tv Street Signs CNBC February 3, 2016 4:00am-5:01am EST
good morning, everybody. welcome. you're now watching "street signs." i'm louisa bojesen. >> and i'm nancy hulgrave. these are your headlines. >> ground for syngenta investors. the stock rallies after china makes an amicable 43 billion offer. the chairman telling cnbc it's the right deal for investors. >> we have managed to put together a transaction that satisfies all stakeholders. it's a great value for current shareholders. it's not a transaction about cost energy. it's about growth, innovation,
about long-term vision. investors also bagging lvmh as the french luxury giant more than recovers from the aftermath of the paris attacks with strength in europe, japan, and the u.s., all offsetting weakness in china. the ceo of abb telling this program on cnbc that he's still bullish on china despite falling demand in the key markets weighing on the swiss industrial group's fourth quarter profits. >> china is changing. we see a tremendous change from an investment driven economy to a consumption driven economy. that means we are readjusting our efforts across the portfolio. bank interest, shares and retail open higher in their london debut, defying the market turmoil. we'll speak first to the company's ceo david duffy in just 15 minutes' time.
good morning, everybody. good morning, nancy. how are you? >> very well. >> it's hump day. middle of the week. we have big deals taking place. always a good thing. china announcing a 43 billion offer for syngenta. it is a big deal. great emphasis has been placed on maintaining syngenta's independence. existing management say they're going to continue to run the company. the combined board of ten people is also going to be including four syngenta members as well. now, flag benefits include a focus on the swiss company's expansion into emerging markets, especially looking at china. so it all goes back to china again. >> that's right, louisa. i think the emerging market
focus, the china element being crucial here. we're also getting more details of exactly what this will look like and exactly who kem china is. state-owned company ranked at number 265 in 2015. syngenta's last market value just before the announcement was around 36 billion swiss. the swiss firm will not be moving to the beijing headquarters. instead, its head office is to remail in ba zil. let's get to julia chatterley. she's been speaking to the chairman of the company. we've seen shares pop on this deal. investors are cheering the final announcement. what's your take? >> reporter: well, the chairman was saying this is very positive, as you guys are pointing out. it's not about cost energies, it's about growth potential. this is about untapping or unlocking the chinese markets. 1.4 billion people going forward. so while the market itself and
the industry is struggling at the moment with low commodity prices, this is about unlocking innovation growth in the future, i think. i think the key issue we have to focus on is the anti-trust, what the u.s. regulators in particular are going to say. the foreign security committee that stepped in on the phillips deal. so you have to look at all these different aspects. i picked up on this point with the chairman and said, will you have to divest of any assets, and do you think you'll have trouble with anti-trust issues. listen in. >> the only key asset. syngenta is much more based on innovation. we don't really see any complications from an anti-trust perspective. >> so you're saying, look, the anti-trust regulators aren't going to be a problem, but what about the politics here? what we've seen just in recent weeks from the u.s. is that security concerns, they vetoed
the deal for phillips. they're going to look at this surely and go, hang on a second, we have food security issues here. >> yeah, yeah. food security is not a security aspect. when you talk about securing food supplies, making sure people around the planet will have enough to eat in the future. >> you could say that about l.e.d.s. they vetoed that deal. >> it's difficult. i think in our case, we've looked at it. first of all, i want to say it's not compulsory to submit an application, but we will because we think it's the right governance to do that. we will work together with chemchina. we don't see major security concerns around this because it is around food. i would even say the standalone strategy with a different owner will give a choice to the
