i'm seema mody it's 5:00 a.m. at cnbc global headquarters north korea threatening to call off talks between president trump and kim jong-un. japan's economy sha ririnki for the first time in eight years. oil is on the move after warnings that supply disruptions could cause prices to rocket. starbucks opening 3,000 stores in china over the next few years. and a red alert in hawaii as ash and smoke continues to be

shot into the guy. it's wednesday, may 16, 2018, "worldwide exchange" begins now. sgl good morning welcome to "worldwide exchange." i'm dominic chu. the futures picture now is looking a little bit more stable as we look at the s&p 500 slated to open up just about flat on the day. the dow jones same kind of situation, just small losses 16 points. the nasdaq up by two so stability right now across the equity markets as for the treasury side of things, that 3% mark on the ten-year u.s. treasury note has been breached. we got to 3.095 yesterday. the ten-year treasury note yield, 3.06% a little bit of a pullback as people buy up a bit of those ten-year treasury notes. the broader market picture, the

macro side of things, oil prices are pulling back just slightly so far today after a run up over the last couple of weeks wti crude, $70.92. ice brent crude, $77.72, off by 1% on the currency side of things, we are seeing weakness on dollar/yen a bit of weakness as well in terms of the overall picture for the euro the pound, 1.34 the last trade there. on the european side, those markets have just opened up. just in the last couple of hours. the dax just about flat. the cac in france, same situation. the ftse 100 in the uk there as well stability, that same theme in europe and asia. the japanese economy shrinking for the first time in eight quarters gdp falling 0.6% in that first

quarter. back over to you, seema. >> north korea canceling its meeting with south korea and is now threatening to skip the summit with the u.s. eunice yoon joins us now with more details >> reporter: thank you very much north korea dramatically changed its tone towards washington today, warning of what it described as a one-sided denuclearization deal. the official north korean state news agency was quoting the first vice minister of foreign affairs as saying if the u.s. is trying to drive us into a corner to force our unilateral nuclear abandonment we will no longer be interested in such dialogue and cannot but reconsider our proceeding to the dprk-u.s. summit he's using north korea's official name in that statement. kim called out john bolton for

his suggestion that the u.s. work out a deal for north korea that would be similar to one that the u.s. had for libya to abandon its nuclear program. kim said the world knows too well that our country is neither libya nor iraq which have met a miserable fate it's absolutely absurd to dare compare the dprk, a nuclear weapon state, to libya, which had been at the initial stage of nuclear development. kim also had some harsh words for secretary of state mike pompeo who over the weekend had suggested that the u.s. would be willing to lift economic sanctions on north korea if it saw a complete denuclearization on the korean peninsula. kim says north korea would never give up its nuclear program in exchange for economic trade with the united states. now, i got on the phone with a couple of analysts who have been watching north korea for a long time they say this is very typical of the north korean playbook.

nick ebberstat described this as standard north korean shakedown tactics to get concessions before the summit. south korea said its foreign minister was on the phone with pompeo, and that pompeo did reassure her that washington still is making its preparations for the summit so as of right now, nothing has changed, though as you can see, there are a lot of dramatic changes on the korean peninsula. >> a lot of sabre rattling going on for sure. thank you very much for that report let's talk about the market impact joining us now is simon derrick, chief currency strategist at bny melon. as we talk about the geopolitical developments, north korea, south korea, everything else, where have we seen the biggest impact in the currency and rates market so far? >> it's got to be said relatively little is the real

answer the foreign exchange market struggled over the course of the last few years to price in the geopolitics story and the north/south korea story. each and every time there's been a fresh event, the reaction has been less and less right now we have almost got fatigue with the north korea story. in particular i think people believe this is part and parcel of the standard negotiating tactics. the real impact will be minimal. there was a slight level of risk in the asian markets the yen strengthened a bit really it has not caught the attention of the foreign exchange traders as you might have thought it would have done a few years ago. >> i want to switch topics to japan. missing gdp estimates. there was an idea that with money trtary policy finally kic in, that japan's economy would

