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 b