, but total deliveries are still estimated at 400,000 this year tesla, musk, and the s.e.c. settled a lawsuit last year over misleading tweets about plans to take tesla private as part of that deal, any material statements that musk makes on social media are supposed to be vetted in advance. the s.e.c. is skgs a judge to issue an order for musk to show why he should not be held in
5:03 am
contempt tesla has not commented, but musk has shot back tweeting s.e.c. forgot to read tesla's earnings transcript, which clearly states 350 to 500,000. how embarrassing tesla said barring unexpected challenges its production of more than 500,000 by the second quarter of next year tesla shares, again, are down this this morning. brian, back to you >> all 3.5%. frank holland, thank you very much see you in a bit now to vietnam where president trump is holding a high stakes summit with north korea's leader all in a city that became an important symbol of america's problems in the vietnam war. aim-on-joining us now from hanoi. >> we saw his motorcade winding its way through the hanoi streets.
5:04 am
we're expecting president trump to land here in hanoi in just a couple of hours, and all of which begs the question, just what should we expect from this summit meeting between the two world leaders? a couple of things right off the get go for this relatively hastily scheduled summit meeting between the two leaders. one is the issue of verification the united states side, brooen, is going to push for some verification that the north koreans have taken steps that were discussed in the singapore summit between the two countries last year, and will look for proof that those steps have actually occurred. also on sanctions, the north koreans are expected really to start pushing now for economic relief from the united states in exchange for further denuclearization steps, and then, finally, officials who briefed us in washington last week, brian, said that those sides have not even agreed on a definition for the term denuclearization ultimately, the two sides are going to have to put on paper just what that term actually means in practical reality in terms of the technology and
5:05 am
the facilities that the north koreans are operating throughout their country, so a lot here on the table. they are effectively at square one despite the fact that they had that summit moo egt between trump and kim last year. now, we're watching for the north korean leader here, brooirn, to get on the move here from the malia hotel we're expecting to see that at any moment we're expecting to see the president of the united states in a couple of hours. >> if you walk around hanoi, you see all of the high-end shopsz samsung facilities, prada stores a lot of economic activity here in hanoi, and in many ways the
5:06 am
u.s. delegation views this city and its history as a model potentially for what could happen in north korea, brian zblierkts the head of the labour party makes a huge u-turn. willem marks joining us live with more on that. willem >> thanks, brooin. once again, political developments here in the u.k. are driving the pound. let's take a look at what happened yesterday afternoon jeremy corbin, leader of the opposition party, formally declaring that the labour party would now back the idea of a second referendum on brexit. you see this blip coming up here that's in response to that, and then later last night what we see here is this rise now ur up nearly .7% against the dollar. what we've seen there is that is a response to reports that theresa may, the prime minister, is now willing to counter the
5:07 am
idea of delay in brexit. it's really a significant change if she does formally announce that, of course, because for the last two years had he said she wants to deliver brexit on time. clearly, though, time very tight. >> she'llen tabling a statement from lunchtime, on if in a couple of hours time on the east coast. talking about next steps later on this evening. >> those could include a parliamentary effort to try and delay brexit they could include a parliamentary effort led by labour to try and pull for the second referendum, the people's vote
5:08 am
then the key data really, according to people in brussels at the moment, is going to be this e.u. summit where all the heads of state from the 28 european countries come together very, very close to that march 29th deadline. that will be the final chance for theresa may to get approval from her counterpart in europe for any deal the house of commons may have voted on and approved by that point >> wow hard to believe just over one month away willem, thank you very much. also happening now in europe, perhaps the most important technology and communications conference in the world is in full swing it is the mobile world congress in barcelona, spain, and cisco systems is not only there, but they have been very active in making deals let's get right now to john ford who is live with the ceo of cisco. john >> thank you, brian. chuck robins, thanks for being with us here on cnbc this morning. >> great to be here.
