tv Worldwide Exchange CNBC March 20, 2019 5:00am-6:00am EDT
5:00 a.m. at cnbc global head skbaurkts here's your five at 5:00. the fed front and center as wall street investors await the big interest rate decision today we'll break down the key things to watch for that's straight ahead. a final push the u.s. and china reportedly jump-starting trade talks. we're on the ground in beijing with those details fed shares tumbling here take a look at this. again, a huge miss, and it's what the delivery giant is saying about the overall economy that's getting all the attention from fedex another california jury says buyers popular, weed killer
roundup caused a man's cancer. we'll have the fall-out. the clock is ticking we are now just nine days away from brexit. we'll go live to london with the latest details there it is wednesday, march 20th. the first day of spring. worldwide exchange begins right now. welcome to worldwide exchange i'm dominic chu. brian sullivan is off today futures are in the green the s&p 500 indicated to open higher by about four points. the dow jones up by 35 the nasdaq up 12 to 13 treasuries certainly a focus today. the fed wraps up a two-day policy meeting for right now ten-year treasury note yields around 2.6%. two-year note yields 2.46%
the business focus onning with toted. the fed. let's bring in gina sanchez, ceo at -- also a cnbc contributor. gina, it's fair to say that there is not an expectation that there is going to be an interest rate decision, but what exactly will be -- >> i would say that hawkish bias would probably be a negative for the markets. particularly given how they reacted to the financial tightening in december >> so -- >> i think the second thing we're looking for is -- >> i was going to say, please
continue >> well, i think the second thing we're looking for is the plans for the $2 trillion run-off. where does the fed back. even most important is that the idea that the dot plots were updated to a rachet lower. that's the expectation right now. or is it the idea that we will get more on the balance side of things >> i think the clarity on the balance sheet side is important, but i actually think the bias could be the kind of element that could either assage markets or spark fear in them. i would actually expect that their bias might actually maintain neutral we have a new member of the fed that joined in the fall of 2018, richard claritta, and he is a known dove, and we could see more dovishness in this makeup of the fed just because, you
know, he believes that wages are structurally lower and, therefore, we probably aren't going to have an inflationary bias if you believe that, and you can keep rates lower for longer. i don't know that that's healthy in the long run. that could certainly be the short run view, and that would certainly buoy markets at least for now. >> the tepid inflation outlook and the -- i guess lack of a fear of growth or any kind of an idea that we could see a market slowing down has to play into the fed's overall thinking, so what exactly will we be looking for in terms of the global economy and how that's going to play into the fed's overall feeling on how to bias those interest rates >> well, the global economy actually is slowing right now. if you look at, you know -- you look at what's happening in emerging markets, china, europe, europe has been stagnating even in the u.s., the expectations are for continued slowing. you know, as that slowdown
happens, it actually -- you could make an argument that it's maybe not, you know, no longer the time to sort of keep the foot on the pedal that we're past that point of extreme stimulus and on the back end of that i do think that that's true. we are going from 2.9% growth in 2018 to probably 2.5 in 2019 to 1.9 in 2020. that's the current expectation the problem is we weren't able to get rates high enough while the -- while times were good to sort of build in enough interest rate cutting power when we do slow down. nobody is expecting a big slowdown, so it really doesn't matter, i think, in some policymakers' minds that we might onliville 250 or 300 basis points of cutting power. >> if you could ask fed chair jay powell one question today, what would it be
>> i would ask chairman powell what are his expectations for inflation visa vi the stimulus that we just had i'm curious to know whether they believe that this past stimulus was totally non-inflationary are we just simply not going to see it anywhere? we're finally starting to see some wage growth the reality is the phillips curve is flatter wage growth isn't as high as it was before the crisis hit. we're still, you know, at least 75 bips below the growth rates of wages before the crisis, and if you believe that that's because of the gi give economy and structurally the markets are different, i don't know that that's a healthy sign for growth going forward in the united states meaning that we could be caught in this really low growth environment for a very long time that keeps the 30-year really trapped in a range
>> okay. gina sanchez, thank you for the thoughts this morning. we are going to have full coverage of today's big fed decision and jay powell's comments and news conference starting at 2:00 p.m. eastern time on "power lunch." in corporate news, shares of bayer under pressure this morning. a california jury says the company's popular reed weed killer, roundup, caused a man's cancer this is the second roundup case to go to trial back in august a jury handed down a $290 million verdict in a similar cancer case a jury will decide if the monsanto unit will be held -- it is disappointed with the jury's initial decision, but we continue to believe firmly that our herbicidess do not cause cancer steeply lower in yurm even trading right now. you can see in german trading off by around 12%.
