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tv   Worldwide Exchange  CNBC  February 3, 2016 5:00am-6:01am EST

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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.
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good morning. welcome to "worldwide exchange" here on cnbc. i'm sara eisen. >> i'm dominic chu sitting in for wilfred frost today. a flood of corporate news this morning, including that mega deal for syngenta. >> plus, shares of chipotle are getting hit hard. it's now a subject of a broader criminal investigation. we'll have the full story in a few moments. boy, did that stock collapse over the course of the conference call yesterday. >> absolutely. you can see those shares down about 5% in the pre-market trade. first, let's check on what's happening with the global markets this morning. u.s. equity futures, like you said, pointing to a modestly higher open. the s&p up by maybe just about two points. the dow jones futures indicating an 18-point open. and the nasdaq, we'll call it flat right now. so again, modest, modest gains to start, at least for the time being. we'll see if that changes throughout the course of the hour. also checking on oil prices.
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they're continuing to be a focus for a lot of traders right now. currently wti crude, u.s. based crude benchmark, up just about 1.5%, $30.36 a barrel. ice brent crude futures, $33.22, up by 1.5% as well. natural gas there down by about half a percent. so again, overall energy very much a part of the story. late yesterday, the american petroleum institute reported another larger than expected build in supply. so worth watching today. that was the trade association. now we get the u.s. government's official oil data at 10:30 a.m. eastern time. >> it was wild to see the last two days in the u.s. oil trade. down 6% and down another 5%. the dow finished down 290 points. >> and it was up huge to end last week. this roller coaster ride. >> we'll see if it was just a technical bounce. we'll see if the strength today can continue into that data. major asian markets did selloff overnight following in the footsteps of the u.s. one piece of news to share.
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that was data coming out of china, showing the services index climbed to a six-month high in january. that's a noticeable difference from what we're seeing in china's manufacturing sector, which has been struggling. japan's nikkei got slammed. the country's finance ministry announcing it will stop a floating rate ten-year japanese government bond designated for retail investors. yields have dropped sharply after the bank of japan last week dropped them into negative territory for the first time, pulling the sale of bonds is interesting, i guess, because it's a gauge of investor demand. why would investors want to have to pay to lend the japanese government money. >> or at least just a commentary on whether or not you want to see what the landscape is like and what investors will do with the appetite given the kind of interest rates we have. >> i have to say, it is concerning people that the central bank stimulus, whether it's draghi speaking in soothing words, very dovish, indicating he might ease further in march,
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or the bank of japan going into this unprecedented step is waning. we got a two-day punch out of it with a weaker yen. that's reversing. equities are reversing and selling off. the question is, do central banks still have the power? >> it really is about fire power. it worked a lot in the beginning. as you keep on going, the marginal benefit seeming to be decreasing. certainly going to be a huge topic for a lot of folks out there as well. >> let's show you what's happening in the early action in european trade. we have seen a little resilience off earlier lows. the german dax down about 1.4%. italy's ftse mib has been bearing the brunt of the selling. european banks have become a major focus for investors. we're going to delve deeper into this. the likes of deutsche bank and ubs have been hit very hard. >> banks all over the board doing some real, real damage to the markets here. now, breaking deal news this morning.
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chemchina striking a deal to buy rival syngenta for $43 billion. chinese state-backed group has offered $465 for each syngenta share. that's in cash. plus, a special dividend. this would be the biggest chinese takeover of a european company to date. syngenta shares trading higher in europe right now. you can see they're up by about 5%. still below the implied takeover price. later on, we're going to go to basel, switzerland, and hear from the swiss firm's chairman. >> china has 1.4 billion people, 20% of the world population. they're trying to feed them. that's what this deal is about. other corporate news to share with you this morning. yahoo! earnings matching wall street estimates, but yahoo! says it will finally consider strategic alternatives for its core internet business. the company also announcing plans to cut about 15% of its work force. shares this morning are down further on the news. joining ounce t ining us on the,
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chief investment officer at tigress financial partners. now that they're considering strategic alternatives, who might step in to be a buyer? >> well, the most speculated talk is verizon. then second would be a couple of private equity firms, including bain and tpg. >> so ivan, this is interesting here because the narrative on yahoo! has been so negative for so long at this point. is there anything -- did you hear anything from the call yesterday from the comments in their prepared statement from their financials that indicates they could be able to turn this thing around? >> i think the whole process they're talking about, a reverse spin of their core business s almost an admission of defeat. their core business being search and advertising and e-mail. their two biggest competitors, facebook and google, are doing phenomenally well. yet, yahoo! has been unable to
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capitalize for the past four, five years on their strength of the yahoo! brand, of their own search, of the platforms they have. so now the focus from the beginning of marissa mayer has been the value of alibaba. now they did the ipo. they're now not able to spin off the balance to unlock the value, so they're talking about selling the core yahoo! search and e-mail businesses that are supposedly worth about 8 billion. yet, they're not realizing any value of it. it's just saying that they now want to sell it because they can't realize any value on it. >> so how as an investor do you value yahoo! right now, especially with alibaba shares tumbling over the last few months? >> this is why we've been neutral on the stock for so long. it's been hard to find any key growth drivers or business performance drivers. the growth and profitability is declining. the value keeps declining.