5:09 am
>> it's been critical to me with all of the geopolitical risk, all the dynamics happening between breck it, the suts government shutdown, the u.s.-china trade relations, other issues in pockets around the world. i have been amazed at the resilience of the economy, at least based on what we've seen so far hopefully as we get resolution to some of the issues and we see whatever resolution comes with brexit, hopefully one that is a little more gentle than a hard brexit if we see continued progress like we've seen in the u.s.-china trade discussions, that would be positive, and i think if the economy has been able to move forward in light of all of that, we'll see better growth >> from there let's talk about
5:10 am
5g you guys. >> 2020 is a year we really expect to see more momentum behind that. what's the range of possible outcomes in 2020 based on demand especially in places like europe and emerging markets that aren't as strong as the u.s. economically right now >> i think that what we see happening is this year we see pilots beginning, and we see carriers announcing trials in turn cities where they're going to deliver 5 g connectivity to handsets, to just show what's possible most of that's going to be integrated into their existing 4g architectures today.
5:11 am
you know this given what you do every day. when you start adding if you look at 2022, we think there will be over 400 million 5g connections in the world, and with all of that capacity at the edge, the core network will have to be lifted in order to accommodate it we think you'll see built-out over the next two to three years. >> thanks for joining us here on worldwide exchange you are making billions of dollars in deals all over the world. is there any sign from where you sit that the global economy is slowing down at all? >> well, we said on our last earnings call that we saw very consistent performance from the first day in the quarter to the last i was just obviously talking about the resilience that the economy has shown. i think in this particular segment in the carrier space we could be entering into a multi-year expansion where all
5:12 am
the carriers, as they build out new surfaces and new revenue streams around 5g, you're going to see capital investments to actually accommodate this onslaught of traffic i mean, in 2022 over 70% of the traffic from mobile devices are going to be videos that puts loads on networks. they're going to have to continue to upgrade hopefully in our business, we'll see service provider segment actually begin to pick up steam over the next few years. that's like with the enterprise piece over the last couple of years. >> should we, chuck, look to regional economic health as a proxy for how much data they're going to be pumping out and, thus, what the demand for these new networks is going to be? >> i think that the data is going to be massive regardless of the economic health >> really? >> in general. i think that in many cases the emerging ktsz will want to take advantage of this technology because some of the problems
5:13 am
they're trying to solve or some of the opportunities they're trying to attack just require 5g think in eamericaing countries that have rural areas where you haven't been able to deliver high quality indication, high quality health care. we have underlying technology that can help them do that, but you need that high speed connections. building tersal connections has been prohibitive in some cases because of terrain, but getting 5g there, changes that i really believe it will give us the opportunity to reach rural areas we've never been able to reach before, and a lot of those areas are in emerging countries. >> very interesting stuff. chuck, thanks for taking the time, sitting down with us hereby on cnbc brian, breaux zbloosh john fort and chuck rob binins, thank your much an investor who called this year's big rally and what he sees happening right now later, do you think housing is dead you might want to think again. wait until you see some of the returns on the stocks we're going to show you.
5:14 am
they're under the radar names, and those names just for you wh wrernene tu. ...red-blooded. right this way. you thirst for adrenaline, you hunger for raw power. well, you've come to the right place. the road is yours, dig in. [kno♪king] ♪ memories.
5:15 am
what we deliver by delivering. willy davis, who has alzheimer's. i decided to make shirts for the walk with custom ink. the shirts were so easy to design on the site. the custom ink team was super helpful and they just came out perfect. seeing my family wearing my shirts was such an amazing reminder of all the love and support that everyone has for my dad. - [narrator] check out our huge selection of custom t-shirts and more, for teams, businesses, and every occasion. you'll even get free shipping. get started today at customink.com.