shares of fedex following a big earnings miss. contessa brewer here with those details. contessa >> the big headline here is that fedex continues to see a big slowdown in the global economy the company reported weaker than expected earnings and revenue in its third quarter, which included the holiday season. while fedex also cut its full-year outlook for the second time in three months, the company's ceo fred smith spoke to jim cramer on "mad money" last night, and he said the u.s. trade war with china and the brexit drama are weighing on global commerce. >> well, we certainly are levered to it, but on the other side of the coin, some of the things that we have done, like our integration of tnt, and some of the programs we have in asia should mitigate some of that, but no question about it, jim, if there's not some solution to brexit and some resolution of the china-u.s. trade dispute it's unlikely to see much global growth >> fedex also reports continued
weakness in its international express business that division includes the former dutch delivery company tnt. fedex has strugged since buying it for nearly $5 billion in 2016 fedex has more international exposure than rival ups. asia accounts for 10% have fedex revenues, and as can you see, the shares are off by 5.5% in early trading this morning >> thank you for that update on fedex. weave also got an earnings alert here on bmw. out with a big profit warning. the carmaker expects 2019 profits to fall more than 10%. the company also announcing a 13.6 billion dollar cost savings plan you can see bmw shares down big right now in german trading and a big reason why the dax is under performing many other european markets new this morning, we are learning more about what happened in a final moments before a boeing lion air plane went down in indonesia back in
october. reuters, citing people familiar with the plane's cockpit record, says the lion air pilots quickly flipped through the plane's manual to figure out why the jet was lurching down wards moments after takeoff. we'll continue to follow the latest on this unfolding story and bring you more details as we get them on our side shares right now of boeing bucking the trend recently higher by about one-third of 1%. we have a lot more here on the show, and coming up next, the brexit battle. u.k. prime minister theresa may under pressure with just nine days to go now until brexit. we are live in london ahead. plus, hitting pause. sony and nintendo stocks are feeling the heat this morning, and it's all thanks to google. chge wlddeain whenorwi
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higher open for now. the dow jones up by 20 points. the s&p by about two the nasdaq by about eight points as well. on the european side we mentioned some of that weakness. especially in the dax. due in no small part to buyer and bmw. the german dax off by a full percent. the foogtsy 100 just about flat right now in the cac and france off by . 1%. on the asia trade as they wrapped up overnight we showed you hong kong just now the shanghai composite and the hang seng in hong kong the nikkei in japan up by a quarter of 1%. sticking with asia, we are getting some big news on the trade front. the u.s. and china are reportedly ready to resume high level talks. eunice yoon has the latest details from beijing the trade negotiators have been in touch for weeks over video conferencing, but now it appears that the two sides believe that it's time for some real life facetime to get the
trade deal over the finish line. a senior trump administration official said that u.s. trade representative robert lightheiser and steven mnuchin will come here to beijing next week to meet china's vice premier. the "wall street journal" is reporting that liu will head to washington the following week. the aim is to get the deal done for a summit between presidents trump and xi by late april the talks are getting stuck on a couple of key issues the americans want an enforceable deal they want more than promises that china will curtail practices that the americans think are unfair they also want the chinese to agree not to retaliate if the u.s. reimposes tariffs the chinese have said that they are fine with something enforceable, but that it has to go both ways the other big issue is the timing to end the tariffs. the u.s. wants to phase the removal. the chinese want the tariffs lifted right away. there's still a lot of work that needs to be done, and a reminder, negotiators had hoped to complete the deal for a trump-xi summit right about now, but the timing slipped after the
chinese were reportedly spooked when president trump walked away from a deal with north korea's kim jong un in hanoi overnight president trump repeated that the china talks are going very well. at least for now well, now switching gears to europe, the clock is ticking towards a hard brexit. we are now just nine days away from the u.k. exiting the european union willem marks is live with the latest there willem, does it look like the extension being sought will be short or long? >> it's a good question. you remember last week that lawmakers here in westminster voted in parliament to seek an extension. they were essentially offered a choice by the government of a short extension if they voted through theresa may's deal by today or an ak nonlment they might face a much longer extension, and that would be up to the e.u what we've heard from the british government thork, though, is that there's not