farmers. they'll have more than one source to go to. i think that's the best component of a security you can think of. >> reporter: just to give you some context there from the u.s. overall 28% of their sales out to the u.s., but they're also the largest provider of pesticides in the u.s. they also sell corn and soybean seeds there as well. i think that's going to be an interesting question, more interesting than the anti-trust questions. most analysts say this will be the easiest from a regulatory point of view. another aspect was post closing. syngenta will have four seats on the ten-member board. the chairman said to me, look, we're still going to be syngenta. we're going to have veto power of all the major decisions that take place here. this is something that's been questioned by a number of the shareholders. is this an effective chinese nationalization of syngenta? listen to what he had to say. >> absolutely not a chinese nationalization. again, china is a fantastic
track record not only with board companies outside of china but also kept investing them, developing them, and keeping cultures and values in place. i'm convinced the same will happen here. >> reporter: so firm denial from the chairman there saying again that syngenta will remain syngenta. to go back to the point about not having necessarily cost synergies between these companies, he's saying it's about the growth. i think that's also an important aspect for jobs. just in the last half an hour, plenty of swiss journalists arrived outside. i think that's going to be one of the questions they're going to be asking the chairman, saying, look, this is not going to be about job losses. back to you. >> julia, thank you very much for that. great interviews there. julia chatterley joining us live out of switzerland. let's show you what's taking place here in europe. we were called lower because it's down to a lot of the data
and inventory data we're seeing in oil. we saw a big boost to inventories yesterday state side. we then saw this big drop once again happening on the back of that, both in the price of oil as well as in the underlying equities out there as well. the u.s. pretty dire session. asia seeing a lot of red. here in europe, we were called lower this morning. we're hanging on to slight losses. flat to a little lower right now. let's glance at some of those main european markets out there. you can see here, we're down by a couple of points for many of these main markets. keeping in mind with an eye to the u.s., you have the manufacturing pmi expected once again to show a little bit of a drop. you've got a whole bunch of earnings still out. there's enough news to really sink our teeth into this week. now, that's what we're seeing here in europe. of course, i just mentioned the asian markets, nancy. >> that's right, louisa. you mentioned the data we're
waiting for out of the u.s. also more data coming out of china this morning. that's china's unofficial services pmi hitting a six-month high as its economy shifts the focus away from manufacturing. meanwhile, the nikkei closed down 3%. let's get out to sri, who's been following the moves in singapore. great to see you. it appears when we look at the nikkei here, a bit of that post negative interest rate euphoria dying down somewhat. >> that's right. that kuroda pot is fading fast. we see the bulk of the selling in the asian indices concentrated in north asia. the nikkei down by 3.2% we'll call it at the settlement. a number of negative drags here. the earnings haven't been too good. the brokerages and steel makers were among the decliners. banks are still under pressure as well. we saw broadly risk aversion permeating the asian markets, so we saw some inflows into the
relative safety of the japanese yen. stronger yen puts pressure on the exports and broader market as well. soothing words from mr. kuroda today. reiteration that he'll do everything it takes to get to that 2% inflation mark. the market shrugging that one off. he talked about the services sector at six-month highs from the forecast. the market shrugging that off as well. oil down, so that's hitting some of the index heavy weights. but the blue chip csi shanghai composite coming off the worst levels of the day. the theme still seems to be underlying sentiment remaining fragile, and oil is at the center of the negative feedback loop out here in asia. back to you now. >> sri, thank you very much. now, where are the opportunities in markets like this? we're going to see a similar month to january, or is february going to be completely
different? the ceo and cio at lig capital joins us. we're very pleased to see you. where do you see opportunities in the market at the moment? >> in listening to people on the show, it seems like everything is dire. china is going to crash, there's no growth in europe. i think this might be the year of the asset picker rather than the year of the market. don't say which market is going up, say which assets are going to do well or have not done well. things we think are going to do well relative to others are you're nineteen investment grade companies. the dispersion, which is the spread between high yield and investment grade is at all-time. why? a lot of companies are losing their ratings. what we're thinking is commodity prices low, china hard landing or slowing down bodes badly for investment grade companies. they turn into what's called fallen angels.
