Good morning welcome to Worldwide Exchange. Im sara eisen im wilfred frost good morning to you from me as well its new music friday. We are kicking off with taylor swifts new song highly anticipated. But not very good i cant tell. Came out overnight i listened to it once upstairs with the team what did the team think. All disappointed, apart from the number one taylor swift fan, karissa. Well have to listen to it a few more times youll hear it more on the show it is new music friday first lets get to the big developing story out of the gulf of mexico, Hurricane Harvey gathering strength the storm a category 2 hurricane. It is expected to make landfall in Southeast Texas later tonight. Harvey is forecast to pack a punch bringing torrential rain, heavy flooding and damaging winds. Widespread evacuations have been ordered up and down the texas gulf coast were seeing a big reaction in the Energy Markets as harvey takes aim. 1 higher for crude prices right now. Same with rbob gasoline, thats where we have seen a move in gas, gas prices. 3 pop there on top of a gain yesterday. We have full Team Coverage of this developing story. Jackie deangelis is live along the gulf coast looking at harveys impact on oil and Gas Industries and we have a look at the storms impact on the Broader Energy section lets start with wvits Caitlin Mcgraw with the latest on harveys path. Reporter harvey working its way into the texas gulf coast overnight. Now seeing outer convective bands working their way into texas it was upgraded to a category 2 hurricane with sustained winds of 105 Miles Per Hour to the south and east of Corpus Christi, texas. Expe expected to make landfall late tonight and early tomorrow morning, right around the time of high tide heres the track it will continue to strengthen into a category 3 hurricane as we head through the day today making landfall as a category 3 with winds in excess of 1 111 Miles Per Hour then it will stall out just enough of the hurricane in the gulf of mexico to fuel it and bringing rainfall of over 30 inches add on a 6 to 12foot storm storm surge, were looking at catastrophic damage. Well bring you updates in just a bit. Back to you. Stay close. We will talk to you soon the Energy Market closely watching harvey as it takes aim on Oil Operations in the gulf. Lets get to Jackie Deangelis live in Corpus Christi, texas with the latest on evacuations and halts in production. Good morning reporter good morning to you. Just as were talking here, you can feel the wind starting to pick up. Intermittent rain from the outer bands of the storm are coming in were standing here on the beach. Actually the flooding is expected to be the worst 35 inches of rain will add to this coastal tide and potentially create a lot of damage the winds up to 125 Miles Per Hour when this category 3 storm does actually land now, in Corpus Christi there are five refineries. Some have already shut down and evacuated staff this doesnt impact the refineries, it impacts the drillers and the nat Gas Producers as well. According to Government Data, about 10 of onshore drilling in the gulf coast has already been halted about 15 of the natural Gas Production has been halted as well thats why youre seeing a spike in some of these prices. But back to gasoline, you mentioned one of the biggest movers, if the refiners shut down, well have a serious problem moving product around and creating new product obviously. If this is a category 3 storm and you see refineries shut down for more than two weeks, there will be severe problems. We have not seen a storm of this magnitude since 2005 that was 12 years ago. A lot of people forget the kinds of move theres a we have seen in commodities you can see these prices move very quickly, very fast. Well be watching the storm all day. Back to you. Jackie, stay safe and dry absolutely right. Lets talk more about harveys impact on the Energy Market. Joining us is john kilduff want to focus on yesterdays moves, when we sort of saw the hurricane being upgraded and the way the market reacted to that, which was quite clearly a fall in oil prices, down about 2 , a rise in nat gas prices up about a half percent why did those two commodities move in that direction thats the net move over the last two days. Because as jackie explained, several refineries in the region are shut down. More will be shutting down so theres a great lessened demand for crude oil the demand for natural gas wont go away because theyre shutting wells in the region. You still have consumer demand for natural gas, rbob gasoline so those prices will get pumped up while crude oil goes down it is also referred to as the refining spread. People are getting a refinery on paper through the Futures Exchange you sell crude oil, by gasoline and have a refinery hitch. If we think about wti, up a bit today, 0. 