Transcripts For CNBC Squawk Alley 20161216 : vimarsana.com

Transcripts For CNBC Squawk Alley 20161216

Good friday morning. Welcome to squawk alley. Im Carl Quintanilla with jon fortt. Kayla has the morning off. Dow up 57 points. Obviously the markets are our top story. Well continue to watch the race to 20,000 in the wake of the feds first rate hike as you know, of 2016. A lot going on. Donald trumps victory since that time five weeks, looking at 8 on the dow, the best postelection rally on record. Jonathan gow want is managing director. Guy, happy friday to you both. Good to see you. Good to see you as well. Tobias, people taking stock of the rally but paying attention to Dollar Strength. The lack of real policy specifics as of now. Obviously memories of how bad last january was. When do we know when this rally is over . We think its a bit overdone near term at the moment. Interstock correlation, top 15 names in the s p 500, is around 10 . Thats one of the lowest levels weve seen in a number of years. Historically when weve gotten this, the market seems to get a bit tired and we start seeing people being a little too aggressive, stocks back off. Its a nearterm phenomenon. Longer term, some of these policy proposals are clearly positive from a probusiness, proeconomy perspective and we saw a little evidence of that in the optimism index. Small business likes less government, letsz regulation and taxation. It should turn into something more positive. Tel aviven the Lending Survey from the Federal Reserve board over the last couple quarters suggests first half strength so Dollar Strength, bond yields moving higher, probably are have the longer tail of effect. But at the other side of that, youre going to be getting some of the probusiness legislation probably by the second half. Jonathan, i believe youre looking at this as as long as the economy continues to replay, market views higher Inflation Expectations and rates positively, this rally could continue. But my question is, how do you protect yourself to the downside with this trump rally . Is there a particular industry that youre looking at as a canary in a coal mine, a particular strategy . If we liken this to say 1998, when the market just went up, you know, beautifully for a couple years, if you play this defensively, youre not going to participate precipitate in the upside. The winners will be banks, deep cyclicals and Consumer Discretionary looks really good. Can you go and be half pregnant with this and play in lets Say Technology or Something Like that . Maybe, but the risk youre just not going to have you cant have it both ways. So no need to worry about those spaces getting crowded . I think its exactly what jon was saying. If you look at this, weve seen Consumer Confidence come in, Small Business Consumer Confidence up, big business, home builders. So when you see that, it means this trade is continuing to reflate. Interest rates are rising, Inflation Expectations are going up. And thats going to ultimately mean that its going to push the banks higher on the back of Interest Rates and the cyclical trade because optimism about spending, and the spending is the key. Doesnt have to happen tomorrow. Just need to be convinced that this thing is on the cuff. Six months, nine months from now, when we start to see the legislative agenda go in place, that then is going to be you know, it will happen. This earnings season not going to matter as much. We want the promise and thats where the markets going to be focused. Tobias, what yo if youre on the sidelines sh not in the market . The gallup poll tells us most of the middle class is exactly there. Is this a point where you get in . Do you wait for some major pullback . When you see these dow approaching 20 k headlines, people get tempted. You know, let me put it in two different ways. From a sentiment perspective i think the sentiment is getting a little complacent in here, neutral territory, wouldnt be chasing the market, wait for the pullbacks to step in. From a fundamentalist perspective, i agree with jonathan on financials and on energy. Im a little less excited about industrials and materials simply because not because my background isnt in industrials, but rather this Infrastructure Spending story is not go geting a whole lot of traction on hill. The republicans arent too excited about it. Municip municipals, state governments arent too excited about it. Interestingly enough, its not eve an big topic for the transition team. It almost seems like the president elect isnt that excited about it right now. People are buying the hope and maybe a little too much hype. When do we start to see, jonathan, the macro guys up their gdp forecast for q1 i mean for 17 and how much of that is expectations for cap ex . When does that start to move . Good point. Its both the economists and the analysts that until they get specifics, theyre going to leave their numbers stale. So the markets moving ahead and people are saying multiples are going higher, the market true. But its not that. Its that they refuse to change their numbers on ford or ge or whatever until they see specifics and therefore theyre really underestimating the strength in this. As far as the power in the economy, youre not going to see a massive upgrade to 17. If these things are going to work, theyre things that are going to hit in 18 and 19. I really do agree with tobias. When you talk to investors, youre not talking about the spending programs. Theyre talking about regulation, talking about Interest Rates, talking about taxes. Not that youre not going to get a some of that spending but its a tertiary issue. All right. Of course by the time 18 rolls around its too late. Youre going to wish you had bought in 17 if all those things happen. The markets going to clearly the markets going to get ahead of the spending and thats the key. The market is telling you its going to come. Its not waiting for the details. Guys, it will be interesting to work our way