wall street pointing to a lower open after the s&p 500 snaps a five-day losing streak pounded. sterling stabilizing as pressure mounts on theresa may and her brexit deal. we're live in london with the latest. and firing back. sheryl sandberg responding to a bombshell report that facebook ignored russia's role in the 2016 election. it is friday, november 16, 2018. you are watching "worldwide exchange" on cnbc. ♪

good morning welcome to "worldwide exchange." i'm dominic chu. brian sullivan is on assignment. let's check on the markets futures pointing to, as you can see, a slightly lower open the dow jones off by 31 points the s&p by 6, nasdaq by 48 points on the treasury side of things, we're seeing a bit of movement on the ten-year treasury note yield, 3.12% 2.78 for the two-year treasury note yield in the energy market crude prices -- we've been talking about this idea of the downtrend in place, another green spec out there. wti at 57.28 ice brent futures, $67.68. turning now overseas, on the asia side of things, overnight

we saw a move to the knee kaunia half percent to the down side. the shanghai composite up about a half percent in europe, broadly speaking a genuinely positive tone there. the dax up by a half percent the cac by a quarter percent the ftse 100 up by 0.1%. sticking with europe, the british pound stabilizing this morning following yesterday's massive drop uk prime minister theresa may says she plans to appoint a new brexit minister within the coming days. all of this comes as political pressure mounts on theresa may and her brexit deal. let's get to willem marx in london with the latest willem, we got stuff going on here what is happening with the latest developments? >> all right so on wednesday we had a bruising five-hour cabinet meeting, yesterday the prime minister took three hours of critical questions from the house of commons from mps on all

sides of the aisle this morning she's been taking listener questions on a british radio station. a lot of people concerned about this proposal. what she really has to worry about today is whether enough members of her own party submit letters of no confidence to a committee inside her own conservative party that could trigger a leadership challenge if that happens she says she will fight it. there's no guarantee she will win. it seems likely she has enough votes to maintain her leadership it's another example of the kinds of pressure this prime minister is facing >> so, willem, as we talk about these developments, we also got some reports now that a key member of this overall brexit ecosystem may not be looking to leave. tell us what you know about that >> yesterday the bombshells were that two of the cabinet

ministers resigned including the man charged with brexit negotiations, dominic raab one person that was potentially going to take his place, michael gove, one of the faces of the brexit referendum campaign two years ago, he is apparently now staying in his position according to multiple british media outlets. he will be staying as environment secretary, but he is a key figure inside that cabinet in terms of pro brexit support for theresa may, the prime minister >> willem marx, thank you very much for the latest on that brexit deal going on now let's bring in patrick armstrong, the cio of pluremi investment managers. all of this has had a significant impact on the pound. it's not as if the pound has broken up or down below a range we haven't seen over the past few months now >> there's nothing shocking that really happened yesterday. we got a deal that the

brexiteers weren't happy with. a lot of remainers were not happy with it. theresa may is in an untenable position there's still going to be a lot of issues. getting it through cabinet is a small step she's done that. getting it through parliament is a much more difficult challenge. i think the market is pricing the risk to that people don't know the consequences of this if she doesn't get it through parliament does that trigger another election is there risk that a left wing government comes in, another referendum there's a very poor political back drop for uk assets now. so poor back drop for those assets, does that mean you stay out of the gain, stay out of the market completely? how would you be navigating this or just suggest that investors stay away until brexit gets resolved >> there's not much attraction to get involved. if you wanted to buy uk assets, buy the large companies.

if you're buying oil companies, that's what we've been buying this week, they're not exciting, but they're very cheap and providing a dividend yield of 6% those are companies that will benefit from a weaker sterling because revenues are dollars, healthcare companies are attractive what we're short and what will continue to be an underperformer are the mid cap stocks those are companies cyclicly exposed. they don't have the foreign revenues coming in, they have a lot of foreign costs if we do have a weak sterling you could see a tight margin squeeze on those mid cap companies, but they don't benefit on the sales side as much as large cap companies do >> you mentioned before the markets were pricing in certain aspects. what's happening, handicap in real time what's going on with brexit negotiations. tell us a bit about what you expect what you think is going to happen here in the coming days,

