tv Worldwide Exchange CNBC December 4, 2019 5:00am-6:00am EST
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it is 5:00 a.m. at cnbc global headquarters. wild markets swing futures rising on a report that u.s. and china are moving closer to a trade deal. meantime, new comments from beijing this morning as u.s. congress takes action on human rights violations in the world's second largest economy and an end of an era alphabet sees its cofounders
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moving out to the sidelines. leaders gathering in england for a second day of meetings and another black eye for boeing as a major airline opts for airbus all of this as we begin right now. ♪ >> good morning and welcome to the show, i'm dominic chu in for brian sullivan let's check out what is happening with dow futures they were lower until a headline moved from bloomberg news saying u.s. and china are inching closer to agreeing to the amount of tariffs that will be rolled back in a phase one deal those headlines sent futures which were solidly red this
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morning and all of a sudden shot higher the dow is up about 135 points if there is a lesson in the last 24 hours, it is that every single trade headline matters. the dow at one point falling more than 400 points before closing down 250 days lower. the worst day insurance early october. a rough start to a month that has historically been a strong one. turning to the bond market the dow jones futures, nasdaq and everything else. 10-year 1.75%. 2-year 1.56% japan off by 1%. hang seng off 1.25%. in european trading, we have seen a bit of green. german dax up over a percent
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ftse 100 up over a quarter a percent. reports crossing that u.s. and china are moving closer on the agreement to the amount of tariffs. that news is spending markets higher china is firing back over the house discussion to pass a bill in support of china's uighur muslim minority. saying the bill will affect china/u.s. cooperation adding that china may take necessary counter measures to defend its rights back in the uk, leaders are gathering for the traditional family photo live on sight for us hadley, we'll start with you first.
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how are the dynamics playing out with leaders is donald trump a key issue? is. >> no doubt. 29 member states represented here just an hour outside of london president trump arriving moments ago. no words yet from the president. over the last 48 hours, his comments on china, france and turkey not just moving markets but frankly moving a lot of opinions within these european countries as to what actually is on the agenda for the president essentially what we had seen he was hitting back at emmanuel macron because of the fact that nato could be brain dead and he was basically supporting the president of turkey. that over the purchase and delivery of the system from
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russia the president seemingly supporting the turks at a time when leaders are raising eyebrows at his actions not only in syria but also buying that russian defense system >> the family photo is ensuing right now with the shots we are showing viewers. what can we expect from the rest of the day what exactly will be be watching for as these meetings take on the second day >> frankly, dom, all options are on the table we are talking bilateral meetings we'll be talking no doubt about turkey, china and the move of the trans-atlantic plants of countries to a mindset to focus on the threat not continuing just from russia but from china,
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africa and the middle east, also in europe as well. talking russia, china and more discussion about what the turks will do. supporting more action in the ba baltics and if you recognition the wpg and the headlines will be coming out no doubt with regards not just to turkey but china and russia >> thank you aemon javers in washington, d.c. what are the thoughts of the very big role of donald trump. >> it was a tense day yesterday. we saw the meeting with the president and macron from france i'm stuck on the picture here.
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you see president trump there standing directly next to president erdogan of turkey. that is the key question this is essentially a birthday party. there is no other reason other than to celebrate nato as an organization this is about deciding what their path forward is going to be now that we are in this post cold war era the president dealing with president erdogan of turkey over the past several months. turkey, you've seen working side by side with russians and forces patrolling with russians at a time when they are a member of nato standing in this photo of op standing next to the president and yet nato was set up to offset russian power in the world. the turks have been buying russian military systems as well all of those are flash points
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between those two leaders as you see them standing there you have some of the literal drum roll here the real flash point there and very visible as you see the president of the united states and the president of turkey standing with one another. the question is the role of boris johnson who you i see there center of your shot. the prime minister of the uk they are facing an election in december that will test the future outcome of the brexit situation. that is a flash point as well. there has been so much question about whether or not president trump and boris johnson who had been seen as political allies or similar figures whether they would even have a meeting this
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time around. it wasn't and the official schedule but there was question that the two men would meet given that the two men would meet is enormously popular going into the time when you are going to see this election in the uk it did happen last night the president put out a tweet. we've got a copy about that meeting which he said he met with boris johnson at number 10 downing street he said ultimately, they talked about a number of conflicts. trade high on the agenda but also geopolitics and the fate of this important world alliance. >> thank you stick around we want to bring you into discussion here. joining me now head of research, james lu as well mentioning trade in that report. it is a huge deal because of the
