♪ it is 5:00 a.m. at cnbc global headquarters and here is your five at 5 aramco attacked. saudi arabia shutting down half of its oil production after a series of strikes at two of the largest oil processing facilities in the world. and locked and loaded. president trump says the u.s. is prepared to respond to those attacks once the true culprit is revealed oil, yes, is surging on those attacks. brent crude seeing its biggest intraday rise on record. then u.s. equity futures pulling back as the major averages

remain just a point or so away from reaching record high levels, and on strike. general motors seeing its first worker strike since the financial crisis and could cost the company millions of dollars each day it is monday, september 16th and "worldwide exchange"egins right now. ♪ good morning i'm dominic chu in for brian sullivan today. energy prices are soaring with brent coming off its biggest intraday move on record. prices right now moving to the upside you can see here wti crude up 7.5% brent crude up almost 8% by the way, it opened up nearly just around 20% at one point here as the saudis aim to

restore at least one third of their lost output by early this week yemen's houthi rebels claimed responsibility for the attack, saying it was one of their largest attacks ever inside of the kingdom. but the u.s. is rejecting that notion saying the scope and precision of those attacks suggest the launch was not made by the houthis but in fact, originated from iran iran rejecting those claims, calling them, quote, baseless and unacceptable president trump, of course, tweeting, quote, there is reason to believe that we know the culprit. are locked and loaded depending on verification but waiting to hear from the kingdom as to who they believe was the cause of the attack and under what terms we would proceed exclamation point. the president also indicating he is ready to tap the u.s. strategic oil reserves to supply global markets if needed we have global coverage of this major story right now hadley

gamble live with us in riyadh. hadley, please, bring us up to speed on what exactly happened and what the latest developments are in the kingdom. >> good morning, dom essentially we have 48 hours on from these major terror attacks on two of saudi arabia's biggest oil facilities is the kingdom still being very, very mute. at the end of the day, all we heard is a statement from saudi aramco saying that we will provide more information and more detailed assessment after a thorough investigation that should be sometime later today even in the coming hours, but at the same point they knocked out half of saudi arabia's oil supply and able to take out 5.7 million barrels. what we have heard from cnbc sources one of which is they have 35 to 45 day in terms of supply to meet their obligations so far we know, of course, that saudi

arabia have million of barrels secured in sites in terms of meeting that demand, they're not that worried they're wored to calm the market in such a way that doesn't create further troubles down the line remember, this is coming just a week after they removed the long-serving energy minister in the kingdom they moved him because he was at the helm of aramco's chairman and he wasn't behind pushing forward with the ipo. we see him calling it out and at the opec meeting last friday i asked the question, do you have a plan if saudi arabia is put on the back burner and president trump goes ahead with the possibility of sanctions on iran we'll continue to be transparent. we are having these conversations but, no, they didn't have a plan this terror attack over the weekend up ending that and underscoring, dom, the vulnerability of the kingdom a major terror attack on oil facilities at a time directly ahead of a major ipo

announcement this is supposed to be the biggest ipo in history and also at a time when you just switched out energy ministers a lot of things on the back burner now, but one question that i have and so many people are asking at this point, why haven't we heard from the saudi foreign minister the uk foreign minister made clear he wants to hear from them the houthis claiming responsibility but the u.s. really seeming to up end that claim and via satellite images saying there's no way this could be a houthi rebel attack a lot of questions about what's going to happen next but underscoring oil assets and underscoring the fact that saudi arabia is in a very, very difficult position dom? >> hadley gamble, stick around for a second here. i want to bring in brian sullivan who is appropriately positioned right now at an energy trading facility out in houston, arguably america's

energy capital brian, take us through the financial impacts here we did see at one point the biggest rise in brent crude futures ever on the heels of this particular move so how is the energy capital of america treating this particular crisis in saudi arabia >> well, dom, it's the single biggest daily disruption ever in the history of recorded modern humanity 5.7 million barrels being knocked off in one day, we have never had that kind of disruption i understand what hadley was saying there are plenty of barrels in storage. i get it that's the bear case okay there's plenty of oil out there. we've got it that's the issue everyone knows that, but this is still a lot of barrels you put one third back on the market, 5.7 million, put 2 million back on the market, okay, now you still have a short fall of 3.7 illion opec has an extra capacity of 3 million. you still have a short fall of 700,000 barrels. there's still a short fall out there and everything goes to the

