good morning. kruds climb. oil back in a bull market as oil prices raise from august lows. follow the money. investors pouring cash into u.s. stock funds for the first time in a month. ask what this says about the broader market sentiment coming up. plus an historic night in right knee. usain bolt blows away competition in the 200 meters to win eighth career gold. it's friday, august 19, 2016 and "world wide exchange" begins right now.

good morning. happy friday. welcome to "world wide exchange" on cnbc. i'm sara eisen. >> i'm wilfred frost. good morning to you from me as well. it's favorite song friday. we're saying one of the most loved tunes. who do you think this one is? >> you. >> i send in a lot of requests. >> i sent three. >> so did i. >> i had a feeling mine have a better vibe for friday. landon has some too. looking forward to all of that coming up. >> you can let us know what you like the most. good choice. i have some better ones from myself. >> coming later. let's check on the global markets this morning. we have two days of back to bckk gains. 29 days in a row now where we have not seen a plus or minus one percent move on the averages. looks like dow is under pressure in morning. down 63.

hold on to the gains for the week which do look positive up until today. s&p down about 8. nasdaq down 16. >> all be it the gains very slight for the week, if we dive into them, we have had sector differentiation. energy up 3% for the week as a whole. looks flat and broad, but sector differentiation has been there. >> absolutely. telecom sector weakness thanks in some part to the treasury yield. they've been in a range, but they're near the higher end of where we have been this week at 1.57. they came back down after the fed minutes were interpreted as i would say minorly dubbish. didn't get exact signal on what the fed was thinking in terms of a rate hike this year t. prospect is still on the table, but there's a lot of debate whether that's actually going to happen and it's not being reflected yet in the bond market or certainly in the foreign exchange market. >> indeed in part because the

yields around the rest of the world anchoring the yield in the u.s. a decedent day yesterday, but it's been a soft week as a whole. looking around 1.5 to 2% declines for the full week, including today's declines for european trade. france down over 1%. ftse 100 relatively outperforming down just one quarter of one%. asian trade has been mixed as we look at things. we are fractionally higher for shanghai. down around 0.4% for hong kong. the nikkei the outperformer of the major indexes, but as you can see, not significantly up. 0.3%. >> still down more than 2% for the week. as for the broader market, oil is the story. strength in oil. sort of a surprise burst for this price of oil. wti crude above $48. brent back above $50 a barrel. what a roller coast r this has

been. just in the beginning of august we were in a bear market, 20% off the highs and now we're back in a bull market, 20% off of those lows in a matter of weeks. a a lot of hopes and optimism fuelled by an upcoming meeting in nigeria. also a lot of positioning here at work. bearish positions piling up. when those get squeezed, the moves get outsized. the third factor i would mention is the dollar which is weak. when you have a weak dollar, prices go higher including oil. >> the oil markets down as you said to just below 40 on wti in early august now back to 48. extraordinarily big moves. clearly highlighting how people still struggling to find out which way oil should be heading. little bit of the talk and it spikes up again. >> the moves have been violent

and sharp and when you think about the historical perspective, 50 is low. 2014 we were trading above $100 a barrel. in the beginning of the year, we're 80% off those lows. all over the place. i mentioned the dollar a big part of it. weak dollar has been the theme this week. this morning it's getting a bit of a lift going against the recent trend. euro still above 1.13. dollar stronger against the japanese yen. that helped tokyo stocks a little bit this morning. that weaker japanese yen. as for the pound, it's back above 1.31. solid economic data. this was a big week. test of first hard data post-brexit. most of the numbers came in a little bit better. the question is to you whether that is just in the near term that the market -- the economy was more resilient than feared. in the longer term you're going

to have session nare scenario. the one that has really moved markets in the pound is the bounce back in the pound yesterday with retail sales stronger than expected. showed that factor that the currency can be a shock absorber. however, you would offset that with inflation the day before. it was higher than expected which you could paint as a positive, but highlighted how the weaker currency if it were to fall further, would spark a bigger impolice station and hamstring what it will central bank can do. >> and what happens when the fall comes and it's raining every single day and the foreign tourists don't want to come. >> many people still brave it. >> i will. >> show you what's happening with goelt. the weaker dollar has pushed up price of commodities. that includes gold lately. 1352. >> fed speak dominating headlines this week.

