welcome to a second hour of worldwide exchange. i'm seema mody. >> i'm wilfred frost. >> chinese stocks are down. shedding over 6%. more stimulus amid fears of a sharp slow down. >> an explosion rips through a shrine in bangkok killing 22 people in what is called the worst ever attack. the perpetrator is still unknown. >> drill baby drill. the united states gives royal dutch shell the go ahead for exploration in the arctic. the oil major will be monitored

around the clock. >> american apparel seals a $90 million deal with creditors to avoid default. this after they warned about operating cash flow amid operating sales. coming up on the show, we reveal why bill gates is staying behind at the office. plus starbucks are filling up it's cups with something a little different than coffee. we take the lid off the plans. and snapchated at jury duty. one gop candidate takes a day off campaigning to perform his civic duty. stay tuned for the details. >> welcome to the show. u.s. futures pointing to a lower open. the dow down 28 points. mixed set of housing data out

yesterday. that manufacturing number that killed the market at the open but then the home builder sentiment number providing a boost to equities but global markets are taking their queues from asia. on that note let's take a look at asian markets. there's been a sense of anxiety surrounding the chinese markets after we got the latest moves to intervene on the currency front. it's another down day for asian market with the shanghai composite shedding more than 6%. the shenzen down a similar amount and the japanese market to the down side after very disappointing growth data out of japan yesterday. as we take a look at european markets they're also following queues from asia aside from the xetra dax higher on the day by 6 points. the ftse 100 moving lower after we got the latest round of inflation data after cpi came in lower than economists were

expecting. prices edging lower for the month of july. sterling moving higher against the u.s. dollar. >> yesterday we saw safe haven buying into treasuries because we saw that manufacturing number that was weaker than expected. let's have a look at the ten year treasury note yield this morning. we're currently sitting at 2.155%. the ten year bund yield at 62 basis points. dollar strength yesterday despite that job in yields but today it's a little bit of a turn around. we're seeing some weakness ahead of cpi numbers and ahead of the fed minutes. euro dollar at 11071 and we did see the spike in the cable exchange rate of the pound against the u.s. dollar. 15664 after that cpi print for the month of july. that came in slightly higher than expected. you're seeing also continued pressure against the green back,

7342 on the continued job in commodity prices around the world. copper just hitting a fresh six year low. let's stick with commodities. brent and wti continuing their downward move today. we're off by around half of 1% for brent crude. 48.47. wti off by 0.76%. 41.55. wow, who would have thought we'd see that level. but according to the survey we saw yesterday market participants are expecting wti to trade between 30 and $40 barrel by the end of this year. >> okay. well, that sell off we mentioned in chinese stocks resumed in afternoon trade with traders citing a big injection from the pboc and really the need for that possible stimulus. this comes despite stronger data overnight which showed home prices rising for the third

straight month. >> goldman sachs lowered it's currency. the sharp 3% devaluations took the bank by surprise. it sees china's currency depreciating versus the dollar by the end of next year. >> joining us live from houston is the chairwoman and founder and cnbc contributor. we're talking so much about emerging market weakness and china weakness on the show. do you want to dip your toe in the water and buy some of the emerging market assets? whether it's currencies, equities or bonds? >> it's one thing after the other. there was always the potential of the booming fed hike. the weakness in commodities continues to be a huge, huge difficulty for a lot of these commodity exporters and now you have the volatility and the trouble out of china.

so the major incident that happened in bangkok doesn't help an already fragile market. too many fundamentals are stacking up and you need some of those to go away and that's not happening yet. >> it's seema. good morning to you. some say china's currency move could delay a rate hike. it's data dependent so do you think a september rate hike is still on the table despite the moves taken by china as of late? >> i actually think more than just china was going to delay this fed rate hike. i think that the markets were very anticipatory of growth which should bring with it a fed rate hike but we haven't seen really, really strong growth. the data continues to be mixed. we see a recovery but it's anemic and if you look at the fed funds futures it's pricing in something around 43% probability where as that used to be over 50.