length of delay. the length of bringing that back on the market is going to be key. so the market clearly oil would not be up 8% if it were not for thatch many you still have the length of delay, the amount of storage, we get that from a market perspective, dom, it comes to the stocks this is a sector that's been ignored, cast aside. so you look at the names heavily shorted. all the energy names that have been just completely destroyed, heavily shorted, they're heavily in debt, they have credit, bad junk, credit ratings, whatever, those are the names you have to watch today because everybody that we're reading about over the last day or so is energy research analysts put together in their notes say there could be a violent snapback in these names. do they expect it to last forever? no but if you're a heavily shortedd certainly be pushed back so look for the heavily indebted names. as a second derivative trade f you will, look for the airlines.

look for travel companies, guys. those are the stocks that are going to react to this kind of news when you got brent crude, wti crude up 7, 8% overnight, look for the heavily indebted names, heavily shorted stocks, travel names, airline stocks as well, those are the ones that, dom, could react violently nobody is suggesting this is a significant permanent turn in this kind of a story, but for today, maybe tomorrow, it's going to be kind of a violent move like we've already seen. >> all right, brian sullivan live for us in houston also to hadley gamble live in kingdom of saudi arabia, thank you both now to this morning's top corporate stories, rahel solomon joins us with those. good morning. >> good morning. uaw has gone on strike at general motors about workers he picket lines

this is the first national strike at gm since 2007 after contract talks broke down. those talks are set to resume at 10:00 a.m. eastern on twitter, president trump urging the two sides to get together and make a deal purdue pharma collapsing under the pressure of thousands of lawsuits alleging that the company helped fuel the opioid cry smichs just last week the oxycontin maker reached a tentative deal to settle 2,000 cases set to go on trial next month. finally disney ceo bob iger resigned as the two companies both get set to launch their own video streaming services last week apple, of course, announced its service will cost $5 a month, less than half of netflix's most popular plan. disney plus meanwhile will cost $7 a month in a statement, apple calls ieger anexemplary board member dom, back to you.

when we come back on the show, much more on those attacks inside saudi arabia and the impact on the global emergency markets. rbc's helima croft is here and will break down all that we need to know, plus, wall street on record watch does fed chairman jay powell have what it takes to push us over the edge back towards records. more head winds for china. the world's second largest economy hits new multiple year lows and violence once again overtakes hong kong in its 15th straight weekend of demonstrations a very busy hour still ahead when "worldwide exchange" returns after this commercial break. so servicenow put your workflows in the cloud, huh? mm-hm. your employees must love you. thank you. ah, you could say that. so how are things with you guys? great. thank you. thank you, sir. lunch next week? terrific. say hi to the team. will do.

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goad pricings and silver prices both catching a bid, perhaps a safety trade on the back of those attacks on oil facilities in saudi arabia gold comex up half a percent comex silver up about almost 2% at this stage. futures also right now pointing to a lower open onwall street despite today's potential move the major averages remain just a stone's throw away from record highs. all of this ahead of what's set to be a major week for the markets, including a two-day federal reserve policy meeting culminating in an interest rate decision so joining us now, james lieu, hoefd research, james, we're a

percent or so away from record highs. sometimes less is what happened in saudi arabia and what's happening right now with oil prices and energy stocks enough to derail the move that we've seen towards record highs again? >> it could for a few days but longer term much bigger issues you look at the direct effect of basically the biggest supply shock we've seen in oil and does affect energy prices directly, of course. that generally is a tax on consumers and corporations, so we could see the hitting of the brakes in the economy because of that but really the bigger issue that you look at these supply shocks and they play into the larger macro economic turmoil we're seeing the federal reserve are playing whack a mole with trade headlines and oil prices so that could play a major issue. the silver lining if there is any is that the energy stocks in the u.s. are down 18% year over

year anyone stands to benefit from oil prices is the energy sector. >> over the course of the past month and a half or so at this stage, we have seen a seemingly bottoming out process in energy. not necessarily an oil prices but certainly in energy stocks exploration in production companies, oil services companies, is this enough now to reinsert energy as one of the leadership parts of the next leg higher i talk about it because it's the rotation everyone has been mentioning over the course of the past few weeks >> yeah. really two factors here. one is just how much they lagged the broader market up 5.5%. so just on a beta basis should reverse itself if there's any catalyst for helping out the sector the second point is to what you're saying, essentially higher oil prices could be that catalyst and we could see that across the board across energy stocks this is very much similar to reversal of what we saw back in