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bilateral situation. >> clearly the trade headlines are moving the markets they have been all year. we've been talking about escalating tariffs since the beginning of this year going back to march. it has been groundhogs day the reality is that investors have a lot to be grateful for this year. we don't have a recession like many thought we have weakness and trade-related areas. on top of that, the fed is offsetting the weakness to some extent by cutting rates. the market is up by 25% with perhaps even more. they are getting past those trade headlines. >> is it fair to say we are in a very different situation in this
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quarter of 2019 than in the fourth quarter of 2018 what are the key differences that we don't have a redux of last year. >> notwithstanding with the market, this is a very different environment from what we saw last year where investors wither worried about the global economy and the fed making a big mistake. the fed has made a 180 over the last few months cutting rates three times. the skocenario hasn't changed much when you look at the next 12 months, can the earnings picture come back. that is where trade really matters. if manufacturing doesn't bounce back and other sectors don't bounce back. then it is hard to see the global industries and earnings
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numbers hit those 9 to 10 numbers wall street expects to hit today. we are only expecting 1% earnings growth and yet the markets are making new record highs every day. >> i want to fold you back into the discussion those record highs in the stock market in the context of an economy in the united states that is growing all bee it more slowly than it has in the past, how much can the trump administration take credit for and how much will give him bigger coat tails, if you will >> my view has always been that presidents take more credit than they deserve for a good economy and get blamed more for a ba economy. the ability of the president to set broad per am meters. the ability for this president to get government out of the way
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and now on trade, an attempt to readjust the entire global trade picture. especially that relationship with u.s. and china. as it plays into nato. the united states' relationship with the eu. this is a president who views the economy as central to his political legacy and central to his reelection campaign, he has a sense of grievance he feels the europeans and the chinese have been taking advantage of the united states for decades on trade he wants to readjust that. so interesting, he and boris johnson talked about trade the big question here has been what will be the u.s. posture on
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trade toward a brexited england. will there be a bilateral agreement. the president views all of this as incredibly important to his political future >> let's talk quickly about 2020 is this a scenario where the markets can be constructive on the bullish side given election and trade? >> we are still constructive we think if earnings can grow even at a moderate face, say 5 or 6%. we can still see positive returns next year. the issue is if some investors are expecting another year, that is probably not going to happen. recession fears are behind us. very few people are talking about those. the fed can only cut rates so many times that story is played out you look at the numbers this year, some of it is a bit of a
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mirage part of that number this year was getting back to par. you look at next year. interest rates are higher. that reflects positively in the market we still like what we see next year >> thank you for those thoughts. when we come back, why google's cofounder say it is time to leave the roost. ceo optimism not enough to help salesforce their ceo on mad money last night. >> our business looks strong fourth quarter we are in a great position to advise customers that's what we see every day >> and later on, why amazon may be looking to the bronx for the nextaj mor streaming deal.
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more when "worldwide exchange" returns after this ♪ yes i'm stuck in the middle with you, ♪ no one likes to feel stuck, boxed in, or held back. especially by something like your cloud. it's a problem. but the ibm cloud is different. it's open and flexible enough to manage all your apps and data securely, anywhere, across all your clouds. so it can help take on anything from rebooking flights on the fly, to restocking shelves on demand, without getting in your way. ♪ ♪
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i spent two years alone and homeless. announcer: as america's veterans face challenges, dav is there. man #1: my victory was finding the support to get back on my feet. announcer: dav helps veterans of every generation get the benefits they've earned. man #2: i'm a veteran. when i got out, i felt like nowhere was safe. announcer: so veterans can reach victories great and small. man #2: my victory was finding the help i needed. announcer: support more victories for veterans. go to dav.org a surprise shake up at the top of alphabet. the company created in a silicon valley garage more than two decades ago. big deal when it comes to the tech giant >> a huge deal
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quite a few announcements. larry page says he's stepping down google chief is taking over as head of the parent company and sergi will be stepping down and that position eliminated it calls the division other bets also when pichai game the google ceo. page and bren said with alphabet well established, it is the natural time to simplify our management structure they say we've never been ones to hold on to management roles they no longer need two ceos
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woman: friction points, those obstacles that limit a company's growth. i try to find companies that turn these challenges into opportunities. it's these unique companies with creative business models that will generate value for our investors. that's why i go beyond the numbers. as can see there, a good
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amount of green on the screen. the dow opening up by 112 points that is a stark contrast to what p it was about an hour or two ago. some trade headlines coming out of bloomberg we'll see if those gains stick as we move to what is happening with the opening bell. let's check on some other big stocks on the move salesforce reporting a loss after its acquisition. shares are lower as the company's outlook for the fourth quarter and 2020 some shares off by 1%. workday as well adjusting profits and revenues easily beat forecast that stock is down as they say new product launches and a recent acquisition will not help those shares off 2%.