5:16 am
you'll even get free shipping. want more from your entejust say teach me more. into your xfinice remote to discover all sorts of tips and tricks in x1. can i find my wifi password? just ask. [ ding ] show me my wifi password. hey now! [ ding ] you can even troubleshoot, learn new voice commands and much more. clean my daughter's room. [ ding ] oh, it won't do that. welp, someone should. just say "teach me more" into your voice remote and see how you can have an even better x1 experience. simple. easy. awesome. >> kind of flipping the trend we have seen lately, dow futures actually in the red. we haven't seen that in a while. dow futures off about 63 points right now. remember, the dow trying to make it ten straight gains in weeks in a row the dow and s&p are up five of
5:17 am
the last six sessions. technology is up 11 sessions in a row. that is the longest winning streak in nearly two years zblierngts trade talks, something we've talked about at the top of the show, certainly very important to your investments. we have seen the markets rise on optimism that a deal with china will roll on your next guest has been bullish to start the year, and he has been right let's welcome back in dan, chief investment officer at palisade capital management i know it was so hard in december the markets were sliding down, down, down >> i think we could be at the very early stages of that pause. i want to make it clear that this is a pause that will refresh the market somewhat from, i would say, slightly overbought conditions. a lot of that optimism that i have for the balance of the year is really circled around the federal reserve, which has
5:18 am
really gone from being a headwind to now a tail wind. >> there seems to be a school of thought that the market gains for the year have already been put in >> yeah. i don't agree with that because i do think there's going to be a catch-up in corporate profits. i think this the fourth quarter was a little bit jarring for a lot of corporate ceos and the guidance was somewhat tepid into the first quarter. so much of that the responding to the markets somewhat, and the uncertainty around trade and that the time the federal reserve, which was really giving a very mixed message about what they were going to do. i think it's very important to note that i think chairman powell has found his voice he did what most fed chairman do when they're now in the job. they make rookie errors, and, again, i pointed out thatle aan greenspan, you know, preceded over the biggest collapse in the stock market that did not result in a recession he had just come in the august before the crash of 1987
5:19 am
>> today we have what used to be called the humphrey hawkins testimony. jay powell and congress. how much of the markets run going forward is going to be reliant on jay powell remaining a little softer on rates >> i think it's extremely important. that will allow the markets to get a resolution on trade that's going to be extremely important for cap-ex cycle we have all the indwreed yents in place of now even lower interest rates, making stocks more competent ti with bonds, and also, that, you know, companies are going to allocate capital because they have a corporate incentive to do so with -- >> it's like december never existed. >> well -- >> we're falling 400 and 500 points in a day. volatility sored all of a sudden the calendar
5:20 am
switches, and we get this market rebound. what happened? >> you just run out of things to sell that's how capitulation. that's the definition of it. we talked about it on the 27th of december. everything that wasn't screwed to the swaulz was being thrown out the window when you get to the sell everything because i can, that's typically a market bottom. it's unusual to see it, but it's not unprecedented. >> do you think the s&p ends the year higher than it does now >> i do. i do i had said between 10% and 20% we're more than halfway through that, so we've already gotten, you know, the low end of where i thought returns would be i think we could easily get to the high end >> perfect example of why you got to stay invested, right? >> you do. nobody sends the memorialo rnd awhen to get in or out you have to stick with it. >> always a pleasure great call, by the way thank you, dan >> it is a businessy day ahead probably the big story today,
5:21 am
federal reserve chairman jay powell heading to capitol hill where he will testify before the senate banking committee now, on the data front, you are going to get consumer confidence and a ton of housing data. housing starts building permits the kay shiller home price index. they are all out today a great window into how real estate is doing. 36% this year, and mi homes up 28% this year. wow. up next, early morning gains we're talking crafts, cars, and health care. three big name stocks that are pushing higher this morning. plus, it is our mystery chart time we showed it to you earlier in the show all right. there's the chart. awful this year. here's a hint, companies started in 1858, but despite that history, it's now the second
5:22 am
worst performing stock in the s&p 500 this year. feed us your guesses at cnbc wel inyou atam'lbrg th ne when wel inyou atam'lbrg th ne when worldwide exchange returnsthingd without. literally! this cable. looks ordinary, right? (and it is!) but plug it into your trading systems, and.... whoah... you open a whole new world of shockingly basic access to those fusty old exchanges and the data they distribute. we're talking monopolistic-levels of access. like, what-am-i-paying-for-exactly levels of access. want the ability to simply trade on modern markets? it's in the cable. want access to the information you need to function at your job? it's in the cable. want to be forced to join in a pay-to-play system that's anti-competitive and learn to like it? come on folk, kiss that cable! it's the only cable you're ever going to need. this cable absorbs all your extra capital! now other places may try to sell you this cable for a hundred bucks. because, let's be honest, it's just a cable.