they're unique opportunities because they overshoot to the downside. everyone sells them. then everyone says, hold on a second, this is a multibillion dollar company, it has cash flows, diversified sources of income. then they look at it again and say, if i gave you an example, triple b, what do you think you'd earn in yield? give me a rough number? have a guess. >> i mean, you tell us. >> normally, you know, 1%, 2%, 3% in the states. >> i would have said two to three. >> high yield, what do you think you should get? single b high yield. >> is there five on the table? >> yeah, five, six, seven, depending how distressed the company is. what if i told you the two examples i'm giving you today are giving you 11%. >> we can't tease viewers like this and not show them the chart. so mittal? >> steel prices down, laying
people off. capacity is too large. not a bad company. we did the analysis. given the current capital structure, meaning how much debt they have, leverages high but not that high. however, i caveat this. if prices stay loan, same with the second one, things will get worse. these companies will have to restructure their debt. however, we think that happens in five years. let's look at the graph here. this is the graph of yield. this is how much you're paid to hold. i took a two-year bond. what we think you buy is two-year investment grade debt in mittal and glencore. >> you mentioned if prices go lower from here. a lot of people saying that if could come true. >> yes. >> in this case, does this investment position no longer hold? >> i'll walk you through glencore. we said, okay, they've got different divisions doing
different things. if prices go lower and we said, okay, let's say prices go 10% lower. if they sell the division they're going to, the agribusiness, even if that happens, we think their leverage goes to eight times. that's not investment grade. in 2.4 years that company will run out of cash the way it is now. if prices stay where they are or go slightly lower. if you buy two-year debt, you're going to get paid. rather than predict the outcome far in the future, take advantage of the dislocation in the markets and buy shorter term paper in companies that have the ability to sustain, you know, markets over time. >> and this is presumably a much better strategy than trying to call in the equity space. >> if i had to be a hedge fund manager, which we are, i'd be short the equity, long the debt. if commodity prices go lower, the equity is going to reflect that right away, and it has
done. >> so you're saying glencore and mittal debt up to two years you like. then i see casino. i hate all bonds. >> you mentioned emerging markets. emerging markets are not only a mess, but they're uncertain. the trajectory of brazil, what's going on in oil producers, commodity prices, we don't know. they've consolidated all the companies for their minority holders, and that's a big no-no. you start to say, they've consolidated revenue, but they don't own 100% of the company, or 50%. we're starting to not like what we see. be short that the debt and that equity. >> great to sea ye you this morning. thank you for your thoughts.
we've got an active bunch of people out there. everybody is awake. e-mail the show. email@example.com. we're also on twitter. @streetsignscnbc or @nancycnbc and @louisa bojesen as well. meanwhile, still plenty coming up. shares are speeding into the red overnight for the red carmaker ferrari as the company puts a brake on guidance. we cross to claudio for the latest. and we'll be speaking first to the company's ceo david duffy in just a few minutes. plus, a possible strategic options under review in a raft of job cuts fails to impress investors in yahoo!. marissa mayer will join us state side. another one not to miss.
well, shares in clydesdale bank rose more than 2.5%. clydesdale ipoed on the lower end of its initial stated range. the glasgow based lender completes a split from national australia bank officially with this ipo. joining us now is ceo of clydesdale banking group. david, pleasure to have you with us following the ipo. a positive result initially. we got this 2% pop. that's good news for you. nevertheless, shares priced at the lower end of the national range. there was a lot of speculation that in this turbulent time for markets, the ipo would be shelled altogether. why are you so confident the timing is right now?
>> i'm very confident the timing is right because effectively we looked at this as a strategic position where this would become an independent bank, the largest charger in the marketplace in the u.k. yes, the markets are volatile, and hence we put out a wide range, but we're very comfortable at coming in at any price within that range. and that's what happened. >> and you mentioned taking on this position as an independent challenger bank now in the u.k. what does that look like, and what's your plan to take on the competition? you have the likes of one of your top competitors, metro bank. how do you plan to stay competitive against them? >> i think you're looking at the smaller banks to try and build a business. we have 3 million customers, 175 years of history. we're the only bank with business and retail customers across the geography we're in, in all products and services. a lot of the challenger banks that are small are looking to be like a clydesdale in the future. we're already there. so it's a question of running the bank a lot better than it's been run in the past. >> david, good morning.
it's louisa. so you were founded in glasgow in 1838, clydesdale bank. you're owned by n.a.b. since 1987. also by midland bank as well. n.a.b.'s chairman is quoted as saying that clydesdale bank has been a significant factor in shareholder returns not being at the level they would have wanted, nor competitive with their peers. where does it leave you? again, some people would argue that it's a troubled unit. so how do you start out running a troubled unit? >> well, i think that's very historical, the perspective because troubled is what it was when it was under n.a.b.'s ow r ownership. getting it out, it's become one of the best capitalized, best funded banks. so it's in one of the strongest financial positions with one of the best franchises in the country. so the point is, it had to be restored to full financial
robust health and position in the marketplace for n.a.b. to be able to sell it. we have a global shareholder base, incredibly strong list of names. they have bought into the strategic intent we have. i think that speaks to the fact this is a no longer troubled but successful franchise with a clear strategy. >> how strong is your loan book at the moment? >> i'm sorry? >> how strong is your loan book at the moment? >> how strong is it? >> yeah, how does your loan book look? >> it looks really, really solid. it has a very low risk level, an all-time low in terms of the risk calculation associated with the assets. it has been cleaned up as part of this restructuring of the bank. so it's a very high-quality loan book. >> and just one question on the delay. you had a 24-hour delay for the ipo. we understand that a ratings agency had requested some information. are you concerned there's still a risk of a ratings downgrade on the stock now? >> no, and that request had nothing to do with our credit rating. all three rating agencies are guiding us to investment grade.