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microchip technology, revenues fell short shares are higher as the chip maker's third quarter forecast is above expectations. microchip is up about 2.5. straight ahead, with he go live to washington, d.c. where the house impeachment inquiry is set to enter a if you phase this morning. we'll be back after this for what's next. (man) we weave security into their business. (second man) virtualize their operations. (woman) and build ai customer experiences. (second woman) we also keep them ready for the next big opportunity. like 5g. almost all of the fortune 500 partner with us. (woman) when it comes to digital transformation... verizon keeps business ready. so servicenow put your workflows imm-hm.cloud, huh? your employees must love you.
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the house impeachment inquiry begins a new chapter to get to a fact finding mission. tracie potts joins us with the latest from washington >> you are right about that. today will start to sound like a civics lesson with four constitutional experts being asked questions about democrats and republicans. that testimony today from three witnesses selected by democrats and one selected by republicans. their job is to explain what it takes to move forward with impeachment. what does high crimes and misdemeanors mean and what does brianry mean and what type of evidence is necessary to prove them that starts this morning after a scathing 300-page report by democrats summarizing the testimony so far their findings that president trump abused power and endangered national security by
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pressuring ukraine for a biden investigation and withholding aid. the white house and the president don't agree with that. president trump out of town at this nato meeting tweeting and watching the proceedings his team, his legal team has decided not to participate in today's hearing. there will likely be more. we are expecting a full house vote before the holiday break. >> thank you for that live from washington straight ahead on the show, futures popping on the report that u.s. and china are getting close tore closer to a trade agreement. have you heart that before our next guest says the ulbeooship shake up at google cod gd news for investors. we'll be back after this driven solutions and services. change healthcare is thrilled to be joining the nasdaq family.
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prevagen. healthier brain. better life. breaking news, futures popping on a new report of a possible u.s./china trade agree. we are live with the latest coming up. google undergoing a massive c suite shake-up as if the star wars empire was not enough it is expanding to include a game show. start practicing those skills as "worldwide exchange" rolls on.
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welcome back to the show i'm dominic chu in for brian l sullivan this morning. when i came in earlier this morning, until the headline moved from bloomberg saying the u.s. and china are getting closer to the agreement on the amount of tariffs that will be rolled back in a possible phase one deal that one flash amounted to a nearly 200-point swing in dow futures. we are going to open lower and now as you can see here, opening up by near 120 points. let's head to beijing live where cnbc eunice yoon joins us now. i say this a little tongue in cheek. we have seen these headlines before yes, the u.s. and china are
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getting closer to a deal no, they are backing further ar way. what exactly should markets be viewing this time around with these headlines given the down days we've seen in the last two? >> i think probably with a grain of salt until that deal is sealed we do know and we have known that china has believed that the tariffs in a roll back is really important. if it is true that they are making head way, that is true because we could potentially see a deal between the two sides everything is up in the air until it is all nailed down. one thing also interesting today was just how sensitive it was revealed by some commentary out of china how sensitive china is to any criticism, outside criticism of the way it treats its local muslim population. up until now, china has not
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officially or in state media linked the bill that passed through congress to the trade talks. but today, the foreign ministry got pretty close the ministry said the bill on muslim uighurs will affect important areas. beijing is accused for some of the background, is accused of detailing up to a million muslim uighurs in the far western region of the country in what a lot of people call camps but what beijing has called training centers. the foreign ministry saying these are a necessary part of the country's anti-terrorism campaign saying beijing would respond further. the ministry did not clarify what that means. based on some of the remarks we
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saw in the state press, it could include the revealing of the unrely on entity's list. the global times suggested the american companies could be on that list. reacting to president trump's comments that the trade deal could be delayed until after the 2020 election. the foreign ministry does not like like a time line or a deadline on this trade deal and reiterated that can only be reached on the basis of quality and beijing is feeling pretty miffed on that bill. that bill goes next to congress and lands on president trump's desk >> so eunice, this is the second time now the u.s. has taken
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legislative action with regard to issues regarding china and its own domestic affairs i refer now to what is going on in hong kong and the legislation passed there in support of the prodemocracy protesters there. both of these have been seen as sort of the u.s. meddling, if you will, with chinese affairs is there one more important than the others should we be focusing on the muslim treatment of minorities in western china or with the protests going on in hong kong >> china is sensitive about both issues i really thought that it was interesting that -- up until now, china has not been linking these human rights issues to the trade talks. today, the foreign ministry suggested it is even more