so even market participants are starting to expect less potential for rate hike in september and remember the fed is going to have to go slow on this one because they don't have the ability to reverse it. i do think that will create continued caution. >> do you think this uncertainty from china could continue to weigh on investment sentiment or data and earnings could keep u.s. stocks afloat? we do hear from today's largest retailer today, walmart. >> i do think that if you look at the expectations for earnings baked into the stock market those are basically questioned for sometime. we have seen the stock market particularly the s&p 500 rounding out a top for pretty much all summer. it would be shocking to be able to gather momentum at this point without any real catalyst except perhaps expectations and see the market build a base here.

if anything we're probably heading into weakness and not strength. >> thank you for getting up early with us. what time is it in houston? like 1:00 a.m.? 2:00 a.m. >> it's like 3:00 or 4:00 a.m. >> okay. well, either way we appreciate you getting up early. enjoy your coffee. gina sanchez. on that note, let's get a run down of what to watch this trading day in the u.s. july housing starts are out at 8:30 a.m. eastern. new home construction likely increased last month boosted by strong demand for rental apartments. however building permits are expected to have slipped in july and it's a big day for retail as i was saying, home depot, dick's sporting goods and tj max reporting before the opening bell. >> u.s. government gives royal dutch shell final approval to drill in the arctic. they spent on operation there

but hasn't operated there since 2012 after a series of mishaps including losing control of a large rig. 20% of the world's undiscovered oil and gas reserves exist in the polar region. environmentalists vowed to might that move and shell currently trading in the u.k. like this. off by 1.2% but you have to wonder how viable that big exploration move is given that we've seen the continued drop in oil prices. i know this is a longer term move. no one knows what oil prices will be doing in ten years time when some of this drilling might become viable but still looking at it from today's perspective it's questionable. >> these types of areas aren't economic unless oil prices are higher but shell isn't going to deploy all the cap ex needed no. at the moment we're oversupplied because of opec and iran shell phenomenon and if we're going to

keep demand-supply balance we need to go into these regions and it does highlight in the long-term that this oil demand supply and balance could come back but at the moment we're heavily well supplied. >> i don't know if you caught the cnbc oil survey where we polled some of the biggest fund managers that allocate money in the market and they expect oil to hang out in the 30 to $40 region for the next coming months which is concerning and speaks to why shell and other companies continue to diversify their assets. petrobras may need to pay finds of $1.6 billion or more for its role in a corruption standard. the state run oil company expects to face the largest penalties ever imposed by the u.s. in a corporate corruption investigation. it falls under american jurisdiction because it's shares are traded in the states. until recently it was the

largest foreign company on the new york stock exchange. in frankfurt it is down by 2.8%. >> the irs says the data breach first disclosed in may is bigger than previously thought. thieves stole tax information from as many as 220,000 additional people. this more than doubles the potential victims to 334,000. the irs believes the breach is part of a sophisticated plan to use stolen identities to claim fraudulent tax refunds. >> the u.s. environmental protection agency is expected to cut emissions by oil and gas producers by 45% over the next decade from 2012 levels. the regulations are intended to put the u.s. on course to meet it's un pledge to cut green house gas emissions. they come just two weeks after president obama unveiled sweeping rules to curb carbon emissions from u.s. power plants. >> coming up won worldwide

exchange, it's been described as the worst ever attack by thailand's prime minister. we'll bring you the latest from the bangkok bombing. that story coming up next.

a smart sell off in china despite stronger housing data. petco gets it's paws on the

public market filing for an ipo and donald trump reports for jury duty in new york. >> in the last few hours a small explosive device was thrown from a bridge in central bangkok. this follows monday's bombing in the capital which was described as the prime minister as the country's worst ever attack. let's get out to ian williams who is in bangkok. any idea as hoe wto who is behi this? >> the authorities say this morning they have a suspect. a person of interest. they have identified a man, a young man from cctv footage. this person wearing yellow appears to be in possession of a backpack. he takes that backpack off and then he is picked up in later security camera video leaving

the area of the shrine but without the backpack. clearly authorities are keen to track him down and keen to talk to him. a much smaller explosion here in bangkok today. this happened down through the river which goes through the senor of the city. somebody threw a device from the bridge toward the pier. this is one of the piers that services water taxis along the river. the device was small and exploded harm leslie in the water but it did all contribute to the tension in a jittery city here. the authorities are being very cautious. they're keeping an open mind about who might have been responsible for this because bangkok hasn't seen anything on this scale or nature causing so much carnage. yes there's been a lot of conflict here. there's a nasty insurgency going