2014, 2015 when energy prices plunged if energy prices increase from here, it could bring love back to that sector. >> from a macro economic sector globally speaking there's been a concern about slowing demand, slowing economic growth, especially in places like the emerging markets is it fair to say that if oil prices do sustain these gains and trend higher those emerging markets will be disproportionately hit because of this particular move in oil >> it's hard to judge emerging markets as a whole, latin america, south america those countries with emerging markets there could be a more mixed benefit. we generally look at those as oil exporting countries, although that composite has shifted over time, but i think that's more of a mixed bag in asia, however, those are generally oil consuming countries and to the extent that oil prices do spike up significantly you could see

emerging markets there this does have an effect on the demand side as well. >> as you look towards what clients are asking you in terms of how they should be positioned, looking at all the asset classes and different types of moves and markets that we have seen, how exactly would you position given the fact that we're near record highs in stocks and we have some of these j geopolitical risks at play >> to the typical diversified investor we like u.s. and abroad the challenge is it's been around central banks so both the fed and the ecb action last week have basically created this renewed enthusiasm within equities across the board and we think that's a challenge. the fed can't solve all the world's issues even if they do and they probably will cut by 25 bases points this week, that probably has very little impact on the actual underlying drivers of the economy. the fact is that the economy is slowing down, we're seeing that across the board, but we're not at a point where we think a recession will happen just yet,

especially not within the next 12 months. >> risks but no recession. thank you very much, james liu. >> thanks dom. still on deck for the show, nearly 50,000 general motors employees hitting the picket lines this morning in a strike that could cost the auto maker hundreds of millions of dollars overall. plus, the one sector our next guest says investors may want to stay away from as the great rotation nears is end. "worldwide exchange" is back right after this as a principal i can tell you this. when one student gets left behind, we all get left behind. this is a problem that affects each and every one of us. together with ibm, we created a whole new kind of school called p-tech. within six years, students can graduate with a high school diploma, a college degree, and a pathway to a competitive job. you know what's going up today? my poster. today, there are more than a hundred thousand p-tech students around the world. it's a game changer.

♪ welcome back a life shot of hong kong, just about 5:20 hong kong time p.m. they finish up their day clashes continue there 15th straight weekend of demonstrations protesters yesterday set fires at a subway station less than an hour after police fired tear gas and water cannon at protests who lobbed molotov cocktails. a lot going on there violence appear to flair up aphthouses of pro democracy supporters march downtown in defiance of a police ban much more on this story as it develops. to china where a trade war is hitting yet another part of the world's second economy it seems generally kind of mixed, but the overall trend for that data in china is certainly

lower. >> certainly to the downside the data continuing to show how the on going effect, dom, of the bruising trade war on china's economy industrial output from chinese factories fell to 4.4% in august, a 17 1/2 year low well below forecasts and 4.8% in july retail sales a gauge of the chinese consumer slowed to 7.5% below the 7.9% estimate and comes as premier li told reporters it will be difficult for china to maintain an economic growth rate of 6% or more because of a rise in protectionism even if we get some type of deal or progress in the october trade talks the lingering effect of tariffs and trade war will continue to show up in china's economic data. capital economics says with a strong rebound unlikely any time soon, their team is anticipating policymakers will ease monetary conditions further in the coming

months and next month, they will hold a key meeting where the expectation is that some type of economic reform could be unveiled there >> so, i mean, the government is the key. obviously the governments are key to all of these fiscal and monetary policies around the world. with china, it's interesting, right, because with china you're talking about a commanding control centrally planned economy. >> right. >> what is it that they will be doing to try to remedy this? if the economic impact from the trade war really is hitting them as hard as the data would suggest? >> as we have seen in recent months, china has been in stimulus mode, just recently cutting fifth time since october of last year they have other tools in their tool box, so they certainly seem like other things the chinese could use to soften the blow of this bruising trade war.

>> is there a worry that the chinese situation -- we've often talked about emerging markets and used the word con ta general. is there a fear that the slow down in china would really affect a lot of those other economies in asia and elsewhere? >> that's what the data is showing us trade data from south korea, philippines and india, all these economies are intertwined with china's economy. >> seema, thank you very much. still to come on the show, the white house calling out iran for the saudi oil strikes while iran this morning denies any involvement. we are live in washington, d.c. for the latest developments there. plus, new pressure on boeing this morning, this time it's from the board of directors there. we'll fill you in when "worldwide exchange" returns right after this ches will find u when liberty mutual customizes your car insurance, so you only pay for what you need.