7 , taking back some of that fall yesterday, could reweb getting this wrong as to why oil prices are falling netnet over the last couple days as opposed to rising . Could we see a need for inventories to come down and then fill them up again . I think the reaction is justified. Youre staring down a potential hurricane 3 hurricane. There will be three feet of rain locally in some spots in texas this could be a classic buy the rumor sell the storm landfall. Thats what weve seen in the past the refineries have a great resiliency theyre fortified against flooding the problem you have is getting the personnel back, if they can travel in this area because of, again, three feet of rain. Thats my biggest concern. They can withstand a category 3 storm. After hurricanes katrina and rita as bad as it looked and as bad as it was, the refineries came back, offshore and onshore production came back rapidly so build on that. Based on the path and intensity that we know so far, how would you characterize this storm as it relates to hough dama s ts ti could cause along the refineries and production along the oil patch . I think the price reaction so far has been moderate. Not just price, but in terms of damage overall to the region and to some infrastructure there. I think the region outside of the Energy Infrastructure will get devastated thats why im concerned you wont be able to necessarily have personnel get back to the plants and ghemt up and ret thed running. Beyond that will you see facilities being resilient they will get through this fine. The water will recede. The problem you have, too that jackie eluded to, if enough of these refineries shut down, there wont be enough new gasoline, new diesel fuel to put into the Colonial Pipeline so they won be able to maintain the pressure that could be problematic then for all of us in the eastern twothirds of the country. Stepping back from specifically this storm, oil prices have been relatively soft this summer. Industrial metals have been strong separate why thats happened and why we have not seen oil react more and could this be a factor that starts to see oil kind of catch up with others in base metals and Metals Sector you have the speculative f fervor of china with Infrastructure Spending and boosting prices. The problem is they already built out their energy sector, refining sectors so much, its like what theyre doing to the steel market theyve been in the process of doing to the refined Product Market they need to export a lot of their gasoline and diesel fuel because theres not enough demand for it. Theyve overbuilt that thats why you are seeing crude oil stuck and not participating in this activity by china because its been so overbuilt john, thank you very much great to see you as always john kilduff, thank you. Lets check in on the Global Markets. U. S. Equity futures under selling pressure after a minor selloff yesterday. They turned around this morning. They are now higher actually dow futures are up 18 1 2 points s p futures up 3 nasdaq futures up 3. I was going to say after a minor selloff yesterday when you had outsized moves in groups like Consumer Staples after negative earnings from hormel and smucker. The whole foods deal hurting grocers. Overall a sluggish, lower volume trade yesterday resulting in another day of delines well see if the gains today can hold jackson hole will be the big market focus Janet Yellens speech at 10 00, draghis speech at 3 00. The nasdaq had its fifth negative session in six, but down 0. 1 . For the week as a whole, still nearly up a percent. That does kind of paint the picture of august for the u. S. Markets. Theres been many more individual down days than up days but it hasnt been too pronounced for the month as a whole, as we approach the end of august, were down, but down sort of 1. 2, 1. 3 for the main indices so you have to take that into perspective. Basically near the highs given you have low volumes, the fact theres been more down days than up, i suppose you think there could have been bigger moves down we also continued to see treasury yields remain low look at the tenyear treasury note yield ahead of those Key Central Bank speeches. The Kansas City Fed do we have the tenyear . Around 2. 2 just shy of that 2. 19, so pretty much marching in place its a strong day for asian equities across the board. Up about 1. 2 hong kong. Hang high up nicely. Japan up a half percent. European trade, which has been encouraging for the ftse 100 this week, despite declines in the u. S. Up 1 germany an france flat for the week ending on a slightly positive note slight gains for those three markets. As for the currency market, the u. S. Dollar ahead of jackson hole against the euro. And we got that double dose of Central Bank Speak janet yellen and draghi. Euro firmer, Little Movement there. The pound, weaker again for the week its at 1. 