on here in the south of the country and there's been a lot of conflict on the streets of bangkok. political conflict which has come to violence and small explosive devices used as part of that but nothing on this scale. nothing quite so indiscriminate and that's puzzling the authorities here and puzzling the security as they try to figure out precisely what it is that they're up against. american apparel is running out of cash. sales fell 7% as the net loss widened. american apparel has been sliding since the board ousted the founder last year. >> abercrombie and fitch is shake up it's management. the move willing announced today as part of a strategist to

organize management by brand rather than product. all except one position will be filled by outciders recently hired from companies such as ralph lauren and kohl's. price action, let's have a quick look. it's up 1% in german trade. >> meantime, petco is filing for an ipo which would be the third listing in 1994. it started as a mail order company has more than 1400 stores. it was taken private for $1.8 billion in 2006. the u.s. pet industry is projected to grow 4% by 2019. rival pet smart was taken private last year. >> etsy's founders might be vocal when it comes to keeping an honest and clean image. the wall street journal reports

it moved some of its intellectual property to ireland to reduce tax in the lead up to its ipo. google, apple, airbnb set up irish subsidiaries. >> still to come here on worldwide exchange, u.s. home builder sentiment hits ten year highs. could it be cheaper to buy than rent? our next guest says that may be the case. we've got all the details after this. need to hire fast?

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welcome back. u.s. home builder sentiment in august rose to the highest level since 2005. diana has the full report. >> confidence among u.s. home builders bumped up 1 point in august on the national association of home builders monthly sentiment survey. it was just one point but enough to hit the highest level since november of 2005. of the index's components current sales conditions and buyer traffic both improve but sales expectations over the next six months stalled. that may be because they're concerned about rising mortgage interest rates. now they usually travel in tandem but they are still way apart. that is builders are feeling better about their business. they're just not building enough houses though to meet demand.

back to you. >> all right. a recent survey shows while 70% of millennials are interested in buying a home, less than 30% actually purchased one. joining us live from miami is jeff taylor, co-founder and managing partner at digital risk. a pleasure to have you on the show this morning. what do you think scares millennials the most about owning a home. for myself, it's not knowing where i'm going to be two years from now. >> i think there's three big things. they're focused on their income. do they have enough money to be able to afford that house? is it the right time to be buying a house? are they ready to start a family? is that the place they want to be long-term and they're trying to weigh the balance whether rents might be higher than it is to own right now but they can move around. do i know where i'm going to be for the next two or three years. that's the points weighing on their minds right now. >> are you arguing this is very

much a millennials factor as opposed to simply market dynamics that people are scared about what's happening in the economy? that prices of properties are high despite the post financial crisis correction and people are slightly more apprehensive about buying a new home. >> anybody in the last ten years in the united states is apprehensive of buying a house. but they're one third of the population and first time home buyers make up about 40% of the housing market. currently they're making up about 30%. so until we're going to start to see the boost in the housing market they have t get bk in and they're getting married late i life and havg kids later in life sot' still not on track where we would like it to be. >> so jeff, millennials, they're really caught between a rock and a hard place.

on the one hand, afford blt is so low because prices keep on increasing. on the other hand if you look at the big cities, not just in the u.s. but london, paris, you name it, rent is so high. you can afford either of the two. what are millennials left to do? >> it's tough: home prices skyrocketed. what the millennials are doing now is they feel good about their job. they have the student debt under control. they can afford to buy a house right now but if they're the least bit hesitant i think that they're waiting and renting in those areas and looking to buy and down the road a little bit when they feel better about their job and they feel more substantive that they're actually forming a family. those are the key drivers right now. >> very interesting research. jeff taylor, co-founder and managing partner at digital risk joining us from florida. have a great day. thank you for joining us. >> moving on to politics. better late than never, donald trump fulfilled his jury duty in

