. good morning. the bulls take control. a new weeks bring new tests for the markets. scam artists hit seagate technology. a phishing e-mail scam causing the company to disclose private information including social security numbers and salaries. >> and race for the white house. a ra a roundup of the weekend. "worldwide exchange" begins right now. ♪

good morning. welcome to "worldwide exchange" on cnbc. >> the dow, s&p and nasdaq on three-week winning streaks for the first time this year. it was a broad based rally with all s&p sectors ending higher. let's check in on u.s. futures right now. will that strong start to march continue? it looks like it won't today. nothing too significant. the dow expected to open down by 60 points to 70 points. the s&p by 10. the nasdaq by about 25 points. >> we will get much more on the markets in a minute. we also want to talk about politics. there's plenty here in the political world to catch you up on over the weekend. in michigan, democratic presidential hopefuls, hillary clinton and bernie sanders, traded shots over everything from trade to the auto bailout to the flint water crisis. on the republican side, donald trump turned in weekend wins in

louisiana and kentucky. but the wig wbig wins in kansas maine went to ted cruz. much more on the race for the white house in 20 minutes. people inside and outside the world of politics are remembering nancy reagan. the former first lady died at her los angeles area home yesterday at the age of 94. as first lady, mrs. reagan was known for her extravagant style and her "just say no to drugs" campaign. she stood by her husband's side after he was shot in an assassination attempt and during his long battle with alzheimer's disease. we'll have more on her legacy on a bit. now the overnight market activity. the yuan easing against the dollar today. the pboc setting the mid point rate within the firmest fixing in two months. china's annual parliament session is going through march 12th.

the currency has been stable over the last few weeks. among the headlines out of the meetings, the country's economy is not heading for a hard landing is not dragging on the global economy. also acknowledging risks, though. china set a growth target of 6.5% to 7% for the year. let's show you how the major markets in asia reacted. the nikkei closed lower. lower in hong kong. the shanghai composite was up 0.85%. it, too, has had a nice rebound over the last few days. >> it has. that announcement that we will not have a hard landing initially sparked a lot more positive to the markets than we had at the close. australia the first to open us with up sharply. it did finish up 1%. the mining sector that's been beaten up linked to china, that was up strongly.

by the time the markets closed, less positivity on that statement. we are seeing some red on the screens in europe following stroke performance over the past couple of weeks, particularly at the start of last week. seeing a bit of a correction today. a correction which has increased during the last hour or so. the dax was down a half percent, now down 1%. a bit of negativity to speak of in europe. >> let's show you the rest of the broader market action. 10-year treasury note yield saw a move up to 1.9. we have not seen that since earlier in the year. selling bonds as the mood improves across global markets. as for the dollar, finished lower for last week. and it is a little bit higher against the euro. it is weaker against the yen. potentially why you saw the selloff on the nikkei on that stronger yen. pound under a bit of pressure, down a half percent against the u.s. dollar. >> the euro in the short-term

last week managing to bounce back a little. it was down to the 108 handle, now back at 109. yes, we approached ecb and expect more easing, just a bit of movement there to take note of. gold continuing its strong start to the year, 1 t.268. oil prices, we've had a couple strong weeks. >> the question for the u.s. market is now that the s&p has had this big move higher and is barely negative for the year, the first three-week winning streak of 2016, can the data continue to point to improvement and away from the bears? this would suggest the selloff to start the year was overblown. >> but then does it play into possibility of a rate hike, which is one of the factors that spooked everybody? >> it's got to be good but not too good. >> which was too good on friday. >> that's the kinds of jobs report we got, 242 is better

jobs, but wage dip dropped slower. oil has stabilized as well. that's been a big part of the story. speaking of oil prices, it could cost you more to fill up your tanks this week. landon dowdy has those numbers. >> the latest lundberg study is out, the average price of gasoline jumped 7 cents over the past two weeks to 1.84 a gallon due to growing demand and higher oil prices. despite the increase, the price is 70 cents cheaper than a year ago. at los angeles, it's still 2.71 a gallon. in tucson, arizona it's 1.33 a gallon. >> either way, the prices are so much lower than they are in europe. you guys have it lucky. >> and so much lower than a year or two ago. >> but there's no tax on it. we get taxed through the nose on guzzling fuel. in corporate news, seagate technology has been hit by