months, weeks. are we going to get a hard brexit will we get a deal done? is there a possibility of another referendum >> everything you said is a possibility. i think she will put it to parliament i think it will fall short what that means, i don't know i don't think we'll have a no confidence vote, but if she puts it through parliament and then it fails, that's more likely the time we will get a no confidence vote there's a few dominos to fall. the question is what happens if she doesn't get support, and everything you mentioned is a possibility. putting them all at a third of a chance is a reasonable forecast. >> you mentioned some companies and sectors you're keying on right now. you also are an investor that goes globally. what do you think is the most attractive part of the market in your mind if it is not in the

uk >> it's the integrated oils in europe they're trading 4 1/2 times enterprise value to cash flow. 6% dividend yields are incredibly attractive. the integrated companies which are the companies that have downstream, they have good margins there. a falling oil price may boost those downstream margins they're well positioned. dividends are sustainable. that's where i would be putting money right now. it's not incredibly exciting, but you will lock in 6% to 9% return over the next six, seven year years. >> patrick armstrong, he's made the call he likes those integrated oil companies out in europe. thank you very much. in corporate news, facebook's sheryl sandberg firing back at a bombshell

report by the "new york times" that says the company ignored russian interference in the 2016 election frank holland has sandberg's response >> sheryl sandberg is denying she obstructed any early investigations into election meddling in 2016 facebook spent much of yesterday addressing the public relations crisis following the explosive allegations in the times article including holding an hour-long conference call with mark zuckerberg the times portrayed zuckerberg and sandberg as downplaying internal efforts to assess the russian campaign in a blogpost late last night sandberg says on a number of issues including spotting and understanding russian interference we saw in the 2016 election mark and i have said many times we were too slow. but to suggest that we weren't interested in knowing the truth or we wanted to hide what we knew, or that we tried to prevent investigations is

untrue sandberg says facebook is looking to make invest melook ing to correct internal issues mark zuckerberg saying yesterday the company will create an independent body to oversee appeals by users about content being removed from the site. dom, back over to you. >> frank holland, thank you very much for that update in trade news, u.s. trade representative robert lighthizer shooting down a report that a new round of china tariffs are on hold. his office telling cnbc that nothing has changed and reports to the contrary are incorrect. president trump is expected to meet with xi jinping later this month at the g20 summit in argentina. now to your top three stock stories of the day nvidia shares are plunging the chip designer warning of disappointing sales for the holiday quarter. it's blaming a build up in unsold chips after the cryptocurrency mining craze

started to slow things down. i want you to look at that that's a 17% drop for shares of nvidia that's something to watch. shares of nordstrom also coming under pressure the retailer posting weaker than expected same-store sales. nordstrom saying it had to refund some credit card customers after overcharging them and william & sonoma shares are in the red earnings beat the street estimates but revenues fell short of expectations. the retailer announcing plans to open stores in india those shares down 13%. we are just getting started here on "worldwide exchange. coming up next, raising the red flag some of the nation's most powerful ceos are starting to get worried. what they're quiet i will telling jim cramer about the economy that you need to hear. and oil rebounding this morning. is the worst over for the energy

crunch we're digging in when "worldwide exchange" returns after this break. 300 miles an hour, that's where i feel normal. having an annuity tells me my retirement is protected. learn more at retire your risk dot org.

. if you're just waking up, let's get you up to speed on the market action. futures pointing to a modestly lower open the dow off by 30 points the s&p off by 6, and the nasdaq off by 50.