new york surrounded by the media. trump drew scrutiny after a state judge fined him $250 for failing to respond to five jury duty summons since 2006. representatives of trump said the fine was wave because they had been sent to the wrong address. i don't know about that. sounds like he was trying to avoid them. >> it's quite interesting to see him do that. is there not a method if you are so high profile that they wave it. >> you can't get out. you to do it. >> surely that massively draws attention away from the case and the fundamentals. >> they usually don't get picked in the end though. >> no, exactly. >> no bill gates reportedly uninstalled mind sweeper off his personal computer as he was spending too many hours playing the game. that lead him to sneak off to play on a colleague's computer instead. bill gates was beaten at his own game when a computer completed

it in only one second breaking gate's previous record of 5 seconds. >> so what game is your weakness? how do you escape from the real world? perhaps classic solitary or candy crush? let us know and join the conversation here on worldwide exchange or our personal handles are at the bottom of the screen and many viewers already tweeted in. david for example said i did the same thing in 1992. he says what were bill's top scores in beginners, intermediate or advance? i don't know. maybe we'll have to put that question to bill gates. >> when he comes on at some point. >> when he comes on to talk about that and other things. >> i used to play tetris on my phone. he said i did have a bad addiction to guitar hero too. that was around 2008. >> i'd say for me football manager as i said earlier.

>> the other is fifa. it's always been soccer games. i never got into the shoot them ups or anything like that. >> back into markets, the chinese markets did close sharply lower in today's session. the shanghai composite down better than 6% and global markets are responding. european stocks broadly lower and a similar picture in the u.s. with futures down by around 40 points. more on global markets and how to trade in today's price action coming up on worldwide exchange. college students drop out. but how can you spot who's at risk? the one who lives far from campus? the one who works the night shift? the one with new responsibilities? one thing can't tell you, but the right combination can. universities are using ibm analytics to understand pressures in and out of the classroom- some expect to cut dropout rates by twenty-five percent.

ibm analytics is working to make education smarter every day.

those joining us from the u.s., good morning to you and welcome to worldwide exchange. >> here are your headlines from around the world. >> chinese stocks closing down in a late sell off. the shanghai composite shedding over 6% citing more stimulus amid fear of a sharp economic slow down. >> a explosion rips through a shrine in bangkok killing 22 people in what is called the worst ever attack. the perpetrator still unknown. >> drill baby drill. the united states gives royal dutch shell the go ahead for exploration in the arctic. authorities saying the oil major will be monitored around the clock. >> american apparel seals a $90 million deal with creditors to

avoid default. this after the retailer warned of low operating cash flow amid falling sales. all right. excitement around earnings season slowing down here but we do hear from walmart. the biggest retailer in the world. of course that could give us a good insight on the financial health of the consumer. ahead of that report we're looking at futures lower across the board. the dow is down about 44 points. out of all the emerging markets china is grabbing the headlines. beijing's decision to allow the yuan to depreciate catching many traders off guard. that resulted in selling off last week. we did gain momentum toward the end of the week but today another volatile session in asia with the shanghai composite losing another 6%. there were rumors that beijing would intervene further on the currency front so one of the reasons we're looking at

equities lower. u.s. futures following the lead of what we've seen in asia and european markets are doing the same. sharply lower across the board with the xetra dax only down about 14 points but this after european stocks starting the session in positive territory. french markets at 4,966. down 18 points. italian stocks down about 60 points. some economic data on the inflation front. slightly higher than economists were expecting in the u.s. in response we're looking at the sterling moving sharply higher against the u.s. dollar. of course the stronger currency not good for the exporters here in the u.k. and that's one of the reasons we're looking at the stock index down around 35 points in today's trade. we have been speaking to a variety of differ investors over the past two hours. here's what they have been telling us. >> one of the stocks we like in particular which is a manufacturer which is competitor

is for example trading on less than 12 times for 20% earnings growth and it's actually one of the few companies which is actually benefitting from a w k weaker one. >> there's the fed policy. it may or may not be a mistake but they certainly seem determined to go on interest rates this year. so, again, that's more up the pressure on the dollar. so, you know, i really don't think given the combination of the chinese and the federal reserve policy, respect to monetary policies i don't think it's going to be looking at emerging market currencies. >> internal imbalances in maces like korea for example where inflation is below target, activity is soft, exports are struggling we expect the currency to move up to 1300. >> just going to bring you the latest flashes coming out of toshiba who are announcing that the interim ceo will stay in the