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the quality, the sustainability of the company is in decline. they have to do something. it would be to turn around the core business. if they want to now sell the core business, it's almost an admission of defeat that they cannot turn this around. >> so we know, vooi van, that the narrative have been negative for a long time. can we balance this out a little bit? is there anything they can do that would make your turn more positive or slightly more positive on the prospects for yahoo! going forward? >> well, i think the focus should have been what marissa mayer's most important skill set was from the beginning. she came from google. her focus at google was user experien experience. she didn't focus on that at yahoo!. she basically focused on financial engineering, on first the alibaba spin-off that has not happened now or will not happen because they will not be able to spin off the rest of the shares on a tax-free exchange, which means -- >> but ivan, what about mavens? i think the company would argue with that.
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>> well, the mobile, search, paid advertising, it has had some growth, but it's so small. they're talking about $8 billion for the value of the core business but only about $400 million and change for revenue from that group. it's very small. >> all right. we'll see if a buyer steps up. it is interesting to see the shares under pressure, even though they're pursuing this path. down 1.5% in the early action. ivan, thanks for jumping on the phone this early. >> yahoo! not the only stock to watch today. chipotle also reporting a decline in quarterly sales for the first time as a public company as a string of food born illnesses contributed to a 44% drop in fourth quarter profits. earnings beat estimates, but revenues fell 7%. that missed analyst's forecasts. chipotle was served with a subpoena last week, widening the scope of a federal probe into
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this e. coli outbreak. so still very much in focus for a lot of regulators and law enforcement. gilead's fourth quarter results strong. u.s. growth for the company slowed down. the company is projecting 2016 sales in line with analyst estimates. also boosting its dividend by 10%. it also announced a buyback program. and 3m also on the dividend side of thing, upping its quarterly dividend to $1.11 per share. the board authorized its own buyback. 3m sayings it will hold on to its health information systems unit, which provides software to health care companies for coding and performance tracking. last year 3m said it was exploring options for that particular business. >> a few more stocks to watch here. the wall street journal reporting that starboard value has taken a nearly 7% stake in marvel technology. that position will be disclosed
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later today. it adds to pressure on the chip maker, which is facing probes into its accounting practices. shares down 44% in the last year. a mixed set of results for lenovo. fourth quarter beating forecasts, but that was shy of estimates. the hong kong based company weighed down by that continued slump in its pc business. but its mobile division, which is driving profits, managed to narrow its losses thanks to job cuts and inventory write down. the financial times reporting microsoft is buying swift key. it's a london based keyboard app for about $250 million. swift key is a predictive keyboard that uses artificial intelligence and is installed on more than 300 million ios and android devices already. the company's co-founders will each make upwards of $30 million for the buyout. i didn't even know there was such a thing as artificial intelligence keyboard. >> just swipe across your keys and it tells you what words you're going to put in. anyway, after the most hiring in a year to end 2015, we're going to get the first look at hiring
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in 2016. that's january adp employment data report today. thatment cos out ahead of the big jobs number friday. landon dowdy with more on the jobs topic. big news on jobs all over the place this week. >> that's right. good morning. economists aren't expecting the huge gains we had in december to show up in today's adp report and friday's nonfarm payrolls number. forecasts call for the economy to add 190,000 private payrolls in january. on friday, look for the u.s. to add 185,000 new jobs in january, following a whopping 292,000 in the previous month. the unemployment rate is expected to hold steady at 5%. average hourly wages to rise 0.3%. analysts saying we should expect hiring to continue in business services and health care. on the flip side, manufacturing continues to struggle. we can certainly expect to shed jobs at firms hurt by the collapse of oil and commodities
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prices. a good report but nothing to write home about. >> we'll see what happens later. landon, thank you. when we come back, it could be the largest takeover by a chinese firm ever. we're going to hear from syngenta's chairman on chemchina's $43 billion offer for his company. but first, we want to hear from you. our twitter question this morning, so far this year financials have been the worst performers. they're down 12%. >> even worse than energy. >> which is down 8%. which do you hate more? banks, energy companies, or neither. tweet us @cnbcwex or @saraeisen. we'll bring you those poll answers when we come back. it's hard to find time to keep up on my shows.