2815, this is the fourth week in a row were seeing pound declines. Its helping the ftse 100 trading near the highs of the week the pound at an eightyear low against the euro earlier in the week gold prices, which have not done much this week not doing much today flat at 1292 on todays wall street agenda just one piece of economic date ta to wrap up the week economists are looking for a drop in orders for big ticket items like heavy appliances, aircraft and construction quip sgloo equipment. Wall street will be watching janet yellen today delivering her speech at jackson hole fed watchers will be looking for yellen to give clues on winding down the Balance Sheet which we expect to come this year, potentially as early as the meeting in september also from ecb president mario draghi, well have live coverage on cnbc. Interviews with cleveland fed president , Loretta Mester and one of the governors, governor jay powell coming later. Two big keynote speeches will be fascinating its amazing how similar a situation yellen and mario draghi are in. They have strong fundamental data but lack of inflation both have very interesting different political situations they have to play the political game as well as different between the two. Thats basically i bet they can have a drink before last night and afterwards and say we both got a similar task on our hands. Except for the ecb has a single mandate, thats to control prices and inflation the fed has a dual mandate, control prices and inflation and and secure growth and employment i would argue yellen is in a much trickier spot the focus will be on her we know draghi is worried about the euro strength. I dont see them pulling back soon you could say she has a tricky one, but she already started. So its easier for her to delay a bit. Mario draghi has a big extra issue, does he have enough bonds to continue his bond buying program. Even if the inflation data is not there, he may be forced to start taping any way because of lack of bonds to continueto buy. Thats wildcard for mario draghi well watch those speeches closely. I cant wait for the wave, when yell een comes out on to te balcony. Its a ritual and tradition of jackson hole its like a red carpet its like the met gala she comes out like the queen. Sometimes she is the queen of the central Bank Ben Bernanke always played it cool that will be on squawk on the street. Uber could hold a vote for its next ceo as early as today uber is planning to hold a Board Meeting today. According to sources, hpe Ceo Meg Whitman will not be there, but jeff immelt will be. Hell lay out his vision for the future of uber re code reported earlier this week that immelt is the frontrunner in the ceo search more on this developing story throughout the day on cnbc still ahead on this show, guilty verdict in a massive bribery scandal at samsung the shares are actually reacting were live in south korea with the story next dished out a bigger punishment than is typical we are also keeping a close eye on Hurricane Harvey as it nears the texas coast. Youre looking at live pictures of preparations underway in houston. So you miss the big city . I dont miss much. Definitely not the traffic. Excuse me, doctor. The genomic data came in. Thank you. You can do that kind of analysis . Yeah, watson. I can quickly analyze millions of clinical and scientific reports to help you tailor Treatment Options for the patients genomic profile. You can do that . Even way out here . Yes. Even way out here. Even way out here . Did you know slow internet can actually hold your business back . Say goodbye to slow downloads, slow backups, slow everything. Comcast business offers blazing fast and reliable internet thats up to 16 times faster than slow internet from the phone company. Say hello to faster downloads with internet speeds up to 250 megabits per second. Get fast internet and add phone and tv now for only 34. 90 more per month. Call today. Comcast business. Built for business. Good morning welcome back to Worldwide Exchange. An update on the market picture. Yesterday we saw slight declines, albeit for the week as a whole were in positive territory. The nasdaq is nearly up a percent. The other two indices up about a half percent we are pretty much flat, bang on flat for the s p tiny bit of red on the screen, small gains in europe. Oil prices, keeping a close eye on these as Hurricane Harvey approaches the texas coastline yesterday we saw Oil Prices Fall by 2 . The belief is that refineries might have to shut down that lores the demand for wti today a recovery in wti, 47. 7. Rbob gas, another thing to keep an eye on. Gas prices going up in light of this theyre up 3 at the moment. Back to you. Nothing like a bangon flat futures board. A south korean Court Sentencing jay y. Lee to five years in prison for bribery. Chery kang is live in seoul with the latest good morning reporter good morning. So i think we have to find some meaning here in that this socalled 35 rule in south korea has broken with todays verdict. Do note this is a lower courts ruling but when i say 35 rule, its the pattern that we find in south korean history when in terms of the lower courts sentences given out to a lot of chiefs in the country. Three years of jail time, five years of suspension. But thats been broken here. So, jay y. Lee, the de facto leader of Samsung Electronics getting five years of jail time. According to the judges ruling here, the judge says that he called