good morning. crude realities. opec reaches an historic deal to cut production, is the devil in the detail? >> mr. stumpf goes back to washington. the wells fargo ceo set to face another grilling from lawmakers about his bank's sales practices. and your money your vote. a new poll this morning on who voters say won the first presidential debate. it's thursday september 29, 2016. "worldwide exchange" begins right now. ♪ >> good morning.

welcome to "worldwide exchange" on cnbc. i'm sara eisen. >> i'm wilfred frost in washington today for wells fargo's ceo john stumpf's appearance on capitol hill. he goes before the house financial services committee at 10:00 a.m. eastern. more on that in a minute. before we go to the markets, good morning to you, sara. >> we're like ships passing in the night. hopefully back together tomorrow where mr. stumpf goes, wilfred frost goes. a lot to cover. >> where christine lagarde goes, so does sara eisen. >> we had a good event. i'll talk more about that in a bit. let's show you u.s. equity futures, after solid rally yesterday on the back of that unexpected opec deal. energy producers are leading the way around the world. dow futures up almost 3 points. s&p 500 futures flat. nasdaq up by 2.

more than 100-point rally yesterday led by caterpillar, exxon. the ten-year treasury note yield. we have some economic data today. after a whole bunch of fed speak and more to anticipate later, ten overyield below 1.60. 1.58. lower yields. ticking up just fractionally this morning. >> watching oil as well closely as we have been for the last 12 hours. prices spiked yesterday on word that opec agreed to limit production, meaning the cartel would cut output for the first time since the financial crisis, today traders are focusing on the lack of detail about the deal. that's putting remember sure on prices. yesterday we gained over 5%. today down 0.6%. 46.8 for wti. goldman sachs says the deal should add $7 to $10 to oil prices for the first half of next year but longer term the firm is skeptical of the quotas.

they say if this proposal cut is strictly enforced and supports prices, they would expect it to prove self-defeating, medium term with a large drilling response around the world. goldman sticking with its forecast for wti, 43 a barrel for the end of this year. 53 a barrel the end of 2017. 46.8 this morning. >> after a 5% rally yesterday, big surprise there. bloomberg calls it a u turn. we'll talk more about what happened in algiers and how it will affect the markets. let's show you the european equity trade early. green on the screens. dax up a percent. in france, up 1.4%. higher in italy, up 1.5%. a lot of commodity producers playing catch up for yesterday's session where we saw the companies rally in the u.s. as for asia overnight. the yen has been weak. that's been helpful for the japanese exporters. the nikkei finishing up 1.4%. hong kong, stocks higher by a

half percent. shanghai up 0.3%. malaysia is one of ashe's only big oil exporters, so every single country that produces oil, venezuela, these countries have been suffering on the back of lower prices they have some hope this morning on the back of that deal. >> worth pointing out that the nikkei is up despite japan being an oil importer, because of oil's effect on the yen. india one of the big importers is suffering today as well it is down around 1%. the broader markets, looking at the dollar. the yen is a big mover. softer because really of the effect of the oil price on that pair. 0.8%. 101.47. otherwise not much movement. the pound below 1.30. a quick look at gold prices, which yesterday moved a little bit around that dollar move,

that oil price move. flat today, 13.24. >> the busiest day of the week for economic data. so listen up. 8:30 a.m., weekly jobless claims. the final estimate comes on second quarter gdp, the third look at that number. and august trade deficit numbers are also due around the 8:00 hour. at 10:00 a.m., august pending home sales and in earnings news pepsico reports before the opening bell. and more fed speak. we'll hear from several central bank officials including the atlanta fed president, and the fed governor, jerome powell. >> some notable comments from kansas city fed bank president, saying she wants to raise interest rates slowly but surely. she adds that doing so does not mean she wants to put the brakes on economic growth. george was one of three policymakers who dissented on the decision last week to leave

rates unchanged. she'll sit down with steve le t liesman for an exclusive interview today. we heard from the japan finance governor saying the boj will achieve it's 2% inflation target. he maintains the central bank is ready to ease policy further by cutting short-term and long-term interest rate targets or expanding risky asset purchases. kuroda says the boj can choose to expand the monetary base faster. boy, is he getting creative when it comes to central bank policies. will it work? does he have the credibility to do so? so far the yen is weak. we are near critical levels and there is skepticism in the research notes. >> absolutely right. we'll have to see if it feeds through to the economy, even if it has a reasonable effect on

