. >> capex cuts are exactly what they need. the fact mining equipment orders are down so much tells you what's going on with capex. the entire mining sector is building towards an equalibrium. i'm not going to tell you where it is. we are seeing supply balance in a number of major commodities. what glencore did is very good. copper will start to show signs of that. >> nike out with a huge earnings beat. what future orders from overseas. we'll hear from ceo mark parker. >> plus it is official. the new iphone 6 is here and ready for pick-up. we'll take you to apple's flagship f flagship fifth avenue store. >> janet yellen is delivering a speech at the university of massachusetts amhurst. we'll bring you the headlines you need to hear. can a business have a mind? a subconscious. a knack for predicting the future. reflexes faster than the speed of thought. can a business have a spirit? can a business have a soul? can a business be...alive? >>> breaking news. fed chair janet yellen speaking at the university of massachusetts at amhu

capex is down dramatically. u.s. it isp's in the down $10 million -- $10 billion.ed costs are down. this capex decline will have production. that will lead to a gradual slow, but an improvement. in the oil market in private the other sector i want to highlight year end. let's not forget we will get more european stimulus. we will get chinese stimulus. it is hard to imagine they are not going to respond. we get further interest rate cuts. finally, year-end, you get one million barrels a day increase in demand. that should also provide support to oil prices. our forecast for next to is $55 a barrel for brent. $53 for wti. equally, i would point out if prices were to decline further in the short-term, the incentive for opec to cut will increase exponentially. manus:. and that is the great conundrum what is their capitulation point? some people say the market has capitulated. what in your mind is the point? opec is broad church. we probably only care about -- sabine: when we look at budget break evens across all opec countries, including saudi, $85 plus. that is just t

to fund m&a, to fund capex.on. >> you know, you made the point earlier that you like stocks and like them because they're the best asset class you can find in the neighborhood. if rates start to rise, do you change your opinion? >> no. i mentioned earlier on average since the mid-'50s there's been eight interest rate cycles. on average the market didn't peak until 30 months after the first rate hike. so who's thinking that the -- i'll go back to your 20 anniversary. 1995, went back and 4.5, currently zero. 16.3, currently 2.2. the s&p multiple in 1995 was 15. it's now about 15 or 16. we have a similar multiple 20 years later, yet the t-bill has gone up from 5.5 to zero. stock market is allowing for higher interest rates or slower economic growth. the market understands that. let's give the saver some return. maybe there's an offsetting benefit to rising rates. i feel sorry for the working man. got to keep working. >> what about asset inflation? what about companies using zero to avoid making long-term decisions

have we seen capex pick up from economies? is this going to have a lasting effect? >> that's been the missing link in terms of the sustainability of the recovery and we've done a lot of research on capex globally and it's been a strong headwind by virtue of the fact that it's from the energy and commodity sectors. from here looking into europe for the next year there's quite positive news actually because excluding commodities we're expecting an 8% increase in capital investment for companies across a broad range of sectors. that's the first time we've seen a positive move there for quite awhile. that's a positive support to the growth story. >> just to sum things up we touched on it and it's ever presence in our minds is that a risk or only will be market risk as opposed to credit risk. >> there's a potential for contagion there but a lot of what we're seeing at the moment is investors and traders trying to understand how the global patterns of trade will shift because we're sort of move agoway from such a focus on the growth to a stronger more sustainable credit m

. >> what needs to be done in terms of your own innovation and your own capex?es that look like going two or three years out? >> certainly there's capex and we've increased ours to be ready for the demand there but certainly it's about the quality and making it fantastic. we're used to five nines on broadcast tv? >> broadcast ratios? what do you mean five nines? >> reliability. you turn on your tv and it works. it works and it's good quality. doing this on the internet is a lot harder than people think, so we're making a lot of investment to make that picture be a great. >> where buffering becomes a thing of the past? >> yeah. you don't want any buffering and you want really high-quality video as well, which is a whole difference gamegame when you go digital over the internet. >> you want to be faster and higher quality but you always want it to be secure. >> absolutely. sometimes people don't think about that, but as you see now, all the things being stolen online and the imemploy indications of that are very bad, so that's the fastest growing business at akama

