good morning. global market alerts. stocks rallying around the world right now. we'll talk about the catalysts right ahead. new this morning -- a breakthrough debt deal for greece. details on another late round of talks in brussels coming up. and a developing story. paypal peter thiel is finance hulk hogan's lawsuit. it's wednesday, may 25th, 2016, "worldwide exchange" begins right now. ♪ ♪ i can't feel my face when i'm with you ♪ ♪ good morning and welcome to "worldwide exchange" on cnbc. i'm sara eisen.

>> and i'm wilfred frost. good morning from me as well. let's bring you up to speed on the market. action a very strong rally yesterday. the nasdaq up over 2%. two others up 1% as well. the dow called higher by 76 points. s&p by 10, nasdaq by 24. just high of half of a percent for most of these indices. of course, yesterday's rallies very strong, but not on the high of the of volumes. nonetheless, quite surprising to see it particularly on the day when the dollar was strong as well. of course, stronger data pushing back on expectations that june and july are very much in play for the fed. let's have a look at oil prices. they are part of the rally as well. we saw oil up about a percent. we're up another percent and a quarter today. 49.2 for wti, close to the $50 mark. let's get a check at global

markets following overnight from asia. the nikkei shrugging off sort of disappointing news from individual stock owners. 1.6%. the weaker yen on the dollar has been helping japan to rebound. toyota had a nice overnight as well. hong kong a star overnight finishing up 3%. shanghai closed lower by 0.23%. and china fixed its occurri rir- currency in a year. resilience in global equities overnight especially in china. notable, that china yuan. and the german dax up one 1% gains. europe with $50 a barrel.

and the u.s. recession, the strength of the banks and technologies are reasserting themselves. the lead will be one to watch. >> and germany was up over 2% yesterday so really extraordinarily strong rally there. i think a big factor is because the u.s. dollar hash strong including against universithe e. and thats who eased pressures on germany and of course wider companies across europe. and as you say, i think over the course of five months, though, markets have got more happy that the chinese authorities are in control of things that they're actually heightening things across the currency. so this is not the most important. on top of that, of course, the recent move has been more about dollar strength as opposed to a lot of financing or escaping in china. >> right. the outflows and scary macro economic picture. >> let's go to broader markets because we did see a decent

move. closer to 1.9% on the ten-year. yesterday, we're shy of that now, 1.88. the dollar, we can't underplay it enough yesterday, strong stock rally in the face of a strong dollar. in the face of more talk of a rate hike. of course, previously, we've been having to rely on more easing talk for markets to rally. the euro, 1.1142, has some reprieve. gold prices recently, weaknesses by half a percent. >> dollar is strong, flip side, gold gets hit. jim bullard said a june hike isn't set in stone. but in an interview with cnbc, bullard did argue that market data suggests it's time to pull the trigger. listen. >> obviously, we try to be data-dependent, i don't think

there's any reason to prejudge the june meeting at this point. we can wait until we get to the meeting, see what the data say and try to make a good decision there. i think on the issue of press conferences we have made many moves over the years, without press conferences. so, i think we could make a move without a press conference in this circumstance. >> keep in mind, no press conference at the july meeting. yes, in june, opening up the suggestion as other regional fed presidents this week have for two to three rate hikes this year. as for the risk of brexit and the chance that the uk vote could give the fed pause in its june meeting. bullard says he doesn't consider it it quite the global market event. but he does note that his view could be, quote, an outlier. >> it's something that the fed is mixed about whether it's going to keep us going to june. the bottom line while investors and the fed are increasingly

getting on the same page about an interest rate hike. the federal reserve itself is getting on the same page. we've heard a lot of the comments echoing themselves. we're not seeing sort of the discord that we saw earlier in the year internally from the federal reserve. but none of this matters until janet yellen speaks on friday. she's speaking at harvard. she's the most important. she's the core of the fed. dudley, the key ally of the new york fed echoed some of these other comments that they're looking like june could be a strong possibility as the economy improves. >> absolutely, she's the one to focus on for friday. down the line capitals jeff goodluck says stocks feel like a short squeeze. as for the fed, he still puts the odds of a june hike at 50/50. a goodo offset to the rally