late yesterday san francisco john williams argued a september rate hike should be in play. suggesting the central bank job is to take away the punch bowl of low rates. he's not in a hurry to hike. still in a q and a with audience members, said the less son of history is if you leave that punch bowl out too long, usually the police come and break up the party. dallas fed president, robert kaplan, says the central bank has limited room here to maneuver on interest rates. why, he's suggesting the neutral rate of interest is somewhat lower than people think. makering th making this a challenging time. the neutral rate is the level of borrowing cost associated with stable inflammation and full employment. so clearly a lot of debate on the fed right now as to when and why this period is different than other recoveries. >> when we offset some of the more slightly hawkish comments. ultimately we sit in the same

position we have been for the last month, september small chance, september, bigger chance. >> that's why the jackson hole speech by janet yellen is going to be so important. >> absolutely right. new data on where investors are putting money to work. $307 million in the latest week. this is the first time we've seen net inflows to stock flows. taxable took in $4 billion on week. >> those record highs attracted new money. now to today's jnd on wall street. we have a few earnings reports to wrap up the week. watch out for deer, es tay lauder. no data on the docket today. >> and corporate news, word of a truce this morning. vie ckom have agreed to

settlement. including vie kom and cbs. will leave and receive roughly $72 million severance package. also end legal battles in many states over whether he had the mental capacity to make decisions. controls 80% of shares. red stone and daughter sherry are now under control. >> stocks to watch today, starting with gap. apparel retailer cutting profit forecast. that company struggling to reduce promotions and sell at full price. ceo says he's unsatisfied with the pace of improvement. shares of ross stores trading higher. the off price retailer posting better than expected revenue. off price continues to be a bright spot in retail.

applied material shares are rising. the supplier of tools to make semiconductors reporting a better than expected forecast profit. driven by higher demand for technology to make memory and smartphone chips. >> square, the company getting a boost on steven cohen raises stake in the mobile payment company. sin task is under pressure. the law firm announced a class action investigation of that company regarding the sale process. losing 1.5 in the premarket. >> deutsche bank whistleblower is refusing a $8.3 million reward. the former employee is upset at the regulators failure to punish bank executives as opposed to imposing a fine on the bank more

widely and therefore hurting shareholders. from that whistleblower in the financial times this morning. >> that's your must read, right? >> sara thinks i should choose that one. >> sometimes when you pick un, i like to. >> have you read the one i picked? >> i have. >> what's it on. >> european something. >> you read it closely. >> when we come back, oil is back in the a bull market. raising 20% from august lows. just three weeks ago, tell you how you can trade the trend next. stay tuned. you're watching cnbc, first in business. worldwide. ke free rds. evenimatisfactn chks. aranteeeee!

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call today and ask how to get these savings plus a $250 prepaid card. comcast business. built for business. let's get you up to speed on the market action. looking at a quarter of a percent decline. sitting with small gains across the board. there has been sector differentiation. telecom down 3% for the week. energy up 3% for the week. new highs we've been hitting slightly deceptive in terms of what individual sectors have been doing. we're called lower 46 points on the dow. let's look at europe. had a strong day yesterday. tough week as a whole. finishing on a soft note. down around 1.5 to 2% for the whole. german down 0.7% today.

asia has been mixed today and soft for the week as well. quite a similar story in fact to europe for the week as a whole. both had been strong in the prior week and prior month. this week taking profits. hong kong down. is a japan and hashanghai just above flat. energy up this week. because oil has been gaining and into bull market territory since dipping below 40 wti in early august and now up to 48 as you can see. just taking a bit of profit today, but 48.12. wti has had a strong run over the last couple of weeks. >> wilfred, that brings us to today's trade of the day on oil. crude nearing $50 a barrel. history shows that this rally will probably run out of steam soon. our team at ken choe, the firm, analyzed what has happened historically. the data shows nine times out of ten, what happened next, the

dollar surged. the following week. putting pressure on oil and other commodities. same sector under these circumstances was health care. interesting historical pattern there is and for more you can go to cnbc.com and check out cnbc pro. >> now to the brexit fallout. the financial times reports london is giving up hope for access to the single market. instead looking for a swiss style deal for various sectors to trade with europe to looking for at a swiss model than a norwegian model. >> what is the difference? >> not formal access to the single european market. instead individual trade deals. switzerland was able to negotiate. this financial time reporting around industry body in the city of london. it's not specific government policy. so again just an indication of where people are heading as opposed to specific government policy. as we get into september it's going to be fascinating.