the yen. wells fargo, despite john stumpf yesterday agreeing to forfeit $41 million in pay, late on tuesday, under any comparison that is a huge amount. pressure on him and the company actually increased yesterday. even before the move had had time to resonate, senator elizabeth warren had tweeted and said that mr. stumpf should resign, return every nickel he made while the scam was ongoing and face the s.e.c. and doj investigations. the day ended with the state of california suspending business relationships with wells fargo for one year. a major symbolic move rather than a serious hit to earnings. 0.1% of the earnings or $22 million. highlighting that things could

get worse for wells fargo. >> these sanctions will be in place for 12 months, however should wells fargo fail to comply with settlement agreements it reached with federal and local regulators or evidence surfaces that they reengaged in the same behavior, the sanctions may escalate up to and including a complete termination of our business relationship with the bank. >> he will be on power lunch today. one not to miss. the bottom line, once again, mr. stumpf heads to capitol hill today still under intense pressure, despite some actions he would have hoped to placate it. >> i wonder if they're going to do anything at all to alleviate some concerns. certainly the public outrage is there. that's what these hearings do. they channel the public outrage. i saw a headline cross that senator elizabeth warren was not happy. she said it was a step. the whole pay issue, but not enough. that seems to be the theme.

>> absolutely right. that was a tweet we brought. it is interesting, this. if you look at the amount of pay he's given back against comparison, it's huge. this has cost the company around 200 million. he's given back 41 million of past pay and stopped getting his current salary. jamie dimon cost his company 6 billion yet he only gave up half of his annual compensation for one year, which was about 11 million. what stumpf has done has dwarfed what anyone else has done in the past for these sorts of issues. yet the public swell of anger is just as big. in fact, increased yesterday. in terms of what mrlawmakers mit do. a warning from analyst mike mayo. the report saying the fallout could mean for the broader market in terms of saying that if lawmakers continue to hit over the head this idea of

cross-selling, being a dirty issue, banks may have to take a new action, new direction which could lead to fewer branches and fewer employees. a side effect could be the banks speed up what they're doing in terms of reducing the number of branch counts, number of employees. so just a side warning for lawmakers for continuing to attack wells fargo on this particular issue. the side point is that it could improve banks efficiency. >> do the reg latulators share of the blame? eight years since the financial crisis of lehman. janet yellen was yelling about the banks yesterday. where were they when this was all happening? >> this wasn't specifically a fed issue, it's a cfpb issue. that continues to divide opinion, whether the cfpb and the occ got to this quick enough, when they did get to it whether they extracted a big

enough fine. the fed looks at other issues, the capital, those types of things. janet yellen was grilled on this yesterday. some exchanges very heated. saying from one congressman that these banks are laughing in your face, he said to janet yellen. there's a question of whether this issue will lead to a further snap back of regulation against the sector. the only caveat, still no proving -- the proof of outright criminal activity by the bank. thus it's more of an oversight issue. also no sign other banks have done this yet either. it's also just a wells fargo issue. >> the other factor that's been weighing on the banks, the price of deutsche bank that we are following. shares today, let's see how they're trading in europe, germany's biggest bank is troubled. trading near a record low. slightly higher this morning. this as the german government refutes a state aid report.

mario draghi is arguing the central bank cannot be blamed for the bank's woes. >> if a bank represents a systemic threat for the eurozone, this cannot be because of low interest rates. has to do with other reasons. >> this is something regulators are watching. the head of the imf, christine laggard told me yesterday, it is a systemic threat. she played down the urgency and the immediacy of any state aid needed. she wouldn't answer my questions about whether she spoke with chance lo chancellor merkel about it, and the fact that the share price was up yesterday shows they are paying attention. >> i think the reason the share price reacted is because the bank and the government of germany have come out clearly to say there's no bank bailout on the cards for deutsche bank. that's given some cause for optimism. these are small share price

recoveries in respect to what's happened over the last few weeks and over the period of this year. what will come down in the short-term is when we get that doj final number, and whether the bank needs to raise capital. >> just when banks were supposed to rise ahead of a possible interest rate hike. when we come back, the top market story, opec cutting a surprise deal. prices choppy in early trade. they're down after a 5% surge yesterday. what happened in all that back and forth negotiating in algeria? first, a look back on this day in history. following the collapse of lehman brothers and washington mutual's bankruptcy, the dow jones fell 777 points on monday september 2 29, 2008. let's hope we don't have that again today. i'm sure we won't. more discussion in two minutes.