5:23 am
but if you call in the next ten minutes, it can be yours, not for 100... not for 75... we're talking recurring monthly payments of $19,995.95 and that's before you make a single trade! if that sounds artificially high for what's really just an off-the-shelf wire that is basically just the cost of entry... well...too bad! act now - because you have to! seriously. you have to. ♪ $20,000 for a cable is just the beginning. download the report.
5:24 am
now you can, with shipsticks.com! no more lugging your clubs through the airport or risk having your clubs lost or damaged by the airlines. sending your own clubs ahead with shipsticks.com makes it fast & easy to get to your golf destination. with just a few clicks or a phone call, we'll pick up and deliver your clubs on-time, guaranteed, for as low as $39.99. shipsticks.com saves you time and money. make it simple. make it ship sticks.
5:25 am
>> is that the strongest growth rate since the company went public back in 2015. it's the same growth as type of buyers and sellers meantime, tenet health care posting a loss, but adjusted earnings and revenue topped forecasts. the hospital operator is also guiding full year revenue above analyst estimates. the stock up noern 60% to round on the i trifecta, hertz shares are soaring today revenue coming in slightly better than expected let's get a check on the morning's other top stories outside the world and money and business francis riviera of cnbc now with those for you. >> hi, brian good morning to you. we start with michael cohen on capitol hill the president's former attorney and long-time fixer will testify before congress for three straight days. today's hearing before the senate intelligence committee is behind closed doors, but
5:26 am
tomorrow's house oversight committee hearing will be public a source tells nbc news that cohen will provide evidence of criminal conduct by mr. trump since he became president during that public testimony wrv. >> the train was traveling when it stopped in its tracks nobody was hurt because of the worsening conditions, though that train had been trapped there since sunday evening zblierngts passengers were headed to -- many of them thb stranded for over 30 hours the resources are running low for the dozens of people on board. one passenger says people have run out of diapers for their babies they have to use clothes instead. amtrak says it's working with union pacific to clear the roads. a two-foot python hitched a ride from australia to scotland hidden in one woman's show it survived a 40-hour trip and three flights. she discovered the snake while
5:27 am
unpacking and so-called u called scotland's society to prevent cruelty to animals you know, a little bit of wanderlust for that snake, it seems like >> francis riviera, nbc, giving new meaning to the term snake skin shoe. thank you. up next, can a deal be reached in vietnam that will make both the u.s. and north korea be able to claim victory we're going to lay out the goals of each ahead. and a biggest just ahead for you. schwab's jeff lays out a battalions royale that is going on in the markets right now. why two important investments may be saying two very different things rlide chgend wodwexan will be right back
5:28 am
5:29 am
5:30 am
good evening, vietnam. president trump expected to land in hanoi ahead of a high stakes sitdown with kim jong un can he secure a historic denuclearization deal? elan musk under fire the s.e.c. wants him held in contempt of court and tesla shares are falling right now we're getting close to revealing our mystery chart. the stock the second worst performer in the s&p 50000 this year another hint it moved to its iconic location 117 years ago. her name and if it's a good deal for your money right now as worldwide exchange rolls on. welcome back, and thank you
5:31 am
for being with us. it's exactly 5:30 a.m. eastern time let's kick off the second half of the show with your executive recap. frank holland is here with that. thai frank. zhoo shares of tesla, they're really hitting the skids this after the s.e.c. asked a federal judge to hold elan musk in contempt of court for violating its deal, citing tweets that musk made last week. back on february 19th musk tweeted and then he revised projections for full year tesla manufacturing numbers. some brexit news freesa may is considering a plan to day brexit. the u.k. prime minister is expected to allow her cabinet to discuss extending the deadline beyond march 29th at a meeting today. the final decision could be announced in parliament later today. back here in the u.s., fed chair jay powell is heading to capitol hill he is testifying before the senate banking committee where, that hearing gets underway at 10:00 a.m. eastern brian, back to you now let's get back to your top story. that is the high stakes showdown