rebound. today's numbers suggest otherwise. what do you make of the data and how should we play the japanese yen? >> i think we lost three decades for japan. we used to tack abolk about the decade we have disappointing numbers coming out we heard from mr. kuroda yesterday making it clear that he had no intention at any time to change monetary policy. still targeting ten-year jdps at zero percent so you could argue that given the fact that yield differential through u.s. and japan are starting to widen even further out, that that should be a yen weakness story but there are other things going on in the foreign exchange market there are concerns between emerging market space about what a rising dollar is doing

there's concerns with europe i think maybe that tone of risk off will -- despite the monetary policy story, will keep a bid under the yen. i don't think dollar/yen is going anywhere dramatic. maybe a percent higher but i would be amazed if it's more than that >> simon, let's talk about the domestic markets in the united states for us, we're looking at ten-year treasury note yields north of 3%. we almost hit 3.1 yesterday. you would expect to see dollar reacting more perhaps to what's going on now yes, dollars are worth more than they were on a broad basis five years ago, but they're still not worth as much as they were two years ago at these levels. so will it be dollar supportive to have an interest rate environment like we have now on the rise, especially on the ten-year side of things? >> i think that's a huge important question they've been talking over the

long-term. there's no nuptials between the rising ten-year yield and the strong dollar. in the 1960s and 1970s that was unrelenting dollar pressure. the only time you get dollar strength is with tight monetary policy relative to inflation right now you don't have that. given the fact that we have gone through this 2014 highs on the ten-year yield, of course in the short-term that will matter. it will particularly matter for the dollar against the emerging market currencies. those guys have big debts, particularly when it is denominated in dollars they'll cies like the peso, the rand, coming under pressure because rising dollar, rising yields puts real pressure on the debt financing. that's where the interesting story will be.

the story is will the fed react. maybe that's what we should be talking about over the summer. >> a question i posed to st. louis fed president james bullard is how will the fed continue to raise rates without inflicting pain on emerging markets. his response was we need to focus on the u.s. economy. you mentioned the dollar continues to strength be do you buy, sell or hold u.s. stocks >> it's got to be said, historically you would be cautious about holding stocks in this particular kind of environment. that said, april and may hi historically have been benign over the last 50 years for equity markets this is not a particularly bad environment it has to be said that it held up well

equity markets have held up well that said you do struggle to have ten-year yields at 3.20 and 3.25, which seems remarkable in the context of what we've just seen, maybe less so you will question some of the yield story in the equity market therefore i struggle to see an aggressive move higher in equities here, unless we hear more cautious comments coming out from the fed what happens in june, july, august for the fed is always important. the period leading up to jackson hole at the moment i find it tough to be excited about u.s. equities >> i don't think you're the only one out there exhibiting some constraint or reservation about what's happening with equity markets right now. simon derrick, thank you very much for joining us. >> thank you

your big individual stock stories of the hour include tesla. reuters reporting the company plans to halt production for six days at the end of the month to fix issues on the assembly line. tesla struggled to ramp up production of the model 3. this would be the third stoppage this year. starbucks looking to more than triple its annual revenue from china over the next five years. the coffee giant aims to have 6,000 stores in the country by the end of 2022. up from about 3300 stores now. starbucks says its tie up with nestle earlier this month helped it extend the reach throughout china. burberry's full-year adjusted profit rose 2%, slightly above forecast same-store sales rose 3% growth did slow in the second half of the year sales fell in the uk >> novartis says its general

counsel is resigning over his role in the 1$1.2 million consulting contract it struck with president trump's personal lawyer, michael cohen. he says though the contract was legal, it was a mistake. novartis has said its new ceo had nothing to do with the cohen deal, and that the board was also not aware of the transaction. paddy power betfair has confirmed its in talks to buy sports site fan duel after the u.s. supreme court paved the way for legalized betting. paddy power runs the largest horse betting site in the u.s. shares of micro focus are up sharply in london. the software company is raising its revenue guidance for the first half of the year and backing its full-year outlook. it merged with hewlett-packard enterprise services last year.