yesterday. apart from yesterday we haven't been range-bound. yesterday was the outlier for me. >> it's sort what he's been saying on equities. >> it is. >> he's been right in saying that the strength of bonds will be persistent and treasuries. it will be interesting to see if he changes it. hpe announcing plans to spin off most of its technology operations. the business will merge with computer sciences. this is an $8.5 billion deal. shares of both companies up sharply reacting nicely to that news. the transaction comes less than a year after the break job of hewlett-packard into hpe and hp inc. they'll now own shares of both hpe and both companies. meg whitman on the conference call had this to say about it

last night. >> for the remaining hewlett-packard enterprise, this transaction contains significant value by unlocking a faster growing, higher margin and stronger cash flow business. hpe will now have $33 billion in annual revenue and will focus on software generation and infrastructure that generates a world class storage and infrastructure as well as our helium cloud platform and software assets. >> moump from meg whitman joining "squawk on the street" later this morning. the only thing i would say focus when it comes to technology. hhp goes from one to three in under two years. >> investors love it. nice bounce in share prices. the data pool is challenged today. and it may focus on a trio of fed speakers making the rounds.

and we've got harker and kashkari and kaplan speaking at various times throughout the day. tiffany reports emption before the bell. hp, williams sonoma and lions gate after the close. mitsubishi motors restating its financial results for the past year to reflect a special loss of nearly $175 million. that's related to its fuel manipulation scandal. monsanto rejecting a bayer $62 billion takeover saying the bid was too low. but the firm is open to conversations. dicomindustry is looking for better than expected outlook. up 11%. in other corporate news, mcdonald's is one to watch holding its annual shareholder meeting it comes as the fast food giant is experiencing a

turnaround in business. landon dowdy joins us with three things to watch in mcdonald's. >> mcdonald's top executives will go into shareholders at the headquarters in illinois. shares up 25% in the past year. stores have turned around and they're up 6.2% globally. and 5.4% in the u.s. in the first quarter. the launch of all-day breakfast has been a big driver for that sales increase. david palmer of rbc capital saying it will be the gift that keeps giving through 2017. but he wants to hear more about all-b all-day breakfast. and raising the wage to $10, labor groups say the change hasn't been enough. the fight for $15 is planning a massive protest. back to you. >> landon, thank you for that.

>> it's so un-american of you. >> i know. >> i used to be once a month type. you can't go regularly. >> wait until the garlic fries come. >> hm, questionable. >> you'll have to try that with me. >> the best story of the morning, the report surfacing that paypal co-founder peter thiel funded the $140 million lawsuit that hulk hogan won against gawker. it's not immediately clear in the silicon valley venture capitalist, how he came to be involved with hogan. >> obviously, the story getting a lot of buzz. according to reports, teele had a bone to pick with gawker. he's an inver, invested earlier in facebook.

hulk hogan won. unclear what they invested. it's not uncommon. they just negotiate a percentage of the wins, if they believe it, why fought. >> it's a legal -- >> i'm sure it's legal to invest in what happened. morally, is that the right thing? anyway, we won't go into the details of that. back to the market, our facebook and twitter question we saw a big rally yesterday. we also saw with it strong dollar and rate hike talk. is this cocktail sustainable? way in here. >> it's interesting to see strong stocks all in one way. it didn't stop the ral little yesterday. coming up the breakthrough deal for greece overnight. details on another late night of talks in brussels next. plus, citi's global held of g 10 foreign exchange joins us.

how will the dollar go from here and what will it mean for equity, next. but first, best wishes to time warner executive jeff bewkes who turns 62 today. very happy birthday. we're back in a couple minutes.

breaking news this morning,

eurozone leaders are hailing what they're calling a breakthrough deal with greece again. talks lasting into the early hours today, told euro group ministers agreeing to release 10.3 billion euros in new funds for greece in return for fiscal reform. the eurozone offering up its debt release in 2018 if necessary to meet its criteria on payments. putting all of this together the imf is willing to once again join the eurozone in funding the bailout of greece. the greek banking index jumping more than 3% harg that deal. the yield dropping to a six-month low, below 7%. slightly above there this morning but clearly this is being taken as good news. the imf caved a bit. they wanted immediate consideration of debt relief. they did not get that. it's go to be put off a few years. but if you think about it the eurozone ministers are in top shape. they're heading into a

referendum in the uk whether to stay in the eu. they have to so solidarity going into that. otherwise, we would have had two dramas this summer going into the brink of a brexit. they weren't go together let that happen. >> interestingly right as you say the imf caved a little bit almost some could argue to make sure the collective kind of voice of people that want the uk referendum vote to remain, it's let's just not cause an extra fuss over it. we don't want to put more fuel on the fire. a deal once again, late night. >> familiar. >> not sold on greece's issues, of course. and other news, we're watching the situation in france. the french oil industry federation said the country has been forced to tap its oil reserves this comes as a labor deputy forces france refineries to halt. and protests at thousands of petro stations run dry.