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oxycontin maker purdue pharma filed for bankruptcy protection. it's monday, september 16th, 2019 you're watching "worldwide exchange" right here on cnbc ♪ good morning and welcome to "worldwide exchange" i'm dominic chu in for brian sullivan. today, let's get right to today's breaking news. a series of attacks on the world's two biggest oil processing facilities in saudi arabia has energy prices soaring with brent crude that world benchmark coming off its biggest intraday move ever in history. prices right now well off of those session highs at one point brent futures were up around 20% right when they opened they're currently up around 10%. $66.05 wti crude, u.s.-based crude markets $59.68 that's up about 9% as well now, as the saudis aim to

restore at least one third of their lost output capacity by early this week, that is the current state of play for energy markets. yemen's houthi rebels claimed responsibility for these attacks, saying it was one of their largest attacks ever inside the kingdom of saudi arabia, but the united states is rejecting that notion. saying the scope and precision of these attacks suggest the launch was not made by the houthis but in fact originated from iran. iran, of course, rejecting those claims, calling them, quote, baseless and unacceptable. president trump taking to twitter, quote, there is reason to believe that we know the culprit and are locked and loaded depending on verification but are waiting to hear from the kingdom as to who they believe was the cause of this attack and under what terms we would proceed. the president also indicating he is ready to tap the u.s. strategic oil reserves to supply global markets as needed now with us is brian sullivan

reporting from america's energy capital houston, also eamon javers live with us from washington, d.c. as well now, brian, let's talk about the state of play because energy traders have to be talking about the biggest gain on record for brent crude prices what is the buzz around houston about whether or not we could see this last medium to longer term >> oh, man, so many good questions there, dom listen, this is one of if not the single biggest price jump in one day that we have ever seen so that's it the other thing i would say is in, nobody i talked to, none of the research notes that i've read suggest that anybody knows anything i'm not knocking the oil markets or any of the smart people out there in them, i'm simply saying we don't know what theimpact i going to be, of course, because you got the saudis saying we have supply, we have inventories. remember the iea remembers every member country to hold 90 days of basically inventory that is sort of their net import there's plenty of oil out there,

but yet you're seeing the oil markets react the way they are let's go through some of the big picture themes very quickly. number one, u.s. oil on the rise, 9% jump. the market is clearly rattled because maybe they're thinking this is the new risk premium yes there may be enough oil to meet near-term demand. there's a lot of fear now. what about gas prices? most of our viewers don't care about oil but care about gasoline perhaps expect a 15 to 25 cent per gallon jump in gas prices in the near term. will that last probably not, probably not because we have plenty of oil out there, but again, it's that new risk premium as everybody reacts to the new world. oil prices up. gas prices they're going to go up as well the other angle is this, aramco the ipo, bankers for aramco, dom, were meeting in abu dhabi

over the weekend these attacks occurred if you're a banker trying to sell the world the aramco ipo and you've got the world's biggest oil facility that is the biggest part of this company's business being attacked by whomever did it, that suggests a vulnerability, so maybe there's some concern that that reduces the attractiveness of the ipo if and when it does happen. also, you have to take a look at the china trade war. why is that? china is the biggest importer, dom, of saudi oil. we don't import that much. we imported 2.2 million barrels a day 20 barrels a day. basically one ship's worth that's about it. china, they import about 1.5 plus million barrels a day they're now going to have to pay more for that, so there's so many different angles to this hit on the world's biggest oil producers. and we're really not going to know the answers to the questions you asked until sort of maybe today trickles through and tomorrow as well

one thing we do know it is major hit to the world's biggest producer and major hit to confidence in the security of global oil. >> stick around here because the questions that are unanswered right now are also being asked by this administration about what's happening eamon javers is standing by in washington, d.c. right now with the white house response to this weekend attack in saudi arabia so right now there's a question. is it the houthis in yemen, iran, the houthis acting on behalf of iran with their help there's all kinds of questions how exactly is the white house tackling these layers of the onion and what exactly could happen with the policy response. >> you can imagine there's an enormous intelligence going on behind the scenes to -- why they conducted this strike. but take a look at the tweet this is the tweet you just read from the president of the united states who indicates here that the united states is close to verification in terms of who actually conducted the strike. the president saying ultimately