welcome back and good morning. oil prices under a bit of pressure after a rally yesterday sent wti nearly 5% on that surprise news out of algeria has opec will cut production for the first time since 2002008. joining us now is richard mallenson. good morning, richard. >> good morning. >> how much of a game changer is this for the price of oil.

explain what this deal will look like. >> i think this is really important news. there are details that need to be confirmed. parts of the market are rightly skeptical given opec's failure over the course of this year, even the last few years to come together and cooperate. this feels important to me. what we're seeing is there will be a cut or a limit on opec output from the 1st of november at about 32.5 million barrels a day. down from where we are today. there are a fusiew exceptions, libya and nigeria will be allowed to increase output if they can. that might add more oil. even with those additions, best case scenario, this means less oil coming out of opec than we were otherwise expecting. that means balances look tighter going into 2017. we should be drawing more of that big overhang of inventories that we built up over the last

couple of years. that's constructive for prices in the end. >> richard, i supposed it's not just the detail that come people are skeptical about, but also the enforcement of this. in months to come, if the prices are higher, haven't we seen in the past that opec members will just ignore the agreements they've had in the past and start pumping more oil? >> yeah. so, you know, one big problem for opec has been cheating by different members. i think it's fair to say the core countries, saudi arabia and immediate neighbors, they are quite disciplined. if they say they will lower production levels, they follow through on that unless they feel other members are cheating so egregiously. in this case, iran is not expected to kit. there's a lack of clarity over what iraq has to do. most cuts will come from countries that have a good record of deliveryiing on deals.

>> what is happening in saudi arabia politically? two years ago they didn't care if prices went down to $20 a barrel. they were on the record saying that the oil minister. they have a new minister, a giant deficit. what changed for them to agree to this deal? >> i think a few things have happened. we have seen more and more evidence that lower oil revenues are hurting them. they came out with another round of public spending cuts, which are affecting public sector salaries which are a big part of the economy. i think going -- what happened in riyadh, if they started looking into 2017, they didn't feel confident that prices were going to rise. when they began the process they were happy to push non-opec supply out of the market, but they expected prices to be rising within two years. when it looked doubtful, they femt the need to react. the other thing is they were

open too cooperation much earlier but they needed iran to be a part of any deal. iran will not cut production but the signs are they will accept a limit on how much production can grow. they were probably going to find that limit any way, but it's symbolic that iran will sign up to a deal. that helped bring saudi arabia across the line along with that growing financial pressure at home. >> we'll see if it works. opec meeting in november to discuss the details. thanks for joining us. still to come on "worldwide exchange," a new poll out on who voters say won the first presidential debate. the details next. first, as we head to break, here's today's national forecast from ray stagic. >> thanks. we have wet weather in the east. that's the big weather story for now with rain, thunderstorms, heavy rainfall from d.c. down towards richmond. they had record rain yesterday over four inches.

multiple inches of rain expected with flash flood watches up. drier weather back towards the rest. the ream show l show is across mid-atlantic. cooler temperatures, about 78 in dallas. 78 here in atlanta. 88 in miami with a chance of showers and thundershowers. the numbers will stay cool, eastern part of the u.s., as we see this trough digging in. temperatures in the 60s to the north, back to the west, close to 80 degrees. more coming up after this. bout . all the networks are great now. we're talking within a 1% difference in reliability of each other. and, sprint saves you 50% on most current national carrier rates. save money on your phone bill, invest it in your small business. wouldn't you love more customers? i would definitely love some new customers. sprint will help you add customers and cut your costs. switch your business to sprint and save 50% on most current verizon, at&t and t-mobile rates. don't let a 1% difference cost you twice as much. whoooo! for people with hearing loss, visit sprintrelay.com.