this cozy relationship immoral and he said shocked to see this kind of relationship as ongoing. As far as Samsung Electronics reaction to all this, i did take detect a level of caution here on the pr front saying there wont be any official statement coming from the company. Because if you think about it, if you look at all the charges here, one of them is actually embezzlement so in a way technically Samsung Electronics is a victim of this embezzlement allegation. So there wont be any official statement on that. But jay y. Lees lawyers said they cannot accept the ruling and said they plan to appeal just a quick question, for those of us who are not as familiar with the Corporate Culture there. We know about tim cook and the influence he has on apple. How big of an impact will this have on the company . What sort of role does he have and reputation, im watching shares get hit a bit on this news yeah. I think the stock did move because of this rational that it was more severe than what the tradition holds in terms of south korean court ruling. At least for chiefs here as far as his role at Samsung Electronicsor Samsung Group overall is concerned, hes a vice chairman but the son of the socalled owner, chairman of Samsung Group. And, yes, he only has less than a percent in terms of shares of Samsung Electronics. But hes considered the de facto leader of this electronics giant, meaning that he would hold the key in terms of making key multibillion dollar strategic decisions, just as we think of tim cook for apple. So, yes. Daily Business Operation has been going on pretty well for the past year and for the past six months but in the longterm this could be a concern down the road for a lot of investors chery, thank you very much for that just to add perspective in terms of the culture at samsung, one reason shares have done well over the last year has been the company stepping back from too much family control, slightly reforming the Corporate Culture there and with it deciding finally to increase the payout ratio which traditionally they had never done they had a huge cash balance one reason for Foreign Investors why theyre happy to go back into it is the belief that shareholder also share in the profits a bit more and that slight stepping away from family control has been a small positive they also released a galaxy note 8, which is getting decent reviews. That big rise is sort of chip related. Twitter gets slapped with a big downgrade. And its an ugly day for ulta investors. And the latest on Hurricane Harvey as it gains strength in the guflf of mexico youre looking at live pictures of that monster storm from the International Space station. Worldwi ehaeildexcng wl return for your heart. Your joints. Or your digestion. So why wouldnt you take something for the most important part of you. Your brain. With an ingredient originally found in jellyfish, prevagen is now the number one selling brain Health Supplement in drug stores nationwide. Prevagen. The name to remember. Your privacy makes you myt number 1 place to go number 2. I love you, but sometimes you stink. Febreze air effects doesnt just mask, it cleans away odors. Because the things you love the most can stink. And try febreze small spaces to clean away odors for up to 30 days. Breathe happy with febreze. Stocks to watch today, twitter getting slapped with a downgrade to hold from buy at jeffries facebook will be the clear winner social media according to the analyst. He suggests twitter will lag behind google when it comes to social video ulta beauty reporting Second Quarter profit and beauty that beat Second Quarter forecasts. The growth slowed from a year af go down almost 5 . Gamestop Second Quarter profit falling shy of forecasts. Revenue Beat Estimates the Nintendo Switch console helped results gamestop expects a boost from the apple iphone when its releas released down 6 . Autodesk reporting a narrower than expected Second Quarter loss revenue falling about 9 the softwaremaker continues its shift to business to rely on money generated from subscriptions instead of licensing deals. Shares of broadcom are lower today despite the company reporting betterthanexpected earnings last night. Revenue was in line with forecasts, but some analysts say investors were hoping for more this is one of those expectation games with this one. Broadcom did raise Fourth Quarter sales outlook. Investors expect perfection. Shares of splunk are rallying the Data Analytics company reporting Second Quarter adjusted earnings and revenue that beat forecast and slightly raised its fullyear guidance. Still to come on Worldwide Exchange, a round up of the top stories including big news on the uber ceo search. And we are continuing to track Hurricane Harvey for you as it barrels through the gulf the impact on the Energy Market and production when Worldwide Exchange comes back a developing story Hurricane Harvey gaining strength in the gulf of mexico we have a live report from the ground straight ahead. Oil is on edge refiners are bracing for this monster