we are just getting started on "worldwide exchange." big money's big bets, where top investors like warren buffett, david tepper and george soros are putting their money to work. those names straight ahead. and hawaii on high alert volcanic eruptions intensifying triggers a redwarning on the island the late on atstth story when "worldwide exchange" returns ♪ most people come to la with big dreams. ♪

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some of the biggest names on wall street making some bold moves in the last quarter. leslie picker has the details. >> we saw a lot of volatility during the first quarter we wanted to look and see how hedge fund managers played some of that volatility, specifically within tech and healthcare sectors. they did purchase facebook en masse, most likely on a dip that stock faced headwinds from the cambridge analytica standal. third point and green light added to position in facebook. apple was more mixed green light and appalossa sold stakes, but berkshire hathaway remained committed some smaller tech companies also saw interesting moves during the quarter. twitter saw a boost from tiger

management and tiger global, which each took new stakes however green light reduced its stake in twitter which is one it's held for a couple quarters. a few well known hedge funds took positions in dropbox which went public during the quarter soros and janna took new positions. healthcare attracted interest. berkshire hathaway doubling its stake in teva to more than 40 million shares, or 7$700 million worth. that stock got a boost in that position in after-market strayeding and tiger management picked up a new position in united health, and janna bought anthem. >> these are great we love the insights, but it's important to note this data is as of march 31st it's 45 days later is it safe to say some of these hedge fund types have trafficked in and out of these positions

even during that span? >> i think you can guarantee in the six weeks since these filings were dated, that hedge fund managers have been trading in and out of these positions. they're not a perfect snapshot of exactly where they're at now, but it gives an indication, at least on a sector basis, how they're thinking, how they were thinking during the first quarter. people would kind of follow these 13fs and trade based on the positions. >> the stocks tend to move despite the older filings or positions from before. you still see the stocks move. >> especially with berkshire hathaway that always seems to have some little nugget in there that gets investors excited. >> thank you very much for bringing us that update. still ahead on "worldwide exchange," the royal tea big news trending this morning ahead of prince harry and megha mark markle's big day. and a low-calorie lawsuit. you will n bieotelve why one man

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prices on tightening global supply we're lower today. $71 for wti crude, lower by 0.4% ice brent crude at 77.89 >> time for this wednesday morning's top trending stories we'll kick it off with a royal wedding update tmz is reporting that meghan markle's dad is scheduled to undergo heart surgery today. that's why he's skipping the big festivities. earlier this week reports surfaced that mr. markle was pulling out of the wedding after allegedly staging a series of photos of him preparing for that big wedding day. markle had planned to walk his daughter down the aisle but no word yet on who might do so in his place. i will see this from a personal standpoint my wife is all about this royal wedding. she's building up, building up to this whole weekend festivities. >> a lot of drama ahead of saturday. major storms battering the northeast last night bringing

high winds and torrential downpours. check out the scene from new york city's grand central terminal thousands of commuters were stranded as a ferocious storm moved through during rush hour the storm forcing major train delays, hundreds of flights were also delayed up and down the east coast took any about two hours to get home >> thousands in grand central terminal i know firsthand because my wife is a commuter up to our place in connecticut. all of these train lines were suspended indefinitely and surge pricing for uber into the hundreds of dollars. >> that weather continues now. but hopefully not with the gale force winds we saw yesterday. a man is suing halo top for misrepresenting itself as actual ice cream. according to the fda ice cream must contain 10% milk fat which halo top does not.