hackers. a phishing e-mail scam forcing the data storage firm to disclose employee data including tax information, salaries and even social security numbers. in a statement seagate telling cnbc data for all current and former workers was sent to an unauthorized third party last week. it doesn't believe the information has been misused but notified the irs. the company is offering employees two years of identity theft protection. stocks to watch, starboard value pushing for change at yahoo! is looking to gain control of yahoo!'s board. yahoo! down a half percent. united airlines announcing it's president and ceo will return to the position full time, he suffered a heart attack and has been on medical leave. a filing revealing that carl icahn has trimmed his position

in mental graphics, he owns 5.5% of the shares. and british american tobacco may be eyeing a takeover of reynolds america. monsanto threatening to pull cotton technology from india. and marvell technology group reportedly opened to selling itself. avago technologies is mentioned as a potential buyer. coming up, a live report from beijing where chinese leaders are gathering to talk about the economy and much more. >> but today's business birthday, sending best wishes to our friend, art cashin, who turns 75 years old today. you'll see art throughout cnbc today, including on "squawk on the street." you always see him weighing in on the markets and economy. he is the director of floor operations for ubs.

he began his career in 1959 and became a member of the nyse at 1964 at age 23. . >> are just wak if you are just up, art a particularly good morning to you. opportunities.>> up, art a particularly good morning to you. are if you are , art a particularly good morning to you. and drive forward with broader possibilities. cme group: how the world advances.

when you're on hold, your business is on hold. that's why comcast business doesn't leave you there. when you call, a small business expert will answer you in about 30 seconds. no annoying hold music. just a real person, real fast. whenever you need them. great, that's what i said. so your business can get back to business. sounds like my ride's ready. don't get stuck on hold. reach an expert fast. comcast business. built for business. welcome back. if you're just waking up, a strong week last week for u.s. equities, we're just going to see a bit of profit taking this

morning. we are expecting the dow to open down by about 65 points. the s&p by 10 points. seeing a similar bit of profit taking, more pronounced in european trade. down a half percent an hour ago, now closer down to 1%. the dax down about 1%. the ftse and cac down about three quarters of 1%. march, though, a strong start for equities globally. china's annual parliament meeting is in session through march 12th. they are lowering the growth target from 6.5% to 7%. eunice yoon has more of the highlights from the weekend. good morning. >> reporter: good morning, sara. the government acknowledged the concerns about the economy and the continued slowdown in growth. over the weekend the chinese premiere unveiled the annual work report. he said in it authorities

decided to lower the growth target from a range of 6.5% to 7%. that acknowledgment has been taken as a positive but many economists are still concerned that the policymakers will struggle to reach growth at those levels. at the same time, all day today and over the weekend the policymakers have been expressing confidence that china will avoid a hard landing. the central bank today said they did believe they will continue to see cross-burner capital flows, at the same time they say they're manageable. the finance minister addressing an important issue facing the economy, rising debt. the finance minister said they believe they would see more bad loans as the economy restructured, however they also believed those bad loans are under control. they also said there will be more room for fiscal stimulus, and that the fiscal deficit will rise to 3% of gdp from last year's 2.4%.

>> thank you very much for that, eunice. when we look at the change in sentiment in international markets towards china over the last couple of weeks, it's the most stark development in markets, not just the recovery in u.s. sentiment, but think how negative things were back in january with china now if we look at currency, the asian market, everything has come back. >> copper, dr. copper the barometer of the economy, it jumped 7% last week. the best week since 2011. copper would not be doing that if there were these deep, deep concerns about a hard landing in china maybe the communication is helping. >> to bring it back, i don't know how orb if if we solved a the issues. yes, the leadership has espoused confidence in terms of growth and the currency, but all those fears we had in january are

still present. yet markets have recovered. something worth bearing in mind. when we come back, just when you thought the race for the white house couldn't be more interesting. big weekend wins for ted cruz and a fiery debate between hillary clinton and bernie sanders. as we head to break, here is today's forecast from the weather channel. >> good morning. we will see a big warmup over the eastern half of the country. new york city pushing 60 degrees today. yes, a bit of a wintry mix in far upstate new york and new england, otherwise the sun is out across much of the south. 69 in atlanta. severe storms across oklahoma and texas, including dallas with the high temperature in the low 70s. after an active weekend in the west, we see more rain in california, there could be issues with mud slides and flooding. that snow will pile up across the higher elevations. 55 in denver.