through what cramer this morning called the gap between the earnings now and the promise of that tripod deregulation tax, repatriation down the road. Tobias, jonathan, guys, thanks. Thank you. Have a great weekend. Sumner redstones saga, julia has details. Hey, carl. Viacom announcing Sumner Redstone will step down from the br board of directors after the companys annual meeting on february 6th. Hell continue to participate in board meetings but in a nonvoting role. Viacom shares are moving about 3 higher today on the news but still down about 13 over the past 12 months. This comes after earlier this week, sumners daughter Sherry Redstone announced they ear calling off their proposal to recombine cvs and viacom, pointing interim ceo bakish as permanent ceo and naming him to viac viacoms board of directors. Hell earn up to 12 million if he gets the maximum bonus, far let less than 93 million that the former ceo earned in his year returning that company. This follows a protracted legal battle over the past year over Sumner Redstones mental capacity that resulted in him stepping down as chairman from both cbs and viacom, removing his voting role at viacom continues this transition of power. Redstone is still on the board of cbs. No word from that company about whether hes planning to step down there as well. Thank you, julia. Also a few individual names were watching this morning. Oracle reporting ayn justed profit of 61 snare in its most recent quarter, one penny above estimates. Sales disappointed. Larry ellison highlighting growth in cloudbased revenue, especially software as a service. Taking lots of shots at sales force, but investors not impressed this morning. Shares down nearly 5 so far this morning. Also watching shares of adobe. That company beating estimates on the top and bottom lines for its most recent quarter boosted by a jump in subscription revenue. I spoke with the ceo after the results came out before the call, covering everything from m a to mobile. That stock down about 2. 5 , 3 . But were going to hear from him later this hour. When we come back, disney looking to catch lightning in a bottle again with its latest star wars film. What moviegoers are saying about Opening Night for rogue one and what that means for bob iger and company. Trivago making its debut this morning. Well get an interview with the ceo coming up. And later on, recodes kara swisher on what exactly happened when Silicon Valley met donald trump earlier this week. Dows up 36. Theres a lot of places you never want to see 7. 95. [ beep ] but youll be glad to see it here. Fidelity where smarter investors will always be. If only the signs were as obvious when you trade. Fidelitys active trader pro can help you find smarter entry and exit points and can help protect your potential profits. Fidelity where smarter investors will always be. Ways wins. Especially in my business. With slow internet from the phone company, you cant keep up. Youre stuck, watching spinning wheels and progress bars until someone else scoops your story. Switch to comcast business. With highspeed internet up to 10 gigabits per second. You wouldnt pick a slow race car. Then why settle for slow internet . Comcast business. Built for speed. Built for business. Disneys new movie expected to grow some 300 million this weekend worldwide. What does it mean for the future of the brand and will it give disney investors reason for optimism in 2017 . Eric davis had a chance to sit down with the entire rogue one cast and director. Welcome to both of you. Eric, isle start with you. Pretty good Rotten Tomatoes rating on this one thus far, not higher than the force awakens but its still early. These things move around. How good is this thing . Its really good. I think its better than the force awakens . Its different. Everybody is trying to compare the two. I think its okay to like both of them. They both have their pros and cons. Whereas the force awakens was more of a remake of a new hope, this is more of a reimagining of that era. I think it takes risks that star wars has never taken before. I think its the gutsiest blockbuster of the year without spoiling anything. Blockbuster of the year . I do think so. Dwut si how . Gutsy in that may make story decisions here you wouldnt expect from a disney movie. Lets go that way. Very dirty dozen, very kind of Felicity Jones said they tried their hardest to make the saving private ryan of star wars movies. Nobodys getting cut in half, theres no blood or anything, but it goes to show you the intensity of this film is on a level we havent seen from these films yet. I think Going Forward its going to be a good thing for these standalone films. Dark mall got cut in half so it wouldnt be out of the question for star wars. Todd, how is this not an issue of sell the news . Is it the potential for more female fans to get on board with this protagonist . Well, first of all, im excited to hear from an expert that this promises to be a good moviegoing experience. For the sock, honestly, any one movie including any star wars movie as big as it might be really doesnt make much of a difference to unless its bad, right . Actually, not really. I mean, if you look back at john carter or Something Like that, you look at what happened to disneys stock, not so much. And it makes sense because, you know, a 200 billion or Something Like that enterprise, any one film actually doesnt mat theyre much. Star wars obviously matters more in terms of the whole arc of the franchise and the Consumer Products that are tied to it and the future of many films to come. But, you know, in terms of whether this beats a little bit or comes in a lit bellow expectations on the film, id be shocked if the stock moves either way. Todd, eiger called it a an experiment earlier in the summer. Were trying to decide whether he was trying to manage expectations or whether or not you believe that studios now have a building that is five stories tall instead of four or three stories tall. Does