5:32 am
between president trump and north korea's kim jong un in hanoi. the north korean leader arriving in the vietnamese capital overnight. president trump expected to touch down shortly both sides are looking for a so-called grand bargain where they can come out and each claim a win. what would that look like? eunice has more. >> thanks, brian well, tim, as you had said, arrived in hanoi today a long grueling trip by train and by car to get here, and he will be meeting with president trump tomorrow, wednesday evening, for a brief one-on-one. then the two are expected to sit down for dinner with their advisors then the hard work begins on thursday when the tour is expected to hold a series of meetings tim is a security conscious person we don't know what his movements have been in the city. we do know that he has met with vietnamese officials and also expected to be visiting
5:33 am
industrial parks such as one where i am now this is a factory that sells and exports clothes to the united states it's one of the many factor that is have helped vietnam make a successful transition from an isolated command economy to a more open one. this is where the similarities are and why north koreans have reportedly been interested in looking at vietnam as a possible model for their future from what we understand from the kim family, they are quite sensitive about the idea of regime change. finally, vietnam has been able to maintain and, in fact, increase a level of political independence they used to be an enemy of the united states. now they count america assist one of their biggest customers, and that's allowed them to have a great degree of leverage over
5:34 am
china, and that could be attractive for kim because north korea is very heavily dependent on beijing for all its economic needs. the big question is whether or not what kim sees in vietnam is really going to influence the negotiations as he heads into the talks with president trump the yeet naumese economy, you can literally see behind you where you are has been firing on all cylinders. how much does the macroasia situation, you and i have talked about so much regarding china, fall into north korea's hands. is it a positive, or is that weakness a negative and gives kim jong un a weaker hand going into the high stakes showdowns >> i think people around are
5:35 am
hoping that this summit is going to be successful because north korea is seen as a major risk for security out here. however, there's been a lot of concern about some of the latest comments out of, say, president trump. president trump seemed to play down some of the examinations for this summit by saying on monday that a key would be satisfied if the north koreans only continued to test and if they didn't really do much else, and that's raised concerns out here because even if the north koreans have stopped their testing, that doesn't necessarily mean they've stopped developing weapons there's been a lot of questions as to what the end of the summit is really going to be. >> eunice yoon, thank you very much
5:36 am
>> we are in the middle of a best run to start the year since all the way back in1987. with us now is ed campbell, senior portfolio manager of global multi-asset solutions i'm going to call this the paula abdul market >> paula abdul market. >> i think it was janet jackson. what are you have you done for me lately? that's what it comes down to we've got the gains. the question is have the gains for the year all been made >> i would say no. i thought it was calling for 10% to 15% returns this year we're right about in the middle of that range if you think about what's really driven the rally, three basic things, right? we've had a big shift in fed and actions going from nowhere near neutral to an emphasis on patients and a newfound flexibility on the balance sheet.