this was a small piece of our funding related to a particular vehicle. the reason for delaying information noting in to do with the bank's credit rating. it's that i would like to be transparent with shareholders. until i was sure what the case was, i didn't want to launch the ipo. i wanted to give all the shareholders time to understand this and full discussion before proceeding. >> okay. thank you. that's david duffy, ceo of clydesdale bank. meanwhile, bbba enjoyed a rise in fourth quarter profit. net interest income, however, fell to $4.8 billion. off some 1.2%. >> abb's net profit has slumped by 70% in the fourth quarter despite the group saying that it saw increased profitability in challenging markets. now, the group missed expectations with a fourth quarter net profit of $204 million, which was below a dow jones forecast of around $225 million. speaking on "squawk box" earlier, the ceo said abb was
adjusting to china's new consumption-driven economy. >> china is changing. we see a tremendous change from an investigationmement-driven e. that means we're readjusting our efforts across the portfolio. there's still a lot of growth opportunity out there. >> meanwhile, novo nordisk shares revising its profit target. they will now target growth of around 10% a year. that's down from the 15% set in 1996. the announcement came as novo nordisk reported a prize in profits in 2015 slightly below expectations. off around 4% there. also looking at lvmh shares. they've defied expectations with a 12% rise in fourth quarter revenue as resilience in europe, japan, and the u.s. helped offset weakness in china. the ceo of the world's biggest luxury group says customer
traffic in france was almost back to normal following the paris attacks, which had led to a 50% drop in sales. he also added he was more optimistic about the outlook for household spending in china. this will come as good news. we've seen a lot of brokers, analysts warning on the impact china will have. >> someone not defying expectations is ferrari. shares there recovering after a steep fall overnight. the carmaker put the brakes on its guidance as fourth quarter results met expectations in its first report as a standalone company. claudio joins us from milan. they met expectations, but they're looking at sales rising, what, 3% this year? >> yes, it's a 2.9% rise they're expecting for 2016, which is one of the reasons probably why the share was hit so hard yesterday in trade, along with some concerns about what is going to happen in china.
china sales did slip by 10%. the shipments over to that area. so the concern is to whether they're forecasting chinese demand appropriately for 2016. as far as their dividend is concerned, they came in at 46 cents per share, which is in the lower part of the range. the question also, of course, is production going forward? you know how they want to keep the numbers of cars they produce at a limit. so the question is, will they be able to maintain that luxury appeal that they have had so far. so it is the first time that they have spoken or come out with numbers on a standalone basis. so the market was a little bit cautious and weary about what is going on of course in the broader market. so that's probably what affected the stock. in italy, the stock is down since the beginning of the year when it began trade on the 4th of january by over 40%. and in new york it has lost a third of its value since listing in the fall. though as far as shipments are
expected to increase by -- well, did increase by 6% for the full year 2015. so once again, the numbers are strong. they are very confident 2016 will be a very good year. >> claudia, good to see you this morning. thank you very much. sticking with the auto sector, the u.s. january auto sales were mixed for europe's largest automakers. vw saw a significant decrease in its u.s. sales in the wake of emissions rigging scandal, while fiat chrysler fared better, posting a 7% increase. >> well, still coming up on "street signs," we haven't stopped talking about iowa just yet, and it's not the best way to do democracy. as the u.s. spotlight now shifts to new hampshire, we'll find out what still has bernie sanders ste steaming, right after this short break.