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good morning. welcome to "worldwide exchange." after a strong week, three weeks of gains for the s&p 500, we're giving some back this morning. dow futures under pressure, down 82 points. s&p 500 down 12. nasdaq futures down 29. the context is that we have been

seeing a rebound in markets from the february lows. the s&p up about 10%. half the sectors including energy are in the green for 2016. wti having another good week. closing above $35 a barrel last week. today the gains continue. 36.53. we are above $36 a barrel on brent, marching towards $40 a barrel. nat gas continues to be under pressure. the euro is weakening ahead of draghi later this week, that's considered a highlight of the week. on thursday expected to ease further, the euro is deline icl. dollar under pressure against the japanese yen. something to watch. the british pound is getting hit again. >> a mario draghi press conference is always the highlight of the week. >> true. >> i look forward to that on thursday. nancy reagan is being

remembered today for her strength, her intelligence and as a woman who changed the role of the first lady. >> across the country, nancy reagan was honored and remembered. president and mrs. obama said they are fortunate to benefit from her proud example and said the former first lady redefined the role in her time here. biographer lou cannon said as first lady she protected president reagan. >> she wanted to make sure people who were around her husband were advancing his agenda and not their own. she was outspoken about it. privately very much so. publicly, too. and that way i think she played an important role in the reagan administration. >> reporter: at the democratic presidential debate in flint, michigan, a moment of silence. on the campaign trail, republican presidential hopeful john kasich who served in congress during the reagan

years, paid tribute to mrs. reagan. >> she was an incredible lady. very strong. a total class act. >> reporter: florida senator marco rubio fondly recalled meeting the former first lady. >> i had been invited to speak at the reagan library, which was an incredible honor to me. i am a child of the reagan revolution. >> reporter: in southern california, mourners brought flowers to the reagan library. >> it's like the end of an era. >> reporter: mrs. reagan will be buried at the library next to her husband. >> and meantime the race for the white house is heating up. after a busy weekend, this morning the presidential candidates are focused on the next primary, tomorrow, in michigan. tracie potts is life in washington with a preview of what the numbers are looking like in this battleground state of michigan. >> we have new polling in michigan. the maris poll giving us a look

at democrats and republicans. republicans, many of them have turned their focus on florida, whose primary is next week. first the stop in the midwest with michigan where the voters are focused on water and jobs. i voted to save the auto i industry. he voted against the money that ended up saving the auto industry. >> reporter: auto, jobs and the flint water crisis big topics in tomorrow's michigan primary. >> people are not paying a water bill for poisoned water. >> reporter: both democrats want michigan's governor to resign. our poll shows hillary clinton with a 17-point lead there, and far ahead in the delegate count after last weekend. donald trump's topping polls in michigan. he's already targeting florida, marco rubio's homestate. rubio won puerto rico this weekend. >> i won 70% of the weekend. >> reporter: but is trailing back home.

ted cruz is closing in on delegates and says he does not want a contested convention. >> you've got to unite. that's what we're seeing happening. >> reporter: trump thinks republicans will unite behind him. >> i'm a unifier, very much a unifier. >> reporter: the next test, tomorrow, in michigan. we also have mississippi, idaho and hawaii voting tomorrow along with michigan. >> how significant is it some of those victories that ted cruz got over the weekend? what is unseated the momentum behind trump? >> no, but it certainly shows that ted cruz is closing in on donald trump in the all-important delegate count. if ted cruz upsets and wins florida, if he wins a significant number of states, there are only about 87 delegates -- exactly 87 delegates apart right now. so it's not the runaway train that we had decision describing with donald trump when it comes

down to the delegate count. that, in the end, is important for this nomination. >> what will also be important is ohio and i'm interested in it, not just because it's my homestate, but governor kasich thinks he has a chance to change the course of his fortunes in this race. and ohio usually does decide the presidential election. how is that looking? he's not leading in ohio in the average of the latest polls, but is certainly close enough to where analysts think he has a chance to win. that -- even winning ohio and all of those delegates won't necessarily bump john kasich up to competition with donald trump. what it will do is siphon off votes from donald trump, make it more difficult for him to get the votes he needs before the convention. in other words, if kasich wins ohio and if rubio wins florida, it looks like more and more we may be going into a contested convention, that's where john kasich could have more of an opportunity. >> lots to watch still this