parliament is in recess at the moment. when the government gets together, we'll see them how they intend to carry out brexit t. bottom line is salespeople still most likely expecting an invocation of article 50 early next year as opposed to this year. >> then they have two years to work out whatever model. >> swiss, norway, or britain. >> when we come back, we'll wrap up two great weeks of olympic events with a trip to rio. including usain bolt winning eighth career gold medal. >> he literally killed it. he's so far ahead. i want to see the face he made whether he did that smile there. >> that performance for usain, he has one more gold to get the triple triple, but as we head to break, here's today's national forecast from weather channel, general carfagno. >> good friday morning. we have a busy day in our hands.

possible severe weather. tracking storms early in the morning. storms are possible in the south again. a lot of lightning, possibility of heavy rain still out there from dallas over to the atlanta area. the northeast gets a nice break. dry weather in place. temperature still on the warm side, but not as bad as it has been. the west is where we have the heat and temperature heating up. seattle 95 degrees. this happens at this point in the season about five times in history so it is significant. hot and dry in the southwest, not helping the fire fight there either. that's your forecast. general carfagno for the weather channel, "world wide exchange" continues after this. i spy so ginninwithth

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narror: discovorg : anpla poslies. kubocome os wanarrat: vit welcome back to "world wide exchange." now to the olympics. jay gray is live for us with all the headlines and another outstanding outfit. good morning. >> reporter: good morning, wilfred, sara. great to talk to you. the americas breaking records it seems almost every day here, but also controversy outside of the competition here. we've just learned this morning that swimmer jimmy will donate to get his passport back and be able to leave. just part of the controversy team usa is dealing away from the competition here. >> american swimmers leave rio just hours after releasing

surveillance video with the men were not robbed at gunpoint as they had said, but instead confronted by security guards after damaging a gas station restroom. in a written statement, the united states olympic committee apologized to the host country and said the behavior of these athletes is not acceptable anymore does it represent the values of team usa. >> and there's the gun. >> reporter: now to the games where usain bolt dashed to his second gold in rio. while the americans continue their amazing medal run. ashton eaton with second consecutive gold in the decathlon. the first american woman ever to win the event. ryan set a new olympic record in the shot put winning gold. joined on the podium by teammate joe who took silver. >> it was a special emotional and historic moment for wrestler

as she becomes the first american ever to win a gold medal in women's free style wrestling. >> reporter: we tried to show you some of the behind the scene things here. through that i've groan to get an attachment to this city, the country t wonderful people here and i think the way do that is you got to get in their skin. if you'll indulge he, today is our final farewell. i've tried. i've tried to learn the language of the people here. portuguese. i'm going to try and say good-bye in portuguese. it's something like this. [ speaking foreign language. ] >> that was a maimazing.

>> reporter: i'm a little rough, but there you go. do i have a follow-up question, you are allowed to take the head piece off. >> i'm a little scared. >> to what extent has the scandal with the olympic swimming team or few select individuals from it, to what extent has that taken the gloss of what has been an outstanding performance from team usa. >> reporter: i think it really has. i think a lot of people are very frustrated they're having to deal with this and it continues to linger here and it didn't have to happen. so you talk to a lot of americans. you talk to a lot of people with the olympic committee here. they're frustrated. they want the focus to be on the tremendous effort by so many athletes here and right now it's not. >> jay, thank you very much and tremendous effort on your part. thanks so much for joining us once again from olympic park. >> outfits all all. >>. >> reporter: take care guys. >> here's the medal count so

far. u.s. topping the list with 35 golds and 100 medals. china second place. third, great britain stayed number three. >> number two depending how you calculate it. >> true they have more gold. not bad. >> here we go. even though china does have more total medals, weighted ranking team gb jumps to second place. >> there you go. it's been really, they've been outstanding athletes from your team. >> and yesterday a couple more medals from team gb including two brothers coming first and second in the triathlon. >> that's cool. >> now to politics. edward lawrence joins us from washington with a look at what we saw last night. a different donald trump. everyone is wondering what it means. >> reporter: a very different donald trump.

