Transcripts For CNBC Squawk Box 20240714 : vimarsana.com

Transcripts For CNBC Squawk Box 20240714

Thatdominated yesterdays action, that along with chinas currency move. Overnight Chinas Central Bank setting the yuan mid point firmer than many expected. That happened at 9 00. We saw a turnaround in u. S. Equity futures which were down overnight as much as 600 points at the lows. Right now a positive open across the board. S p looking to be up by 11 points dow jones up by 102. The nasdaq looking to recoup 44 points as for u. S. Treasury yields, we saw a 2016 low also. We had the tenyear note at 1. 758 overnight we breached that 1. 7 level. A key level here. We have cnbc reporters everywhere this morning covering the Market Reaction to this escalating trade war willem marx is in london well get to him in a moment, but across the world to china. Eunice yoon is on the ground in beijing. Reporter china strongly opposes being labeled a currency manipulator. The central bank, which manages a floating currentry cy exchang rate called the move unilateral protectionist behavior that violates International Rules it also says china doesnt mean the three criteria for the label. Secretary mnuchin said he will have conversations with the imf as part of the process to eliminate the unfair competitive advantage of chinas actions the central bank addressed that saying the imf believes the Yuan Exchange Rate is in line with fundamentals so the evidence from chinas perspective is in beijings favor. I spoke with a source who consulting with the Negotiations Team in china he said at the end of the day the chinese want to have a trade deal. And that we should expect the rhetoric to be firm and strong but that the action will probably be moderate for example, he actually brought up the decision yesterday and the announcement that china was going to suspend the purchases of american Agricultural Products he said the word suspend was used very carefullybecause it seen as a way to message the u. S. That there is still room to maneuver for a solution. Even though china doesnt want to be labeled a currency manipulator and it could be seen as an escalation of the tensions between the two sides, he said it is not necessarily if the u. S. Were to come to the negotiating table from the chinese perspective, and come up with some other solution eunice, it looks like overnight the pboc took some actions that made it seem like it was in their interest to stabilize yuan trading, right . By suspending the sale of yuan denominated bills in hong kong that was the signal and message that people were taking. You were talking about it, too the central bank set the midpoint as well it was at the lowest rate weve seen in 11 years, but still set stronger than the psychologically important 7 mark so people were seeing this as a way for the government to say we will stick by our word, which is to maintain a stable currency. Okay. Eunice, thank you for that well come back to you in a bit. We have to get over to willem marx in london hes looking at the market moves taking place as a result of all of this in europe. Yesterday we saw the worst day on european equities since that brexit referendum quite some time ago. We saw the ftse 100 down more than 2. 5 . Its coming back today we have the german, french and italian markets back in the green. The french have seen much better manufacturing numbers and pmis over the last few months that is trading strongly today we look at the individual sectors behind the numbers, its worth looking at oil and gas its slightly below the flat line we saw that reaction yesterday in oil and gas prices. Clearly some stocks exposed to that feeling the heat this morning. Media, this is a strong performer in europe. Thats primarily being driven by one big french firm. I want to bring in some top movers on the stocks front vivendi is up 6. 5 that has to do with an interesting deal in this context, the idea that tencent will take a 10 stake in vivendis universal music group. Amid this tension between the u. S. And china, theres one Chinese Company looking at a big stake in europe. One of the worst performers, metro, a german supermarket chain, theyre facing difficulties so those kind of stocks you might expect to see more movement in because of exposure, not a huge amount of that today it feels like europe is stabilizing slightly okay. Thank you to willem. We want to get to our guest host this morning, figure out what the heck to do what are you doing tom farley is here mr. Wonderful is here. Are we in it i think this is garden variety volatility thats all this is . Thats all. This is not a turning point yesterday . No, nothing really changed. The rhetoric is up a bit i like this pressure because you have cash. No. No i need the end game to end with c access to the Chinese Market and protection of i. P. There what is relevant is consumers in the United States, no this is a small price to players haves the upside of the potential. Imagine if we sit here today, trade deal is done with access to their markets and protection of i. P i will launch 30 products that iml already manufacturing in china, i can release it to them. Keep squeezing their heads i want to jump on kevins train here i think chinas in a very tough spot illustrated by the last 24 hours. Why would they want to devalue . This is an exportled economy that stated they want to be a consumerled economy i agree with kevin they dont buy more soybeans, thats only a big deal because two swing states are growers of soybeans i think china is in a tough spot lets say they did allow the yuan to deprecate. Its not in their interest to devalue completely. I agree on that. This shows china has other tools in its arsenal that maybe the u. S. Is not factoring in state media made a reference to stopping the export of rare earths, which would hurt us. Everyone from the military and electronics uses some rare earths we have some in california. We do, but thats not fully operational. From here to there, what do you do its not a onesided fight. I dont want to give that impression really what they have is an election the u. S. Has many, many more tools at