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and welcome back to "worldwide exchange." if you're just waking up or you're just joining us, let's get you up to speed on what's happening with u.s. futures right now. we're setting up to be at least stable, i guess. if you look at dow jones futures, down marginally, just about three or four points. a relatively flat open implied to start here. s&p futures, again only up by one point. nasdaq futures down fractionally, eight points. of course, sara, all of that happening in the context of red action, negative price action in europe and asia as well. back over to you. >> thankingssthanks, dom. deal news is the talk of day. chemchina agreeing to buy syngenta for $43 billion. julia chatterley joining us from
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basel where she just caught up with the chairman. >> reporter: good morning, sara. thank you so much. as you quite rightly pointed out earlier, this could be the biggest takeover by a chinese company over a european one. the question is, is this an effective chinese nationalization of syngenta? when i spoke to the ceo, he was pretty unequivocal, absolutely not. listen in. >> absolutely not a chinese nationalization. again, chemchina has a fantastic track record with board companies outside of china, investing in them and keeping the culture and values in place. i'm absolutely convinced the same will happen here. >> reporter: so he said they're going to keep four seats on a ten-member board. they're going to have effective veto power. what about anti-trust issues? he said, look, this is not going to be a problem. we're not expecting to have to divest of anymore assets. and what about the big one, the u.s.? this is the biggest supplier of
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pesticides to the u.s. he said we're not going to have an issue with foreign security either. it's not going to be a problem. i think that's the one to watch. i think the big question, given the size of this deal, and remember it's an all-cash offer, is it going to be enough to prevent further people coming back, monsanto the example, bidding for syngenta. the chairman wouldn't give a comment on it, but i get the sense they think this deal is big enough. it's expected to close by the end of this year. guys, back to you. >> julia, thank you. i did want to take a moment to ask you about european banks. i know you were just at ubs headquarters yesterday. whenever the discussion right now comes down to why the banks are most hated, and we're getting a lot of answers on our twitter questions that they are right now, it comes back to europe and worries about the european banks. what is going on? what's at the heart of those concerns? >> reporter: we've had a number of issues as regards the european banks. just a couple weeks ago,
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concerns about the italian banking sector and the nonperforming loans there. we're a couple of years behind the u.s. banks in terms of raising capital. so there's still issues in terms of regulation, capital raising for these banks. and of course what we've heard from the likes of ubs is a paralysis of client activity, which is what the ubs ceo told me yesterday, and they're being hit on all sides. the trading conditions are hitting the european banks hard. we're going to continue to see that. a number of elements i think playing in here, sara. ye >> yeah, a lot of people watching that. julia, thank you. >> all right. let's turn from financials to technology. it seems just about everyone on earth has a mobile phone. the actual numbers, they aren't that far off. with rapid adoption of devices, surging demand for content, a new report out from cisco is forecasting there will be 5.5
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billion users by the year 2020. that's 70% of the world's projected population. joining us now with more from the findings from cisco's an july visioning index. this is interesting, thomas. as we talk about what the future is for mobile computing, everyone knew it was going to be big, but just how big is it going to get and how much are we going to crave only that type of content? >> it's really interesting, dom. i think the growth, as you said, is phenomenal. we're actually going to see eight full growth of traffic. but one of the key takeaways or surprises for us was really the pervasiveness of mobile technology. as you mentioned, 70% of the world's population will use mobile technology. actually, more people will have mobile phones by 2020 than actually have electricity in their homes or bank accounts or cars. so it's a pervasive technology. one of the key drivers that we've seen is really the growth and adoption of 4g.