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in political news, 52% of likely voters who either watched monday night's presidential debate or said they followed it believe hillary clinton won the showdown. 21% thought donald trump won. 26% said neither candidate came out on top. so a lot of questions right now about the federal reserve. janet yellen facing heat from republican lawmakers yesterday over a fed official's donation to hillary clinton's presidential campaign. we're talking about fed governor brainard, who gave $2600 in four contributions between last february and yesterday. there are unspecified reports that brainard is angling for a

top job in the clinton administration if she wins. janet yellen said those do not violate any rules. i asked yesterday about this. >> donald trump told 84 million people that the fed is just being political and keeping interest rates low to help obama. is that true? >> around the world we think it's critically important that central banks be independent. so we have not seen the fed not being independent in its decisionmaking process, the way in which it's governed, we don't see a lack of independence there. >> it's not seen being not independent, translation, willfred, she disagrees with donald trump on that point. >> big issue, and janet yellen got a lot of grief on that

yesterday. congress is sending president obama a bill to keep the u.s. government operating through december 9th, averting a possible shutdown this weekend. the vote came after top lawmakers broke a stalemate over aid to help address the water crisis in flint, michigan. the measure is congress' last major to-do item before the november election. keeping an eye on the saudi ra riyal, following a vote in congress allowing 9/11 victims to sue. one year dollar forwards contracts hitting an eight-week high today. a lot of news oud s out of sau

arabia, including that owe pk cut and the vote by congress. moving on to sports, tim tebow making a good first impression in his quest to make the transition from football to baseball. in his first at-bat yesterday, tebow hit a home run on the first pitch. tebow is playing in the new york mets minor league system in florida. the former nfl quarterback has not played organized baseball since he was in high school. congrats to him. >> trending all over. coming up, the top stories including oil prices the morning after opec agrees to an output cut. and don't miss cisco systems ceo chuck robbins as he joins jim cramer on "mad money." t. kubo: wow. narrator: so grab your loved ones monkey: don't even.

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the cartel's call, opec reaches a historic deal to cut production but analysts are skeptical. john stumpf headed back to congress ready for another grilling from lawmakers. it will be huge. today's top trending story we know who will be playing donald trump on "snl" this coming season. it's thursday september 29, 2016. you're watching "worldwide exchange" on cnbc.

♪ good morning. welcome back to "worldwide exchange" on cnbc. i'm sara eisen. >> i'm wilfred frost. i'm in washington today ahead of wells fargo's ceo john stumpf's second appearance in just over one week on capitol hill. he goes before the house financial services committee this time, 10:00 a.m. eastern time. >> we are expecting fireworks. we'll take it live at 10:00 a.m. any reason to think it will be less contentious than what he faced at the senate? >> we might have thought that when he announced the claw backs, but just as much tense pressure on him yesterday in various circles. i'm sure it will be more of the seam later today, 10:00 a.m. what about fireworks in the markets? we saw them in the oil markets yesterday. a bit in the equity markets. this morning more muted. futures right now pretty much flat.

just below flat at the moment. the dow called lower by 7 points. yesterday energy was the best performing sector as oil prices surged. we saw the energy sector up 4%. telecoms down 1%. overall a half percent of gains for each of the indices. around the world, a good amount of positivity out of europe. this is the first chance the energy sectors there have had to react to that opec deal late yesterday. energies leading the charge. another good day for banks. deutsche bank having two good days in a row. asian trade, despite being an energy importer, up 1.4% because the yen slipped. hong kong and shanghai doing well. malaysia also doing well. india, big energy importer, suffering. energy companies leading the gains. the nci world index heading for its best quarter since 2013. the broader markets now.

oil prices, after a big pop yesterday on the surprise deal for opec to cut production are giving a tiny bit back this morning. goldman sachs pouring cold water on the bullishness of that deal. brent, 48.24, down almost 1%. gasoline down as well. the ten-year treasury note yield, low yields are the name of the game. ten-year note yield, 1.58. we get a bunch of economic data, including jobless claims. we'll see if better data can lift that yield. for now, below 1.60. the u.s. dollar has been weak lately. weaker on the back of strong oil yesterday. the dollar weaker against the euro 1.12, stronger against the japanese yen. music to japanese policy makers ears. 101.41. the pound continues to languish trading below 1.30. the price of gold on the back of