its disposal. China will hope the tough guy negotiator loses in the next election but they have a losing hand. But how about the markets in the meantime what youre seeing last night, china lets calling it backing up a bit by setting the fix below 7. To the extent theres a volatility story here, i think this is one piece of a longer sort of this is a marathon. Earnings did not disappoint we had a pretty good session nothing has changed. The rhetoric is going up so what . This is the first administration, whether you like trump or not, it doesnt matter. No one is taking these guys on for the 15 years im doing business there im sick of it im ready. Lets dance. Keep it up im so big a hawk on this. Keep squeezing their heads do we care about the cost to the consumer in the end the upside to the consumer is immense. What is going to happen is the upside to the s p and all the Domestic Companies that want to sell there see the other side of the river, youre crossing the rubicon, rowing the boat, when you land into the land of ip production, you will love china, everybody will be happy. How long does this take six years so the markets for the next six years do what . Theyre not having a good time over. There capital decisions about building plants in china theyre not having a good time we came off a selloff that so he the lows down 900 yesterday. People say uncle eventually keep squeezing water will find its level in terms of the consumer. What will happen is the big producers in china will just move theyll move to vietnam, thailand theyre doing it now i spoke to a friend of cnbc, very well business person who said i already leased out five factories in five countries. Its in production now to move my computer production i think youll see that over and over again let me say this, weve been talking longterm, i like that were talking longterm, because shortterm is not nearly as important. However investors are waking up this morning watching us and trying to figure out what to do. Before we go to break what are either of you thinkings will do . It will be volatile it will be a month or two of volatility move to Companies Generating more cash. You dont have to care about sectors, find the best Balance Sheet in every sector. It will have less vol. People like quality. Its a quality story now okay. Well be with you for the rest of the show. Well continue this debate when we come back, four former fed chairs getting together to take on President Trump and they are out with a new oped calling for fed independence we have that story coming up after the break. And well talk about the implications of the market turmoil on the feds Interest Rate plans for the rest of the year as we head to break a look at the biggest premarket winners and losers in the dow. Your daily dashboard from fidelity. A visual snapshot of your investments. Key portfolio events. All in one place. Because when its decision time. You need decision tech. Only from fidelity. News just out about apples new credit card. Today a number of customers signed up about the payment offering will be selected to participate in a preview program. This credit card will spintegra with apples wallet app. People will know where their money is going apple plans a full launch of the apple card later this summer if you get the notification, you get your card on the phone first. Then they send you the card. You need to pair your card with the phone. You dont pair it with the card, you pair it with the box it comes in what do you mean . When you pair it, you have to pair it with the box that the card comes in. Because the idea is if the card gets stolen, you wouldnt want the card to pair on its own. So the box becomes part of the pairing process. Youll see if someone steals the box thats interesting. Its a tough space. Youre not as bullish on this if you look at the credit card companies, the big issue is Customer Acquisition costs versus lifetime value. If apple can pop this up on my screen and say andrew, take my card. I bet its not as fast as you think. People dont say ill give up my cashback credit card and switch to apple why . Why could you do that . All the hassle of switching. I dont think so another credit card . 3 back on apple products, 1 back on on apple products only. Think of all the money you spend. I think theres a 1 cash back on everything we have to get the details not so fast i have seen it. Its cool. It is cooler than anything youve seen. All right. Lets look at individual names to watch in the trading session. Shares of shake shack are higher the Second Quarter earnings beat estimates. It raised eits guidance for the year it announced its partnering with grubhub. And marriotts Second Quarter earnings were in line with estimates, but theyre cutting their fuoutlook for fullyear expectations coming up, former fed heads speaking out against political interference in the Central Banks business. We have the highlights next. And fallout from the selloff. Well talk about the other potential trade war weapons and reaction from the fed that could have an impact on your money squawk box will be right back. E1e1q. E. E1q. Welcome back to squawk box. Time fore the executive edge. We have to start with a must read in the wall street journal. The last four fed chairs teaming its titled americaxdneeds an independent fed. Paul volcker, alan greenspan, ben bernanke and janet yellen are writing that we are united in the conviction that the fed and its chair must be permitted to act independently and free of the shortterm political pressures and inj particular without thrt of removal or demotion of fed leaders for political reasons. Read between the line3iy you know who this oped is addressed to this isfq basically leave jerom. X ]1 alone that could have been the headline easily for this i have tremendous respect for these authors. I thought this wasj a bit ridiculous they all got the call themselves elections have consequences president s will always apply shortterm pressure. Lbj beat up the fed chair. This is a long history in this country. Get over tchlit paul volcker has a piece in his own book about the time whe reagan came to him and