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interested in the treatment of muslims. because china doesn't want to link the two they want to have a trade deal and they want things to be simplified because they do see the benefit of having a trade deal that would potentially end the trade war and get those tariffs lifted >> thank you very much joining me now, chief strategist chris campbell. he previously served as the chief secretary under the current fed chairman jay powell back when he was at treasury you heard eunice's report. is this a situation where we should believe the latest headlines again that there is positive i positivity around u.s./china trade. he said it maybe we'll wait to get the deal done >> the president is a tough
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negotiator you are seeing a classic -- i'm been a part of so many of these things classic negotiating tactics. the president saying, yeah, i'm not in a big rush. i advise china to read into this what eunice said is exactly right. a reelected president trump, who knows where he goes on negotiations he could double or triple those if he wanted to. let's assume a democrat wins and president trump is not reelected. as suggested just now, china is not eagler to put on these trade agreements i've never seen a democratic administration not one, not want to or put human rights, labor
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rights in a trade agreement. i don't believe china will want to sign up to that china is very eager and my sources suggest they are motivated to get a deal before the term tof this administration the next term is not a guarantee. they are motivated to get to a deal before the end of next year >> that implies the u.s. actually has a good amount of leverage if that is the case, i'm curious whether or not the market runnup has been predicated on not just the easing how much of the market run should come off if the trade headlines are less positive going forward? can we still hover around these
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record high levels >> i think they will remain strong through next year and if reelected, the next four years no one wants to see the economy faulter in any way trade is an important part of this at the end of the day, we have had some slow down in china. creating the caution that the markets would be so quick about it the reality is and the challenge that we have and that problem with china it will get you to a place of guess because of the challenges before. >> chris campbell, thank you in corporate news, stepping
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aside as leaders the the tech giant. likening to parents letting their 21-year-old child take over the rooste. under page alphabet has underperformed faang peers joining me now, senior analyst richard cramer and investment advisors tim lesco as well tim, we'll start with you first. you are an owner of these shares and this company, are you happy with this new ceo? >> we are happy to see the peaceful transition of power at alphabet/google. they have these core businesses that generate the cash flow.
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we are happy to see them move to an operator. when big companies like this move to founders to salesmen perhaps in the case of microsoft or back when apple moved back to john sculley, they were unsuccessful we are happy about this choice >> sun day pichai, indicating that investors should be happy with this move he was seen as the man who would take over eventually that timing was in the air tell us what you think sundar pichai is walking in to as the head of alphabet overall what can he look forward to in the coming months? >> i have to agree with tim. that i don't think much changes here i think sundar has to tip toe through the mine field of
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regulations not just in the u.s. but in the eu and other countries. he's got to figure out a way to placate unhappy employees and figure out a way in which the company is run that being said, there is $100 billion of cash. he has tremendous resources. he can't really use them for fear of oversight or review. they are precluded for doing any large scale mna. they don't have any places to move that wouldn't be already contested terrain. >> that sounds like you are saying it is like alphabet/google cannot get bigger because the government won't let it is this in essence a large utility company and will be focused on growing the return of cash to share holders. is this a stock that is some
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kind of growth mechanism >> it is that in a sense they still find ways at 20 percent of the top line in the cusp of looking at areas like cloud computing and looking at area you to get into whether or not that turns into hard returns to apple hardware. they have a tremendous amount of option value in the $25 million of r&d they do turning ai and science into growth opportunities. addressing large markets, that is not on the table when they are under the microscope the way they are >> tim with those thoughts and confines you are a portfolio manager and you allocate managers. given the career change with
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sundar pichai, given your exposure to tech and services companies. >> we think there has been a lot of confusion with changes like this, you put sundar in charge of all of the umbrella may lead to more focus. as the another guests mention, so much cash on the balance sheet. in parts of the story that are so much more valuable than the parts that make money. >> tim lesko, thank you for your thoughts coming up, saudi aramco surging ahead. new big numbers coming up next spotify reveals the top streamed artist of this past decade who took home that title and other stories you'll be talking
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about later in the day ahead stay tune to "worldwide exchange." they changed how the world fights cancer. blocking the pd-l1 protein, lets the immune system attack, attack, attack cancer. pd-l1 transformed, revolutionized, immunotherapy. pd-l1 saved my life. saved my life. saved my life. what we do here at dana-faber, changes lives everywhere. everywhere. everywhere. everywhere. everywhere.