how do i compete with jay gray coming up right before me, but this is the donald trump 2.0. this was a softer even more humble donald trump. >> reporter: from the moment donald trump started speaking after the campaign reshuffle, things were different. gone was the unapologetic candidate for president. >> sometimes in the heat of debate and speaking on a multitude of issues, you don't choose the right words or you say the wrong thing. i have done that. and belief ve it or not, i regr it. >> reporter: he went on to ahe will always tell the truth. used this change in attitude to take the debate to hillary clinton. >> she never tells the truth. one lie after another and getting worse with each passing day. >> reporter: clinton met with the top police chiefs in the nation. she wants to show she can

support communities and the people who protect them. >> i believe supporting our police officers and improving policing go hand in hand. everyone is safer when there is respect for the law and when everyone is respected by the law. >> reporter: in a statement, clinton responded to trump's new tone saying he started the campaign by insulting people and continues to do so. and donald trump campaigns in michigan today. he started running ads in four battleground states. they'll spend 4 million in florida, ohio, pennsylvania, and north carolina. >> edward, thank you very much for that and fascinating change in tone from donald trump. still to come on "world wide exchange," top stories including a big -- this is a great strong. do you like this one? >> what is this. >> phantom of the opera. whose choice is that? >> stay tuned i'm going to say this slowly so we can enjoy a little more of this fantastic

andrew lloyd weber classic. music from phantom of the opera. it's so powerful. the strings coming in there. the base.

good morning. oil back in a bull market as prices raise 20% from august lows. new this morning, a truce. viacom and redstone agree to a settlement. plus top trending stories include the u.s. american girl doll making her debut in

detroit. it's friday, august 19, 2016. you're watching "world wide exchange" on cnbc. ♪ ♪ ♪ >> good morning and welcome back to "world wide exchange" on cnbc. i'm sara eisen. >> i'm wilfred frost. a very good morning to you from me as well. it is favorite song friday. a term we have coined. >> this is landon's. >> very good choice. i mean, outstanding. certainly much better than your choice earlier, but not quite as good as mine. >> phantom of the opera, really? >> we want to hear wilfred sing his favorite song, follow me on snap. >> i don't mind. it's just such a good song, despite the terrible singing of butchering it, it's still good. >> it's amusing. let's check in on global markets. called lower to the tune of 3%. the dow expected to open 57

points below flat and this week as a whole, we have seen slight gains for all three embassies. there has been sector differentiation. in terms of s&p sectors. down. oil as surged. >> keep a particular eye on the nasdaq which is on a hot streak in terms of weekly gains. this could be eight in a row if it does hang in there. >> indeed. let's have a look at european trade today which is soft. had a decedent day yesterday. for the week as a whole, we're down. looking at 1.5 to 2% decline for europe. bear in mind it comes off the back of a strong week last week and a strong month as a whole. asia is a similar story. strong last week, strong month. coming into this week looking at declines for this week and mixed today. shanghai and japan just flat. >> as for the broader markets the big story is the price of

oil surging back to $50 a barrel on brent. $48. $48.08. bull market. just below $40 in august. we're back above these levels right now. keep an eye on it. seeing half a percent decline on crude this morning. brent down .30%. as for the ten-year treasury note yield, inching higher. here's some selling pushing up. still in 150 range. yield on ten-year. no economic data today, but this week we did get numbers that look better. industrial production, housing starts, and the fed minutes that shows this fed is in wait and see mode on the data. as for the u.s. dollar, the trend has been a weaker u.s. dollar. that's helped push the price of oil and gold higher. it's also helped fuel talk that the market is not bracing for an interest rate hike. if that were the case, the dlor