effectivelye1 pressurednihim. Its not that president s have not pressured fed chairs before, but have they done it so publicly does t a public nature of it change the dynamic especially when youre trying to inr example or otherwise with other countries . Since when is the mandated of the fed to discuss politics and trade wars itsq inflation and employment. All of a sudden 60 of the reason is because of trade wars . You dont think the president would like the fed to get in line and help with the trade war . You dont think theres something going on you dont think thats part of the arrangement . You dont think thats what the president wants . I think hes encouraged. He says i want 50 basis points gone off rates he gets results by saying that why stop powell actually acquiesced by saying i did this because of trade wars isnt that terrible no. Its not terrible. Gregg popovich when he gives the nba refs a hard time, should he be thrown out of coaching . That ref should continue to be a great job and be an independent arbitrator its okay to have pressure what is the upside . He gets beaten to a pulp transparency. You dont want transparency . You do not need a press conference you want to rewind to the old days twice annual Humphrey Hawkins . You put out the press release and go back to work. You dont need the press conference you get nothing from that but abuse. It was perverse, it was weird it was crazy. What about this . What about that . It was crazy nuts i dont know if i agree with kevin on that. That argument but the rest of it you agree with the transparency thing i think the press conferences are good if you go back to the december press conference you learned more about the attempt the market showed the reaction it was a healthy but volatile feedback why do you want the president to effectively try to politicize the fed . Its been going on since the fed not an open forum like this on twitter almost on a daily basis. Twitter didnt exist for lbj lbj didnt go out on tv constantly criticizing the fed the reason i understand that we need to move past it and get to the substance im not arguing donald trump is infallible here. The pressure he applies on the fed is not always the correct pressure his voice being heard is a healthy thing. Everything is working keep everything going the way its going thats what i say. No problems yet. Im not sure everybody sees it as working. Well talk about that. Lets bring in some more voices into the conversation helen hazen and stan stovall from cfra. Welcome to you both. Good morning sam, ill start off with you if you look at the lows of yesterdays session, down 900 points, all the way up to where we are today, which is dow implied open up 82 points, you could argue this is quite a turnaround in the markets. For you to be convinced this sticks, what would you need to see . Follow through. I like to say theres usually pop after the drop if you go back, this has happened before, and i think i need to see what happens not only today but also for the rest of this week to see if theres true meaningful follow through when yourewatching what else happens, are you also watching what happens in terms of the barbs being traded between the u. S. And china there seems to be backing off, cooling of heads this morning in terms of chinas response. The ball is in our court i would say. I guess im trying to figure out did the president up the ante on trade in order to get more pressure on the fed if thats the case, to me that would be like drilling a hole in the bottom of your boat to bail out rainwater. We have to be careful what tact we take to get the desired outcome. The fed funds pfutures, the pricing of a 50 point basis cut has gone up since friday thats note enough to offset concerns in the market to exist because of an ongoing and deepening trade war . Its unclear whether or not the problems that were seeing in terms of global gdp slowing, global pmis slowing, and other weaknesses that were seeing are due to Interest Rates too high theres some concern that the fed is to some extent pushing on a string as it were. And i agree with sam i think theres certainly some chance that this most recent ratcheting up of tensions was in some part designed to respond to what you were saying earlier about the fed responding to this trade war. But the results are real weve seen this slowing in the industrial economy here and in other places, and part of that is do you to uncertainty and the slowdown from the trade rhetoric i dont know if a 50 basis point cut or more will turn that industrial economy around. In the meantime, we just came off a decent Second Quarter earnings season. Were at the point now where were approaching september. September is traditionally the time when companies decide what to spend an how much to spend. We enter september with this turmoil and volatility on our hands. What would you think about Third Quarter earnings well, Third Quarter earnings now are expected to be negative. But then Second Quarter earnings initially were negative. First quarter earnings were initially negative this is the 30th consecutive quarter in which actual results have exceeded end of quarter estimates. So right now the earnings recession is off the table because while the Third Quarter is expected to be down by 2 , Fourth Quarter is expected to be up by 5 or more right now earnings recession is just evaporating. Business activity has slowed. Business confidence reduced, and the consumer keeps chugging along in the u. S who wins the consume ser tr is twothf the economy. Our best Case Scenario is the consumer will win. Weve seen strong retail sales, low unemployment, weve seen wage growth. Consumer confidence near an alltime high. The consumer seems relatively unaffected so far by uncertainty going on in the industrial economy, both here and globally. And of course part of the question will be with this newest round of tariffs, which is slated to hit the consumer more than the previous rounds, is that going to begin to be dented right now we are expecting that it will not make a significant difference but thats the biggest point of pressure ellen a

© 2025 Vimarsana