5:37 am
valuations had gotten incredibly low. we go back to christmas eve when we had hit the low now we have geopolitical risks whether it's on the china front or, you know, the possibility that we could get a delay in brexit if we do get a greek e break lou with the china deal and if we do get a brexit delay, that could push the market -- >> which one do you think is more important >> i would say china trade deal. if we can put that way and get detante there ahead of the presidential elections, then i think that would -- there would be a big decline in risk premium. >> they are expecting president xi and president trump to meet in mar-a-lago in florida coming up do you think some of that optimism is already priced in? >> i think some of it is priced in, but i don't think it's fully priced in. >> if they go to mar-a-lago, if we get a positive tweet, or we get an actual deal, a handshake, we see the smiles, does the
5:38 am
market rally again >> i think we have more fuel in the tanks here. >> is that another layer to this market >> that would be a low probability that, you know, brexit would be reversed, but if we do get a delay here, more time for negotiations. we have to remember that this was not long ago -- the bake esh hughes index of economic policy uncertainty was at an all-time high 20 plus years of data. if we can bring those risks down a bit, that's going to be more fuel for the fire.
5:39 am
an environment where interest rates are low, and inflation is not a threat, i think those are good valuations where. >> ed campbell, always a pleasure to get your views, ed >> thank you very much >> a big analyst call just hitting the tape, and it is a double downgrade gore a dow components ubs cutting its rating on caterpillar to a sell from a buy. the firm coming out with a note saying the majority of caterpillars in markets will peak this week and demand declines even with a 3% drop in the stock. that is happening right now.
5:40 am
ubs out downgrading dow component caterpillar from a buy all the way to a sell. sees $12 more down side in that stock. more to come on that call throughout the day here on cnbc. coming up, we'll focus on another stock, and your mystery chart time it is time to reveal it. second worst in the s&p 500 this year a retailer started in 1858 we'll bring you that name ahead. later, is it a tale perhaps of two markets? what the dickens is going on with sckantos d bonds? with sckantos d bonds? we're back after this. with tough food, your dentures may slip and fall. fixodent ultra-max hold gives you the strongest hold ever to lock your dentures. so now you can eat tough food without worry. fixodent and forget it.
5:41 am
5:42 am
5:43 am
welcome back 5:42 here on the east coast. 4:42 a live look at chicago, the city with broad shoulders time now to reveal today's mystery chart and to recap the hits 1858 founding. moved to its most iconic location in 1902 it's the second worst performing stock in the s&p 500 this year the answer is macy's the single m results are on the way for macy's investors have very low expectations for macy's numbers. >> macy's already told us how tough it's going to be they made a pretty lengthy
5:44 am
disclosure of exactly what they thought was going on they told us how difficult it was. yeah, it's time to take a hard look at that because macy's will be the survivor in the space, right? and they're not highly levered they are maximum taxpayers they have all those advantages the disadvantage they have is they're in a lot of malls that are struggling, and it's hard to fight that battle against on-line and they have to invest a fortune into on-line to do it. same thing wal-mart did, right some they invested a fortune in on-line, and it's working for them what we want to hear from them today is that smaller stores, is it some store closings, is it restructurings, are they doing some things that will help the business going forward we don't know about yet i think we may hear some of that today, and i think, yeah, it's a time that you can take a good hard look at them because they will win the space >> paul mart did well. does macy's have an economy problem or a macy's problem? >> macy's does not have an economy problem. just like wal-mart had a great number
5:45 am
target gave us great numbers when they released their preshow. the consumer is great. that's not the issue kohl's will have good numbers. nice macy's is in the phase of having to reconfigure the business to serve that customer, and they're mall-based they've been doing a good job of it, right? they're moving on-line and doing all the buy on-line pick-up and return to store. all the stuff you have to do but it's an expensive process, and we've seen that put a lot of pressure on them yes, they're not where they need to be, but it's not the consumer it's the department stores problem. >> i know real estate and malls in particular whereby have been an issue with a market cap of 7.5 billion dollars, at what point does macy's real estate value support the stock? the market appears to be valuing their core business at almost nothing. >> we're clearly there if anybody cared about the real estate the problem you've got today is the real estate values are hard
5:46 am
to realize they would take a long time, and what have you -- nobody gives you credit for that in the current marketplace? >> why not >> because it's hard to realize it, and it takes a long time >> you can't sell the real estate a lot of it's real estate and maybe others for amazon, perhaps, don't want. >> right nobody needs that real estate. all the stores today are too big. >> you ran department stores for, what, 30 years? >> 20 department stores. other times other kinds of retail, but a long, long time. >> what would you say to macy's ceo right now? >> i would say that jeff is doing exactly what they have to do, and the question is when can he get the marketplace to understand that it takes some time and that it's all going to work i personally think they're going the right thing. i think they have the strength of footprint they've got to put in more off price into their stores, which they've been doing they need to do that faster if they can they need to deny to move on-line. they need to recognize that and start bringing that to the bottom line.