that the united states is locked and loaded, which seems to imply some kind of military response he also says that the united states is waiting to hear from the kingdom that is saudi arabia as to who they believe was the cause of the attack and under what terms we would proceed. the president leaving there unsaid what the united states might proceed with, but it is prime bli some kind of military response we'll wait and see what the white house has to say during the course of the day today. there was a high level meeting at the white house with the secretary of defense and other officials yesterday. and the secretary of state mike pompeo also took to twitter in his case pompeo may be a little more forward leaning than the president pointing the finger more directly toward iran, saying teheran is behind nearly 100 attacks on saudi arabia while they continue to attack. there is no evidence the attacks came from yemen. so the secretary of state very

forward leaning in attributing this to iran yesterday we'll wait and see during the course of the day today what form any u.s. response might take, but obviously a significant, ratcheting up of tensions in the region, dom. >> our thanks to eamon javers live in washington for that. let's bring in helima croft, a cnbc contributor and brian is also remaining with us in houston. helima, aimen brings up some key points here and so does brian. you now watch commodities. you were formally part of the intelligence community what exact -- there are so many different questions right now. is there some view you have about whether or not this was iran it wouldn't be out of the realm of reason. they attacked tankers and seized them in the persian gulf. >> i think this is the culmination of what we have been seeing since may and when we had six tankers attacked in the straits of hormuz, tankers seized and saudis east, west pipeline the main diversionary

pipeline was hit in may. what's interesting about that may attack is there has been increasing speculation that the drones did not take off from yemen in that case but they took off from iraq. and so what everyone is closely watching today is whether there is a finding that the drones and missiles left from iran or more potentially from iraq. there are many shiite militias in iraq that are backed by the revolutionary guard. we had israeli strikes on these militia sites in iraq. so that is the real issue that everyone is looking at what was the involvement of militia's in iraq. the iraqi prime minister was out yesterday saying iraq was not the launch pad for these attacks but that's where speculation lies again, if there is a finding that this was the irgc, elements of associated with them, i think we're very much moving towards a military confrontation >> so, brian, i mean, this is interesting right now, right >> yeah, it is certainly i want to ask helima a question.

hi from houston. >> hi. >> you have the bankers from the aramco ipo meeting over the weekend in the abu dhabi as this occurred in your mind n your big brain, is there any hint that this timing was not accidental, this was not only an attack designed to damage confidence in saudi oil but designed to attack confidence in the aramco ipo. >> think about someone like the head of the revolutionary force, for him timing is everything i think you also want to ask the timing of the exit of john bolton and the discussions about a potential deal between the united states and iran that would bring back oil the fact that this occurred just days after that could be a powerful signal from the revolutionary guard they will dictate the terms with the white house. in terms of the off ramp the questions that are going to be asked is really what comes next the irgc looking for a better

deal were they looking to potentially take this o the brink of military conflict? this was a really audacious move this is the nerve center of the saudi arabian nerve system they tried to hit in 2006 and failed with two truck bombs. the fact that a group was successful over the weekend is terrifying. >> so, let's bring you back into this conversation here because as we talk about the idea that this could have wide ranging policy responses, not just from the u.s. but elsewhere around the world, as we take a look at the developments here, this is also happening right after ambassador john bolton, who was one of the biggest war hawks in the trump administration has now stepped down, been fired, relieved of duty, however you want to say it, does this kind of perhaps put a little bit more emphasis on the idea that there are geopolitical risks that need to be address and ones that

could flair up like what we isn't that true saudi arabia >> absolutely, dom john bolton is removed from his position as national security adviser and some question about who the permanent national security adviser is going to be so the trump administration foreign policy apparatus is in something of a flux at this point. the question is whether the trump administration is now more accurately seen more dovish without bolten than it was with bolton back in june, you remember, the president came very pretty close to authorizing a military strike on iranian targets after some of those attacks that we saw in the persian gulf were attributed to iran as well the president calling off that strike with just a few minutes to spare, according to all the reporting that we got on that one. so the president deciding ultimately we didn't want to have a large body count on the iranian side he felt that would be disproportionate we'll see whstraint prevails he