week. thank you for joining. in sports, peyton manning has decided to call it quits. fresh offer the super bowl win with the broncos, manning will announce he's retiring today. drafted number one by the colts in 1998, manning is a five-time nfl mvp, a two-time super bowl winner and leaves as the all-time leader in passing yards and touchdowns. to golf, for the second straight weekend, adam scott comes out on top on the pga tour. the australian knocking it in on the 18th hole for the win at the wgc cadillac championship. and the world famous iditarod dog sled race kicked off on sunday in alaska. >> iditarod. it's a cultural phenomenon. >> never heard of that before. that took off over the weekend.

>> yep. >> from one hotly contested sport to another, here is something that you might recognize from your country. a french and american couple holding on to that title in great britain's annual wifeshpc. >> i never heard of this couples race over a hilly 400-yard course featuring articles like a splash zone. some women carry men, there are some same sex pairings. >> look at that. >> the person being carried must weigh at least 110 pounds. the winner set a uk record, sun minute and 40 seconds. the prize, a barrel of beer. >> i think you can see by the number of people in the picture that this is not a global sport, despite the billing we get. >> but the video is so good. >> it's a shame i'm not doing that around the studio right now. >> we would have a real shot at this. moviegoers flocked to z

zootopia this weekend. the animated movie which stars jennifer goodwin as rabbit who joins the police force took in nearly $74 million in the u.s. and canada. that's a record debut for disney's animation division. zootopia has already grossed nearly $160 million overseas. action thriller "london has fallen" came in second opening with just 21.7 million. >> did you hear president obama will be paying tribute to charlie brown, snoopy and the rest of the peanuts gang. he has written the forward for the 25th volume of the complete pea nuts, the latest in the series preprinting of the iconic comic book strip. this issue covers january 1, 1999 through february 13, 2000 when the final peanuts strip was published the day after the

death of charles schulz. president obama said for decades, peanuts was our own daily security blanket. that's what makes peanuts an american treasure. >> what could get in the way of a rally this week? policy, central banks, oil or something else? lots more to discuss after this short break.

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good morning. an ecb meeting this week dominates the global conversation. shake shack set to post quarterly results as shares trade nearly double their ipo price. and turning the tables. why a law school finds itself the target of a lawsuit. it is monday, the 7th of march, 2016. you are watching "worldwide exchange." ♪ welcome to "worldwide exchange." i >> a strong start to march last week for global equities. just taking a bit of profits. that's what we expect at the open for the u.s. trading day. the dow set to opener lower by

70 points, s&p by 10, the nasdaq by 24 points. in europe it was a positive start to march across the pond. we are seeing a decent amount of profit taking. the dax had been down about a half percent, now just down over 1%. similar sized moves across the board. asia did see a bit more positivity. we had the chinese authorities commit to no hard landing, that gave a bit of positive performance for the shanghai comp. japan and hong kong down a bit. as for the broader markets, wti oil prices coming off a strong week and bidding on those gains again this morning. wti over $36 a barrel, up another 1.5%. brent the international benchmark up a percent at 39.18. as for the ten-year treasury note yield, ten-year yield sitting above 1.90. we saw a selloff in treasuries as money moved out of bonds and into stocks.

that has sent yields higher. the dollar is gaining against the euro. euro under pressure ahead of mario draghi on wednesday. the dollar broadly finished the week last week lower. the japanese yen is strengthening. it's something we'll keep an eye on. it's not extreme, but we are at 113.41. gold continues to surge, whether the mood is upbeat or down beat. gold is under some pressure this morning down 1.80. but the mining etf that tracks gold, that's up 45% so far this year. it has been a beaten down sector, the gold miners, boy, is it charging back. what we've learned after last week is that the bulls are back in control. the dow closed above 17,000. >> all sectors were up. >> s&p temporarily went above 2,000. all sectors up on friday.