the lawsuit argues that use of the words light ice cream should be more prominent on the label and that use of the words all natural and no artificial sweetens is false and misleading the plaintiff is seeking $5 million in damage. i don't agree this lawsuit is the most legitimate one out there, but i do agree that halo top is not ice cream >> i disagree. maybe it's not ice cream, it doesn't have the 10% fat, i still think it tastes pretty good we'll leave it to you viewers to judge. game two of the nba eastern conference finals last night the cleveland cavaliers were looking to bounce back from a blowout loss to the boston celtics in game one. the cavs kept the game close, but boston managed to pull away in the second half the celtics withstood a 42-point effort from the man himself, lebron james, and beat cleveland 107-94 to go up two games to

none in the series game three in cleveland on saturday night >> boston doing some good work let's check on the other top headlines outside of the world of business. for that we turn to frances rivera she's live in new york in the nbc newsroom with the latest >> good morning to you hawaii officials have now raised the volcanic alert level to red warning a major eruption is imminent the ash cloud from kilauea's summit reaching as high as 12,000 feet above sea level. officials say this next one could shoot out boulders of lava the size of cars miles into the air. the senate intelligence committee will favorably vote gina haskell out of committee after she garnered enough support to move her confirmation forward. one republican member is doubling down on the candidate the teachers movement comes

to north carolina. so 15,000 are expected to rally to north carolina. those are your headlines >> all right thank you very much for that update still to come on "worldwide exchange." we're on trade deal watch. the two big stories you'll need to be following out of the nation's capitol today we're headed live to washington after this break >> later we're talking global risks. emerging market pressure finding out why and what's the best trade there when "worldwide exchange" returns. esults with rich potting mix and essential plant food for three times the blooms. success is sweet. miracle-gro. three times the beauty. one powerful guarantee.

trade alert. a double dose of trade news topping your agenda. we're live in washington, d.c. with those details >> global risks. emerging markets under pressure. we'll find out why straight ahead. >> the next big thing for crypto wait until you hear what the bitcoin jesus said about bitcoin cash it's wednesday, may 16, 2018 you're watching "worldwide exchange" right here on cnbc ♪ welcome back to "worldwide exchange." i'm seema mody >> i'm dominic chu brian sullivan is on assignment today. wall street futures moving lower after the dow snapped an eight-day winning streak north korea canceling a highly

anticipated meeting with south korea. its threatening to pull out of the summit with president trump. the move follows joint military exercises with the u.s. and south korea. >> the iea cutting its outlook for global oil demand as crude nears 80 bucks a barrel. the agency saying iran and venezuela are quote a major challenge to the market. we'll have more on that later on in the show. >> first, let's look at early market action and bring in michael purves from wheaton & company. yesterday stocks fell about 193 points a significant move what was behind it. >> the big news yesterday was bond yields finding fresh highs. not just getting through 3%, before you gbu getting there with some vengeance. when you see that, that spills over into other asset classes,

like the dollar. the dollar getting stronger and no equities as well. i think part of what's going on is that there's a regime change unfolding here, broadly speaking, one defined by monetary stimulus to one defined more by fiscal stimulus and normalization, return to good old-fashioned equity valuation, which is more earnings centric as opposed to, you know, fear of missing out and trying to compete with, you know, treasury yields >> michael, let's talk about this move. yes, we've seen peaks above 3% before this was a sharp and big move higher intraday to 3.09. does this now mean there are legitimate drivers for the price action in treasuries are yields justified where they are now? do they keep this trajectory higher >> let me take the first one first. i think the -- you know, the

velocity of this move is very important, as important as the actual level one thing to keep looking at, even if you're an equity investor is the move index, it's a vix for the treasury curve that has not been going up it was interesting to me to watch the move index really not do too much yesterday. i think yesterday was much more about the interpretation of a more hawkish narrative more rate hikes coming a little bit more inflation perhaps. one thing i was also interested to note is that the term premium, the premium problem which longer-term treasuries are used, that also has not moved higher that much either. i think a lot of yesterday was due to technical and algorithms. >> in general, rising rates has been seen as problematic for