storm. Details on the Energy Market impact coming up. A big day at jackson hole. Well tell you what to watch when janet yellen and draghi take the stage, its friday, august 25, 2017, youre watching Worldwide Exchange on cnbc good morning welcome back to Worldwide Exchange. Im sara eisen im wilfred frost good morning to you from me as well its new music friday, were lining to democrat m demi lovatw song, and it sounds better than the taylor swift song. Really . Yeah. I need to hear more futures are pretty much flat, coming off slight declines yesterday, but slight gains for the week as a whole. Nasdaq comes into the final day of the week up almost a percent. S p and dow up about a half percent. Futures now higher gaining some momentum in the last 15 minutes. Up 32 points on the dow. Lets go to the big developing story of the morning in the gulf of mexico, Hurricane Harvey gathers strength the storm a category 2 hurricane is expected to make landfall in Southeast Texas later today. Widespread evacuations have been ordered up and down the texas gulf coast were seeing a big reaction in the Energy Markets as harvey takes aim. The biggest reaction in pump gasoline prices, rbo bshg gab g 3 wti bouncing back, up 0. 7. Jackie deangelis is live along the gulf coast with a look at harveys impact on oil and gas refineries in the region lets start with wbit kaitlin mcgrath. Harvey is continuing to intensify as it moves towards the texas gulf coast right now a category 2 storm, expected to upgrade to category 3 before making landfall overnight friday into saturday you can see the current track, continuing to gain strength. A number of hurricane warnings and Tropical Storm warnings in effect for much of the texas gulf coast as harvey continues to churn through the gulf waters, it will continue to gain strength as a category 3 hurricane. Expected to approach the texas gulf coast with winds up to 120 Miles Per Hour already seeing some of that rain work its way on to the texas coast. That will continue ahead of landfall later this evening. So again, you can see the current track bringing it across Corpus Christi right now storm surge expected between 6 feet and 12 feet, rainfall totals between 15 and 25 inches. Locally up to 35 inches. Devastating rainfall is expected well continue to keep you posted for now, thats the latest on Hurricane Harvey thank you very much for that. The Energy Market closely watching harvey as it takes aim on Oil Operations in the gull ever lets get to Jackie Deangelis in Corpus Christi, texas. Good morning reporter good morning to you from when we spoke about 30 minutes ago, the wind is picking up here on the ground. The rain is coming down harder as well. Let me set the stage for you as we drove into town the refineries are picturesque you could see them all lit up. The big drums with oil storage what will happen when this storm packs a more powerful punch tonight, that possible category 3 storm, those refineries, some have shut down, perhaps all of them will shut down. It will be harder to move that oil around thats why youre seeing a reaction in the rbob market. Avenue all the different Energy Markets could potentially be impacted by this storm as well yoc onshore and offshore drilling, the Government Data says about 10 of facilities shut down. Natural gas facilities b 15 have shut down i expect those numbers to increase as this storm becomes more powerful. The market has been measured you saw crude prices go down yesterday on the notion ma ththt there would be less demand for refining right now you will see the moves in tandem today. Watch them as this storm starts to progress more youll see Short Covering in the market, too. A lot of traders tell me they dont want to be short going into a weekend with a storm like this on the way. Back to you. Good commentary, stay safe and dry there. I have a feeling hopefully she will certainly keep safe, but hard to keep dry it looks like shes suited up. Suited up in the tv hurricane gear. As long as she stays safe, thats satisfactory. The Global Markets this morning, we are seeing a bounce in u. S. Equity futures dow futures up 27. They reversed an early decline s p futures up 4. 5 nasdaq up 7. All the three major averages are higher for the week which is important especially for the nasdaq, which, if it does finish higher at the end of the day for the week, that breaks a fourweek losing streak for the techheavy index tenyear treasury note yield, we watched this one ahead of that duo of top central banker speeches 2. 19 on the tenyear 10 00 a. M. Is when we will get headlines out of janet yellen speech the topic is financial sta stability. We wait to see how it relates to the shrinking of the Balance Sheet. Is it Financial Stability of course no. Could be. Im saying of course this is what were looking for any way, looking forward to that Steve Liesman there throughout the day for us. Lets look at the picture around the world, asia up 2 , shanghai, 1. 2 for Hong Kong Samsung slightly weighing on koreas index. A big part of the index, down 0. 