at the market, it's been the eye of the storm lately. the strong dollar reasserting itself. not so much this morning. the euro is say bit strong on the back of that greek resolution. temporary resolution. it is strong against the japanese yen. above 1.10. the pound is flat. but it's rallying as the polls have increasingly shown that britain may remain in the e up. joining inin ining us to talk, gains and strengthened all day yesterday, steven, the difference is global equities seem to be okay with it, is that true? and will it continue? >> well, i think it's okay for now, i think what really sparked the equity rally was the strong housing numbers that we had had yesterday. they really took off after they came out. and the message i think that they're sending is that the markets are more afraid of having a really weak subpar u.s. recovery or growth, than they

are of having the fed move two times this year. >> steve, that's a lost progress, isn't it? in the beginning of the year, the reason markets were so weak is because we thought we were going to have lots of hikes. not because necessarily we thought the economy was too soft? >> well the economy started softening at the beginning of the year. i think our standards have changed, right? at the beginning of the years, lots of hikes or four hikes in the year, now if we get too strong, for the market, moreover in the out years, 2017 and 2018, we're really not placing in more than one hike at this stage. we think that the markets are kind of reassured at the growth and hoping they'll get top line support for equity valuations. >> the only thing that's different between now and january is that the market seems to be okay with the weakening of the chinese currency. overnight, a report that china sat at its lowest fixing in

years over the u.s. dollar. and the comp barely closed lower. >> if you take a look, we've done studies on this if you take a look at the reaction of cny and cnh, the much more modest than what we saw in august of last year and december and january of this year. i think china is sending a signal that they're not the ones to destabilize the financial markets this time of year. >> very quickly, how much stronger does the dollar get this year? >> i think they still have a couple percent more. probably more against the yen than against the euro. i'd say we could see another 5% against the euro maybe. maybe a bit more against the yen. >> steven, thanks so much for joining us this morning. steven englander of citi. still to come, today's top political stories including anti-trump protests turning

invite lea violent. >> today, the weather channel's paul good lowe. >> good morning, thanks, wilfred. if you've been wanting the warm weather it is here. 90, the first 90 of the year in new york city. kind of chilly last week, today, boom, 90. you'll hit 90 before atlanta does so far this season. 88, one of the warmest in atlanta today. otherwise, a lot of red here in the middle of the country for thunderstorms and tornadoes again from the twin cities and even chicago, you'll see late day thunderstorms. some of those could be on the strong side. otherwise, you'll have snow coming down in areas of montana and wyoming. yellowstone seeing snow showers again today it's like winter does not want to quit. otherwise, scattered thunderstorms popping up across the west even mountain snow across the southern sierra. we need that. cooler as well.

l.a. only 67 degrees. hey, we're back with more "worldwide exchange" after this.

to political news, hillary clinton is opening up a new line of taxi on donald trump accusing of him looking at dollar signs. trump is firing his own personal shots. tracie potts from washington with the latest. >> with all of that happening we

also saw protests again outside of a trump rally last night. a trump spokesman calling them thugs and punks. a lot of these people were carrying mexican flags saying they were offended that donald trump would bring his anti-immigration message to new mexico. protesters outside of donald trump's albuquerque valley throwing rocks at police in the dark. several officers were treated. they responded with smoke canisters. ♪ >> reporter: inside, trump responded to hillary clinton's claim that he was rooting for the housing crisis that destroyed millions of americans. >> that's what i'm supposed to do. i'm in business. >> why on earth would elect somebody president that actually voted for the collapse of the mortgage market? >> reporter: later they're

making that same point. >> some people are just allergic to the facts. >> reporter: as bernie sanders told california, clinton can't be tough on wall street either. >> you can't take their money and take them on. >> reporter: all three candidates are in california today. sanders the underdog is pushing to win there june 7th. >> california, it's a long way to washington. >> reporter: overnight, donald trump picked up more delegates in washington state's republican primary. now, they'll be counting up the final votes from washington state this morning to award the rest of the delegates but the way it stands right now, donald trump is about 40 delegates away from securing this nomination. >> tracie, thank you for that update from washington. still to come here on "worldwide exchange," this morning's top stories. a live report from you're on that breakthrough greek deal we had overnight. and the story everyone is talking about today, why paypal

co-founder peter thiel is backing hulk hogan. midway dak to normandy medina ridge the chosin reservoir these are places history will never forget but more important are the faces we will always remember. ♪

good morning. ready for a rally, green arrows around the world right now. new this morning, microsoft is cutting nearly 2,000 jobs in its smartphone unit. and check this out, paul mccartney is inviting fans in this studio. you won't even have to leave the comfort of your own home.