going to be a vote tonight before that e.u. summit in brussels starting tomorrow, and theresa may is going to be sending a letter to her european counterparts asking for that short extension under pressure for some members of her own party and indeed her own cabinet. what that means, the government is acknowledging, that the e.u. could decide to insist on a much longer extension, and that will be very much in their hands. we've heard already from the e.u. they're running short on patience they want to see a reason to offer an extension without a specific reason from the british government they're not guaranteeing that they'll give an extension, and as you mentioned, just nine days to go, theresa may with the possibility of coming back here next week trying to get her deal through once again, but still facing that same problem where she doesn't have enough support inside her own party she's not certain of support from the small minority party from northern ireland that propz up her government, and there's no certainty she'll get enough people from the opposition labour party to support her either in order to get that magic number that rears a majority here in the u.k. and so
a lot of uncertainty as ever here in westminster. >> and willem, that uncertainty playing out right now. thank you very much for that let's bring in jane foley, head of fx strategy fx strategy is key especially gin sterling given the brexit drama. take us through how all of the volatility is playing out, and should we expect it, jane, to continue in the coming weeks jane foley it appears as though we've lost our connection we'll get back to her if we can, the connection being established. coming up next on the show, trump versus general motors. the president blasting the carmaker after it closed its lord's town, ohio plant. we are live in lord's town with the puss of the city coming up first, a big breakthrough. sage therapeutics hitting a major milestone in the battle
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>> last week when we had the u.k. lawmakers that vote for a delay, i think the market assumed that there would be a delay. we've got a few other hurdles to cross before that. we do need to wait to see what the e.u. will give the u.k. in terms of a delay they've said that they will only grant that delay if there is a concrete reason. of course, it's a big splooit split in the u.k. cabinet as to what those reasons should be even how long the delay should be there is still thatistic risk of a hard brexit next week or if a short delay is granted potentially at the end of a three-month period there is still a lot to play for and a lot of nervousness that should really be sinking into the market in the u.k. wrv how
are people positioned or should be positioned for the eventual outcomes and what the possibilities are that they could come to fruition. >> looking at the way sterling has been trading, there's a look at the performance it gets bought on dips, and, again, this is part of the glass half full. the market is of the view that as long as there is the will in parliament to avoid a hard brexit, no deal brexit, as long as there is the will in europe to avoid that, and as long as the electorate doesn't want that, a hard brexit, they won't have it. they are legally positioned for a hard brexit to drop over the edge of that cliff there is still a lot to be done to avoid that, and so we do see a little bit of volatility we do see some nervousness because the market has been assuming that we will get a
deal, a brexit deal and a hard brexit will be avoided, yes, there is room for celebration in sterling, room for up side if we get that deal and a hard brexit is categorically taken off the table, but i don't think the market is very prepared for a hard brexit. if that was then stance, then i think sterling will fall really very rapidly >> sterling, a key focus as is euro sterling as well. thanks, jacob foley for those thoughts this morning as well. let's get a check on the other big stock moves of the day so far. the fda approving sage therapeutics drugs to treat post part emdepression. sage says the drug, which is administered as a single 60-hour intravenus infusion will cost an average of $34,000 per patient before discounts it will also carry a black box warning flagging risks of excessive sedation we'll hear from the sage therapeutics ceo tonight 6:00 p.m. eastern on "mad money" with jim cramer
10 cent music reporting its first results. reporting adjusted earnings in line with forecasts. shares of the chinese streaming service are down today as the company faced higher costs to license music. those shares off 6.5% in extended trading nintendo isn't taking kindly to google's plans to launch a cloud video game service later on this year shares of the console maker falling more than 3% overnight in japanese trading. the google effect there playing now. let's get a check on the other top headlines. francis riviera live in the new york newsroom with the latest. good morning, francis. >> good morning to you well, they've gotten slammed in the west flood warnings still in effect across the midwest where a historic disaster is still unfolding. the situation is worse than ever before the damage to ag culture in nebraska this week is estimated to be nearly $1 billion.