u.s. stocks. perhaps that's a rceason why we did see stocks move yesterday. do people stick to growth stocks versus value oriented stocks which may be more rate sensitive? >> that's the question right now. typically, if you're in a rising rate environment late cycle you want a shift into value. we've seen rising rates now since september. this transition into value has been much easier said than done. i think this gets back to sort of a more overarching theme within the u.s. equity complex, which is that tech has been so dominant and so successful the earnings growth created by f.a.n.g., created by the tech sector has been so superior to the s&p 500, it's also become one in the same in a way i think i've been arguing that so goes tech, so goes the spx. that's also significant. if you believe in the tech

stories, they are also much less rate sensitive they're much less commodity and inflation sensitive. >> so you like them? you would buy them now >> i'm not saying just today, from a purely tactical point of view, but i think i would say, yes, i think that's one of those things that will keep continuing to outperform. and i think value stocks will be things that you need to trade more tactically. >> let's broaden out towards the global side of things. we are seeing stress in other parts of the world we have shefk problem have specn venezuela, argentina, east asia. does that mean that the global emerging markets trade is done is there still an opportunity out there? >> you can throw turkey in there as well. you have a lot of idiosyncratic issues you have some issues in brazil as well. you know, as far as i can tell, they're all pretty idiosyncratic and unconnected, if you will

you know, the big thing now in emerging markets is, of course, the stronger dollar, stronger rates, which leans on emerging market risk sentiment. one thing i would point out is that the -- there's a big divergence between emerging market equities, for example the eem etf, relative to its counterparts it gets to how are those meaning market equities constructed? china high growth f.a.n.g. type stocks the eem etf has a 0.98 k coefficient with the f.a.n.g. index. if they are stocks like alibaba, those will have much less dollar sensitivity in them and local economic sensitivity in them of course you do need the overall global risk ap tipetite hang together there. >> certainly a part of the market we're watching closely.

micha michael purves, thank you very much for joining us. let's drill down more on the weakness in emerging markets, joining us is richard kang good to see you. for the longest time we thought strong dollar was highly correlated to the emaernerging market trade and now we're seeing that play out would you be a buyer or seller of emerging market stocks? >> i would rather be a holder. buying now is not a problem. we're seeing market volatility your past speaker said the same thing. the more you see macro inputs, whether it's jerusalem, syria, latin america, we are seeing spikes we've all seen this before it's not problematic for investors. what is problematic is the flattening of the yield curve, that's something that should be on the top of the mind of

investors and they should be reallocating based on that one thing that we talk about so often is the idea of correlations, trading relationships, how they pair up and trade in concert with each other. we had michael purves tell us that the f.a.n.g. stocks and emerging markets etf has a 0.89 coalition, meaning they trade in tandem is this something that we need to watch more closely is that emerging markets strayed so specifical -- stray trade so strongly near other markets? >> yeah. we think how do you slice and dice emerging markets, if you pick eem you're basically paying a higher fee to track what might be a levered s&p 500 play. with a dull market running since

2009 basically, you really need to be more specific. so you see investors searching for new categories that might be ai, robotics, blockchain it might be reaching out to asia in my opinion, it's late in the bull market. you want to be active. you want to be finding what others may not be looking at or what has more legs maybe more fintech, social network, more online shopping. anything in that direction >> interesting macro view. let's drill down on the argentina peso, which has come under pressure with the rising dollar that's pushed the central bank to raise rates to 40%. they're seeking financing from the imf. how do you see this story playing out? >> this is something that's weird. a long time ago i remember trying to repatriate money out of argentina it was a pain. then there was reform and a new government everyone was talking about how

positive it is this is a strange conundrum. you can see various press talking about the huge rate jump i think this has to be temporary. they're competing with other global emerging markets for the wallets of ours. we're seeking alpha. we're trying to squeeze any return we can from a bull market that started in 2009 they'll try to figure out a way to clean this. because they have to compete with china and everyone else who is getting attention >> that's a good point we wonder what political troubles could ensue if the story continues. especially because macron positioned himself as a pro business leader. rich richard, thank you. still ahead, a double dose on trade news. we're live in washington with the details. and the coin rush. why the so-called bitcoin jesus is making a big bet on bitcoin cash orwi ehae"nd "wlddexcng will be right back