it's wednesday, may 25th, 2016. you're watching "worldwide exchange" on cnbc. ♪ good morning, welcome back to "worldwide exchange" here on cnbc. i'm sara eisen. >> and i'm wilfred frost, go big or go home. that's certainly what markets were doing yesterday. 2% rally for the nasdaq. >> best day for the s&p since march 11th. it looks like the party continues this morning. u.s. equity futures pointsing to a higher start. dow futures up 76 points or so. s&p futures up a little more than 10 points. nasdaq up 26. tech again in the spot light. it was a big leader in yesterday's session along with financials. europe early action is continuing. we're really seeing a global stock market rally this morning. it's on the back of stronger oil prices and of course strength on the back of u.s. equity markets led by home builders and tech. german dax up by more than 1.3%.

1% across the continent. the euro has been weakening in recent sessions. could be a lift for german exporters and european exporters. and also a breakthrough deal in greece. we'll get to that. quickly show you the action in asia overnight it was also marked by gains especially in japan and especially in hong kong which grows higher by 2.7%. toyota was a notable winner in japan's nikkei session after announcing that partnership with uber. shanghai closed lower. which was resilience given the fact that the chinese currency is now at the weakest level against the dollar in three months after the chinese government or central bank fixed at the lowest since 2011. that would have been spooky early in the year. it is considered okay for the markets now as investors everywhere are warming up to this idea that the fed could move sooner than later and that might not be such a bad thing because the u.s. economy might be able to handle it. look at housing data yesterday.

>> that's the big thing on the chinese strength, more dollar driven than the weakness side of things. that's a big take-away. dollar strength yesterday and markets managed to shrug it off. it's not just the story domestically that we saw that. europe very strong in the last 48 hours. asia also strong. yes, there's some weaker euro reasons there, for example. but when we were talking earlier, it was spooking equity markets around the world. we've got 4% of gains for the german dax. very strong indeed. >> maybe the economy can handle it globally and in the u.s. >> let's have a look at global markets it's not just the dollar. oil was strong yesterday. $49. pretty much bang on for brent and wti this morning. a bit of movement in the ten-year note 1.9%. picking up just below that, 1.87. the dollar index up 1.4%.

not significant happening. the story of recent has been dollar strength as opposed to weakness. let's have a look at gold price. at 1221. >> eurozone dealers are talking about deals. julia chatterling has the story. is the big story here a bit of uptake? >> well, that's a question. the germans here have to concede to a greater extent to even offer some kind of future debt relief. so there's good news there. i think in the short term as well. the positive here is that greece now marks 10 billion uros worth of cash which means hopefully we're not going to see the turbulence if you'll remember with the ten-year bond in the summer of last year. so that's a positive. but going forward when are they actually going to get some form

of debt relief? well, they're not going to get it until after the end of the current program. i don't have to remind anybody out there just how likely is it that greece manages to finish a program here. so that's one thing. no one has agreed to anything, remember. these are broad principles. i'll just wrap up by reminding you how many times greece has been promised debt relief. i can till because i was there. november 2011, july 2015 and again for 2018. guys, i think it's a case of what's in. and now, greece down since november of last year so some optimism that there's lighting at the end of the party for greece. but devil always in the detail. that gets us past spain and brexit. i think that's the bigger issue here. >> julia, thank you for the update on greece. in corporate news, microsoft is cutting 1850 jobs in its smartphone unit. most of those positions are actually in finland. this as sales of the device

continue to decline. remember, the tech giants acquired the business from nokia a couple years ago. microsoft taking a current charge of this of $950 million. hulert pack area enterprise announcing plans to spin off most of its technology services operations. business will merge with computer sciences in an 8.5 billion deal. shares of both companies up sharply on the news, as you can see. the transaction comes less than a year after the breakup of hewlett-packard. computer science has been involved. hpe will own shares of both hp and the combined company. ceo meg whitman will join david faber on "squawk on the street" later this morning. toyota is hailing a ride with uber. investing an unspecified amount in the company. report says it's under $100 million, though.