would be stronger. the euro is back coming back a bit. overall weaker dollar. stronger dollar against the yen right now. above 100. 100.11 dipped below there yesterday. the pound flexing the muscles this week. >> only flexing its muscles in the second half of the week, which again highlights the extraordinary weakness in the u.s. dollar for the week as a whole. gold prices as well, quick look on them, as we look at things today. little bits of weakness. 1352 # price. >> viacom and redstone have reportedly agreed to terms of a settlement. this would end the battle for control over the $40 billion

empire. as part of the agreement here, ceo will leave and receive a $72 million severance package. the deal will also end legal battles in multiple states whether redstone had the mental capacity to make decisions. redstone controls 80 pkts of the shares in viacom and as a result of the settlement, redstone and daughter are now fully in control overall viacom's future. >> stocks to watch today, retail in focus. gap the apparel retailer cutting profit forecast. company struggling to sell merchandise at full price. gap ceo still unsatisfied with the pace of improvement. shares are all nearly 2%. had a decedent run in the last three months. >> shares of ross stores trading higher. better revenue and same store sales up 2.6%. few more earnings due today to wrap up the week as a whole.

deer, estee lauder, foot locker and madison square garden reporting results before the opening bell. also samsung newest reality toy will hit the shelves. gear vr. >> we're continuing summer sizzler series. looking at top performing sectors in the s&p 500. this summer and the stocks that heat up because as wilfred said, the embassies have been flat, but big stories on sector performance. landon dowdy joins us. >> good morning. industrials among the top five best performing sectors so far this summer. surging more than 5%. finally on a win streak after six summers in a row of losses, ubs saying there's a rotation back into the struggling area due to improvement in rental rates. so which stocks are sizzling. american airlines up 25% as it

expands credit card partnerships. morning star citing the acquisition of rental agency. just this tuesday the $2 billion deal is expected to add to shareholder value. look at the stock. up 6% this week. finally united rental sizzling 19.5%. improving housing market has been driving that stock higher. ahead for united rentals as more people rent. >> some of the stocks that vz v been moving this summer. land landon, thanks very much. if you look at the week of which sectors did the best, it was energy and industrials and financials. it's worth watching the sector pemp performance because what we've seen over the last few weeks as we have the slow creep higher has been a bit of a rotation out of the staples, the telecom, the

yultds that pay high dividends are at record high valuations for that sector and not growing and are considered defensive and into energy with the price of oil and better economy. if we can continue to see that if that it is bullish sign. >> i couldn't agree more. to me the more interesting is the ones that have fallen this week. not gained. telecom down. that came on one day. i forget if it was tuesday or wednesday. the day yields on the bond market went up slightly. you saw a 3% move as a sector in one day when the rest of the market appears to be broadly flat and really worth pointing that out. the chance of big falls if we see a shift in interest rates. >> they're vulnerable. >> still have a 17% gain for year to date. highlights how much room there is for pull back if some of the factors we're relying on change quickly. >> also highlights the bond

move. the fact that yields continue to stay low which makes the stock market a relative attractive bet here. whether it's global easing or sluggish u.s. economy. so that's why the moves really matter. it's going be important to see when jackson hole happens next week. janet yellen speaks in a week from now. what the reaction is. >> and financials a potential to go in the other direction. a lot of talk now on who could be the next bank to have a big investment in it and some kind of activist investor moves. as a sector continue to watch. it's the worst performing sector. tell co-is the best. >> viral video alert. jones meeting katie ledecky. captioned i met the champion myself. totally embarrassed myself, but i don't care.