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we have to show it to you. it has been the story of the morning so far we started off very much in the red for futures. we are green across the board. the dow would open up by about 115, the s&p up about 11 and the nasdaq up by 41 on headlines and reports that the u.s. and china may be inching closer to a phase one trade deal time for this morning's top trending stories we turn to rahel solomon music is front and center. >> i'm about to break some news here taylor swift not the only musician being named artist of the decade spotify has announced drake has been streamed 28 million times over the last 10 years more than
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any other artist on the platform rounding out the top five. ed sheeran, post malone, and post malone is the most streamed artist globally. who new? >> i should get with the times >> where is beyonce? >> my question nothing against emenem he's number five, above beyonce. >> we'll see if any other lists come out >> can i command a recount if you ever wanted to live the life of a jedi disney has ordered a star wars
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themed game show called star wars temple challenge. they'll face off in a serious of competitions disney describes the show as a test of strength, knowledge and bravery. ican attest that, dom, you hav all of those things. >> this is like american ninja warrior with all of the costumes for you. >> not perfectly fit for me. >> you play golf >> that is one thing i think you would be much better suited for this. i could see you as like an american ninja warrior >> i would love that speaking of athletics. yankees fans may be able to stream via amazon. the team is working to become the first in the mlb to be the
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first to stream games without a cable subscription the goal is to have this up by the 2020 season. it would be the first. that ee grow to an annual streaming package. the yankees saw a drop in their viewing. >> front page of the new york post >> i can understand this product. for me, an eagles fan, in new york i always question where do i watch the game >> i know your pain. for me as a niner's fan for football i have to go to buffalo wild wa wings or some other bar. >> so there is a market for it coming up, we layout the trading day ahead. pushing markets into positive
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territory. plus boeing suffers another blow as airbus lands a new deal with one major u.s. airline ose details when "worldwide exchange" returns after this when you move homes, you move more than just yourself. that's why xfinity has made taking your internet and tv with you a breeze. really? yup. you can transfer your service online in about a minute. you can do that? yeah. and with two-hour service appointment windows, it's all on your schedule. awesome. so while moving may still come with its share of headaches...
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welcome back to "worldwide exchange." the headlines you need in 60 seconds. in a blow to boeing, united airlines has ordered 50 long hng range jets from airbus to ee place a fleet of boeing 757 models and will start to use them in the year 2024. johnson and johnson says more testing shows there are no traces of asbestos in its baby
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powder the fda found trace amounts in a bottle bought on line. tests conducted by two different labs on the same bottle tested by the fda the demand for saudi aramco appears to be high they say over $50 billion worth of orders have been received they are expected to set the final price for the ipo tomorrow with trading set to begin the following wednesday. markets looking to bounce batod following two days of losses shifting on a headline that says the u.s. and china are getting closer to agreeing on the amount of tariffs attention turning to this week's numbers for adp employee and nonfarm payrolls report.
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getting to the president of blue line futures there is so much going on right now. do you believe these markets should be higher now given the headlines we have seen >> i think the markets need to settle in. yesterday's weakness, i was calling it a healthy correction. there are big levels if we are talking technicals in the s&p and the nasdaq calling it 30/40 and 80/80 if a trade deal totally fall as part, i would imagine those levels get taken out we'll see a minor scale correction now a healthy consolidation. we have settled on monday. those cause the s&p around
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31.15. if we can get out of there, i think president trump has a press conference around 9:30 if we can get out above 31.15, this move is totally neutralized. >> from the horse's mouth from president trump himself about the idea that we would pause we are not in a rush to get the deal done. we could wait until after the election now there are reports about whether or not there could be a possible inching towards a possible phase one agree is trade the main focus of investors right now? >> trade is the main focus for investors right now. we are at elevated levels. the earnings reports are great we are looking at the december
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15 tariffs the december 15 tariffs matter right here and right now we could see 5 to 10% move lower. i still think we are talking a healthy correction that's what matters. there are a couple of pieces of legislation moving through the u.s. the hong kong bill, the other bills causing tension out there. this is where things could escalate behind the scenes we won't see that as quick in the headlines like trade things fall apart behind the scenes on a legislation stance where things could get ugly and hurt trade on the other side >> what goes on your shopping list if these things do pull back >> i think there are some real
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decent break outs. you can look at the stocks atf and the chip makers. i like to avoid the risk there until that level gets taken out, i like that. if you are taking on the risk, that reach is where to be right now. >> that does it for "worldwide exchange." "squawk box" begins right now. good morning, futures jumping higher on a positive trade report that is today's trade report de jour >> after president trump's trade comments sparked stock sell off. we'll take you live to london where president trump is expected to speak in the next hour or so >> and big shake up at alphabet. larry page expected to step
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down "squawk box" starts right now. good morning, were live from the marketsite in times square tom farley is here filling in. former president of the nyse and cnbc key contributor and joe also with us, also a key cnbc contributor looking at dow futures that were down until a headline move from bloomberg saying u.s. and china
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