7 on the news that one of the familycontrolling stake has been jailed for five years more than expected i think its 15 of koreas gdp is sam supg sasung sales i think its about 20 of the index as well. Used to be 20 i dont have the latest figure. European markets are higher. They have been about flat this week ftse up about a percent on the softer pound ending on a just positive note for europe the dollar is little changed this morning against the euro and against the japanese yen its trading just below 118 against the euro pretty much flat this morning. Its trading just below 110 against the yen. Also not moving a whole lot. The pound is getting a bit of a burst, but still weaker for the week 1. 282. As for gold prices, gold has had a strong few months. It looks set to break out here well keep an eye on that. Slightly high their morning. 1,292. The big story is jackson hole yellen and mario draghi both speaking today what can you expect . Joining us is david rosenberg. We had a bit of an argument earlier this morning on whether draghi or yellen was in a tougher position as it relates to facing mandates and issues, and getting out of this super easing policy. Which would you say has the bigger challenge i would say that probably janet yellen does. I only say that because mario draghi, you know, clearly is facing a situation where at least inflation there is heading towards the target its taking a long time, but at least thats happening here you have the fed where inflation is heading in the opposite direction yet the fed is trying to convince everybody that they still have another rate hike this year in their arsenal if Janet Yellens speech today was about price stability instead of Financial Stability, she would have to come clean and explain why it is that inflation continues to surprise to the down side and not just because of a couple of idiosyncratic sectors doing it this inflation trend is quite broadly based. But the topic is Financial Stability. The fed has been vocal, just to go back to the last fomc minutes. Where there are concerns over valuations in segments of the stock market, concerns over commercial real estate, in the past, comments about subprime autos, and areas that, of course, are influencing the Balance Sheets of the small regional banks, which, by the way, have rolled over in the past several months. So, its going to be interesting to see how she puts this in the context today after talking about Financial Stability given all these concerns david, all other things equal, does what she says today and the actions of the fed in the coming months change give than she has less time left in her tenure than if she had another two years left i dont think that is going to have an influence at all. If you go back to the changeovers, lets go to volker to alan greenspan, back to 1987. The policy that was in place was actually reinforced by greenspan. Greenspan leaves in 2006, bernanke takes over. Its not like theres a shift in policy it was steady eddie smooth going i dont think whether its gary cone or anybody else that replaces janet yellen, assuming she doesnt serve another term, i dont believe in the rhetoric that the whole institution is going to be changing from a policy standpoint. You know, obviously from a regulatory standpoint there are already changes underway from a policy standpoint, i dont think anybody will be changing i think for today what is important is how the markets are positioned futures are priced 40 of the way for the fed to raise rates by the end of the year the fed collectively has been seeing otherwise if janet yellen wants to nudge the markets towards the view that the fed is not being swayed and that they still want to raise rates again, this will be the opportunity to do it if she does start to nudge the market in that direction what do you think well see in terms of equities . I think that the yield curve probably goes through a temporary bear flattening. Against that back drop you will find most likely in my opinion a correction in the stock market lets face it, liquidity is the life blood for this market if the fed gives an indication that theyll flatten the curve and raise rates, i have a tough time believing, especially in the context of whats a squishy soft outlook come on. When you have companies that are truly ultra defensive like jm smuckers and hormel foods reducing their guidance, that should not be giving you much comfort about the economic outlook. For the fed to raise rates and flatten the curve in light of that, i cant paint a pretty picture for the stock market. Theres also the risk that the president put on the agenda he called the debt ceiling discussions a mess and threatened a Government Shutdown over his border wall if either of those happen, does that prompt a reaction from the fed . Most likely it does it prompts at least a temporary reaction in the stock market we have a template for this. We saw it two other times so far this cycle there will be at least a brief pull back in Risk Appetite i dont think it should be