this could this force you to reevaluate . You know, its actually good to see some risk taking, id say. One thing that you hope for the vitality of the moviegoing business is that we dont get too formulaic. If youre going to take a few risks, this is a good vehicle to do it. Theyre stepping outside of the conventional trilogy, i guess, and take a bet. If my statement before is right in that eve an little bit of failure probably isnt going to hurt the stock, i think theres probably more upside from taking the risk than downside. You know, certainly, plenty to come back next year with the next star wars movie and revert back to the core if something here strays a little bit. Speaking of taking risks, im putting you on the spot post 9 because youve both seen the movie. Is it better than the force awakens or not . Theyre all different, yes. But better or not . Im going to say its better. Carl . I will agree. Wow. Okay. But i cant emphasize enough that its different. Its a war movie. It is. In a way i dont think a franchise film has been. What do you make erik, of this heroine kind of renaissance that the star wars universe is going through . It used to be you had leah and if you squinted you had mon mothma. Now two major characters. How much of a difference does that make when it comes to merchandising, when it comes to costumes, bringing more people into the fold . It makes a big difference. My daughter dressed as ray for halloween. This speaks to a larger trend in hollywood right now are these femaledriven movies. We have wonder woman in 2017, an alien covenant movie, announced a big female villain movie. Its a larger trend were seeing with the femaledriven movies. Audiences are demanding more diversity, more females in lead roles and i think hollywood is saying, okay, well listen to you, now come and see our movies. Well see if we get the Action Figures of the women. That a lot of people are looking for. Erik and todd younger, thanks for joining us. Still to come, travel website trivago making its market debut on the nasdaq today. The ceo will join us in a first on cnbc interview. Also watching markets as the dow hovers just below 20,000. Trivago opened at the nasdaq today. The ceo joins us. Good morning to you. Congratulations. Thanks a lot. The sheer calendar issue, getting this in before yearend, how hard was that . Celebrate christmas this year, so i think its we just made it in time. Expectations for next year and for what you expect travel to do overall. We have an incoming president elect, a lot of talk about the economy reflating, consumers with confidence in multiyear highs. Is that going to help business . I think generally were seeing very healthy growth. So like Online Travel is very low penetrated to only 33 of people book online. We expect that to go up next year. For us, if the market is over the last five years its grown about 90 yearonyear. So we dont see this industry trend so directly. Where are the opportunities for technological advantage . Is it in improving your mobile experience . Are there other things that you can do to differentiate your experience from your competitors . Yeah. I mean, mobile experience is already doing very well. So we went through the mobile transition in the last three years, and more than 50 of our revenue today is coming from mobile devices. But i think there is a major problem unsolved and thats really getting you into the ideal hotel. And i dont think that is happening right now so, i think theres nobody delivering on that right now. And theres a huge value that can be unlocked. And why not . Is that just a matter of showing people more images, integrating video . No. Figuring out Virtual Reality . Why isnt that connection working . Its not about showing content. Its about understanding a hotel, understanding whats good in a hotel, whats bad in a hotel, understanding also about you, what are you expecting as a customer and matching both together. I feel nobody is doing that and thats a problem we want to solve. Strength geographically around the world, where is it the the strongest . So, i mean, weve seen tremendous growth out of u. S. , so u. S. Is definitely our strongest market and it became our strongest market in a very short time. And within three years. But we also are now going into lots of asian markets, japan, india, south korea, so that has a strong Growth Market for the next year. Are you expecting currencies to have an effect one big for good or bad as we look at Dollar Strength versus other currencies . So for us, thats not you know, we cant predict that, so for us wed rather look at things that we can predict and currency is nothing that we can predict. Rolf, when you look at a situation like cuba, which appears to be opening up but we dont know exactly what the Trump Administration is going to do there, what sort of waters does that create for lack of a better metaphor, for you to navigate figuring out how strategically to approach cuba . You know, every new market that is open for us is good, yeah, so i think, you know, at the end, to go against consumer wishes, you know, and then just limit down what consumers can do, i think generally thats not good, but at the end, we are not so much into politics. We are more into creating a great product and, you know, creating a great business. Is there a particular market right now thats a surprise standout, maybe having to do with currency or something else, just trends where people are visiting more than they have in the past . So i can just tell you what we are doing particular good. I think right now for us like and i think that is not sure if its a general trend, but i think these markets will be catching up. Congratulations to you, rolf. Were going to watch you guys closely. Obviously, Rolf Schromgens of trivago trading today at the nasdaq. Thank you. Coming up, cameras only got a small glimpse of Donald Trumps meeting wednesday with Silicon Vall

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