it's a data-light week, earnings light week, so what can get the numbers higher? >> to point to the fact that all those sectors were up, we saw equities globally up, saw some traditional risk off moves unwind, yields ticking up a, bonds selling, this was a risk on start to march. the only thing i would say is that we had two strong weeks for oil. this could be an energy related correlation and a bounce in that sense rather than fundamental strength. >> the u.s. data has come in better than expected. yes, maybe expectations were ratcheted down so far, but the data has not told a recession story. we were sitting at this desk a month ago wondering if the u.s. was going into recession. we're not getting those numbers that would suggest we are. it is a light week, potentially it will be driven by central banks like europe. >> i think with the ecb on thursday, there's some easing priced in. we could discuss how draghi might do that, if he doesn't

deliver -- >> negative rates and qe. >> having had all that positive data in the u.s., it's a lighter week this week. today we get january consumer credit at 3:00 p.m. on thursday, the ecb meeting as we know with mario draghi's press conference, on friday february import prices. also something to watch, shake shack reporting results after the close today. landon dowdy has three things to watch in this report. love how they break it down by same shack sales. >> it's a mouthful. same shack sales. the street expects the burger chain to serve up fourth quarter earnings of 7 cents a share on revenue of $50 million. here's three things to watch. restaurant growth. watch for updates as shake shack plans to expand from 75 to 455 locations. second, will profit margins continue to improve? some analysts believe the

introduction of the chicken shack sandwich in january could drive sales. shares traded at double the ipo price of $41.50 a share, but some question whether the momentum can continue. out of the ten wall street analysts who cover shack, only one says it is a buy. short interest in the stock has soared to near record highs. traders will be watching up to see if the stock will have a short covering relief rally. elon musk's spacex successfully launched the falcon 9 rocket from cape canaveral on friday but afterwards was unability to successfully land it on a floating drone ship at sea. this is the company's fourth attempt to land the rocket on the drone ship. the flight had been delaned four times since february 24th and is the second of more than 12 spacex launches planned for this year. the obama administration says it will begin rating health

insurance plans based on how many doctors and hospitals they include in their networks. under the rules insurers will still be allowed to sell health plans with a narrow network of providers. some sad news to report. ray tomlinson, the inventor of modder e-ma eern e-mail has die age of 74. before him, there was no way to send a message to a specific person at a specific e-mail address. at a speech at his induction to the internet hall of fame, he said he knew what he was doing when he invented e-mail but had no notion whatsoever about what the ultimate impact would be. tomlinson was also the person who chose the "at" symbol to connect a user name and the destination. for today's top trending

stories. the world premiere auction houses are experiencing slumps in profits. sotheby's and christy's brought in 45% less than the year before. christy's had a 5% decline in annual sales after five years of growth. picasso's oil painting recently sold for 10 million euros less than it did in 2013. so, the art market obviously still suffering. >> bubble bursting? is that too extreme? for the first time a law school will stand trial for inflating employment data. former top tier student anna alaburda is suing and will testify against thomas jefferson school of law. she graduated top in her class back in 2008 and has yet to find a full-time job as a lawyer. 15 similar suits have been filed against law schools for counting part anymore and waitressing jobs and employment numbers. but only one besides anna

alaburda is still active. apple users were targeted in the first known ransom wear campaign. the software encrypts data and then asks users to pay a ransom. this is the first functioning ran so ransome ware on a mac. >> much more about that in my must read of the morning. did you see this? fights breaking out across the u.s. over the new air jordan sneakers. foot lockers in wisconsin, nebraska and minnesota had to shut down because of rowdy crowds. one fight spilled into a parking lot where two men were shot. the wounds were nonlife threatening. the men will recover, but still this is crazy. there is this hard to get limited edition sneaker release

culture. i bought some under armour stuff this weekend, because of steph curry. >> did you get the curry 2 shoes? >> no, i got a t-shirt. i'm a sucker for this advertising. coming up, an apple executive speaks, why he says law enforcement could put everyone at risk if they hinder innovation. you don't want to miss that. and much more importantly, my must read, which is also coming up.l lingering garbage.. ...in her kitchen yup, she's gone noseblind. she thinks it smells fine, but her guests smell this. ding, flies, meow febreze air effects heavy duty has up to... ...two times the odor-eliminating power to... ...remove odors you've done noseblind to [inhales] mmm. use febreze air effects, till it's fresh and try febreze small spaces... ...to continuously eliminate up to two times the odors... ...for 30 days febreze small spaces and air effects, two more ways... [inhale + exhale mnemonic] to breathe happy.