a weaker dollar getting a boost along with other commodities. 1,324.80. it is pretty much flat in the early morning session. >> on the ajgenda today, weekly jobless claims, the final estimate on second quarter gdp and august trade deficit numbers are out at 8:30, that's followed by august pending home sales at 10:00 a.m. pepsico reports before the opening bell, look for results from conagra and cost co. we hear from several fed officials including atlanta fed president dennis lockhart. what can we expect in today's session? joining us is dan hackman, senior fixed income strategist. welcome. i know you focussed on fixed income, but it feels like oil is at the center of global market moves. are you surprised to see it down this morning after that big agreement out of opec yesterday? >> not surprised by the -- i would say the profit taking,

sara. opec has a history of noncompliance. so i think there's a reasonable amount of doubt. but i think there's validity to the cut in opec production. saudi arabia, if you remember, cut compensation to several government officials, announced that this week. to me it's an indication they're suffering, running some budget deficits over there. they have a lot of incentive to have oil prices rise. this does help the markets to rebalance, speed that process up. bottom line, commodity prices have bottomed here. >> dan, one other big factor driving u.s. equities over the last week or two is the state of european banks. the general effect that's had on risk sentiment. are you concerned about the potential plight of the likes of deutsche bank for u.s. equities or is that something a little too far away?

>> i think there is a certain amount of worry about that, by at the end of the day we think the progress that the european banks are taking are a positive. they'll get through this rough patch. i'm confident of that. i think they're taking a number of steps to restructure, build up capitals. we view the trend to be a positive, not a negative. >> just back to oil. if you do think this is very symbolic and will drive the price of oil higher like we saw yesterday, why aren't we seeing, for instance, the ten-year yield higher on this idea that higher oil prices will lead to higher inflation? >> the bond market is waiting to see proof. i'm concerned about it to be candid. we think this is sowing the seeds for future inflation. the fed has to be very concerned that they may be getting behind in terms of monetary policy. we think the fed should raise rates in december, probably have at least two, three rate

increases of fed funds rate in 2017. so that the market doesn't appear to be ahead of the fed, but that the fed ahead of the market. that's important. inflation is starting to rise here in the u.s. i think we're now at 2% level. the fed has expected that. it's starting to creep above that rate level. so i think the fed needs to act sooner rather than later. we expect that to happen in december. >> you're not the only one that thinks that. dan, thank you. >> thank you. let's move on. stocks to watch today. shares of intercellular therapies are plunging. the biotech form releasing disappointing drug tests for schizophren schizophrenia. it had the same effectiveness as a mplacebo. hit tach chi, toshiba and

mitsubishi could be in agreement to merge a nuclear unit. those stocks getting a bit of a boost today. carl icahn cutting his stake in transocean by two-thirds, from 6% to 1.5%. an s.e.c. filing said the move was for tax planning purposes. it comes a week after icahn cut his stake in chesapeake energy. a film about the company coming out this weekend. >> seen the previews. in other corporate news, the saga continues over sumner redstone's empire as reports surface that a merger could be on the table. landon dowdy has more on this story. >> reporter: good morning. just weeks after rising to the dominant role in her father's $40 billion media empire, reports say that shari redstone is poised to undo the last strategic move of her father and merge viacom and cbs.

they will send the message in a letter before the market opens today. this coming a decade after mr. redstone split the two companies and said the inen it shun to free the fast-growing viacom from the cbs broadcast assets did not pan out address intended. shares of viacom and cbs rising on the news. this following the power struggle that played out all summer over summer redstone's empire as viacom has been struggling. a deal with les moonves, could revitalize viacom's assets, but reporters are concern that the deal would be more beneficial to viacom than that of cbs. the combination could help cbs when negotiating with cable and satellite distributors. back over to you. >> we'll continue to follow that one. it's time for top trending

stories. vice president joe biden putting his acting skills to the test on last night's episode of "law & order: svu." this from instagram, a picture of the vice president filming a seen from the show. the cameo called a true crossover between life, art and activism. t interesting move. got a lot of attention. >> i love that sometime yell laos. i don't know whether films and tv shows need news anchors to feature. >> they do. >> well -- >> i think kelly evans was on an episode. put your name out there. the new season of "snl" debuts this weekend with a new but familiar cast member. the show is tapping alec baldwin to play donald trump.