>> she of course has been a very enthusiastic supporters. >> she wins social media of the olympics. they flew her there because she was getting so into it on social media. donald trump like we've never seen him before. life size statutes popping up all over the country. made by an activist group called in decline. in decline saying the hope is that trump is, quote, never installed in the most powerful political and military position in the world. that's one way to do it. it was in union square in new york city. >> do you sigh the joke little hands. >> making fun of his small hands. >> no. >> this is an unusual election. >> it is indeed. next trending story, fixed and you happen rented out, the stars of gtv fixer upper

cracking down on client's contracts. make a living fixing up homes in waco texas are rethinking client contracts after they've ended up on sites like air bnb. range from $195 a night to $2,000 a night. >> the newest american girl doll making debut in detroit. nine-year-old melody from the motor city who finds her voice. she will be available by catalog and american doll stores nationwide starting thursday. love these american girl dolls because they have such detailed history and story. they're all role models for young girls. >> very nice indeed. kids around the world are awaiting the release. still to come, this morning must reads plus a live report from rio, but first, business

birthdays. happy birthday to satya that dell la who turning 40 today. .

welcome back to "world wide exchange." time for must read stories catching our attention. my pick is the financial times. the center left in europe faces

a stark choice. i picked this because the focus in the uk has been on what the conservative government is doing, plans for brexit, and less focus what's happening in the labor party which is imemployeding at the moment. and tony basher taking this moment to tell how it is facing difficult times. two pae the center left, not the center right that is suffering the heaviest blows and has most reason to be anxious about the future. sit an excellent and detailed discussion of the positions and various different countries right now across europe and the political situations there. the fracturing that's happening and the effect that anti-eu parties are having and how that's manifesting in different countries with important elections to come next year. we haven't focused much this year, but the center left in europe is in disarray at the

moment. >> corbyn is still there. >> he's facing another leadership battle he's about to win again and that could lead the labor party, the party that dominated politics from 2007 to possibly split all together and be a force weakened forever more if that happened. >> we will watch that. my pick is in usa today. on the whole idea there's a movement here gaining traction that the olympic athletes should not be taxed on the earnings from the olympics. olympic tax gains and it's from the editorial board. they weigh in here saying that's a ridiculous idea. medallist deserve every bit of pride. the years of grueling work they put in, but amending the tax code to single them out because what they do is judged as particularly worthy and p

patriotic. the list goes on and on and they say that's not exactly fair. they do make the point, though, that they should not be taxed on the value of their medals, like the $600 gold medal. that's a little extreme and ridiculous, but the earnings thing, that is a good point and debate. >> it's special treatment and almost a way the politicians are trying to jump on the band wagon of the olympics and get some sort of kudos out of it themselves. >> i agree. they say let them be on our cereal boxes. let them be in our advertisements. they'll make enough money. by the way, those with the highest tax brackets, like kevin durant, can afford to pay the higher tax. >> let's get to andrew. he joins us with a prove of what's to come in the day ahead and results from yesterday. >> reporter: great to see you from rio this morning.

the big story before we get to the athletics, the truth has come out officially regarding the four u.s. swimmers, including ryan lochte, who were involved in what the police are calling an act of vandalism at a rio gas station. not a robbery. two of the swimmers involved, gunnar bentz and jack conger, were the ones taken off the flight home to the united states. wednesday had their passports returned by brazilian officials after providing statements to the police. the two left rio last night. ryan lochte we already know returned home. the fourth team member, reached an agreement with brazilian authorities. he's going to be allowed to return home after he pays $10,000 which is going to go to a charity. in response to all of this news, the u.s. oc issuing a statement overnight saying the behavior of these athletes is not acceptable nor does it represent the values of team usa and the conduct of

the members. we will further review the matter and any potential conflict. it went on to say on behalf of the united states olympic committee, we apologize to the host in rio and the people of brazil for this distracting or deal in the midst of what should rightly be a celebration of excellence. so that bringing a close to what had been a bit of a soap opera over the past 24 hours, but talking about excellence, if you would indulge me. we do have sports to talk about. unfortunately, it has been largely overshadowed by that developing story. here's what happened overnight. the united states defeated france in the women's basket semifinals advancing to the gold medal game against spain on saturday. u.s. going for sixth straight gold medal. i was there last night. it was something to behold. we have in the men's decathlon,