post. they have appointed 7 external directors, four internal directors and will hold a share holdings meeting in late september to continue exploring these changes in management. there will be a news conference with tos hirks ba's management at 10:45 london time. that's about 10 minutes time. so we'll keep an eye out of any interesting flashes coming out of that. >> analysts are expecting walmart to report an earnings per share decline of about 8% year over year. however the company is expected to report it's fourth straight quarter of higher sales. joining us is brian roberts. good morning to you. it seems like the trend in it's domestic business is solid. what about the pressures though coming from china and the u.k. business? >> walmart is a fascinating business for a number of reasons but it is one of very few genuinely global retailers with

a footprint in every continent. but yeah we are expecting descent numbers from the american business. perhaps they might exceed expectations when it comes to earnings per share and a return to very solid trading from the main u.s. retail business helped by a strong performance. a lot of eyes will be on the international business this afternoon. so how are we doing in the u.k.? how are we doing in china? walmart is not alone in the chinese retail sector. we heard from the french rival fairly recently and trading in china continues to be borderline horrific. so there could be some positives as well. continued strength in latin america but a few concerns creeping in now back the direction of travel in some of the parts of walmart's global empire. >> because of the recovery in the u.s. walmart is expanding overseas. taking full ownership of a

chinese e-commerce firm. buying out a 39% stake. does that help walmart position itself in the chinese retail market or is this just a push in the e-commerce space. >> a bit of both. the future for for chinese growth in particular and that impressive e-commerce business itself. it's pursuing virtually all of it's global operations now. it's really driving a global online flat form as well so huge upside in part of the e-commerce business and might help them to defend their corner against amazon. >> well, e-commerce in the states and the u. s., how has that gone for walmart the last couple of years? it destroyed most of the food retailers in the u.k. but doing a much better job overall. >> yeah, in term of general

merchandise it's performing strongly and offering options to shoppers in terms of ordering online and paying with cash in store which is quite an interesting way of making e-commerce accessible to lower income shoppers. so lots and lots of interesting stuff happening around the world including the u.s. and importantly, the u.k. business is incredibly influential in terms of exporting multichannel best practice to other parts of the walmart empire around the world. although it might be disappointing in terms of lifelike sales growth, what it might be achieving perhaps goes underdocume underdocumented. >> briefly, walmart is paying at least $9 an hour. that's going up to $10 an hour

in february. how big of a dent will that be for profits or do you think it's positive because walmart employees are going to spend more of the cash in the stores? >> a longer term positive. walmart has a high staff turnover in the states. the longer it can keep staff in place the better the service will get and the mechanics of replacing lost labor will be reduced as well. so overall it's a positive. >> okay. brian, thank you for that. brian roberts. >> let's talk pets. petco is filing for an ipo. the third listing since 1994. it started life as a mail order company has more than 1400 stores in the u.s., mexico, and puerto rico. it was taken private by tpg for $1.8 billion in 2006. the u.s. pet industry is projected to grow 4% to $92 billion by 2019. petco's filing comes after rival pet smart was taken private last year for about $8 billion.

do you know what my biggest pet peeve is when it comes to companies like petco. >> what is it? >> don't sell enough bunnies. >> they don't sell any animals. it's only pet supplies. i used to always go there as a child hoping to see cute dogsover cats or bunnies but not there. >> you don't get big brick and mortar pet shops do you? i don't have any animals -- you do? but they're not to the same scale as petsmart or petco. >> no, you can go to breeders or it just depends. >> so you have to go visit a different type of store to see the cute animals. >> nowadays you can do it online too. >> really? >> you can find those bunnies online. >> yeah i know. >> interesting that it's been taken private and relisted quite a few times but that ipo apparently due to come soon. now investors are also set to pull maybe 2 billion from the