thousands in the houston area are on edge this morning as a huge fire at the intercontinental terminals company, petrol chemical plant, continues to burn. the blaze has now spread to eight storage tanks and while there is no timeline for when the fire may burn out, authorities are trying to assure residents the air quality is okay even after 72 hours of that fire and you feeling lucky this morning? tonight's powerball jackpot now stands at more than half a billion dollars, so a lump sum weighing in at a whopping $335 million. can you imagine what kind of investing can go on with that kind of money? >> i've already got my tickets francis riviera, thank you for that update. well, still ahead on the show, crude realities. oil prices touched their fresh highs of the year. $60 a barrel is now within striking distance. we'll find out what's driving the big energy rally, but, first, we are counting down to the fed decision today the key things you need to be watching when worldwide exchange comes back after this.
the dount is on. investors are waiting. that big fed rate decision we'll bring you everything you need to watch. that's coming up bracing for a slowdown why fedex is raising a big red flag on the global economy and the verdict is in. a california jury says buyers roundup weed killer caused a man's cancer that stock moving in a very big
way this morning. >> here's what's leading cnbc.com right now fedex reporting weaker than expected earnings and revenue in its third quarter, which included the holiday season. the company also cut its full year outlook for the second time in three months. it cites the slowing global economy and the negative impact of trade disputes. fedex shares are down more than 6% in this early trade bayer under pressure this morning. a california jury says the company's popular weed killer roundup caused a man's cancer. this is the second roundup case to go to trial in august the jury handed down a $290 million verdict in a similar cancer case. now a jury will decide if
bayer's monsanto's unit should be held liable bayer says its herbicides do not cause cancer down 12% in germany. on the trade front, the u.s. and china reportedly ready to resume high level talks the "wall street journal" says negotiators from both nations have scheduled a new round of meetings in beijing and washington they're apriling to close a deal by late april. that would smooth things over for fedex, which is concerned about this trade dispute >> thank you for the headlines contessa brewer. let's get a check on the markets. futures pointing to a slightly higher open after yesterday. the dow broke a four-day winning streak the dow up by 25 points if these futures gains hold into the opening bell the s&p up by two points, and the nasdaq up by around ten points on the bond side of things, a key focus as the fed hands down its interest rate decision later on today ten-year treasury note yields 2.59%. two-year note yields 2.46% like i said, the big focus, the
fed today. we are just a few hours away from this afternoon's big rate decision let's bring in linda, senior portfolio manager at fed rated linda, thank you so much for joining us this morning. let's take us through just what you think the current market expectations are what are we all pricing in so to speak with regard to fedex or inaction today >> they are expected to announce balance sheet plans for their runoff you know, we want to see the timing of that, the level of that, the pace of that i i that's the first thing that's telegraphed over the last couple of weeks. i think in addition, what do we really want is for chairman powell to really stick to the script and not create headlines. not create just be consistent in what he has said of a last couple of months those two things are what we are focussing on at the moment
>> at least there's a concern right now. that global growth is going to play a factor into the fed's thinking should we be worried, should investors be worried about the global growth picture right now. >> we are seeing an air pocket both in u.s. and globally. really drin by the events of q4, government shutdown, trade issues slowdown in europe, brexit i think that is all kind of -- in addition to some weather issues in the united states as well, so all of that is kind of contributing at the moment a little bit of an air pocket in united states and globally, but as we look at the second half of 2019, i think we're going to see some green chutes starting to emerge we're seeing it in the united states with consumer sentiment numbers that have been bouncing back housing numbers that are being stabilizing. you have billing index, which is construction tooit indication for the next six to 12 months.