>> yes. >> talk about activists cutting cap capex.ny has $800 million to a billion and a half in capex spending. the credit rating has gone to a triple b-plus. >> hunter, how did you do that? that sounds like a magic trick. >> well, that's the problem. people think it takes a magic trick. and i think it's more abc's and basics. we know how to railroad, okay? we know how to put ties in which are capital. you just got to get the right formula to bring all those forces together. that we talk about. and it works. it happens. i mean, look back -- if you look back three years ago, very few, if any, people i could find said this is going to be a success. people were saying, what? he's coming back to do what? and, you know what the proxy results were and what they went through. i was on the sidelines then. and it just shows what an organization can do when they put their shoulder to it and focus on the basics and understand what the business is about which is providing service to customers. now, when i was here three years ago, people said yo

they have onto crease their capex. >>> moving on. the first time the fed passed on raising rates. what works when the fed punts? dom has through things to buy when the fed chickens out. >> things to buy and things to sell. the analysts at citigroup put together a list of six times over the past couple of decades we've seen a predominant bias towards an expectation for a rate increase. then the fed not follow through with it. you can see that list of dates going back to at least 1994. what happens when the market really thinks the fed is going to raise then it doesn't? we asked our data partners at kensho to look at those dates citi analysts were looking at to look at some of the best and worst performers. if you look at the stock side the best performing sector in the s&p 500 during situations like that were health care. the best performing sector at least on a winning percentage basis here. it's up about 1.7% up 70% of the time. the worst performing sector were the materials. down about 0.6%. also again only positive about 30% of th

combined with more capex and durable goods, we've seen very strong hiring at low and medium income jobs. i think it's much stronger than people appreciate. david: i want to pull up that goldman sachs chart again. this is something one of our fed reporters came up with, and what he found is the fed had not tightened monetary conditions in 15 years. does that give you pause when you look at that? torsten: the fed would like that when you hike interest rates to get the long end of the yield curve. at the moment, we have had at asian central banks and elsewhere in emerging markets have been buying treasuries and now we are seeing a reversal of that. it's getting a lot of attention at the moment. it used to be the case that central banks were buying a lot of treasuries to make sure they did not appreciate too much. now it is a complete reverse. that is why they are selling treasuries. we could be in for the reverse where we would see the laws of economics when the fed starts hiking and central banks are selling treasuries. alix: what do you think about that? that it could work this time if t

if you frame that in the opec sense, in the middle east is rising -- capex is rising.om: so the distinction here, is in the last three days, did you note a change in opec language policy or posture? andrew: not at all. the usual opec bulletin that came out was really a nonevent. the market was really fixated on it, the market was overly net short. vonnie: opec said it wanted to talk to other nations with regards to pricing, and it seemed maybe opec was getting hot under the collar about factoring in oil not rising anytime soon. andrew co. i think it was more or less an overreaction. tom: what i want to know about the terminal value of oil, manus cranny this morning had an interview this morning. i am going to -- is everybody coming back down to where you people are? andrew: exactly. the global oil costs are moving down in a parallel fashion pretty much, flattening out to a certain extent. it has to do with twin factors between technology and fx as well. brendan: if we are looking at the rig count in the middle east going up, does that tell us that the pricing power of

. -- companies are not committing to capex at this point. angie: what about alternatives?hat if you are nervous about it and fed up with the volatility right now? >> the problem is that there are not a lot of alternatives. market,d income interest rates are ridiculously low. in terms of real estate, not too difficult to buy, but very difficult to sell, so do you want to commit to a long-term investment in real estate at this point when prices in many areas have actually risen quite a bit? is this the time to get in? the same thing is true going back to fixed income. if interest rates are going to to go into thent fixed income market now, where you are guaranteed that if interest rates rise you will lose money in the bond markets. i say sitting on cash is your only alternative to equities. if you look at equities, you can find value stocks, some dividend income, rising dividend income, and stocks historically at attractive evaluations -- valuations. actively's -- it could be seems to me to be the only game in town. angie: ok. are those valuations cheap as well for emerging

the quid pro quo is you'll see the equity boosted but you have to spend on capex and wages. this summer both have disappointed. so the recent impasse, the question is does it apply investment trust but have you reached a point of returns and is there some sort of fiscal move, et cetera? >> is it a short-term call? it's one more leg of liquidity. >> if you went back three or four years and asked anybody who appeared in this show would the return in equity in japan challenge the return in equity in the emerging markets, i don't think anybody would say that was possible. focussing on returns and focussing on shareholder returns and that's a major culture shift. once they get going they can run for years and that is very very supportive. >> great stuff. pleasure having you on the show. economist and strategist at intex can economics. >> meanwhile the slow down in china seemingly is not impacting germany. exports climbed 2.4% while imports were up 2.2%. both were far ahead of expectatio expectations. that widens the trade surplus to 22.8 billion euros. the highest since 1991. ear