kate mckinnen will continue her role on the show as hillary clinton. baldwin hosted "snl" 16 times over the show's 42-year history. it's not the first time the show brought in an outsider to play someone during an election year. in 2008, tina fey returned to play sarah palin. i can't wait. will be good. >> they have such great material. how many times have we watched even the debate and said this is "snl" material? they have a lot to live up to when it comes to real life mimicking the skits. >> "snl" can make the most boring of election campaigns amusi amusing. >> another political gaffe for gary johnson. the libertarian presidential candidate struggling to name his favorite foreign leader. during a town hall last night, chris matthews pushed johnson for an answer. >> name a foreign leader that you respect. >> i guess i'm having an aleppo

moment. >> i'm giving you the whole world. anybody in the world you like. anybody? pick any leader. >> onson referring to his aleppo moment a couple weeks ago. he was asked what is aleppo after being asked on morning joe how he would deal with aleppo. the conflict in syria. this continues to be a problem for the independent candidate. this idea that they're very focused domestically, and the foreign policy in the so much. their whole idea is to disengage and focus on america. we'll see how much of the vote he gets. >> pretty awkward, even worse than the aleppo moment. >> sara, who is your favorite central banker in the world? >> you know, that's tough one for me. koroda? >> you're wrong, super mario. >> i knew you were going to say mario draghi.

>> i just love super mario. >> we have answers. coming up, today's must reads including an op-ed from aol co-founder steve pace on why he is breaking with history and says he is voting for hillary clinton. stay tuned. you're watching "worldwide exchange." cathy's gotten used to the smell of lingering garbage...

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my pick in the "washington

post," comes from steve case, founder of aol. writing why i'm voting for hillary clinton. i picked it because he discusses the fact that he never gets public on politics. he has to work with both parties. he's rarely partisan but he makes the case for why as a technology innovator and entrepreneur clinton is his choice. one reason is immigration. more than 40% of fortune 500 companies were started by immigrants or their children. think how many viewer jobs we'd have in the united states if the entrepreneurs and their parents were kept out by a wall. trump's harsh policies will cost u.s. jobs and his rhetoric will chase away immigrant families whose children could grow up to be the next steve jobs. he lays out four points. that was one on jobs and immigration why he chooses clinton over trump. clearly silicon valley has leaned left. that's no surprise. has leaned towards hillary

clinton, except for peter teal, which makes him interesting. it's worth a read. not sure it matters a whole lot to the trump contingent. >> not just worth to read, but also worth the watch, because steve case is on cnbc later today. my pick is in the wall street journal. trump tees up a necessary debate on the fed. the markets are as dependent on the fed as ever. goes on to say trump's rants may often be inaccurate but regarding the ripple effects of fed's easy money, mr. trump is directly on point. it comes the day after, sara, janet yellen was grilled on capitol hill for various things like this. just to clarify what the author says, he doesn't say that they're doing it purposely because politicians are telling them, but he does agree with the conclusion that mr. trump made,

perhaps not quite the extent of it, that markets have been artificially propped up by loose monetary policy and there should be a debate on this topic coming forward which is interest tock hear from a morgan instantly strategist. >> with the fed so active in the global economy, what would hatch if trump does win the election, what would happen to janet yellen? would she stay? clearly he's been bashing her more lately. who would he pit in place? when we come back, futures trading flat after a rally yesterday. second in a row. watching oil prices carefully here. pulling back maybe some profit taking after yesterday's big gains. we'll talk about the big market trends with art hogan next. so , so , and now we're getting all kinds of new customers. i know. can you believe we're getting orders from canada, ireland...

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we are approaching the top of the hour so the team is getting ready for "squawk box." some big stories like oil and the wells fargo chief back on the hill. >> we'll talk to wells fargo, talk oil. the big topic of the morning. market reaction later. mohammed alarian will join us later. wells fargo, wilf being one of our guests. a lot there. finally steve case with us this morning. a big lineup to come right here on "squawk box." >> looking forward to that with his new op-ed in the post about why he's voting for clinton. >> did you have that in your must read? >> we did. thanks for watching. >> there you go i was just preparing. i had time, but i wasn't listening as well as i should.

these little things called ifbs -- every day, 5:45. >> it is my fault. >> becky is over here. we were talking. >> sorry. my fault. >> forgiven. >> great stuff. look forward to it. "squawk box" in about eight minutes time. back to markets on "worldwide exchange," joining us from boston is art hogan, chief market strategist at wunderlich. i wonder how many we will get a bump off these oil market deals. a little bit of a bump yesterday, will that effect on equity markets peter out quickly? >> i think about this the other way. this securely puts a floor on the energy markets. it was february when we were trading at $26 for a period of time. the street was calling for even lower prices in the teens.