i think they're starting to show positive signs if we go to china, which is really a big engine of market growth and, in turn, european and german growth given their trading ties, i think the last six to 12 months, they have put over 70 different stimulus plans, including tax cuts, and that cuts as well. i think we're going to start seeing all of those kind of activities start to show green chutes out of china as well, which is going to help overall global activity more in the second half of this year >> we've been speaking so much over the course of the past few weeks about inflation and the inflation outlook. all of those stimulus measures you mentioned should start to at least move it in the upward direction, about ut we are still at relatively depressed levelled i was just looking earlier today. ten-year break-even rates that the prediction in the markets for an inflation right now, ten years out is still just around 1.7% what exactly does that say about
what the fed is looking at with regard to that overall inflation outlook? >> well, we have heard that fed is going to stay more patient with inflation even if it moves a little bit higher i think as we see more capital expenditure, that would also improve productivity and keep that overall inflation in check as well. we have full coverage of that decision and jay powell's news conference starting at 2:00 p.m. eastern time a big day for fed watchers >> if you haven't been paying attention, oil is now up more than, get this, 30%
year-to-date what's driving the rally receipt yoo, simply put, what is driving? why is oil up 30% since the beginning of the year? >> i am surprised it's not up even more. we obviously had opec production and sense then you had venezuelan production. there are no exports going to the u.s. right now weak venezuelan production the markets actually are very tight and kind of especially in the physical grades. you can see that refineries are coming out of maintenance, and i think this is just the start you are going to start to see more upward pressure on crude prices >> we talk about today being the first day of spring. the summer driving season here in the u.s. and other plays around the world just getting started. what is the outlook for oil prices and gasoline prices as we head into may, june, july?
>> i think oil prices should remain supported, and like i said, i think we can see another $5 to $8 higher gradually, not like immediately over the next few months on oil prices gasoline, however, of course, we've seen a very significant increase as we've switched the summer grade, like you said, but overall we remain quite negative on the outlook of gasoline prices simply because there is a lot of light crude around, and that is leading to a lot more gasoline and that's the production compared to the tightness which is really in the heavier andthe medium grades which is what venezuela and iran produces >> we laerd over the course of the past few days a lot of commentary coming out of the opec meetings. there is not going to be an april meeting now. what exactly is opec and its partner countries -- what are they thinking about weather production cuts will stay in place or whether they should start to maybe ease a bit and let countries take advantage of
the higher prices we've been seeing >> so i think the first and foremost thing in terms of what happened is that, yes, they decided to cancel the april meeting. however, this isn't because there's a rift between saudi arabia and russia or any other country. the reality is they would only have february data when they met in april it's just too little data to go on, and when they had decided to meet in april back in december, venezuelan sanctions wasn't a reality. they do need more time to assess where the market stands. our conversations with us also suggest that it's more likely than not that they will continue with the cuts when they meet in june opec do want to keep inventories in check and be slightly lower they definitely don't want the market to be over supplied all they're doing is just buying time rather than shift in policy i think saudi arabia leading from the front with production at 9.8 million barrels per day is very, very clear in esmessage that that's what they're staying
their course also remember, we've got the iranian waivers coming up on the 4th of may meeting in june gives them more clarity about where iran is going to be, where venezuela is going to be rather than rushing into a decision. >> supply has been a key focus for yourself, i'm sure, and many others out there let's talk about the demand side of things. how exactly do you see the story playing out from a u.s. economic standpoint, a global economic standpoint is there enough demand there to support oil prices as well >> i would say it's a great question i would say that the supply has been the main factor why oil prices have gone up 30% since the start of the year. i think that's why it's going to continue to go up towards, say, $75 for brent. i think the critical thing over here is demand because that's what really led to that decline in prices. at least part of it in q4. demand had come off very, very sharply. we had started to see stabilization, particularly in asia chinese demand is starting to pick up. the government is starting to boost the economy over there
i think that's really helping. we are concerned about european demand the outlook doesn't look very positive at all. u.s. demand is healthy, but it is slowing because, again, there are a lot of headwinds when it comes to economic growth that said, with the fed pausing and, like you said again, very important decisions coming up, we do see the economy is going to stabilize and that means oil demand growth is going to stabilize. we're not expecting fireworks, but we definitely don't expect a collapse in oil demand either. as long as growth remains stable at around 1 million to 1.2 million barrels a day, globally, i think oil prices already have a lot of up side from here >> our thanks. thank you very much for joining us this morning. we appreciate it >> thank you we have an earnings alert on bmw. the company out with a big profit warning bmw now expects 2019 profits to fall more than 10% this as the company launches a $13.6 billion cost saving
program. they're down more than 5% at this point in german trade you couple that with bayer's decline. coming up in the show, shutdown fall-out lord's town, ohio, in the spotlight over the closure of its general motors plant we'll take you live to that city with more coming up. san francisco taking a big stand against e-cigarettes chgeom bk tethwhen worldwide exan cesacafr is break. could you hand me those files?