they're going to sharply reduce the capex from 23 to 24 billion euros this year. it will shrink from between 20 and 21 billion next year and the 17 to $19 billion in 2017 and that's to compare with $28 million in 2013 and total remains confident in production. the output would grow by 5% per year on average between 2014 and 2019 after that date it will grow by 2% per year. the announcement was made this morning. meanwhile, the company is facing an inquiry in the united states. the u.s. energy regulatory commission says that total put in place a scheme to manipulate market prices between 2009 and 2012 at least at 38 locations. they are expected to have made some large economic trades in order to move the market price which would benefit to the company total said it fully cooperated with investigators. >> moving on, the ceo has told nbc he will lower the price of a pill at the center of a drug fire storl. hillary clinton sparked a sell off when she accused the sector of price fixing. it came to direct response to the fact that they raised the price of its drug from

>> yeah, well at $50 we're talking about 25% of our capex working or a quarter working at $50 but asthe price code, we see the cost code. we see people comfortable at $65, $70 per barrel range. >> james webb, wood mackenzie. really interesting report we appreciate you staying on late and joining us. up next, more on yesterday aeg big drugstory. plus the best banking mets to make right now. we'll talk about bank of america, goldman sachs and more. again, we're all over this market selloff. the dow is off its lows. still down 246 points. you're watching cnbc, first in business worldwide. stick around. >>> the company raised price of a drug used to treat infections of $13.50 a pill to $750 much here's what he had to say whether that drug price would be cut. >> doctors are come out saying that you guys need to revise the pricing strategy. patients can't get access to the drugs. they're trying to hoard it in order to provide it. do you feel badly about what is happening? >> no, we're increasing access to patients. i think that we're dra mat beingly increasing it and lower co-pays and givi

if you couple that with the fact that there are large capex cuts across the oil community, you see thekets starting to tighten up pretty quickly as you of into the second quarter 2016. all of this relies on the strength of the u.s. dollar. we also have this fed rate rise that could be happening in the next couple months. of course, the question of global growth. wayne: i guess there are a lot of moving parts at this stage. but we still think the growth will be modestly good in 2016. yes, it has been pared back little bit, but we still have a general, modest growth picture for the world in 2016. scenario is hike pending. we at ubs think they will raise rates in december. the u.s. consumer, generally speaking momentum in the u.s. economy, is doing pretty well. that is fairly buoyant for oil prices into next year. however, that's not to say we won't see further weakness in the third quarter, largely around the fact that we still have an oversupplied market. prices are still going to be fairly volatile as we go through the back end of this year. certainly next year, things are starting to

>> yeah, you know,ation bruise to capex interesting to see repercussions, going to stimulate economytocks, i love this man, looking at expression on as if he said happiness, just hit in i couldn't stays fills -- with joy. >> expecting the point about the expecting a million people at that mass on sunday, philadelphia, crowds today memorabilia -- nervous as new york 6,000, that are on the streets. >> thursday, friday. >> driving -- obviously isn't driving the car in this car, he is notorious, for walking the streets, visiting the poor, taking care of the every day person, the italians absolutely love him even though a nonitalian. >> take care of those in need, and live modestly. >> his parents italian? no? >> south american. >> he is i think -- >> they went -- >> okay. >> i am showing that right now. -- everybody. >> dplooen prices down what does that mean for oil in general we will have answers next stay with us fox business network "mornings with maria". we'll be right back. welcome back oil higher from yesterday's losses on fierce of slowing demand, for energy, of course, we have p

that the ea restated and said we peaked in april but you're starting to hear from all the cfos where capex are sticking in. what do you do? and you have to trade this. and you're trading this stuff and you're dancing near the door but buy best of breed. anadarko, break of 72, that means you get back above that, then it's safe to buy. that's a key level for that stock. hess, marathon. these are the keys. don't stray too far from quality. >> and nobody says you've got to be in oil stocks at all. any of the oil stocks. what would you do? i mean, would you choose to be in oil? >> i think the schlumberger headline last week or so really got a lot of people to start saying is the company that i am short in, is that going to be the next one to be taken out? so i think that's starting a lot of buying in the process. i think if you want to buy stocks maybe emps, eog, that's a good quality name for you. other than that i do think oil as a commodity goes lower. >> still ahead hunting for cheap stocks in the dow. it's a tough job but somebody's got to do it. we've got the list of five dow stocks that