carlyle group's fund. it managed as much as $8.5 billion as recently as last september. it's flag ship fund lost 10% in 2014. it's first losing year and is down more than 5% this year. report sas the money is expected to be paid back in the 4th quarter. >> let's take a look at the other top stories at this hour. the u.s. government is giving royal dutch shell final approval to drill for oil and gas in the arctic. the company has spent about $7 billion on exploration but has not operated there since 2012 after suffering a series of mishaps including losing control of a large rig. now the u.s. estimates 20% of the world's undiscovered oil and gas reserves exist in the polar region. environme environmentalists vowed to fight the move. in the meantime, shares down 1.5%. >> the u.s. environmental protection agency is expected to

propose new rules today by up to 45% from the next decade from 2012 levels. the regulations are intended to put the u.s. on course to meet it's pledge to cut green house gas emissions. they come just two weeks after president obama unveiled sweeping rules to cut carbon emissions from u.s. power plans. >> petrobras may need to pay $1.6 billion or more to settle u.s. criminal or civil probes into it's role in a corruption scandal. the story suggest brass szil's e run oil company will face the largest penalties imposed in a corruption investigation. it's shares are traded in the states. it was the largest foreign company on the new york stock exchange but recent declines put others ahead of it. it's down 23.4%. in german trade it's off the best part of 3%. >> still to come on worldwide

exchange, running on empty. american apparel maybe on the last leg as the struggling teen retailer says it's cash reserves are drying up. that full story coming up. don't go away.

>> now if you're wondering why

u. s. futures are lower this may be one of the reasons. shanghai composite closing sharply lower in the session. marking a return to volatility. a lot of analysts talking about the concerns over china's growth prospects as one of the reasons investors are selling chinese stocks but we've seen moves like this before wilfred. so perhaps this volatility is a new normal for chinese stocks. >> in the course of 2015 not totally out of the ordinary but weighing on the rest of asian indices all in the red today. moving on, retailers are in trouble as what was once hot among the young consumers maybe falling out of fashion. several chains including wet seal and deliahs have fallen into bankruptcy. >> american apparel was once known for its hot and edgy

fashions and now may be hanging by a thread. it may not have enough cash to keep operating for the next 12 months. losses may continue through the rest of the year. on monday american apparel reached a covenant with capital one. this comes as it says it's second quarter losses widened with sales falling 17%. the shrinking cash could push it closer to filing for bankruptcy which would help it cut costs by getting out of leases for underperforming stores. it picked up since they ousted dov charney following a probe into several charges including sexual harassment. they announced a turn around plan under the new ceo two months ago but is still facing several losses from charney and his allies.

they'll organize managers by brand instead of product. all except one of the positions are being filled by outciders who were recently hired from chains such as ralph lauren and kohl's. they're looking for a permanent ceo. they struggled to boost sales as customers tired of the log logo centri clothes. the struggle is that teens are so fickle. we've all been there. i used to shop there. >> absolutely. when i was a middle schooler. >> i missed it -- it came here a bit late to the u.k. you walk in and you come out stinking of their perfume. >> literally. >> it's beautiful. >> no, i have not been to the one in paris. but there's a couple here in london and purely from observing from a far looked like they did

well for a year or two. >> you go in and -- when you go into one of those stores you come out after 20 minutes and you're essentially deaf. that's the problem. >> it's so loud and smells like their cologne. >> we'll have to leave that one there. thank you very much. >> now switching focus to health care, it's decision day for sprout pharmaceuticals as the fda could approve the female viagra drug. the drug has been rejected twice in the past five years because of questions about it's safety and effectiveness but after defense lobbying they threw support behind the drug this summer. they agreed not to advertise on tv or radio for 18 months. the company called slate pharmaceuticals got a warning letter from the fda in 2010 for exaggerating marketing claims about it's testosterone drug. the ceo has been here on worldwide exchange. we'll see what happens in the vote. >> starbucks wants to be your neighborhood bar. they're ramping up efforts to

sell wine and beer in it's u.s. stores. it will start selling adult beverages along with bacon wrapped dates and truffle mac and cheese at two dozen new locations this week. it also applied for liquor licenses at several hundred new stores. it's also touting a pumpkin spice latte with actual pumpkin in the recipe. an influential food blogger called out the coffee chain for lack of transparency. is it already that time of the year again? >> not yet. that starts around october. we get to the holiday season. >> it would be totally unheard of to have anything other than coffee in your cup -- >> that's why you've been so chipper this morning. >> that's very nice. right let's move on. are you a, quote, breakfastarian. it's a term for people that eat more than one breakfast and crave the meal several times a day. according to ugov they're big