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balance sheet commentary in the dot plot, so to speak, will be a focus. 2.596% the last for ten-year note yields. two-year note yields 2.46% as well lord's town, ohio, a big key has dominated all the headlines this week. thanks to president trump's push for general motors to reopen its plant there. frank holland joins us live in
lord's town with more on that story and set the scene for us how ask it feel in that part of ohio >> hope is the word we keep haergs in lord's town. there's hope the gm will reopen the chevy cruise plant and the hope that the president's tweets about lord's town will pressure gm to bring back the 10,000 plus jobs that were here at the height of production the president will be in ohio today visiting a tank manufacturing site, tweeted about lord's town over the weekend, tweeting in part, i want jobs to stay in the usa, and want lord's town and one of the best economies in our history open or sold to a company who will open it up fast lord's town closed on march 6th. it's currently on what's called reallocation, meaning it is possible that m could reopen it. gm called this closure a business decision citing sales of the chevy cruise in the u.s. for more than 273,000 in 2014 to about 142,000 lasts year
laid off workers in limbo after other gm plants that could take them away there their homes and their families ryan mccabe says after 19 years at gm, it's heart breaking >> when general motors says there are all these opportunities to transfer, it comes across as so cold and calculated because i know they have kids. i know they have families. you know, how would they react in the same situation as us? well, the jobs here at lord's town, the average seller was about 60,000 per year. that's that% more than the average of the median salary here on this county. the closure of this plant also expected to have a $3 billion negative impact on this region dom, back to you >> frank, how have people there reacted to the president's tweets about what is the feel
from the residents down there? >> people called this the heart of the community there are a lot of good paying jobs here that brought a lot of economic development to this area 2016, this county voted for trump in 2012. they voted for obama this is technically a trump county mixed reaction some people are also resentful that in 2017, the president said don't sell your home or move away the jobs are coming back this plant then closed however, on the flip side, manufacturing and jobs -- manufacturing jobs in ohio have increased by about 2.5% in the last two years a mixed reaction and some of the jobs have come back. >> in a battleground state, for sure, in this upcoming 2020 election thank you very much, frank holland. time for the morning's top trending stories contessa brewer is back with those. contessa >> dom, mostly, i want to talk about 11 minutes until the vernal equinox i feel like we should have a countdown. >> you have been hyper focused with regard to the spring
equinox. >> i'm so ready for warmer weather. let's move to san francisco where maybe it feels like spring already. san francisco officials introduced legislation would ban the sale of e-cigarettes in the city the shares of altrea, that has a 35% stake in jewel, to put this into perspective, not only would they ban it from city-owned property, like city hall, but they're even considering a measure that would ban the delivery to private residences in san francisco think about the efforts that that kind of prohibition take and why that wasn't done against cigarettes years ago they're really making it about the move to prevent young people from vaping. >> i guess as a naish californian growing up there, it was always -- california was always at the forefront of trying to kind of express health
concerns and legislation maybe it doesn't surprise me that san francisco, of all cities, would be on the tip of the spear, so to speak, in trying to attack this. the environmental working group has released its annual dirty dozen report listing fruits and vegetables most contaminated with pesticides, and kale, which is, you know, the main ingredient in a lot of smoothies, came in at number three. more than 92% of kale safrp samples had two or more pesticide residues even after washing. kale's growing popularity may have hurt it it was at its first appearance on this list since 2008 as the ewg only test foods common in american diets strawberries came in as the dirtiest and spinach, you know, these are all things that we want to see in our diet and the doctors are just saying to eat,
and one of the reasons why going organic matters because you can't wash it off necessarily. some of these pesticides go right into the soil and in the plants absorb it >> it's inside them as opposed to just washing them off >> you can't wash it off it may not feel like it, but today, as i said, is it is first day of spring. you can celebrate the official end of winter with something that's not so healthy. free vanilla soft serve cones at dar dairy queen. >> rita's italian ice is offering italian ice dq's in malls are not participating. coming up next, going for the green. the key investment principles that every investor needs to know to meet their goals we'll dig in on them when worldwide exchange comes back after this plaque psoriasis can be relentless.