toyota and uber will now offer vehicles to drivers through a new leasing program. they'll be able to cover their monthly payment use uber earnings. the companies will also share information on research and techniqu technology. yet another deal with a ride sharing company and a car company. >> there are a lot of toyotas on uber. the data pool is shallow, so we focus on a trio of fed speakers. philly fred patrick harker, minneapolis fed president neel kashkari and dallas fed president kaplan speaking. hp inc., williams sonoma and lions gate out after the close. tiffany, if you want an example of how it's hurting corporate america.

tiffany highly exposed. not just overseas in markets like japan but in u.s. flagship stores where there are so many tourists just not spending very much. >> tiffany is considered high end? >> very high end. luxury rea little. the dow and s&p coming off the best days since march 11th. joining us now to discuss it further, senior vice president. thank you for joining us. we've gault a strong dollar, those two usually aren't correlated together and also strong equities in the nation of the stronger dollar. this is kind of a great cocktail. >> well, i think we have tailwinds at long last in the global company and particularly the u.s. economy. we think we're entering a period where three weights that held down economic growth have been lifted. >> those three weights are? >> so we start with, of course, the manufacturing contraction in the u.s. has come to end.

>> are you sure about that. richmond fed was negative yesterday. regional feds missing which could suggests - it's never a smart move. but the pattern of consistently below 50 on ism has certainly been broken on two reads above. we're thought say it's at the bottom recovery, roaring back, but all of those downward pressures, it's behind us. i think that's consistent with what we're seeing from the fed. >> that's number one. >> number two, energy and the dollar. >> and those can continue at the same pace together? >> well, we don't need to see a continuation of higher energy prices. but the fact that we've got stabilization, we also tonight think the dollar is going to continue to fall. we just don't think we're going to have the repeat of last year soaring higher dollar. that was a tremendous impediment to earnings. your tiffany story is one example of that. >> so safe to go back in, but go back in where? do you go to the defensive, the

yield payers? or the more cyclically financials? >> we ejected a read asset class which is reads and mlps combined. not because they're not necessarily go to be the strongest performer but we think they have the best risk adjusted recurrence partially because of dividend distributions. >> what's your expectation for rate hikes because that influences people's sector choices as well? >> we've been very steady, two rate hikes this year. >> starting in june? >> we don't think it's significant whether it's a june or july start. we think it is likely this summer, we'll sneak one more in towards the back end of the year. >> i wonder if the recent m & a has added fuel to the fire? the 62 billions offer from monsanto and may get even higher -- >> not completed yet.

>> not completed but going back and asking for a bigger offer. you've also got this hpe deal out of nowhere last night, splitting now? >> yeah, i think what's interesting about all of this, this has been going on for some time. but it's really a continuation of trend of businesses looking for ways to grow. to some degree that reflects some confidence in the future. >> is that a good thing for the market and would you be investing around these and which industries are responsible? >> it's not one of our drivers in portfolios. >> jeff, thank you for joining us. now, to our top trending stories, and this one is on top of that list. reports say yesterday a paypal co-founder peter thiel funds the $140 million lawsuit that hulk hogan won against gawker founder. confirming the report it wasn't immediately clear that the

silicon valley capitalist is the sole funder of the case but how he became involved with hogan is a great story. a great investment for peter thiel, if you go back and look at it it looks like he's had a checkered feelings about gawker. and paul mccartney is inviting fans into the studio. the legendary musician is the subject of six vr documentaries. a retrospective look at his career. it's out on the 10th of june. it is rolled out this week displays a handful of songs on a 360 form at and on facebook's obvious rift. samsung and other devices. >> of course, paul mccartney. >> he's a legend. it looks like nordstrom is giving michael kors the boot.

almost half the stores have stopped selling his hand bags. this is to phase out the brand by the end of the year this is from sources telling only lifts that michael kors is the store's number one returned handbag. >> you there go. i usually keep the ones i bought. other people return theirs. still to come in today's "must reads" including a memo to democrats to stop panicking over polls. and this day in 1977, "star wars" opened in theaters. the third highest grossing movie of all time i'd "avatar" and "gone with the wind." >> that's all we needed another "star wars" holiday. we'll be right back. ...in her k yup, she's gone noseblind. she thinks it smells fine, but her guests smell this. ding, flies, meow