the nation's top ceos are raising the red flag on the health of the u.s. economy many have been speaking with jim cramer and they're helling h te we're starting to get worried. >> many ceos have told me they're baffled that with could find ourselves in this late cycle dilemma. they come on to tell me that say something. yesterday the ceo of kb homes said sales slowed dramatically 11 years ago i began hearing the same kind of talk about how the fed was out of touch, out of sync with what was happening with wall street my sources were so good back then, i had sources pretty much everywhere, i had grown up with people running the very joints we had started at 20 years before they came to me. one after another, to say something, to warn i did. unfortunately it meant nothing i was laughed at for being a

lunatic. it was mortifying. but i was right. i did my best, and at that time i made a resolution. if i thought we would ever get back into one of these situations again, i promised myself i would be vocal about what could go wrong even if i knew it wouldn't be as serious as the great recession there are degrees of slowdowns that nonetheless can cause an awful lot of havoc and cost jobs and that's what we're on the verbal of her verge of here. that's what the markets are saying that's what the ceos are worried about offline. >> some interesting sentiments from jim cramer. if you want to find out more, go to our website, cnbc.com. one of those ceo's worry spots could be energy. crude oil is rebounding, but still down more than 20% just this past month alone. let's bring in beth evans from s&p global plats is it fair to say the crude crush is over?

>> wow never say never in this market the volatility is incredible the market is up a bit today after putin came out and said russia is still happy po to be t of that opec plus group. you have a big hitter there still involved in the opec decisions. at this point in december the talk is that the next opec meeting will end up in a 1 to 1.4 million barrel per day cut in production. that will add to a floor on prices overall it's a bearish picture now as you can tell from that 20% drop between october and november >> what is one or two factors you think that are driving oil the most to this downside trend? >> wow a big one has to be u.s. production

you're talking about -- they hit 11 million barrels per day in the summer they are well on their way to hitting 12 million barrels per day. that's been a major, major game changer in the market. some of the other things going on, you have the iranian sanctions. it's fair to say in october the market was totally focused on the tailwinds from the uncertainty over iran sanctions. who the u.s. would grant waivers to now we know it's eight countries that receive them. that was unexpected a bit more lenient that people expected you have a lot more iranian production out there in the market you have the ghost tankers these tankers with iranian oil that turned off transponders a lot of them have turned them off. iranian crude and where that's

going is playing a big part. >> you mentioned so many supply issues what about the demand side opec energy ministers have cited demand weakening as being a reason to rebalance the supply side of the equation what is it about that demand picture that is worrying to you? >> the demand is definitely looking fairly weak going out. platts analytics and my colleagues are putting the forecast for brent at $70 to $80 per barrel, but are currently saying due to the bearish sentiment they expect -- and the stock builds, they expect it to test $65 per barrel going forward. >> all right beth evans, thank you very much for joining us from london coming up next, music to the ears of investors. the one stock that is surging in a big way this morning we'll bring you that name ahead.

later, commuter chaos. i was caught up in this. a wild winter storm wreaking havoc across the northeastern united states. it's the story that has everyone talking at least out here today, this morning, the fallout when we come back what if numbers tell only half the story? at t. rowe price, hundreds of our experts go beyond the numbers to examine investment opportunities firsthand. like a biotech firm that engineers a patient's own cells to fight cancer. this is strategic investing. because your investments deserve the full story. t. rowe price. invest with confidence.

if you are just waking up or listening in, futures are

pointing to a modest loss. dow jones off by 50 points s&p off by 9 the nasdaq off by 57 we are seeing a slight acceleration to the down side over the course of the last 20 minutes or so. cryptocurrency is an interesting trade. it's been volatile to the down side, again after being relatively flat and uneventful for months bitcoin prices on coinbase now still below that 6,000 mark. $5,550 and change. ether, lite coin, ripple off as well it signals this trend of stability in the cryptocurrencies, albeit from really high levels before, now very much lower and they're lower again. now to some more stocks that could be on the move today intel's board approved a $15 billion stock buyback.

the company has nearly 5 billion remaining under an interesting program. the shares are off by 1% applied materials under pressure the chip equipmentmaker said its results matched forecasts but it has a weak guidance for the current quarter. the company says near-term headwinds remain so that semiconductor trade weak. shares of sonos are surging. the maker of high-end audio speesh speakers reporting a narrower loss than expected sonos citing stronger than expected sales of its new sound bar. patrick spence will be on "squawk on the street" later this morning at 10:00 a.m. and check out shares of p e