welcome back. futures pointing to a negative open. the dow down about 18 points. the s&p by 13. this follows two strong weeks of equity performance in the u.s. >> news outside the world of business, nancy reagan is being remembered today for her strength, her intelligence, her style and as a woman who changed the role of first lady. she died at her los angeles area home yesterday at the age of 94. as first lady, mrs. reagan was known for her extravagant style and her just say no to drugs campaign. she famously stood by her husband's side after he was shot in an assassination attempt and during the long battle with alzheimer's. lots of good obituaries out in some of the papers. "new york times" one stood out to me from an author of five books of ronald reagan. it's time for our must reads. i went to the "washington post,"

the senior vice president of software engineering for apple actually wrote an op-ed. not every day you get an executive of apple writing out. this is titled the fbi wants to roll back safeguards that keep us a step ahead of criminals. during this legal battle apple cons to speak out. he writes that the security of ios 7, while cutting edge in 2013, has since been breached by hackers. what's worse, some of the methods have been product ties and are now available for sale to attackers who are less skilled, but more often malicious. the reason i chose this quote, the new thing sort of here in apple's defense that he went back to is the fbi is asking them to roll back security measures to that 2013 ios software, which is long outdated, long been hacked and able to be accessed by criminals. that's how he's comparing what the fbi is asking them to do in

making them unlock the iphone. >> apple making their arguments much more clearly than the first two weeks of the scandal. and my pick for must read is in the financial times. this one titled european central bank must be much bolder. we have the ecb meeting this week. the big call he makes in this is that the ecb should be buying nonperforming loans in the banking sector. but i picked out a particular quote relating to his conclusion that so far qe has not worked. he said in europe p came too late. he said the purchasing volumes were puny but also the programs in the u.s. and uk started when market interest rates were higher than today. the european program came when rates were already low. since one of the main objectives of qe is to lower rates, its marginal impact is thus much smaller. this is important when the u.s. and uk might be considering

negative rates themselves and the way japan has done it and not worked because it's sort of too late now, the marginal impact when you introduce it is so much smaller. the u.s. had an advantage with qe, i think trying to chase that further now won't work. >> the question is can draghi succeed where the bank of japan is not, in terms of asset prices and stimulating the economy with rates. >> this article saying he has to change the bonds that the ecb is purchasing to get marginal impact. >> get creative. we are approaching the top of the hour, the team is getting ready for "squawk box." michelle caruso-cabrera joins us now from new york. we're just talking about the ecb, because it's a data light week, earnings light week, we're wondering whether this winning streak for stocks can continue. >> this morning the futures look like they don't suggest they will happen. we will discuss politics, the

debate last night. a debate about donald trump. a republican congressman from pennsylvania supporting donald trump, but a former george w. bush white house official doing everything he can to stop trump. we'll note the passing of former first lady nancy reagan. and her death crystalizes for a lot of people in the middle of this gop nomination the person who the party misses so much, ronald reagan. and we will discuss shake shack with their results out after the bell. and netflix dropped a new "house of cards" over the weekend. what will that do for subscriber growth? >> i watched the first two episodes of that. >> you did? i was disappointed. >> yeah. >> not as good as it was in season two. >> i gave up after the first season. >> you gave up at the right time. >> here's the thing, nobody in washington dresses that well. all those people dress so

beautifully. in washington, they're all frumpy and their suits fit badically. >> that's perhaps the most unrealistic part. >> thank you very much. we have 12 minutes until "squawk box." still to come, stocks in rally mode last week closing at two-month highs. can the trend continue? are there global head winds to keep an eye on? we'll discuss that with talley leger. stay tuned.

dow futures under pressure to the tune of 75 points. s&p futures down 12, nasdaq futures down 28. joining us in studio is talley leger global strategist. you joined fund strat last week.