the mix of foreign policy around the president has changed significantly it's difficult to predict exactly where he's going to land here of course, this is a much more significant attack that we have seen in saudi arabia that might force the administration's hand here and the president signaling in his tweets he's willing to contemplate military action. >> brian, over to you. >> yeah. i want to ask helima this, we're in houston and there's a lot of concerns about the heavily indebted, heavily shorted u.s. oil names. i know you're not an equity analyst per se, but does this make u.s. oil more attract snif. >> think what's really interesting is that we had seen before the trade war you know ramping up of u.s. exports into china. so you brought up the whole trade war dimension of it. this would be a time where those exports are potentially really needed from a whole host of consuming nations. the real question is who steps up and fills the void with

china? russia has also surged their exports to china because again china lost a lot of iranian barrels. that's why these countries ramped up exports. china had to slash their iranian imports. now china is going to be looking for who you purchase your oil from the u.s. had been trying to gain premarket share. interesting dynamic to watch >> obviously team coverage all across the board for cnbc today. thank you very much for all those thoughts we appreciate it. coming up on the show, the u.s. auto industry is facing its first work stoppage in 12 years this morning uaw workers walking off the job at gm. a live report from detroit that's coming up. then later on in the show, the vaping epidemic, new york governor andrew cuomo announcing an emergency ban on most e cigarette flavors. those details coming up after the break.

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♪ welcome back to the show a live shot of new york city just going now 5:47 a.m. eastern time today's big corporate story, united auto workers, workers going on strike against general motors phil lebeau joins us with the latest they walked off, yes >> reporter: hey, dom.

we're outside the gm plant and we're talking with some of the picketers here, uaw workers. keith, you have been out here far couple hour now. give me a sense of what the feeling is that the negotiations broke down >> we haven't really discussed it much as a collective. >> reporter: are you ready to stand on the picket line for an extended two, three weeks however long it takes? >> yes >> reporter: 2:50 a week is enough to keep you going >> we've had time to prepare, so yeah >> reporter: keith barbie, one of the uaw members picketing here thank you, keith outside the gm plant guys, this really comes down to money. it's all about money as it usually is when it comes to labor strikes when you look at from the perspective of gm and the union, the union wants pay hikes it also wants more jobs guaranteed here in the united states and they want to see more products brought back to the idle gm plants four plants including two final

assembly plants been shut down many nerms the f of labor costs, all in, wages, health benefits, all benefits $63 an hour, far hire than their competitors in the big three or foreign auto makers for general motors, the idled plants they did that because of overcapacity, but i can tell you from talking with people familiar with the negotiations, that they have said, look, we will bring back at least some product at the gm plant. we're also offering other solutions for the other plants let's see if there's any movement when negotiations continue at 10:00 a.m. dom, back to you. >> we had a work stoppage at gm, hundreds of millions of dollars impact for general motors. what could it be this time around >> reporter: the estimate, one estimate that's out there is they're losing about 8,000 vehicles today, a day, in production that comes out to about $50 million a day in terms of a cost for general motors in terms of what we see at

dealerships when you and i go out to a chevy dealership, you won't notice any change at least for several weeks. they have plenty of inventory to last on that front, but the cost component for general motors an estimated $50 million a day. >> phil lebeau, thank you very much for that update on deck for the show here, bob iger is leaving the apple board as the streaming wars heat up for the disney and apple ceos the details coming up next plus, much more on the global market to this weekend's attack on the saudi oil field crude prices are jumping other ripple effects we'll tell you the impact on the stock market when "worldwide exchange" returns right after this

♪ live shot in chicago, 4:52

central time the city just getting moving there time for this morning's executive recap, the headlines you need in 60 seconds disney ceo bob iger resigned from apple's board this comes as the two companies prepare to launch their own streaming services purdue pharma collapsing you should the pressure of thousands of lawsuits alleging the company helped fuel the opioid crisis. a committee of boeing's board will report lid call for changes to the company in the wake of the 737 max crashes. the new york times says this includes changing the reporting structure for top engineers so they report first to the company's chief engineer and then to business division heads. and new york governor andrew cuomo is banning the sale of flavored e cigarettes in their state following a rise in vaping-related illnesses. watching futures right now, we're poised for a pullback. right now the dow would open

down around 108 points if these future holds move into the opening bell for regular cash equities trading the major indexes all nearing all-time highs the dow and the s&p both less than a percent away from the rarefied leveling. joining me is chief market strategist and david katz chief investment officer at matrix asset advisers gentlemen, thank you both for being here this morning. david, start with you first, the market moves today, they are significant in oil, but they have not yet carried through into major parts of the macro scheme gold is up, yes, but half a percent. treasury yields have pulled back by only three bases points is the market looking beyond the oil situation in saudi arabia for the market guidance that it seeks? >> we think so basically what you have is very significant geopolitical ramifications, very significant ramifications for the oil markets, also significant for energy stocks, but beyond that, we don't think it will have a