pg&e the utility jugiant seeing a massive jump this after a report saying regulators want to avoid the company from falling into bankruptcy after it was reported they could be to blame for a massive wildfire out in northern california a 35% bum top that electric and gas utility. let's get the latest on those california wildfires from frances rivera in new york >> good morning to you president trump is flying to california tomorrow to meet with first responders and victims as those wildfires continue to ravage the state in northern california the camp fire is the deadliest and most destructive wildfire in california's history with the death toll at 63 the number of people missing has doubled to 631 authorities estimate that over 50,000 people have been driven from their homes and into

shelters. the u.s. justice department revealed the existence of charges against julian assange a spokesman for the u.s. attorney's office said the disclosure was made in error after a court filing was unsealed in an unrelated case. and the justice department is preparing to prosecute and is optimistic about getting assange in a courtroom for the first time in months, elon musk's spacex successfully launched a satellite in or bit. the falcon 9 rocket lifted off from kennedy space center. this is the 18th successful mission in 2018. those are your headlines for this friday. back to you. >> thank you very much coming up next, firing back. sheryl sandberg responding to a bombshell report that facebook ignored russia's role in a u.s. 2016 election. we'll bring you her comments coming up. and later, a record breaking

art sale david hockney's pool painting selling for big bucks. we'll tell you how much when "worldwide exchange" returns prn and improves memory. - dad's got all the answers. - anncr: prevagen is now the number-one-selling brain health supplement in drug stores nationwide. - she outsmarts me every single time. - checkmate! you wanna play again? - anncr: prevagen. healthier brain. better life.

red arrows on wall street as investors digest a big batch of corporate earnings >> under pressure, theresa may feeling the heat as a brexit

backlash grows and computer chaos did you have enough time to get home from work last night? you were not alone the story that has everybody in the northeast red hot over the ice cold it's friday, november 16, 2018 you are watching "worldwide exchange" on cnbc. ♪ welcome to "worldwide exchange." i'm dominic chu. brian sullivan is on assignment that day let's get you up to speed on what's happening out there frank holland has the morning top headlines. >> here's what's leading cnbc right now. brexit remains front and center this morning the pound stabilizing following yesterday's massive drop uk prime minister theresa may says she plans to appointed a new brexit minister within the coming days.

facebook's coo sheryl sandberg firing back at a bombshell report by the "new york times" that portrays the company as ignoring russian interference in the 2016 election the facebook coo is denying she obstructed any early investigations into election meddling she also adds she was unaware that facebook was involved with the pr agency that ran anti-semitic campaigns shares of nvidia deep in the red. the chipmaker's q3 revenue coming in below consensus. guidance for the next quarter also missed expectations dom, back over to you. >> all right, frank. let's check on the markets futures accelerating a bit of their losses the dow now slated to open down by 53 points the s&p down by 9. the nasdaq really hurt by those chip stocks, down by 56 points premarket. let's bring in steve cheverone

from federated investors i remember talking to many experts about whether or not it was safe to get in the markets, that was the end of october, early november, then we took another leg lower. we're seeing a bit of stability with yesterday's gains is it safe to get back in or could we see more downside ahead? >> now is not the great time to be a hero. that second leg down broke a lot of long-term support doesn't mean you will head lower, but your downside risk is a bit lower than before. the fundamentals remain good you have strong corporate earnings, economic growth remains fine inflation is benign, we have volatility and a couple key events, both the december 1st meeting with president trump and xi >> this is seasonally a strong time of the year we mentioned it many times before on the show what is it about this particular

end of year that what you more concerned? >> i think the fed is the key here the fed has five rate hikes scheduled in the dot plots one more this year, three more next year, one more in 2020. we think they need to cancel those last two we're seeing stresses in the real estate markets, stresses in the auto markets the dollar is a bit stronger international growth is weaker if the fed pulls back that seasonality will kick into play. we have a good consumer for christmas, but we need the fed to get out of the way a bit. >> does it worry you that we're seeing jim cramer's comments and ceos saying to him they see a slowdown >> yes, but we need to separate it we're not on the verge of recession in our view. we were at 4.5% gdp growth, 20% to 25% earnings growth, what we're going to is 3% gdp growth,