does that mean you have to be as positive on the markets? >> we talk about many of the same things. you know, he's very bullish. i think he's making the right arguments. part and parcel to the bullish view at fundstrat is a bit of dollar weakness will go a long way in helping oil to recover. oil has been acting well. that should support the stock market, at least given the strong correlations we've been seeing. >> would dollar weakness evaporate into strength if we get another rate hike? >> that's a key question. right now the fed is one of the key risks faces the market, particularly a potential policy error. i think the fed is walking a tightrope between market volatility on one side, including foreign economic weakness, maybe a little low inflation, but on the other it's also seeing a strong labor

market. a pretty stable to strong u.s. economy. that means the fed is on a path of a lower tightening cycle. >> i wonder how much of this rally we've seen over the past few weeks is about the fundamentals. the u.s. economy showing we're not in recession and the markets pricing out what they priced in in the beginning of the year, which was overly pessimistic. >> that's a great point. you mentioned a data light week ahead of us. that's good because it allows investors to take a step back and realize the economy is doing well here. we had an update to the atlanta fed's gdp now tracking model on friday. it is showing us that the economy is growing at a 2.2% pa pace. meanwhile stocks are down this year. to your point, that's right. markets have overreacted to the down side. we're seeing a melt up which makes sense. >> which sectors have

overreacted the most? where is there opportunity given this strength in the labor market you're seeing, albeit lower inflation but things have sold off at times this year? >> it's clearly the cyclicals. that's presenting another opportunity. as a firm we'd be playing the industrials on this melt up here. you mentioned transports, they've been punished. that presents a good valuation opportunity for investors. >> on a day like today where we are looking at a selloff in futures. would your advice be buy the dips because this market has room to rally throughout the year? >> absolutely. we focus on the fundamentals, that forces to us have a longer term view. when we take that step back, we see the economy doing well here. if that continues to be the case, you want to focus on the economy sensitive sectors. >> when you look around the

world, what are the top risks that can deleverage. there were fears a few weeks ago that deutsche bank could spark another selloff. outside of the u.s., what is your number one fear? >> a key risk is a downward death spiral of the global economy. you mentioned earlier on the show that dr. copper has been acting well. that wouldn't be the case if we were headed into a death spiral. i think related to that, inve investors shouldn't be so quick to discount the willingness of policymakers to support the pboc. >> do policymakers have the strength they once did? that is key. credibility is important. but i think mario draghi that

kind of displayed his willingness to step in and support when it's necessary. >> whatever it takes. so you like industrial stocks, as you mentioned. you like consumer discretionary as well. within those groups which ones do you stay away from? which do you look for. >> we downgraded consumer discretionary last november. we swapped it out for positions in energy and industrials which has been acting pretty well. but in terms of where we would stay away from in a consumer discretionary, it would be the higher labor intensity segments including restaurants and department stores. which suffer from a classic margin squeeze. if average hourly earnings keep accelerating. on the flip side, the industrial sector is not labor intensivnte. we would be focusing there. industrials and energy.

>> and we can watch shake shack today to see if that theme comes through. only about a minute left. so we want to highlight a few things we're watching. i picked out the euro stoxx 50. less data to focus in on in the u.s. this week. given we have the ecb meeting this week, i wonder whether europe will lead the u.s. this week. >> i'm watching the dow transports. talley was talking about some industrial names doing better. the dow transports have been outperforming, that's a signal about where we are in the u.s. and global economy. they're up about 2% from the end of the year, where the s&p is down 2% if th. our twitter question, cha what could get in the way of a market rally this week?

24% say politics, 27% central banks. 39% oil. >> "squawk box" is next.

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>> good morning. u.s. stocks charging to two-month highs, but those gains could be tested by a key central bank meeting in europe this week. seagate employee data linkedlink linked in a phishing scam. and apple targeted by ransom ware. and an updated score card on the delegates and the wildest comments from the candidates. it's monday, march 7, 2016, "squawk box" begins right now. ♪

>> good morning, everybody. welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernan and michelle caruso-cabrera. andrew is off today. stocks coming off three straight weeks of gains. friday at the highest level we've seen in two months. check out the u.s. equity futures. the dow futures are down by about 75 points below fair value. s&p is off by 12. nasdaq down by 28. overseas in europe, already in the early trading, some similar patterns there. the dax is down by 1.1%. cac by a similar percent. in asia, the nikkei closed lower by more than half a percent. the shanghai composite earned 0.8%. look at price of crude, it's continuing to creep higher. up to