welcome back to "worldwide exchange." the key deadline for reaching a nafta agreement is today, this as trade talks with the chinese vice premiere kick off in washington kayla tausche has more it's the front page of the "wall street journal," hopes fade on nafta deal by year-end are we pretty much dead on nafta? >> that's what the mexican

economy minister had said. he was pessimistic in some remarks yesterday. that's what that article is based upon first the talks with the vice premiere, that those are set to begin today. administration officials, outside stake holders and members of congress are all i could y all quiet on what could happen some say offering to trade american sanctions enforcement to promote jobs in china is plainly a bad deal for american workers and for the security of all americans. aides say the president touched on trade briefly at a lunch with senators he also talked about north korea, that was before north korea got cold feet about those talks.

there was testimony in washington about doing business in china and what that means american superconductor faced a dramatic slowdown after its intellectual property was stolen about seven years ago. >> if our company as loud as we've been, as damaged as we've been, as clear as we've been, if we can't get restitution from the chinese what company can >> in addition to these china talks, the nafta deadline looms for thursday they need to have a deal, have it approved by congress by the end of the year. the three countries held a phone call together on monday. that looks like a bad sign since they're not here or anywhere negotiating in person. the prime minister of canada said the three countries continue to work, but those statements by mexico throw cold water on the possibility of getting one date deadline.

>> i want to bring in some comments that larry kudlow made to politico. saying that both sides, china and the u.s., should try to lower tariffs as much as possible and take down non-tariff barriers wherever they are free and open trade, that's the solution and that's where we are as a group is there a sense you get that that's where they are as a group? is that just larry kudlow? >> that's potentially just larry kudlow one thing chinese officials have poentd out pointed out is there's not a united front by the u.s. delegation we have seen this before and heard larry kudlow also say before that he thinks a deal with china can be reached, it's just a question of whether it's to the president's liking. there are several scenarios where the treasury secretary and the commerce secretary have reached a deal they may be okay with but you have people like ambassador lighthizer, peter

navarro and the president who feel it's not tough enough on china. there's a divergence of views that's not just ideological, it's put into practice when the negotiations take place and could have a strong bearing on the outcome of a deal. on non-tariff barriers, when they talk about the u.s., they talk about not putting tariffs in place that are waiting in the wings in the first place the u.s. really wants china to relax some of its tariff barriers that have existed for several years, if not decades. unclear how they'll get that to a resolution >> we'll see if the vice premiere can lead to more progress kayla tausche, thank you very much switching to cryptocurrencies, bitcoin.com ceo roger vera making the case for bitcoin cash on "fast money" last night >> the economic path led to

bitcoin's original success i'm incredibly bullish on bitcoin cash, like i was bullish on bitcoin in 2011 when i became the first investor in the world to invest in the space >> that trade has worked out well bitcoin cash is up 64% over the past of the last month alone bitcoin cash was given up for dead when it first came out. >> that's what we thought. there was a fork in the fall of 2017 when bitcoin split into two, and there you have it bitcoin the original, and bitcoin cash some say this one is better because it's faster in terms of transaction speed, efficiency. down today by 6% but higher by 64% over the past month. >> here's my question for you. you're our crypto expert in all of your travels through the crypto world, where have you seen the most bullishness in terms of currency? is it ripple bitcoin? ethereum >> it changes.

it fluctuates. when we're in puerto rico covering crypto, there was a lot of excitement for bitcoin. but this week with blockchain week happening in new york, and this big conference which brought over 8500 people to the conference to talk about cryptocurrencies, bitcoin cash is the big buzzword it depends i think that really shows you how this cryptocurrency currency story is not over yet and is quickly evolving >> more on that coming up. a big warning for the oil market the new report that could have an impact on what you pay at the pump those details when "worldwide exchange" retus ter rnafthe break.