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it's moved a lot faster than we thought it would. and it's driving a lot of new bhafrs over the mobile network in general. >> i'm curious, thomas, about the runway for growth and the specific question about apple. a lot of people are worried that apple has peaked when it comes to selling smartphones all over the globe. do these results offer any insights into the answer to that question? >> well, you know, today, surprisingly, we in north america are really very familiar with smartphones, but there's still a lot of growth. basic feature hand sets are still the number one device type globally, but by 2020, smartphones and phablets will really take the lead. when you look at emerging markets within asia and africa, there's still room to grow. really, the fastest connection type is going to be those machine to connections, the internet of things or the digitization of transformation is going to be the fastest growing area. >> thomas, thought leadership involves thinking about the future of security as well.
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if we have that many mobile devices, the cybersecurity profile, the way that we approach it, may have to change. how is security, cybersecurity going to adopt at least this mobile, mobile world and how is it going to change given the fact that computing is going to happen more on those tablets, phablets, and phones? >> the intelligence within the network is really key. i think you hit the nail on the head, dom, as we have more and more things. by 2020, there will be nearly 12 billion global connections. so authenticating and authorizing those connections and keeping everyone's data and content and profile secure is key. a couple of innovations. one, the addressing scheme that we have. so ipv-6 going global is key. and the future in terms of 5g networks provide a whole new series of security and maintaining our integrity of the data. again, that's years away, but
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there are companies like cisco and many of our competitors that are focusing on mobile security. a lots of that is really because these are now state-funded attacks, cyber crimes. so we need to combat that with similarly heavy protections on the network as well. >> it seems like years off, thomas, but we all know it can come on quickly. >> it comes very quickly. >> thomas barnett, thank you so much for joining us. >> sharing those industry numbers with us first. thanks to cisco. when we come back, big news from the super bowl, and it has little to do with the game, which means i'm particularly interested. first, today's weather forecast from the weather channel's jen carfagno. >> we made it halfway through the week. we got a big weather day to get through. big old front that stretches all the way from canada right back down into the southeast. ahead of it could be thunderstorms, possible severe weather. yesterday in mississippi and alabama, there were a handful of very strong and large tornadoes. that caused significant damage. concern today about damaging
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winds with storms in the south. plus, rain that goes up into the northeast. on top of the snow pack from winter storm jonas. so that's going to mean flood concerns. flood watches up for that. northwest, another system coming on in. in the middle, we've got cold air filtering in behind our system. not crazy cold. not record-breaking cold. actually, just getting back to average for a lot of folks. ahead of it, still very mild. temperatures up to nearly 60 in new york city. that's the latest with your coast-to-coast forecast. i'm jen carfagno. yeah, so? it stinks in here. you've got to wash this whole room are you kidding? wash it? let's wash it with febreze. for all the things you can't wash, use... ...febreze fabric refresher whoa hey mrs. webber inhales hey, it smells nice in here and try pluggable febreze... continuously eliminate odors for... ...up to 45 days of freshness pluggable febreze and fabric refresher... ...[inhale + exhale mnemonic]... ...two more to breathe happy
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welcome back to "worldwide exchang exchange". we're just five days away from the spectacle that is the super bowl. the nfl announcing lady gaga will sing the national anthem. gaga is having a great 2016 so far. she won a golden globe for her performance on "american horror story" and she's set to perform a david bowie tribute at the grammys later this month. i want to know, what will she be wearing? >> i don't know. may not be raw meat. maybe cooked this time. >> she's toned it down, as we have been discussing. >> i think tony bebt has had a soothing effect on her. >> i would like to see her come out during the halftime show with coldlplay. >> i don't know. we'll see what happens. everyone is also making super bowl predictions, including members of the animal kingdom. yes, this happens. this is ozzie the grizzly bear who lives in montana. he chose between two cakes, one with the panthers logo, and one with the broncos.