5:47 am
they're doing all the things that you have to do to make that happen if macy's can't make this work in department stores, nobody can. >> they're doing all those things, but the stock is down 33% in 180 days. >> yes >> has the market discounted macy's stock too much? >> well, i think it has. my point is they haven't shown us that yet, and as soon as they do, the market will go, oh, my god, it's working, and they'll all be buying dpen right now they're in the wait and see mode of is this really going to work? is there a future for the department store if there is, it's macy's kpo. >> why stocks and bonds seem to be telling two different stories right now. schwab's jeff clinetop is here and will help you make sense of it all later, hidden housing plays. the rbi of the day
5:48 am
random but interesting the small town producing two of the hottest housing stocks in america. i want you to think patsey cline. stick aroundre... ...red-blooded. right this way. you thirst for adrenaline, you hunger for raw power. well, you've come to the right place. the road is yours, dig in. for just $39.00 ? yup that's what we do. and you guarantee they'll get there? yup that's great! i have two sets. you know ship sticks only ships golf clubs? right?
5:49 am
honey are we there yet? umph! ship sticks. that hurt. unpredictable crohn's symptoms following you? for adults with moderately to severely active crohn's disease, stelara® works differently. studies showed relief and remission, with dosing every 8 weeks. stelara® may lower your ability to fight infections and may increase your risk of infections and cancer. some serious infections require hospitalization. before treatment, get tested for tb. tell your doctor if you have an infection or flu-like symptoms or sores, have had cancer, or develop new skin growths, or if anyone in your house needs or recently had a vaccine. alert your doctor of new or worsening problems, including headaches, seizures, confusion and vision problems. these may be signs of a rare, potentially fatal brain condition. some serious allergic reactions and lung inflammation can occur. talk to your doctor today, and learn how janssen can help you explore cost support options. remission can start with stelara®.
5:50 am
that's where i feel normal. explore cost support options. having an annuity tells me my retirement is protected. learn more at retire your risk dot org. welcome back something very interesting and important is happening in the markets right now. let's call this the wbi, wonky but import this line is the gray one, the blue one it's the msci all world stock index. okay very broad measure you can see for most of the last year they were tracking in roughly the same direction look at recently receiving msci world stock index employ up, while yields on the ten-year come down a big divergence rfr what is that telling us? jeff columbinetop, is the chief global investment strategyist at clarlz schwab. we pulled this chart out of your notes. thank you for bringing it to us.
5:51 am
what different stories are these two things telling you right now? >> it's worngy but important, right? the stock market seems to be rallying on the idea that some of the headline issues, let's call it maybe fewer concerns over bris e breck it going a bad way. maybe on a trade deal. those news headlines are lifting the stock market giving investors optimism that growth is going to rebound with the economy and earnings the bond market doesn't see it that way very focused on the data, which continues to be to the softer side but for earnings and the global economic picture. >> there was paired in the fall where they started to diverge just a bit, jeff bond and stock markets telling different stories. not necessarily to the magnitude recently wrk every what makes you so confident that bonds and the credit people who like to believe they're smarter do have it right
5:52 am
>> credit conditions are incredibly important in the latter stages of the cycle, and the bond market seems to be focused on that. even more so i think some of the things that have helped support this rally, like the burgeoning trade deal between the u.s. and china, really aren't the root cause of global economic weakness not even in china. for example, export growth from china is up 9% year-over-year through january. trade hasn't been a problem for chinese growth it's much more focused on things like tighter credit conditions, which may be lingering here this year and further slow the world's second largest economy i think the stock market has taken optimism from some headlines that aren't really the root cause of weakness in the bond market is instead focused on the root causes which have yet to change. >> is the stock market wrong >> i'm afraid, look, the rally so far this year does make some sense. stocks may be going a little too far in pricing in the start of a global recession late last year. certainly getting rebound there. i'm afraid, as we look out over the next is it months, from might be more risk to the down side than the up side from here.