welcome to "street signs," everyone. i'm nancy hulgrave. >> i'm louisa bojesen. these are your headlines this morning. >> fertile ground for syngenta investors. the firm rallies to the top after a $43 billion offer. the chairman tells cnbc it's the right deal for investors. >> we have managed to put together a transaction that, in fact, satisfies all stakeholders. it's a great value for current shareholders. it's not a transaction about cost synergy. it's a transaction about growth, about innovation, about long-term vision. >> now, investors also bagging lvmh as they recover after the
paris attacks. and the ceo of abb tells "squawk box" he's still bullish on china despite falling demand in the key market, weighing on the swiss industrial group's fourth quarter profits. >> china is changing. we see a tremendous change from an investment driven economy to a consumption driven economy. that also means we're readjusting our efforts across the portfolio. there's still a lot of growth opportunity out there. we are tapping that actively. >> and yahoo! plans to cut 15% of its work force and explore, quote, strategic alternatives for its core internet business. it's part of an overhaul aimed at appeasing disgruntled shareholders. ceo marissa mayer will be speaking to cnbc later on today. this has been expected quite some time, that we could be looking at a change from within
yahoo!. >> that's right. finally have marissa mayer coming out and giving her defense after a lot of pressure that shareholders. she has a plan to cut back on jobs, close some units. they say about 400 million in savings here. still, investors not really buying it when you look at the reaction. >> but it all goes back to that shareholder value question. some are saying she's had long enough to try to turn the company around without divesting these units. >> sure. shares down more than 30% over a year. anyway, so many earnings still to talk about. let's give you a look at how u.s. futures are set to open. it was a disappointing day on wall street yesterday with the major indices closing off more than 1%. the dow jones called higher by just about 65 points. s&p 500 called higher by 11 points. nasdaq moving up in the green as well. rather modest calls to the upside. they will, of course, be taking into consideration the moves we've seen in asia and europe.
this is the picture we have in europe at the moment. red arrows across the board. once again, investors keeping an eye to the downward movement in oil prices. we'll get into that in a little bit. as you can see, the ftse 100 off about 0.5%. germany's main market off about 0.8%. the french cac 40 off about 0.4%. >> thank you very much, nancy. we're just getting flashes through. let me pull them up. on ford. we were just talking about the auto sector a second ago. ford essentially saying that they're planning to reduce jobs. they're planning to cut low-profit auto models in europe as well. they're targeting 6% to 8% long-term operating margins for europe. the ford europe chief expects hundreds of workers to leave the company. they're going to be using a voluntary redundancy program to trim their white-collar work force. they're saying basically they're going to be cutting jobs to
achieve a $200 million cost savings figure per year. so that news on ford europe just coming through. the oil price -- i mean, we were having this discussion on "squawk" earlier about what does it actually feed through to become something good for consumers, like all you drives out there, and when is it something bad. >> absolutely automakers have been benefitting for quite some time, especially because it's driving suv demand. when you talk to trying to shift to more fuel-efficient cars, they don't have the demand there because of lower fuel prices. i know that ford is really keen on picking up their suv production in europe. i'm sure that's part of the plan as they talk about a turnaround here in europe. mean while on that oil price discussion, let's give you a check on exactly where wti and brent are trading.
again, played a huge factor in the equities market yesterday. equities taking a downward trend on the moves in oil. now we're getting a rebound here. brent rebound up about 1%. wti higher by about 1.5%. as mentioned, energy was the worst-performing sector in the u.s. session yesterday. s&p has cut its rating on ten u.s. oil and gas companies now. exxonmobil is now on negative watch, while chevron has been downgraded by one notch. the rating agency cited the continued decline, no surprise here, in crude prices as the darkening outlook for exploration and production firms. now, nigeria is seeking $3.5 billion from the world bank and the africa development bank to plug a shortfall in its 2016 budget. the request for emergency loans comes in the wake of the prolonged dive in crude prices. $2.5 billion of that $3 billion total has been requested from the world bank with approval subject top endorsement by the
imf. julia caught up with the nigerian vice president in davos. she asked him about opec's importance. >> we're not saying that opec is irrelevant or anything. but there's a general atmosphere of fair out there, and everyone seems to be rushing their own particular interests. >> well, joining us to talk more about nigeria is the senior vice president at taneo intelligence. welcome back. good to see you. the 3.5 billion requested now, many are categorizing it as emergency loans. yet, the finance minister, she hangs on to her line that it's not emergency loans, it's just the best way of financing nigeria's needs. >> well, i mean, here we're talking about sort of how do you color a fairly bad story. we do know that the nigerian government's fiscal resources have been hit as a result of the oil price drop. but is this actually a surprise? not really. they made it quite clear as far
back as december that they were going to borrow close to $9.4 billion in total, a combination of domestic borrowing and foreign borrowing, and they were going to mix multilateral loans and also europe bond issuances. so this is just the first step to what could be even more borrowing. actually, what will be more borrowing. >> we're looking at the range of 3%. >> debt to gdp is roughly to be about 14%, assuming they borrow at 9.4 billion. i suspect we'll will looking at borrowing far higher than those levels actually. >> and loans we're talking about right now coming from institutional development banks come with pretty strict standards for reform, obligations. what appetite does the administration have to carry out these reforms? >> this is going to be a real test i think for the government. they've made the point when they came to office to say, we're going to tackle corruption. and part of that also means better fiscal management. so for them to actually go for