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he's going with denver. but the last time ozzie picked the broncos, they got blown out by the seahawks in super bowl xlviii. we'll see what happens on that front. the b the broncos hoping for a better showing. >> this is about as random as me picking. >> remember when the octopus was picking the world cup games? >> yes. i'm choosing carolina because i like cam newton's outfits this week. >> i don't know. i'm trying to figure out the spread. anyway, we're also watching pga golfer stewart sink. this is the halftime of the duke, georgia tech basketball game. he sunk this 94-foot putt on hardwood, which is the entire length of the court. his shot one a student a $25,000 scholarship. a nice feel-good sorry. there are a lot of imperfections in the wood. that's a lot of ground to cover. he made that shot. >> i don't get it. is he golfing?
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>> he's golfing on a basketball court. he's doing this at halftime. he made a shot the entire length -- that's a small golf ball into a very small hole. did it the entire length of the court. then won a grad student $25,000 in scholarships. it's a good story. >> can you do that? >> i can't. anyway, coming up, this morning's top stories, including that $43 billion deal. yahoo!'s turnaround plans and chipotle's criminal probe. plus later on, goldman sachs ceo lloyd blankfein in his first interview since his cancer diagnosis and treatment. blankfein joins "squawk box" to talk about the recent market turmoil, his outlook for the economy, and of course his fight with cancer. that's at 8:00 a.m. eastern time. you won't want to miss it. we'll be back in a couple minutes. oh remotes, you've had it tough.
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show me funny movies. watch discovery. record this. voila. remotes, come out from the cushions, you are back. the x1 voice remote is here. good morning. another day, another volatile trading session. asian stocks down sharply. yoo europe opening in the red. >> and happening right now, chipotle shares under pressure. the mexican chain now subject to a broader criminal investigation into its recent food safety scandal. >> and an amazon bookstore seem too good to be true? think again. it's wednesday, february 3rd, 2016. you're watching "worldwide exchange" on cnbc. good morning. welcome back to "worldwide exchange" here on cnbc. i'm sara eisen.
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>> and i'm dominic chu. among the stories front and center today, chemchina striking a deal to buy rival syngenta for $43 billion. also, yahoo! says it will consider strategic alternatives for its core internet business as well. the company also announcing plans to cut about 15% of its overall work force. don't miss ceo marissa mayer live at 9:00 a.m. this morning. a huge interview after the earnings report coming out. now let's get a check on u.s. equity futures. at least a fractionally higher open. s&p futures implying perhaps a 3% open higher. dow jones by about 27 points. the nasdaq up by about one point overall. again, an interesting move overall for the markets. finding at least some stability
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in today's trade. >> after another brutal session where the s&p dropped back into correction territory, which means down 10% from the high. energy and financials got slammed the hardest. serious questions about what that's telling us about the economy. on that note, today's market agenda, we are inching toward the monthly jobs report on friday. there's an economic report today that could provide clues of what we will see in the new nonfarm payrolls data. we've got the january adp employment report. that's private sector. 8:15 eastern. employers are forecast to have added 183,000 private sector jobs last month. much less, by the way, than the 257,000 that we saw in december. then at 10:00 a.m., we'll get the january ism services index report. and we're at halfway point on earnings season. look for numbers today from comcast, the parent company of cnbc, general motors, and merck. after the bell, go pro, yum brands, and more. >> very consumer oriented. right up your alley, i would suspect.
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>> as everyone tries to get a sense of what the consumer in this country is doing after 0.7% growth in the last three months of last year. >> and if they're spending those gas savings on anything. >> true. >> we're also watching what's happening with the ipo drought. it's come to an end. two biotech firms priced the first initial public offerings of the 2016 year here in the u.s. this all, of course, as market volatility put a lid on the ipo market for over a month. these two offerings could push other firms to move forward with raising their own cash in the ipo market as well. >> we've got auto news to tell you about. toyota recalling 320,000 vehicles because of a safety issue, specifically trucks and suvs like the tundra, 4-runner, lexus, and a few others are impacted. this as their roof-mounted air bags can inflate without a crash.