5:53 am
>> how much risk >>. >> i think one of the things that could change that outlook, maybe more optimistic on the stock market, is the start of a tax war. a tax war. germany is talking about cutting corporate taxes. so is the u.k., netherlands, canada many countries following the lead of the u.s. that would turn around the trajectory of earnings estimates and really cause maybe a brighter outlook as earnings would then support higher valuations that could change, and it's potentially something on track for the second half of this year >> do you think that's why the globe has done well in part, that optimism over that so-called tax war that you talk about, jeff? >>. >> there may be more stability or earnings as to what we'll see in the u.s. this year? the other is the fact that valuations overseas and the countries and certainly emernling markets are well below those of the u.s.
5:54 am
>> maybe like health care. health care is probably less vulnerable to a potential slowdown later this year, given its earnings are less economically sensitive >> want to row cap what just broke a few moments ago. probably the big analyst call of the day. that is a big downgrade for dow component caterpillar.
5:55 am
ubs doing a double downgrade on cap. think aus believe an earning decline is not fully priced into caterpillar stock. they are cutting their price target to 125 from 15 had. okay caterpillar's current price, 137. stocks down 3% right now on in the premarket. ubs is seeing more than $12 of down side for caterpillar. here's their view also they know that buy backs have been a big part of the caterpillar story. they think buybacks are going to continue, about ut they don't believe that the buybacks are going to be enough to put a floor under caterpillar given the slowdown, particularly in oil and gas. big double downgrade for caterpillar on this morning. stock kodown 3%.
5:56 am
zbloinchts well, we just talked about wbi, wonky but important time for the rbi, and today let's get random with housing. housing starts figures are out in just a few hours. despite some investor concerns, it has been a hot space. did you know the average housing or home related stock, you know, kidnaps who make carpet and faucets and paints, is up 22% this year. wow. the best performing housing related stock this year is american woodmark. up 54% never heard of them? don't worry. most of you probably haven't $1.35 billion market cap covered by only a couple of analysts, and it is based in the heart of the shenandoah valley, winchester, virginia another hot housing stock this year, deck maker trex. up 28% this year based where? winchester, virginia it's random but interesting that winchester, perhaps best known as the home of patsey cline and apples and some others is home to not one, but two red hot
5:57 am
housing stocks you go, winchester thanks for watching worldwide exchange quk x"s xt 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. healthier brain. better life.
5:58 am
5:59 am
president trump, meanwhile, set to arrive in vietnam for a high stakes sitdown with north korea's tkim jong you thinun we'll go live to hanoi >> we'll hear from home depot any minute now, and macy's later this morning it's tuesday, february 26th, 2019 "squawk box" begins right now. ♪ why do you build me up ♪ buttercup, baby, just to let
6:00 am
me down and mess me around ♪ >> live from new york where business never sleeps, this is " "squawk box." this comes after a bullish run for wall street. we have seen the highest closes for the dow and s&p 500 since november 8th yesterday we also had the highest closes for the nasdaq since september 7th. nasdaq, by the way, has been up ten out of the last 12 sessions, and the dow and s&p have been up five of the last six trading days we'll see how things go as we get close to the opening bell. we have fed testimony today and other things that the street will be watching right now you see that

42 Views

info Stream Only

Uploaded by TV Archive on