multilateral loans that will come with those heavy conditions, i think they're trying to kigal to markets, we are ready to make those commitments. once they eventually go to issue a bond on international capital markets, they're hoping that by getting the imf's approval and world bank's approval, they can say to markets, actually, we are ready to take the tough decisions we need to take. >> and to what extent are resources being deployed to diversify away from the oil industry? we know we could be seeing oil prices at this level for quite some time. so it's not just a matter of riding through the storm. it's a matter of looking toward the future and developing other industries. >> well, i mean, the issue about diversification is very hard to actually see when it's happening, right, because it's such a long-term process. i think one of the things that the government has signaled this year, which obviously lots of investors will be looking at whether they do, is massive investments in infrastructure, which has been a huge problem for people investing in nigeria. power infrastructure is a huge problem. obviously we're waiting to see
how much money actually goes into projects in those areas. >> and the president, his government has only been in place like eight months. is he going to be able to push through what would be, you know, the biggest budget ever in terms of all the spending that we're looking at for infrastructure projects. i think that happens this month as well. >> you know, they are clearly optimistic they're going to get the budget approved this year. the president in nigeria suggests we will be lucky if we get a budget approved by march. maybe -- i mean, for me, i would say april before we get the approval. i think approval will come through. >> and it's not just the economic challenges that the new administration has their hands filled with. it's this horrific threat they face from boko haram. is this going to weigh at all on the government's ability, their popularity in the country , ther mandate to govern if they can't tackle this crisis? >> i think a lot of nigerians see a major improvement from the
security perspective. if you even look at the numbers, the number of fatalities associated with boko haram attacks has gone down dramatically. the problem is nigeria remains quite vulnerable because neighboring countries, the number of attacks and fatalities are going up. actually, another risk security that no one seems to be paying attention to is down south. we're starting to see a sort of -- what looks like a resurgence of militancy in the niger delta. there's obviously a bit of secessionist threat. that's obviously one thing to watch going forward i think from a security perspective. >> okay. and just before we go, do you think we get a currency devaluation? >> i think we are not going to get a currency devaluation any time soon. >> okay. thank you for joining us. senior vice president at taneo intelligence. >> the irish prime minister is
seeking a disillusion of parliament and calling a general election. that's happening right now. no more details on that. it's broadly speculated that's coming up at some point in the very near future. we'll keep you abreast of more news out of ireland as it happens. >> all right. as we talk elections, we can't ignore what's happening in the u.s. while that battle is now moving on to new hampshire, u.s. democratic front runner hillary clinton has taken her 0.3% victory over bernie sanders now to the granite state, saying, quote, i'm a progressive who likes to get things done. meanwhile, sanders says his campaign will take a closer look at some of the iowa results. he told reporters, quote, it may be the case that some delegates were selected based on the flip of a coin. not the best way to do democracy, he says. >> well, edward lawrence from nbc news joins us with the very latest on the campaign excitement. edward, so much excitement just closing out of iowa, but already the focus on new hampshire. what can we expect in that race?
>> reporter: louisa and nancy, it seems like the intensity has just been turned up a notch. it's really fun to watch. both sides, republicans and democratic front runners, are trying to make new hampshire count. they're fighting for new hampshire. it's one of the smallest states in the nation, yet it's now the center of the national political world, so to speak. many republicans see a kink or a break in donald trump's armor. he finished second in iowa to senator ted cruz. coming in a close third, very close third actually, almost beating donald trump, was senator marco rubio. for that reason, they believe that trump is beatable now. donald trump told voters yesterday that he is the reason there was massive voter turnout, record voter turnout in iowa. he calls that a win for himself. senator cruz actually won, political experts say, because of his ground game in iowa. cruz says he has that same
organization on the ground in both new hampshire and in south carolina, the next two primaries that are coming up. meanwhile on the democratic side, senator bernie sanders has a moral victory. from that moral victory in iowa, he was able to get $3 million in donations in the last 24 hours. 40% of that money came from new donors. obviously hillary clinton got the toss-up win there. it was actually literally a toss-up with a coin flip for some of the delegates there as they split with the majority going to hillary clinton. there's now a double-digit lead for sanders in new hampshire. clinton decided she was going to bypass new hampshire, go on to the next primaries in south carolina and nevada to try and focus on those races. this week, though, she decided to stay in new hampshire and close the double-digit gap there with senator sanders. nancy, louisa, back to you. >> edward, thank you very much. edward lawrence from nbc news. a 0.3% difference. >> unbelievable.