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u.s. senators are calling for a much broader recall of defective takata air bags, according to "the new york times" today. cars that may contain dangerous air bags are still on the road. the most recent plea for action follows updates to the circumstances of a death back in 2006. that driver died as a result of the takata air bag ten years ago, and the part wasn't recalled until last month. what's taking so long? a total of ten deaths and over 100 injuries have been linked to this defect. >> stocks to watch today, sara. ica interactive swings to a fourth quarter loss as it booked more than $100 million in charges, adjusted profits missed analyst forecasts, while revenues rose just 2%. iac's results weighed down by a 28% drop in revenue from its and city grid websites. you can see those shares moving lower. match group reporting its first quarterly results since the owner of dating sites such as tinder and was spun off by iac in november.
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net income falling 26% in the fourth quarter. adjusted earnings beat forecast, but revenued missed. match blaming that on a drop in sales at its nondating sites, which include the princeton review and on the education side. shares falling below their $12 ipo price. you can see there in extended hours trading. and lvmh soaring today in europe after the luxury goods maker reported strong results on tuesday. fourth quarter revenues rising 12% as the company shows signs of resilience amid the weak global economy and after the terrorist attacks in paris. the ceo says traffic at its stores in france, which account for about 10% of total sales, are almost back to normal, and all of this for lvmh despite the fact china is slowing down. they say sales in the u.s. and europe helped offset that china weakness. >> some good news for here. chipotle shares are going to be big movers today. tumbling this morning as the burrito chain struggles to wrap up the food safety issues that started in october last year.
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executives had warned of a messy earnings quarter in the fourth quarter. that cleanup is worse than wall street expected. landon dowdy joins us with more. >> that's right. chipotle beating fourth quarter earnings expectations, but shares tumbling in after hours amid the news that the company is now the subject of a broader criminal investigation following its food safety scandal. the burrito chain posting earnings of $2.17 a share, topping estimates, but revenue came in below consensus at $998 million, marking its first quarterly sales decline ever as a public company. the ceo steve ells calling q-4 the most challenging period in the burrito chain's history. the criminal probe was originally limited to california. now it's a national investigation. still, analysts are optimistic they can rebuild traffic and restore sales. take a listen. >> if that happens, i think you pay the 2017 numbers, you're talking about a p.e. much more reasonable. that said, you're going to have to have some patience.
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this is going to be a bumpy ride. >> shares tumbling in after hours and down nearly 40% in the past six months. >> those 36% sales decline for january also spooked investors. landon, thank you. a look now at this morning's top-trending stories. amazon planning to open as many as 400 brick and mortar stores. the online retail giant opened its first bookstore in november in seattle. amazon said that it stocks it using location and data from its website and it's plowing forward and going to open hundreds more. >> i can only imagine what's going to happen with an amazon bookstore on my corner. i guess it replaces barnes & noble. borders and everything else. >> it will be interesting to see whether they can revive the whole idea of brick and mortar bookstores, which they helped to kill off. >> everyone seems to read them on ipads and everything else now. we're also watching what's happening with mark zuckerberg. he became the world's fourth
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richest person on tuesday. the 31-year-old facebook founder had a $50 billion fortune, valuing him above carlos slim and amazon's jeff bezos. facebook is up almost 10% this year, despite some trouble in global markets. you can see there the facebook outperformance making mark zuckerberg an even wealthier guy. >> he's having a good year in the stock market. d.c. lawmakers voted unanimously tuesday to approve a bill that would pay residents not to commit crimes. city officials would identify up to 200 people a year who are at risk of committing violent crimes. those people will be directed to behavioral therapy programs if they stay out of trouble. advocates say the spending pales in comparison to the cost of incarceration and could be worth it. what do you think? >> could be interesting. >> i guess there's a test case