fans of mcdonald's. the chain topped a poll for people seeking to eat breakfast food two or three times aday ahead of other destinations like burger king and starbucks. mcdonald's is offering an all daybreak fast menu starting from this autumn. right as we go to break, let's remind you of the headlines. a sharp sell off in china despite stronger housing data. a small explosive device was thrown from a bridge in bangkok after monday's deadly bombing and petco gets it's paws on the public market filing for an ipo. worldwide exchange is back in a couple of minutes. you wouldn't do half of your daily routine.

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we opened to the tune of 0.4% but we sold off throughout today's trade with continental europe just below flat. and it's off 0.5%.

all indices weighed by a 6% decline in the shanghai a market. >> one of the reasons we're looking at the u.k. stock index underperforming it's european peers, it's the miners getting hit right now. down about 2% as we continue to see the commodity route in focus. what does this all mean for u.s. futures? sharply lower right now. coming back a bit. dow is down 40 points in premarket. this after a very tough session overseas in asia. >> let's get out to larry mcdonald that joins us early on this morning from new york. good morning to you. we had another big decline in the equity trading session over in china. the yuan has been a little bit more stable over the last three trading sessions. how big of a worry is this for u.s. markets going forward? if you look at yesterday, for example, even though we saw continued pressure on emerging markets u.s. markets shrugged

this all off. they were higher at the end of the trading session. >> when you go through something like this, we had similar issues in europe in terms of risk. you want to look at emerging market countries and of the big asian banks. hsbc and standard chartered and when you have underperformance of leading risk assets like those that's a sign that u.s. equity rallies should be sold. >> good morning, it's seema. i want your thoughts of why the shanghai composite ended lower by 6%. because typically we see it react to disappointing data or unconventional policy measures taking place by beijing. no data or moves by beijing yet stocks ending lower. >> well, think about all the different information the

markets take over last week. at first, the central bank of china made this move. it appeared they were going to do more and then they came back and started to intervene. so the market is getting a lot of mixed signals here. overall the central bank of china lost some credibility because they said they wouldn't deval and number two official said that and now they have done a 3% devaluations in a week. so the market is starting to say okay maybe they might do more than 3%. maybe not. there's a lot of uncertainty. >> we only have about 20 seconds left. quickly, are you a buyer of u.s. equities ahead of the rest of the year? >> as long as the cds of the big asian banks is underperforming the u.s. banks in a meaningful way i think you sell rallies in u.s. equities. >> great stuff. thank you for joining us. that's larry mcdonald. that's all we have time for today on worldwide exchange. thank you for joining us. i'm wilfred frost. >> i'm carolyn roth.

>> i'm seema mody. next up is squawk box. have a great day. port backpack, a powerful new dell 2-in-1 laptop, and durable new stellar notebooks, so you're walking the halls with varsity level swagger. that's what we call that new gear feeling. you left this on the bus... get it at the place with the experts to get you the right gear. office depot officemax. gear up for school. gear up for great.

good morning, the shanghai slides. stocks tumbling on fears of a deeper currency devaluations. we have home depot expected any moment and walmart on the way. what will the numbers say about the consumer and why is donald trump calling out mark zuckerberg? it's tuesday, august 18th, 2015 and squawk box begins right now. >> live from new york where business never sleeps, this is squawk box. >> good morning and welcome to squawk box on cnbc.

i'm becky quick. joe is off today. millions of americans will be starting their day with starbucks and now one of the popular drinks is getting a recipe change. the pumpkin spice latte will now have real pumpkin. although they're keeping a lid on the seasonal offering in terms of when it's going to be released. no word on when they'll start selling the psl. last year they started to show up on september 2nd so it could be just around the corner for when we actually see this. let's focus on the markets this morning. stocks with another big hit overnight. the hang seng down 1%. beijing wants to see a bigger slide in the currency. remember last week the central bank of china sees no further reason for depreciation after it's surprised the global market by devalue