>> it's a funny thing, our democracy. if you have 50.1% of the vote in one camp, 51.49, we say it was democracy. >> this is democracy at work. the caucus format. down to a coin toss. >> i was reading interesting thing from american indians about how we see democracy. but that's how we traditionally see democracy. listen, how would you like a private jet for economy prices? sounds nice maybe. well, one lucky lady in china got just that as she flew home for the new year holiday with all passengers having swapped to an earlier flight because of a blizzard. she found herself as the only passenger on the plane. the 126 pound ticket left her feeling like, quote, a rock star. i have to say if you're the only passenger on a plane in a blizzard, i'm not sure. >> that's a good way to upgrade
to premium. >> not sure how secure i feel. i want to hold somebody's hand. >> have to hold the pilot's hand, i suppose. >> no, i need him to fly. >> meanwhile, one of our favorite topics on this show. a nice chunk of cheese. >> the cheese again. >> we won't go there. >> less than a week ago we were talking cheese. >> more cheese in the news. this time an italian dairy cooperative has sold bonds backed by none other than parmesan. the cheese maker raised 6 million euros in mini bonds guaranteed by the wheels of hard cheese, which it says it will use to improve its facilities and promote its products. the bonds will pay a fixed yield of 5% each year until they mature in january 2022. >> i love parmesan. like, the real fresh stuff. >> it's the best. we've got to get louie back on. high yield? let us know. >> now, declining foot fall in unoccupied stores is perhaps
welcome back to "street signs." let's bring you up to speed with the top stories this morning. the first known case of zika virus transmission in the united states has been reported in texas. local health officials say the virus was likely sexually transmitted, not by a mosquito bite. this comes just a day after the world health organization declared international public health emergency around zika. meanwhile, north korea's neighbors have criticized the communist state after tf announced plans to launch a satellite rocket, a move that would breach a key u.n.
resolution. japan has placed its military on alert, while south korea is warning the north will pay a harsh price if it goes ahead with the satellite launch. and european council president has unveiled a draft deal to keep britain in the eu. the proposal paves the way for the u.k.'s brexit referendum to take place as early as june. u.k. prime minister david cameron said the draft delivered, quote, a substantial change. and the fbi says it is joining a criminal investigation of lead contaminated drinking water in flint, michigan. according to a bureau spokeswoman, the agency is working to determine whether federal laws were broken. now in tech news, something completely different, yahoo! shares falling more than 1% in extended trade after the company announced a range of measures to cut costs and reduce its business. this happening as shareholders voice disappointment in the revamped plans. josh lipton has more on the story. >> the fundamentals of yahoo!
for many investors have now taken a backseat to the strategic options that ceo marissa mayer now has. she's really laid out two broad paths. one is she wants a yahoo! that gets smaller and leaner and meaner. on the conference call with analysts she talked about closing offices around the world and eliminating a significant part of the work force, about 15%. she's also continuing to pursue those faster growing area, mobile, video, native, and social. in 2015, about 1.6 billion in revenue could be attributed to that. she's also giving a nod to exploring thing strategic alternatives. that's what some investors want to see. some don't believe marissa mayer can turn around this company. they want an outright sale. names of potential suitors include verizon and at&t. i should mention we reached out to those companies. they declined to comment. one question is why would anyone want to buy yahoo!?
remember, for all the challenges, this is a company that still does touch a lot of people collectively. about 200 million unique visitors to yahoo! properties in december alone, according to com score. analysts already asking, exploring strategic alternatives sounds broad. what exactly does that mean? does that mean a real active sales process? does it mean opening your books to suitors? a lot of questions from investors and a lot of skepticism from investors. yahoo! stock already down more than 30% over the past 12 months. for cnbc, i'm josh lipton in san francisco. >> well, banks cutting their price targets on yahoo! stock this morning. the yahoo! ceo marissa mayer will be joining cnbc state side at 15:05 cte. >> who are the buyers you're speaking to? i doubt she'll give anything away there.