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in richmond, virginia, where it has worked. >> outside of the box thinking. you've heard of mortgage-backed bonds. what about cheese-backed bonds? an italian dairy cooperative has sold about $6.5 million in mini bonds guaranteed by, yes, wheels of parmesan cheese. the chaompany's chairman says ty will use the money to improve facilities and improve the thick-rinded cheese made in northern italy. >> would you buy their bonds? i think this is speaking to an issue in the european banking system. normally small businesses can take out loans from the banks. because the banks are struggling, it's been hard to get kred. >> we'll see what the appetite is like for cheese bonds. >> good one. >> i know. >> take a quick look at this video. 14-month-old snowboarding for the first time. sloan henderson has her own
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youtube channel if you want to check out her progress, i guess. >> i can't do it. i've tried snowboarding twice. it didn't work for me. i'm more of a skier. >> when withe come back, your te of the day. and why concerns about the zika virus here in the u.s. may with overblown. and don't miss our exclusive interview with irene rosenfeld, ceo of momdelez. >> big interview. >> stay tuned. we'll be right back on wor "worldwide exchange." whole communities are living on mars and solar satellites provide earth with unlimited clean power. in less than a century, boeing took the world from seaplanes to space planes, across the universe and beyond. and if you thought that was amazing, you just wait. ♪
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welcome back to "worldwide exchange." an update on the zika virus. the first known case of zika transmission in the united states was reported in texas. the centers for disease control say the virus was contracted through sex and not through a mosquito bite. this comes just one day after the world health organization declared zika an international public health emergency. and that brings us to this morning's must-read in "usa today." the editorial board writing, quote, zika's dos and don'ts, our view. it's an effort to tame the fears surrounding this outbreak. they say the world health organization's language that the virus is spreading explosively in the americas and that the level of alarm is extremely high served to frighten more than illuminate the w.h.o., which initially slumbered while the deadly ebola virus was gaining a
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foothold in africa might be overcompensating for its bumbling performance in 2014 that cost lives. it's just more about the idea that you shouldn't panic, sara, and that this is obviously a very serious situation, but that education can serve to calm fears more than enflaming them by making that kind of rhetoric. >> good to keep in mind. my pick today is in the "financial times." "what a u.s. election year means for global investors." just something to keep in mind as we march through primary season. there's little evidence to suggest the president's party has any consistent statistically significant impact on the market. he also busts this myth that markets don't usually do better under divided government because usually nothing gets done. he shade barack obama has shown he can make actions of his own, even with a divided government. so that's not necessarily the case.
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>> some people think gridlock is good for the markets. anyway, we're coming to the top of the hour. that means joe, becky, and andrew are getting ready for "squawk box." joe joins us now here with a look at what's ahead on the show. i got to say, this is a great day for interviews overall, joe. but lloyd blankfein coming up at 8:00 a.m. on your show. it's going to be huge, right? >> you're doing it alphabetically. larry fink is on too. and bill miller is on for two hours. lloyd will be on at 8:00. it's a time where you just look around and things just don't look right. there's something rotten in denmark. like 186 on the ten-year after the fed has raised rates. that's weird. again, 300 points down yesterday. earnings aren't great, but $30 oil, so many bizarre things. is it some type of canary in a coal mine? these are three guys that can
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probably either allay some fears or give us the reason that maybe we should be a little bit worried. japan today, hideous. all bets are off on any type of market recovery we see. we get back to a resistance level. so to have these three guys on, you know, i'm sure they won't all have the same opinions, but blankfein is probably one of the greatest risk managers we've seen. bill miller, one of the best long-term records on the street. and then larry fink, the biggest money manager on the planet. still a young guy to build a company like that based on really his knowledge and all financial markets, but really interest rates and mortgage securities. yeah, i would watch. >> yes, we'll be watching. >> that's a lot. >> banks were the worst performers and have been this whole year. "squawk box" coming up at the top of the hour. coming up here, $90 billion of advice.
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that's how much money henderson global investors manages. we'll hear from their head of global equities on what to do next.