this puts a floor on the market. doesn't mean we'll get back to $70 oil soon, but it means the down side is more protected. so we probably break that correlation that the s&p 500 had with wti. the good news is saudi arabia blinked on this. we'll see this as a positive. i don't think we should sort of look at this as a concrete positive, and for all the sort of second derivative negatives that we thought about in lower energy prices, whether it's the economies around the oil patch or banks that had exposure, high yield, we'll know more after the november meeting, but this is one of the positive drivers of the market today. and heading forward. >> just on the energy stocks themselves. the s&p energy sector had its best day yesterday since january. do you go in and buy and what

parts look cheap? >> that's a great question. when you look at this the fully integrateds have priced in something positive happening. that's probably the one spectrum that is the least effected by this. look at more speculative lays in the permian basin, probably the most economic right now. if you're further down the risk scale look at eagle ford and then north dakota bakken. but then what happens is that that thought that, you know, we could have another washout, another significant down draft that will take a lot of these independent emp companies out of business is behind us. for some of those well-capitalized companies, they just want to sit in the middle of that range, i think you could still have plenty of opportunity. instead of being sort of 40/50, we're probably 45/50 this year. next year in the 50 to 60 range.

that's probably enough to keep the well capitalized north american plays economic this year. the other end of the spectrum is oil field service. they certainly have not participated in the move. when you think about oil field service names, probably a lot of opportunity there as they get margin back. >> let's touch on the banks. a couple months ago, we thought the worst of the regulation was behind. has this wells fargo issue damaged the whole sector? will we see another wave of regulations hitting the banks in the u.s.? >> i don't know if the regulations could get much stricter. the pendulum there probably swung way too far. the problem is this is a public case, it will have public outrage and outcry. it will remain in the headlines for a period of time. again today up on capitol hill. the problem is was it regulation that was lax here or was it oversight at a particular bank? i think as we digest and

disseminate the news, we will probably see it doesn't spread beyond. the problem here is if cross-selling becomes a dirty word, you will see downsizing in a lot of commercial banks and that shouldn't happen. right now this is a wells fargo specific case. >> what about deutsche bank? isn't that weighing on the sector here? that's germany's biggest bank. an international bank, trading at record lows and serious questions about its financial health. can you touch the banks at a time when oil prices look set to rise, the fed set to raise rates, you would think that would be beneficial for the banks. >> that's a great point. you have to -- the assumption that we made is that deutsche bank was united bank of germany. angela merkel came out and dispelled that myth. if you separate those banks that are domestic, domestic focus, you look at a basket of regional banks do be great in north america versus european banks late at the party. >> art hogan, thank you.

i'm watching wilfred frost on capitol hill hayes down john stumpf again. "squawk box" is next. we're talking within a 1% difference in reliability of each other. and, sprint saves you 50% on most current national carrier rates. save money on your phone bill, invest it in your small business. wouldn't you love more customers? i would definitely love some new customers. sprint will help you add customers and cut your costs. switch your business to sprint and save 50% on most current verizon, at&t and t-mobile rates. don't let a 1% difference cost you twice as much. whoooo! for people with hearing loss, visit ntrelay.com.

good morning, a surprise deal from opec to cut production, after an initial surge in oil prices, the agreement is getting a luke warm reception. mr. stumpf goes back to washington. the wells fargo ceo set to face another grilling from lawmakers. and another aleppo moment for gary johnson the libertarian presidential candidate failing to come up with the name of a single foreign leader. i think i could get a couple. thursday, september 29, 2016. "squawk box" begins right now.

>> live from new york where business never sleeps, this is "squawk box." good morning, everybody. welcome to "squawk box" on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. yesterday we did see a big surge towards the end of the day for the equities markets fueled by the oil price increase. we'll talk about that in a moment the dow was up by 110 points yesterday. s&p gained 11. the nasdaq was up by over 12 points. in asia, the nikkei up by 1.4%. hang seng closed higher. ha shanghai was up. you do see green arrows across the board. look at europe. some of the early trades. concerns about deutsche bank have been affecting some markets