coloring anybodys views for the next three, six, nine, months. Maybe it provides a buying opportunity. From a trading standpoint that risk will clearly result in more volatility and weakness in risk assets generally speaking, probably keeps the treasury market bid alive and well. Again, i think thats very temporary. I think that the trend historically of reaching a deal no matter what at 11th hour is a best Case Scenario you would think especially with all the republicans in charge of the three branches of government david rosenberg, thanks for joining us be sure to keep it right here on cnbc throughout the day. Well have full coverage from jackson hole, including interviews with Loretta Mester and fet god governor jay powell. Uber could vote on a new ceo sooner than thought. Landon dowdy has more. Reporter the uber board is holding a meeting today and they could hold a vote on a Ceo Meg Whitman has firmly said she will not be the ceo will not attend the meeting, but re code says two other candidates, jeff immelt and a dark horse candidate will present their vision for the future of the Ride Hailing Company all this comes as the bickering continues between the firms biggest Investor Benchmark capital and former Ceo Travis KalanickTravis Kalanick was ousted from his role as ceo in june but remains on the board and will vote on his replacement. Ththat sounds like stakeo opportunity. Wlofrnlg who is the dark horse. Still ahead, bracing for the storm. Hurricane harvey picks up steam. The latest on the major storm threat straight ahead. Heading to break a check on oil prices wti bouncing back, 0. 7 after 2 decline yesterday. Gas prices at the pump up 3 this mniorng back in a couple minutes tada all this devotion only calls for a little bit of dawn ultra. So concentrated, just one bottle has the grease cleaning power of three. Bottles of this other liquid. A drop of dawn and grease is gone. Try using dawn beyond the sink. Welcome back to Worldwide Exchange. Happy friday im sara eisen here with wilfred frost. Time for some mustread stories. My pick in the wall street journal, trump divorces the gop congress this is the Editorial Board of the journal, which i always watch. They havent been so antitrump. They have been conservative leaning, siding with sometimes the congressional republicans, sometimes the president. So the take here is that they say republicans in Congress Need to think of themselves as governing with an independent president if they dont already. This doesnt mean joining democrats as the resistance, but it does mean acting on their own to fulfill legislative promises with or without the support of mr. Trump. If the president goes his own way, at least republicans can point to votes for legislation that they put on his desk. Theyre referring to some twitter attacks lately from the president on mitch mcconnell, on House Speaker ryan saying, look, get the debt ceiling raised. Get the shutdown averted start working on tax reform. These are all in the interest of the party of the republicans whether the president is on board in picking fights or not despite that, interesting to see paul ryan in that exit interview yesterday not taking the bait following the twitter criticism that ryan got from the president saying, look, he would speak lots were on the same page t publicly at least saying the relationship is strong my pick is in the the financial times, the fed ponders the fractious politics of debt. Though mr. Draghi may have the slightly trickier job when it comes to communicating the banks intentions to the markets hes operating in an easier political environment than ms. Yellen youre trying to set this straight for a long time it was the other way around these days ms. Yellen has more cause to fear Political Risk upsetting the bond markets i picked this one because i disagree with it the ecb, i still think has a difficult task in terms of placating those massively different desires of, say, the greeks and the germans to paint a picture. Nobody can going after them as soon as we get through the german election in a couple months, i think that will change massiveliment. Maybe i do think in the shortterm this Editorial Board is correct, but not in the medium or longer term the political balance that mario draghi has had to get through over the last five years and still for the next five years is way tougher. Well see what they both say today. I have a feeling yellen will spark more fireworks. Up next, bracing for the storm. Hurricane harvey picking up steam as it nears the techs coas texas coast. The Market Impact when Worldwide Exchange comes right back welcome back to Worldwide Exchange. Just debating if you would rather be president or central banker. Central banker because its more powerful. Because youre such a geek or its more powerful its the ultimate i disagree. I dont think id like either. We have a bigger interview now, david bianca from deutsche Asset Management good morning good morning. Thanks for joining us what do you expect today who has the tougher job, yellen or mario