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everyone will be watching today to see what the fed says about the health of the u.s. economy. if you are betting that a slowdown is coming, what will you be doing to your money senior managing director at first national bank of omaha kwha e what should we be watching >> showing good growth >> so as we talk about the idea that the economy is front and center, are there places that we should be a little bit more worried about or focussing in on as a possible indicator for the broader outlook to come? >> in the short-term we see the risk as being from the global
economic activity, so certain areas within the global economy are slowing in particular. the trade-oriented economies china, germany, japan are seeing slowing activities that's the biggest short-term risk on an intermediate level, a part of this is we expect the federal reserve to be on hold from an interest rate perspective. that only works if inflation is still contained. from an interimmediate rat risk level we look at is there any signs of inflation, which today there are none >> is there a sign, though, that is -- is there a worry this is an outlook is there a worry among you and perhaps your clients that inflation could pick up and start to perhaps change fed policy going forward >> not at this point embedded inflation expectations are come down over the last few months part of it is the global economy is slowing there's a lot of excess capacity globally.
any indication of how that carries forward? >> we are positive on the consumer even with slielts lower private employment, a report this month we think the labor market is strong you are seeing wage hikes in the 3.5% range job openings are at all-time highs. there's a lot of positives coming out from the labor market, which is flowing into high or rising personal income we believe that is income rises for the average person some of it, they may save and pay down debt, but invariably it ends up in terms of higher levels of consumption. to us that's why the u.s. economy rel ti to the rest of the world is showing a lot of resilience and just the health
of the consumption, the labor market, income levels that we see here in the u.s. >> it sounds like your wealth outlook is generally constructive and positive. there are risks out there that you have to be worried about, so we just have a few moments here. what exactly would be the risk that you were most keenly aware of right now >> weltd say it's the slowdown in the global economy. we saw the federal express news in terms of their earnings short-fall or concerns about the global economy to us in terms of what it means for the u.s., it's want that oil caused a recession we've seen that over the last ten years. europe slows or the rest of the world slows, but it doesn't necessarily mean a recession it does have an impact on our economic growth and more importantly, it has an impact on company earnings where we see the valuations in the market after the rebound from the december sell-off, is valuations are fairly close to average or a little bit above average and you need to see that earnings growth come through then to us it's the potential for an earnings risk
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waiting on the fed the futures are mixed this morning as markets will focus on the fed's language later this afternoon, although assuming the fed isn't what it used to be three, four months ago, is it? trade showdown u.s. china schedule a new round of high level talks and a final push for a deal. what happened yesterday? the slightest thing in markets take their cues from that. a strategy session for your brackets how you may be able to improve your chances during march madness. who is the as i understand rela team this year i have no idea fairly ridiculous.
fairly dickinson wednesday, march 20th, 2019. "squawk box" begins right now. ♪ life from new york where business never sleeps. this is "squawk box." >> good morning. welcome to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm becky quick along with joe kernan and melissa lee andrew is out this week. the markets are watching the fed today. central bank will be wrapping up its two-day meeting with chairman jay powell holding a news conference. all of which you can see right here on cnbc meantime take a look at the u.s. equity futures yesterday towards the end of the session you did see pressure on stocks as there were concerns about what would happen with the trade talks with china none of that has been cleared this morning, but you do see things, though, that are modestly higher. yesterday the dow wa