meanwhile, microsoft has announced they're buying u.k.-based keyboard app swift key as the u.s. tech giant seeks to boost its mobile and artificial intelligence platforms. now this one. i love it. they say everything is moving online. is it though really? a surprise move. amazon could be going against the grain by opening as many as 400 physical bookstores on the streets. according to a mall operator first reported in "the wall street journal." amazon hasn't commented on this, important to say, but back in november, the e-commerce giant opened their first bricks and mortar store in their hometown of seattle. basically, they take all the bookstores out of business. you know, barnes & noble. they all disappeared. now they're taking over that
space. >> it's brilliant model where they have to hold all the inventory in the store. we've been seeing this with other retail products as well. >> i like where you can click and look inside the book. i want to see what the book looks like inside before you buy it. >> read the first chapter. not just judging a book by its cover. >> i'd love to see more bookstores. >> maybe they'll merge with some of the old rare bookstores. we'll have to see. meanwhile, you have heard of the f.a.n.g. stocks, but what about toothless tech? go pro shares are down to around $10 from that high of $98 they hit in 2014. twitter shares fell another 10% in session yesterday and are down nearly 55% since jack dorsey returned as ceo just in july. >> u.s. marks sold off throughout yesterday's trade with the s&p 500 and nasdaq, dow, all down by more than 1.5%, as seen here. the dow's worst day in more than two weeks, incidentally. our next guest is saying the
recent volatility is no reason to stop loss yourself out of the market. tim courtney is the cio at exential wealth advisers. you say stay away for top loss investing. i would have thought this was the perfect environment. >> i think what we find the problem is with stop-loss investing is that we have so many of these tiemt periods when you have pullbacks, and rarely do the pullbacks go on to become a full-fledged bear market. in the u.s. if we go back and look over the last five years, we've had 20 times in which the market has had a 5% decline or more. you know, if you have stop losses on your portfolios, you're constantly going out of the market. on average, about once a quarter. only rarely did these 5% pullbacks go on to become something larger, 10%, 15%
pullbacks. never in the last five years have they gone to 20% pullbacks. in many cases, you're stopping out of the market. as the market recovers, you're out of the market. then you've got to get back in. the math really works against you, trying to time it out. on the back end, you have to have both of those times right. most people just can't do that. >> you mentioned u.p.s. as one of your stock picks. in a slowing growth environment, are we really still looking at companies that are in delivery services like u.p.s.? >> yes. you know, i think u.p.s. over the last year has had record earnings. they did just this last year deliver to, i believe, 1.5 million new addresses. with the growth of online sales, u.p.s.'s earnings have gone up along with that. they have had some logistical issues in years prior.
in 2013 and '14 they were having difficulty delivering these packages because of the volumes. but the logistics over the last couple years have gotten better. the earnings are very good. if you're going to buy individual companies in this market, you should probably buy companies of higher quality. we believe they are with the earnings and volumes they're able to handle now. >> and tim, what are your views on financials as a broad sector? we have now seen financials become the worst performing sector so far this year. some concerns over their exposure to the energy space. do you think these fears are overdone? >> yeah, we do. financials a couple years ago, six years ago, they were one of the biggest components of the s&p 500. now, you know, they're just a shell of their former weight there in the overall market. the banks overall in the united states are healthy. one thing that came out of the qe is the banks got healthier. we do think there are certain areas of the financial sector
that do have some exposure to some of the lower quality debt, but for the most part, they're healthy, and we think at these prices, it's an attractive area. >> tim, we've got to go. thank you very much. tim courtney live out of oklahoma city. stay tuned to cnbc. our colleagues in the states will be speaking to the goldman sachs ceo lloyd blankfein. thank you for all of your e-mails. we've been reading them with great interest. don saying it's way too early to get back into the banks. >> we'll be asking lloyd blankfein exactly what is dragging that goldman stock so much lower yesterday. >> bye for now. fantastic having you with us. see you tomorrow.
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good morning. global markets on high alert. stocks selling off in asia overnight, but u.s. futures are pointing to a higher open here at home. will it last? big driver is oil prices. >> and breaking deal news. chemchina offers to buy syngenta. under pressure, yahoo! considering strategic alternatives for its core internet business, cutting about 15% of its work force. this as ceo marissa mayer deals with intense criticism from investors. it's wednesday, february 3rd, 2016. "worldwide exchange" begins right now.