long-lasting impact in terms of the u.s. equity markets. >> matt, if that's the case, does this derail things, the thesis right now for the overall markets, is this particular geopolitical risk in the middle east enough to take the wheels off of the rally that we have seen back towards record highs >> well, it certainly can if it continues for a while. as you mentioned the markets right now seem to be quite complacent about what's going on there are certainly down but not in a major way and the thing is about oil prices, a lot of people don't understand is that oil prices when they go up, it's usually positive because it's usually because demand has picked up however, when oil prices go up due to a slow-down in supply or cutback in supply, the obvious example is 1970s with the oil embargo it's very negative because it hurt earnings across indexes. listening to your experts this morning on the energy and geopolitical side of things it seems this could be -- last a little longer than a lot of

people think and with the market near all-time highs could have more impact than the markets are showing right now. >> the bullish case is evident the u.s. economy is growing albeit slower but better than a lot of other places around the world. the investment thesis for record highs has support, however, are there signs out there that we could be due for some kind of a pause or pullback given the current macro economic situation around the globe >> no question i mean, as you mentioned, there's a lot of positive news out there, but there always is when the market is reaching all-time highs we've reached these highs several different times over the last two years and each time we seem to fail to break out because the overall growth is really not there it doesn't mean the market is going to suddenly go into a bear market, the economy is going to go into recession, but you don't need a recession to have a deep correction and when you have situations like these on the geopolitical side that aren't really being priced in at all, brand new, the risks are there

i also think this big move we have seen in the bond market the last week or so has been very technically done for technical reasons. the ot longer. >> so david, i mean, we're 1% away from record highs you buy stocks for clients for a living are there still places that you want to commit capital to given the fact that we are a stone's throw away from the most elevated levels we have seen in the stock market ever? >> well, definitely places you want to buy individual stocks. we wouldn't make a new allocation to equities at this point. you could have significant ups and downs. >> so what kinds of stocks are with talking about are they energy stocks on the value side, utilities because of the safety play. >> we avoid that and avoid rates. we have liked energy prior to today, so we like energy a limit more after today we would not buy the stocks on the open oil prices were up 20%, now

they're up 9 or 10%. the oil stocks will spike higher in the open, probably drift lower during the day, but if you have a six-month time rise and we think this could get a risk premium back into energy oil prices and the energy stock should do better. >> what stocks in particular are we talking exploration in production, oil services, broadly just ets >> across the board. we like occidental we think it's too cheap and will do better. royal dutch. beyond that we do also like the financials >> all right matt maley, last word to you here, is there any place you think we could find opportunity just a handful of seconds left for you? >> i totally agree with your other guest on the energy sector it's incredibly underowned and was already behind the level of underlying commodity oil prices. if this group starts to go at the end of the year a lot of

people are underperform willing play catch up by buying the energy sector. >> thank you gentlemen both for your thoughts. we appreciate this morning that is it for "worldwide exchange" this morning we have futures pointing to some modest losses at the opening bell brent crude up 9%. "squawk box" begins right now. goompl. locked and loaded. president trump says the u.s. is ready to respond to the attack on saudi arabia oil facilities breaking overnight, lots of stuff here purdue pharmaceutical files for bankruptcy facing lawsuits from every u.s. state over the opioid epidemic and auto workers are on strike against general motors, one of the biggest strikes in years really we'll take you live to the picket lines and tell you how much it could cost general motors it's monday, september 16th, 2019, and "squawk box" begins

right now. ♪ >> announcer: live from new york where business never sleeps, this is "squawk box. good morning, everyone welcome to "squawk box" here on cnbc we are live from the nasdaq market site in times square i'm becky quick along with joe kernen and andrew loss sorkin. look at the u.s. we canty futures. on friday, the dow was up for the eighth session in a row. less than a percent away from all-time highs but this morning you're seeing red arrows across the board. dow down by 111 points right now. oil prices have speck and that is definitely adding to the prices of energy stocks. in fact, i believe if you look at it, exxon and chevron would be by 40 points adding to the dow. the concerns this is kicking off i cross the globe and all the major averages bringing them down pretty significantly. s&p down by 14 points and the

futures indicated down by 65