10% to 15% earnings growth and a neutral fed and fiscal policy. those are all fine, but that adjustment can cause volatility and concern. we need to make sure we don't get too aggressive on the monetary policy and roll over to something more sinister. >> let's assume that scenario you just outlined plays out. slightly less gdp, the economic dynamics are still growing but just not as robustly what kind of investing do you do at that point? >> a couple things you put together your list of things that you think are overly beat up. if you think the fed will pause, maybe that's value cyclicals maybe it's the dividend names that have gotten beaten up we would suggest that folks focus on adding good diversified multi asset strategies that can be flexible and navigate that volatility >> you know what sector or industry seems beaten up to me now that people may want to either think about or stay away from that's semiconductor stocks.

would you be going into semiconductor stocks given that profile? they have been beaten up >> they had such a great run they are drivers of a lot of the industrial revolution technologies they're also cyclical. if you get a pause from that fed and people are less worried about us being at the end of a cycle, yes but i think we need to see the all clear from the fed on this >> on the global side of things, should investors be looking for values outside the u.s., emerging markets, developed markets that have been trailing the u.s. >> for international markets you're getting hit by the trade rhetoric, the strong dollar and then rising interest rates i don't want to sound like a broken record, if the fed pulls back there's opportunities there. i wouldn't hold your breath on trade. that's a longer term issue put your list together, if you get the all clear from some indicators, yes. that's more of a 2019 story. you have better opportunities between now and the end of the year with some beaten up u.s.

sectors. >> on the bond side of things, we noticed there's been a trend at least medium term for higher bond yields. they have pulled back to be fair do bonds represent a more competitive asset class? >> we are overweight equities based on stronger fundamentals don't forget cash. cash is yielding 2%, 2.25% at this point you don't have that duration risk that you have in bonds. we think rates will move higher over time. they will grind higher, not shoot higher, but we don't see a compelling opportunity in bonds. >> so still stocks versus bonds. >> absolutely. >> thank you very much >> thanks. time for the top trending stories. frank holland has those. i was a commuter >> you and i both. i think it's one of the few times we were part of the trending story my commute home usually takes 20

minutes. yesterday an hour and a half >> i was lucky i was speaking at an event at jpmorgan yesterday afternoon, midtown manhattan. i got on the train home. it helped. the trains were running pretty well my wife had to pick up our daughter from school it took her 3 1/2 hours to drive the 5 or 6 miles across town to get home >> we have to remember, we have a worldwide audience not everybody knows but a wild snowstorm barrelled through the northeast. check out these pictures from new york city's penn station the port authority bus terminal in midtown became so overcrowded that access to its second and third floors had to be blocked off. they had to shut it down the line of people waiting to get into the terminal stretched for a block. >> it was pretty amazing one -- we're showing the train/mass transit side of thing. what we're not showing you is

the roads. there were school buses strewn all over the side of the road. there were cars. i heard on the radio on the way to work on the major deegan expressway in the bronx, new york, there were still car there's when i drove into work this morning that had been there from last night. >> serious >> yeah. that's what they told me on the radio. it's something we'll be talking about all morning. >> november snowstorm catching everybody off guard. we're a week away from black friday that has a lot of us thinking about holiday gifts. pnc tallied up how much it will cost to buy all the gifts in the song 12 days of christmas. the turtle doves, partridges, pear tree. that bill would run you over $39,000. >> i always love this indicator. it means nothing to any of us, it's still great to talk about consumer inflation and trends. >> the gold rings are actually cheaper this year. >> they are because gold prices have fallen.

>> 9% cheaper. i don't think i would have use for a partridge in a pear tree a lot of people appreciate things like this, a painting by english artist david hockney selling for 93 million at auction. the 1972 painting is the most expensive piece of art sold at auction by a living artist >> i was looking at this this morning, i yelled out somebody paid $93 million for a painting from an artist who is not dead when you're a living artist and still making $93 million -- >> he's not making 90 million. >> i know that >> he sold this painting in 1972 for $18,000. >> wow >> he's still mad about it >> i'm sure. >> he said it was underpriced now, he's even madder now that its 90 million >> i can only imagine what some of these paintings will be going

for. >> art, depends on peoples tastes and aproosh ypreciateapp. coming up, a rising risk to amazon why the retailer picking long island city, new york as home to one of its hq2s could be a threat we'll pln exaiwhen "worldwide exchange" returns.