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welcome back to "worldwide exchange." let's get you caught up on what u.s. equity futures are doing right now. joining us with his read, you can see there a flat open, matthew beesley, the head of global equities at henderson global investors. they manage about $90 billion overall. he's got a nice view of how a lot of people want to put their money. matthew, as we talk about the volatility globally, where are you seeing the most volatility and action that's creating some kind of an opportunity possibly down the line? >> asian emerging markets and by extension japan have been caught up in the maelstrom of this
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negative feedback loop that appears to be building across equity markets globally. we've been very exposed towards those mark markets for a while. if you're looking for opportunity over the next year or so, that's certainly going to be where we as a team are going to be refocusing our efforts, given how beat up valuations are and how negative other investor perceptions are towards these markets increasingly. >> i sort of like how joe just put it. something's not right. specifically in the u.s. equity markets where banks are down double digits for the year. a lot of these health care companies, which are actually posting earnings growth, are getting hit. how does it feel to you? is the market trying to signal something that we're not seeing about the global economy or the u.s. economy? >> i think that's exactly right. i think the markets are leading economics. go back a month or so, relatively decent across most geographies, china perhaps the
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exception. but markets are now driving economic decisions and will have an impact on the corporate world. you're seeing chief executives reigning back investment spending, worrying about top lines. the cycle continues. we're increasingly worried that markets are driving economics. yes, some things are not right. some of that smacks to positioning of investors. right now investors seem to be very overinvested in health care, including going into an election year in the u.s. that's a concern for many. but what's going on in the banking system globally, not just in u.s. banks, is very worrying indeed. it smacks of lower interest rates for longer. and potentially in some geographies, a credit cycle, which is the last thing financial services companies need right now. >> our twitter question of the day is about which sector people hated the most. was it going to be financials, energy, or something else? the results are pretty evenly
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split right now. so where are you seeing the most pain for the rest of 2016? >> we look across the investor surveys, and it's very clear people are the most underweight in the energy and materials complex. it's interesting to see how those stocks start to behave on a more medium-term basis. if you get a sharp move up in that sector, i think there will be lots of investor pain, lots of short investors looking to cover those shorts and to lock in what have been substantial gains. financials, i think, is a new area of concern for many investors, which is why you've seen that sector perform so badly. but in aggregate, it speaks of a market that's very underweight and disbelieving in value and very focused on growth and focused on growth because there's so little growth around the world. so perhaps as we look forward the rest of the year, the biggest pain will come in value sectors, materials, energy, and
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financials. >> so matthew, is the strategy to load up on the so-called f.a.n.g. stocks? we did get word from facebook and google that things are growing nicely. >> certainly where we struggle is towards the valuation being paid for lots of u.s. companies. we do find in general, u.s. valuations are still pricing in more growth in the broader sense. so for us, the strategy is to look outside the u.s., to look towards europe, and perhaps increasingly as valuations start to look more attractive, also look towards asia. a part of the world that's been much ignore eignored. >> so it sounds like opportunities are still out there if you want to look for them. matthew, thank you so much for joining us here. that's matthew beesley, head of global equities at henderson global investors. >> before we say good-bye here on "worldwide exchange," we want
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to highlight what we will be watching today. what are you watching? >> i'm watching after the closing bell earnings here in the u.s. for yum brands, specifically because it's such a lens on what's happening with china. they get the bulk of their business there. yum brands has not exactly been a star performer. we'll see if the china numbers and the consumer there can kind of prop them up. >> as they plan to spin off their china business. i'll be watching yahoo! shares after the company did report earnings, but the big headline is it's finally exploring strategic alternatives. it's laying off some of the workers, 15% of its work force. we'll see if any buyers step up or if any buyers of the stock step up. we asked you on twitter today, which do you hate more, banks, energy companies, and neither? banks are the worst performers of the year. interestingly, look how much the sentiment has turned. 35% of you say they hate banks more. 30%, energy. 35%, neither. keep voting.
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thanks for the results. we've got hundreds of answers. that does it for us here on "worldwide exchange." "squawk box" is next. opportunities aren't always obvious. sometimes they just drop in. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances. four score and seven years ago, our [train horn blares]th-- ... to the continent... [claps] ... a new nation. announcer: don't wait until presidents day to get a better night's sleep. during sleep train's presidents day sale save up to $300 on beautyrest and posturepedic, get three years interest-free financing on tempur-pedic, plus same-day delivery, and sleep train's love your mattress guarantee.
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good morning. we're back on a global market alert. stocks selling off in asia overnight, especially in japan. u.s. equity futures pointing to a flat open after a big loss yesterday. and again the big driver, oil prices, which were up just a little bit. yahoo! under pressure. the company considering strategic alternatives, cutting about 15% of its work force, as ceo marissa mayer deals with intense criticism. and shares of chipotle getting
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slammed as the mexican chain reveals it's now the subject of an even broader criminal investigation into its recent food safety scandal. it's wednesday, february 3rd, 2016. we didn't have that groundhog day problem that bill murray had. it is tomorrow today. and "squawk box" begins right now. live from new york, where business never sleeps, this is "squawk box." >> good morning, everybody. welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. we're off to the worst start to the market in years, but we have a big lineup to help us tackle this volatility. coming up at 6:30, larry fink is here. at 7:00 a.m. eastern time, legendary investor and


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