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the iea cutting its outlook for global demand as oil prices shoot higher jackie deangelis joins us from new york city with more. over to you. >> that's right. the key headline from the iea report here is the fact that they are lowering they're demand forecast ever so slightly. it's not a huge drop, but what they're saying is that the rising oil price could have a chilling effect on demand. why that's important is the run up in oil prices has been partially based on the fact we have seen these robust demand forecasts. the idea that strong demand will churn through excess supply in the gobel mlobal marketplace. that's one takeaway. the second thing is the fact

that the agency talks about 1$12 million barrels a day in exportses that could be affected more and more traders say we don't know wlat impnoknow what s of this may be the fact that the u.s. pulled out of this deal does not mean iran's barrels will quom ocome e market at all or right away. we saw a build in the api inventories, that's taking prices down because investors are focusing on the fact that supply is going up and the iea saying demand could be going down >> great perspective, jackie, thank you very much. let's continue this discussion john kilduff joins us today. great to see you >> what do you make of this recent move in oil >> it's been a witch's brew of factorers. there's been strong, synchronize

the growth that kicked in. >> the iea bringing their forecast down. >> because of the high price the old saw about high prices being the cure for high prices is because of that the impact on demand part of the situation is the situation in the middle east this missile fire between iran and syria got this thing on a boil has iran stepped back from it? possibly they made statements yesterday that if israel were to do something like that again, their response would be outsized it was iran who moved first against israel so israel probably won't do that the situation you have to watch carefully. what's priced in now is a situation like i said that's on the boil to the extent things can calm down a bit these prices could ease as well. >> the move by the u.s. treasury

adding the governor of iran's central bank to the list, this may prove trump is serious about moving forward >> very serious. i thought he would do a political dance and maneuver with this whole thing, out the window it's a forward leaning strategy. the analysis that jackie referenced about iranian oil not coming off the market is a hopeful one. it's clear the trump administration will see to it that riranian barrels do come of the market >> let's focus on one aspect of the report that we should be focusing on, u.s. oil production they boosted their forecast for oil production growth in the u.s. they also say in today's uncertain geopolitical climate, higher production from the u.s. will be a contributor to compensating for lower volumes from elsewhere can u.s. shale producers fill the gap? >> so many people ask me, we're

producing a record amount of crude oil in the u.s why is the price still going up? is this enough to wrauf soffsete situation? it's not yet you have brent at nearly $80 a barrel wti at about 71 right now. $9 discount. the price of oil in midland, texas where the permian production is most robust, $8 below that the glut there is that the oil is sort of stranded. there's not enough infrastructure to get the po duck shun out production out to the coast, they're working on that. the potential losses from venezuela, iran, the purposeful withholding by saudi arabia of oil to the open market is also producing these prices that's the situation >> all right >> john kilduff, thank you for joining us >> appreciate it >> wti crude right now trading around $71 a barrel. that does it for "worldwide exchange" this morning "squawk box" is coming up next

a lot of stuff to focus on with regard to the markets. thay tuned in for at >> "squawk box" is next. mom you called?

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good morning north korea threatening to call off next month's talks between president trump and kim jong-un. we'll tell you why the rogue state could be backtracking straight ahead new filings reveal the latest moves from some of the biggest investors. and the iea is cutting its outlook for global oil demand. it could mean changes for the vienna agreement in terms of production maybe they cut it now. it's wednesday, may 16, 2018 sq

"squawk box" begins now. ♪ live from new york where business never sleeps, this is "squawk box. >> good morning. welcome to "squawk box" on cnbc. we're live at the nasdaq market site in times square i'm melissa lee along with joe kernen and mike santoli. sitting in with us for the hour, karen firestone. welcome to you >> let's check u.s. futures, seeing how we're setting up for the session. yesterday we had losses across the board. on the s&p 500 we snapped a four-day winning streak. on the dow, we snapped an eight-day winning streak the dow looking to lose 28 at the hope s&p down by 1.5. nasdaq is higher overnight in asia, north korea developments have affected trade