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welcome back let's check the stock futures side of nithings they are indicating a slightly lower open the dow jones off by 50 points the s&p off by 8, and the nasdaq down by 57 points. amazon's pick for its second and third headquarters facilities dominating the headlines this week, but the long island city, new york choice could be a gamble especially when it comes to the real estate side of things diana olick has more on that. >> long island city may seem the perfect spot from amazon, across the street from manhattan, but its location may pose a huge risk to the development. the rising risk of rising tides and extreme storms the location is on the lowest part of queens and on a floodplain the area could see significant coastal flooding by 2020, and by

2050 extreme projections of sea level rise has low-lying buildings there under water, even moderate projections have part of the county flooded by 2080 >> this is a building clearly in the danger zone for frequent flooding amazon can protect their investment locally by building seawalls, barriers, designing their development in a way that would be robust even if it does flood and if the water comes high then you have to ask how easy will it be to get to and from the headquarters what's happening to the surrounding neighborhood they'll need the city's help to fortify the whole area so that it can deal with the types of floods that will be routine. >> more severe flooding is more likely from 2005 to 2014, queens saw an

additional 31 days of flooding because to climate change. if the area saw a six foot flood, that would put $30 billion worth of property at risk for damage. we asked amazon what kinds of plans they have to make their r q2 resilient, a spokesperson said he could not comment. >> you bring up all of these excellent points what would you be doing? are there steps that can be taken if they want to maintain that facility there that could help them buttress themselves from flood >> you look at the brooklyn navy yard, they raised that first floor up higher, put all the systems in the buildings up higher, also pumps all the different things you can put into a building to make it resilient. the issue becomes what about everything around it you have

this yild island of resiliency, what about the workers who have to get there, the properties around it, so you have to look at what their steps will be in making this area fully resilient in the coming years. >> a crazy, interesting story. we think about real estate values, but we don't think about the damage from flooding diana olick, thank you very much coming up next, the fed is in denial. that's what one market pro's take on the market is now. we'll see what his case is straight ahead. and as we head out, another check on how stocks are shaping up this morning. the futures starting to move lower again. stick around "worldwide exchange" will be back

welcome back we're approaching the top of the hour that means the team at "squawk box" is getting ready.

joe kernen is live in new york's times square with a look at what's coming up it's friday, did you get caught up in that commute last night? >> i was lucky enough to be waiting for people at my house which was not -- actually, it's close. is that better than -- i thought you were going to three some confetti on me come on in i don't know whether that is better than being the person that on the school bus, dom, for seven hours -- >> i heard those stories >> leaving at 2:00 in the afternoon, getting home at 9:00 at night kids exiting the bus to go wee-wee, because of seven hours. don't eat the yellow snow. >> i heard stories that some kids in certain parts of the northeast stayed at school overnight because it was safer there than going out on the school bus >> no one's prepared i'm not prepared i don't have snow tires on my car.

i went flying up my driver at the last possible moment that was about 1:30. it was just starting to stick on the ground i made it. i put it in the garage that was it. then i was waiting for everybody to try to make their way home. a mile and a half was taking 3 1/2, 4 hours for people. it looked like -- no one was prepared it's not funny unbelievable people in new york city are like, what do you think, honey, are we going over to -- they have no idea >> some kids were stuck in school >> new york city, it's like what a great night. the fire at the restaurant so cozy here they have no idea what goes on out -- >> out in the wilds. >> i know you have a huge interview, a fed interview today. >> if liesman remembers.