ashton eat een tieing an olympi record. usain bolt, blowing away the competition in the 200 meter field winning gold until 19.78 seconds. he has won the last three. he was doing the jig before the race even started. and the u.s. has now one it's 100 medal of the 2016 games. muhammad took gold. this is the fourth straight time the u.s. has won 100 medals or more at a summer olympics. all of us, everybody going for 30 of their 30 medals now up for grabs as we get two and a half days from the closing ceremony. a lot going on here. >> it's been very exciting to watch. quickly, have you heard anything about the sponsors of ryan lochte? i know other companies do pay

him. >> right. so we had reached out to a number of the sponsors yesterday. most of them came back with statements effectively suggesting they weren't going to comment or withhold comment until they could hear more. perhaps start hearing more from sponsors today. i do not know, but thus far people trying to withhold judgment in terms of what's taken place. now we have an answer, maybe things will be different. >> got it. andrew, thank you from rio. it's been a great week for you. long days, but exciting stuff. >> exciting stuff indeed. great coverage. still to come on "world wide exchange": fed speak dominating the market this week. lindsey piegza will join us. don't no anywhere. thgohe liheeri garbage...

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d e losts inecades and the t envinmt for bune to thve. us help ourcomorr- day buss. welcome back to "world wide exchange." the yield on the ten-year this morning, just above the 1.5 level. 1.542. we've been sort of rangebound in that area over the last week.

some movement in the fed expectations. joining us from minneapolis, lindsey. good morning. thanks for joining us. yesterday we reported that paul singer said we were in a massive bond bubble and things could turn around quickly if we start to see inflation. >> i don't think inflation is a near term concern and, certainly, not for fed officials. looking at the july meeting minutes that came out earlier this week, the fed was quick to acknowledge the improvement in the labor market, but in fact a majority of fed officials remained concerned about the lackluster level of inflammation and several noted the downside risk to their inflation outlook. so certainly no sense of concern or sense of urgency on the part of the fed that inflation will begin to rapidly rise and force the fed's hand. >> so you're saying bonds are not in a bubble or not going to

burst any time soon. >> well, i think the latter is the more clear argument. we continue to see or continue to expect a very low rate environment. right now, the fundamentals of the economy are very fragile still. we're talking about 1% growth across the first six months of the year. you're talking about a consumer doing heavy lifting in the second quarter. against the backdrop of extreme negative. we don't expect the consumer to be able to maintenance these types of spending into the second half of the year. >> why not. >> what do you think is going to change? why can't the consumer continue to hold up the economy? >> well, consumers can't continue to outspend what they're making so unless we see the corporate strings loose with more job creation leading to income growth to support levels of elevated spending, the

consumer will be forced to par back. we can see a temporary support from drawing down savings or the consumer willing to take on new amounts of debt, but if we talk about extending the disconnect between declining income growth and increased consumption, we know the disconnect cannot be maintained over the long run. >> given your fragile view of the u.s. economy, do you think the weakness in the u.s. dollar we saw over the last week and indeed month or so, is that justified? >> well, i do think all little bit of a pull back in the dollar is justified. when we look at the u.s. economy relative to our counter parts abroad, we still do appear to be the relatively stronger economy. the u.s. economy is still growing at over 1% as of the second quarter. compared to just a few tenths of a percent to european counter parts. does appear to be on relatively stronger footing. still moderate footing and not the type of growth the fed would

have expected to see six months after liftoff. >> we have to leave it there. thank you for joining us this morning. >> that's it, have a great weekend.

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good morning. markets are in focus. we are cnbc, right? brent crude trading above $50 a barrel. think about it, two weeks ago was threatening to break under 40. now 50. that's 25%. u.s. equity futures as a result heading up. red arrows in europe. a full market run down coming up. reports of a truth in the redstone viacom drama. replaced immediately. details straight ahead including a sizable severance package. donald trump striking a new tone

on the campaign trail. expressing regret for things that he has said that may have caused personal pain. it's friday, august 19, 2016 and "squawk box" begins right now. gl bloelksgood morning, everybo i'm becky quick with joe kernen. andrew is reporting from the olympics in rio. we'll get to him in just a moment. in the meantime, check out the u.s. equity futures this hour. some relatively steep declines based on what we've seen recently. the dow is down 51 points. s&p down close to 7 and nasdaq down 13. at this point, the losses could push you into negative territory. if the nasdaq does