we know the capex story. what is the next pressure?: the integrated company still have strong balance sheets. we think protecting the dividend will be there priority in the near term. they will use balance sheets to do that but it will not force any drastic action. but as you start to get down the market cap, the ability to recapitalize is becoming more difficult. bank loan redetermination's come up in october. raonic's g or, you start to see distrust that could lead to an m&a cycle -- i think by early next year you could --rt to see emanate m&a. at a low levelre medium term. you probably continue to see high volatility. we are moving into refinery maintenance. youre demand goes down, will see testing of low levels over the course of september and early october. i do think we will get a recovery in 22016. we will see prices average above $70 in 2017. francine: thank you so much. we have some live pictures from the president of the european parliament. he's addressing the crisis in brussels with the migrants. we saw some horrific. pictu

capex coming down. do we think that is going to be continuing? probably not. we do not like forecasting me price, but will you get an impact next year? probably not. manus: that is what the fed is going to do. they have to look through those numbers. lucy: yeah. so, will they put everything on whatever the number is see? -- the number is today? no. it could push some people one way or the other. if it's really out of line of expectations, but it should not be. manus: september or december, still 2015? lucy: 2015. it is 50-50 between september and december. some think they want to go now, earlier. manus: get it done now. lucy: make a start even if it is one and done. manus: get the noise over with so we can enjoy thanksgiving. tell me this. china's slowing down. we've had a couple of days off from minutia of volatility. that's what it feels like. talk to me about america's relationship to china. it is barely 1% of gdp. expand into emerging markets, it is a more contagious issue. how does it fit into your perspective as a cio? lucy: how much does it affect their

they talked to people they say on the capex side.been stubborn on the way down but starting to happen. miners tend to be selling assets at the bottom. copper may be the most imbalanced of the major commodities right now. you are getting back to a place where there is sanity. >> labor day passed, the peak driving season passed. any time they had a summer like they just had, the fall's been difficult for them. >> without a doubt. i do think, to be honest, there is too much focus on has crude bottomed, is crude the tale to tell us where other risk assets are going? i think you can have some comfort that it's somewhere in the zone of trying to find the low and it's probably a net positive until we get there on the consumption side. >> the dow transports. this is an area of the market that peaked last december. true to form, it became a bit of a tell. we went through that sharp correction a couple of weeks over the last couple of weeks. it starts to get a bid now. does that also -- how much more does that rally have to extend before there

from 1994 until 2014, caterpillar revenues are 93% correlated to mining capex.ce that is expected to be down 10% compounded from 2014 to 2017, i think caterpillar fell revenues have or downside from here. we do not think they cut enough. ford's spoke with president of the u.s., and he says the f1 50 or super duty sales have been negatively industry.y the oil how exposed is caterpillar to the oil industry? ,ordon: it has resources energy, and transport, and right now resources and energy, and transport are weak. but the issue is construction. durable goods came out in the u.s. today. the architectural industry came out yesterday, very negative. i think construction is rolling over and that is what people will be seeing the negative surprise on the company. pimm: shares of caterpillar trading at $65 a share. what is your price target for the stock? is $28.our price target i know that sounds for coney and. but caterpillar's management agrees with us. -- i know that sounds draconian. there is a significant downside. futurethink there is pain and head for these guys,

like in energy, a capex that's not going to get better.s, this is a mature part of the cycle. ism manufacturing looking good, now what? i can't get much higher. maria: keith mccollough, your report card. >> if you take a look at what michael showed here and pro sickle that happen at the end of the cycle. high highly-- what i would characterize is the rate of change as well. we can put a grade on something, i think that mike said this, too, i don't care about whether things are good or bad, but where it's going. we have been bullish on housing, for example, the data has been nothing short of fantastic. when it goes from great to good, you want to get out of the stock. dagen: grade the direction of those four, do it. >> give you back to the top of the list, the top of mike's list. dagen: jobs, housing, manufacturing and services. >> and the u.s. labor market and services, again, they-- that's what you got. it is for back to school like i say to my little kids at home, you get what you get. you don't get upset. we're never going to have an a-

doesn't it, when you shut down as many of these rigs that have been shut down and when you put a lot of capexrojects on hold. at some point we see a small amount of demand since the price of oil a rocketing higher? >> i think we will. and i think the issue right now is how quickly will supply drop in the u.s. because i think by the end of this year or beginning of next year, we'll be about a half million barrels down from the peak, which we saw earlier this year. and if we also see some kind of coordinated effort among opec countries where there is discussion going on, and maybe the saudies just sort of back off without any big formal announcement, back off their high level of production, not specifically to drop it, but just let it, i think we could see early next year, the beginning of resurgence in the oil price which could give some confidence, but only if the demand growth returns. you've got iranian oil and demand growth should soak that up. in addition, new car sales that are fading a bit in china, which is not a good sign for domestic growth. so, there's just a lot going on out there.