he kept forgetting yesterday he's a big grateful dead fan, you know what i'm saying >> yes >> richard clarida at 8:30 a.m that's big especially with some of the recent comments from powell. it's like a test, he says it is strong, no, no, he conceded global growth is slowing maybe he'll slow down. >> he's done a good job. if the effort was to make it a little less clear about which way he's heading >> to be obscure i will say one thing, i'm not taking a victory lap, but did you see apple yesterday? >> i did after you told me. >> you did >> i don't have much of a memory either i liked the dead went to school in boulder. let me think

no we're back maybe in the soup again. there's something about china yesterday, too lighthizer -- >> throwing cold water on that talk >> i'm hoping no global warming comes raining down on our heads. it's confusing, isn't it cold because it's warm have i got that right? >> i don't know. depends on who you ask these days what did we hear just now? the seas have risen a foot since grant was president but rising six feet next year did you hear that? >> diana olick told us that. >> what was the -- >> i think diana olick did tell us that. >> i think she said by 2080. you know what? i don't care if i get wet in 2080 from the rising -- if i'm around then, i don't care what's going on i really don't i just want to be there to be there. >> joe kernen, thank you very much >> wants to get out of here. >> he does

>> way over did it >> thanks, guys. former treasury secretary larry summers says the u.s. economy could be headed for a rough patch. >> i think the recession risks are probably 50% over the next two years given the financial situation in markets, geopolitical risk and that the fed is in a tightening cycle >> larry macdonald is from acg analytics, editor of the bear traps report is the economy as good as we think it is? >> we have our index of 21 lehman systemic risk indicators. we put out a report that they're rising at the fastest pace since 2015 the important thing to remember is so much money has gone into tech 6 trillion of passive capital has moved into the etfs. more importantly than that, the

triple b bucket, the triple b bucket, so in the corporate bond market, there's 2$2.5 trillion f triple bs. that's bigger than the entire high yield market. the rotation here will be spectacular. you want to look at the u.s. consumer staples >> consumer staples have been catching a bit of a bid as of late on a trailing -- or on a next 12 months basis, they're trading at a premium to the overall market even a premium to certain parts of technology. is that something we'll see play out again, this big rotation out of growth into value it will be spectacular we delivered a speech this week out in newport beach the focus is out of that money that's in passive, you could see a trillion bucks move into staples and value, and then the money will come out of the bond market

here's the kicker, the staples right now are 7% of the s&p 500 market capitalization. and in previous runs where the global economy hurts the u.s. economy, that number can go up to 10% to 14%. so you're talking about, if you look at 1999 and 2000 when that money rushed out of tech, rushed out of tech in 1999 and 2000, staples could be up 30%, 40% from here. >> let's talk about the fed. they're the focus for a lot of conversation about valuations in the market, everything else. the market activity. does the fed have it right is jerome powell as federal reserve chair aware of the right things to make a call on interest rates going forward >> well, right now if you look at the global economy, look at oil, they're smoking in the dine

nate she -- dynamite shed. there's 62 trillion of gdp outside the united states. 18 in. 62 outside 18 in. we're not on mars. if we were on mars the fed would be making a soinund case the global economy once again is a global wrecking ball that is the u.s. dollar. it's going to embarrass the fed sometime in the next three months they'll backtrack as they did in 2015 and 2016. they promised us eight rate hikes. they delivered two >> all right larry macdonald of acg analytics, thank you very much we'll keep a close eye on everything you have been talking about. that does it for our show. let's check futures right now. we're seeing a slight acceleration to the down side. again, still modest. down by about 75 points for the dow. off by 11 points for the s&p 66 points for the nasdaq chip stocks will be a key part of that story in the market today.

they have been a momentum source we'll see if that continues. it's to the down side today. that does it for the show. "squawk box" is coming up next

good morning stocks on the move red arrows on wall street this friday as investors digest a big batch still of corporate earnings chip wreck nvidia shares plummeting after the company's earnings missed estimates and they lowered guidance and facebook under fire again over its response to election interference. sheryl sandberg firing back last night against a "new york times" report i like what's happening here andrew, the new yo"new york tim right about things, right? >> yes

>> he's in an odd position "new york times" is right. so i don't know what to say about all of this. they're denying a lot of that story. it's friday, november 16, 2018 "squawk box" begins right now. ♪ live from new york where business never sleeps, this is "squawk box. all right. good morning welcome to "squawk box" on cnbc. we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. the u.s. equity futures on this cold and snowy morning here in times square are indicated lower. dow futures down by 71 points. that comes after a 208-point gain for the dow yesterday and a reversal of fortunes across the board. yesterday the s&p was up 28 points and the nasdaq was the best performer, it was up by 122 points this morning dow