draghi. All right i think they both have tough jobs they both have a couple things to acknowledge we think yellen will acknowledge that inflation has disappointed to the down side particularly even out of services we think mario draghi will make some comments along the lines that hes watching the euro. If it goes higher from here t might be a concern you will also get messages along the lines that they want to proceed along a path as best they can towards normalization i dont think youll get anything blockbuster out of this jackson hole was never meant to be bernanke used it as a platform and it got overhyped. Precisely i think they would like to walk that back a bit, which they have been doing i think youll get a negotiatme along the lines that even though theyre watching inflation, theres room from here to hike rates. This whole mystery of lack of inflation puzzles me a bit i would say amazon just bought if i were fed chair. Amazon bought whole foods, theyll lower prices, therefore all grocery chains in this country, including walmart and kroger will lower prices look at retail apparel prices are down. People are not shopping like they used to technology, Financial Services just explain whats happening in the real world the most havent bout of disinflation has a lot to do whats going on in the u. S. Service economy. This is not about oil or china this is something different. I think we have to go back to the drawing board and think about what causes structural inflation. In my view it takes highly organized labor and disorganize tdisorganized bankers to cause inflation so you do think well get another hike i do does that make you more bearish on the equity market bullish the way i see it so i was setting him up. We think rates will climb from here, which is bullish for u. S. Banks, but rates dont climb so much that it jeopardizes the pes of nonfinancials. I think the best healthcare, banks, are the best. When do we move from u. S. Banks to european mank banks and wer making some of that transition now. Some people made that transition in march. So you think european banks have a way to outperform u. S. Banks over the cycle, two, three years, yes theres more upside on their valuations and more Interest Rate normalization to go on in europe thats the structural upside what about the Political Risk . It feels like increasingly this market, whether its vulnerable because of evaluations or because its late august is paying closer attention. When you have a president threatening a shutdown, breaching the debt kreeling wce without raising nafta, how do you approach that . We think august, september, october is a place for the market to consolidate, but he can dont expect a correction. The market sees higher levels by the end of the year because well get a Corporate Tax cut late this year just a Corporate Tax cut . No tax reform just a corp plat tax corate tax. 30 seconds left where do you think the dollar are go this year stable if the fed if yellen is to say shes more concerned about thises did s didisinflation, m dollar weakens david, thank you. Some predictions. Nice predictions there. Nice bullishness thats it for Worldwide Exchange. Well leave it there have a lovely weekend squawk box comes next. I love you, couch. You give us comfort. And we give you bare feet, backsweat, and gordos. Everything. I love you, but sometimes you stink. Soft surfaces trap odors. Febreze fabric refresher cleans them away for good. Because the things you love the most can stink. And plug in febreze to keep your whole room fresh for up to 45 days. Breathe happy with febreze. For years, at t has been promising fast internet to small businesses. But for many businesses, its out of reach. Why promise something you cant deliver . Comcast business is different. We deliver superfast internet with speeds of 150 megabits per second across our entire network, to more companies, in more locations, than at t. We do business where you do business. Good morning breaking news. Hurricane harvey upgraded to category 2 as it gathers strength in the gulf of mexico we will have full Team Coverage of this monster storm and you can monitor the storm in our convenient hurricane box the oil market on edge as mar i have ta harvey takes aim at refineries wall street also keeping a close eye on harvey as well as fed chair Janet Yellens big speech later this morning in jackson hole, wyoming. We will tell you what to expect. Its friday, august 25, 2017 squawk box begins right now. Live from new york where business never sleeps this is squawk box. Good morning. Welcome to squawk box on cnbc. Were live at the Nasdaq Market site in times square im melissa lee with joe kernen. Andrew and becky are out joining us is joe ter noe terraa cnbc contributor hope you drank some coffee today. Already have. Lets look at how u. S. Futures are pointing this friday morning. Looking to open higher the dow looking to add 50 points out of the open. S p at about 7 nasdaq up by 18. Lets look at the action overnight in asia. Its been a strong week overall for