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mrs. clinton enjoys structural advantage in demography, party registration and electoral college. it's interesting to focus on what the betting market says. that's not budged. she's remains a clear favorite. >> the other thing i point out galston at the brooks institute was a aformer adviser to bill clinton. he's making the case by a democrat for a democrat. >> but still, he's telli ing democrats not to worry. >> yeah. >> my pick is foreign policy. it doesn't seem to be resonating but the a big deal in our world. "usa today," writing alphabet,

apple, cisco systems microsoft and oracle, collectively held $504 billion in cash at the end of the last year. it's something we've known, nothing new about this. eye-opening figures in tellers of cash by u.s. conversations on nothing being done about it which we still have 30% tax rate which make tgs it uncompetitive bring it back to the u.s. on the campaign trail, all you hear with the rhetoric, corporations are skirting their taxes. they're not paying their fair share of taxes. corporate tax reform not an issue that gets through. >> no something as we have said lots of time, it will be topping the agenda. >> if you do talk to ceos, this is number one. we are approaching the top of the hour. that means the team is getting ready for "squawk box" in

new york. joe kernin takes a look at what's coming up. good morning, joe. >> two days in a row. >> what? >> giving you the thumbs up. maybe george stephanopoulos is going to write the next piece on hillary's chances, you know. he's so tough, man, really asks those tough questions of hillary. i agree, though, i think that the campaign should just coast. not worry about terry mcauliffe or any of this stuff. i would just coast from here on out. a shoo-in. >> joe, i was talking to one supporter of clinton he actually said the biggest threat she has for sanders continuing is energy. she needs to have holiday and relax. >> her biggest threat is herself, wilfred. you haven't lived in this country for the past 20 years. let's not go there. let's not go there. >> you could say the same thing about trump. both sides.

derek jeter is going to be on on a day where it looks like we may have a winning session again. when is the last time we had two decent days in a row. pretty good day yesterday. oil is. you. dollar continues to get stronger, down 1.11 again on the euro. but maybe this is the time where, you know the sell and may trade maybe at -- it is a little bit over a bounce perhaps. we'll be talking about that. as far as other guests, it's kind of an interesting lineup. we've got pro-trump and pro-clinton people coming on. what are we going to do for the next five months? it's going to get heated all the way around. but as always, guys, i'm going to stay up here. >> of course. >> you know where this is? here's the fray. this is the fray down here. and i'm up here, above the fray. >> well, joe, naturally -- >> we'll think of you. >> naturally, as a tool man, i guess i could argue i'm there as well. >> you're up above the fray. i'm going to keep you above the

fray. i am watching you -- sara, the last two days, you are awesome. >> i'll take a complement from you any day. joe kernin coming up on "squawk box." still to come here on "worldwide exchange," stocks in rally mode, is fed speculation behind the moves? drew matus will weigh in with his views coming up next. you get use to pet odors in your car. you think it smells fine, but your passengers smell this. {ding} eliminate odors you've gone nose blind too, for up to 30 days with the febreze car vent clip.

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looktry align probiotic.our digestive system? for a non-stop, sweet treat goodness, hold on to your tiara kind of day. live 24/7. with 24/7 digestive support. try align, the #1 ge recommended probiotic. welcome back to "worldwide exchange." after strong rally, the best day for the s&p since midmarch, march 11th. s&p pointing to another day, dow futures up 88 points. and nasdaq up 29. tech the real star in session yesterday. joining us now is deputy chief economist, managing director at ubs, you sit on the trading floor. how much of this rally is built on purely economical data showing that we can withstand a

45-basis point interest rate hike? >> it's a huge move. i know if people look at the spread between 2s and 10s in yield they're becoming a little more nervous. one of the things i like to look at is gold relative to the s&p. seeing whether people want to be in higher yielding assets. or they want to be in kind of real assets. do they have more faith in the fed? if they have more faith in the fed the s&p should do better than gold. i use that as a proxy for fed credibility. that's been rising lately. i don't think that's a mistake. >> is there a global economy factor in it as well? things seem to be improving elsewhere. >> no news is good news. we haven't had any news, therefore, it's good. i think it is true. things have calmed down globally. that means the u.s. and federal reserve can focus on what's going on here. the news is pretty good. the last guest was talking about the stabilization of manufacturing.

i know we've had regional issues. if you look at customer inventory levels. people are reporting inventory levels too low. the isn numbers should actually hold in above 50. that will give people even more faith. of course, you have the labor market which kind of keeps chugging along. >> the problem with this theory is, we get on one narrative, all of a sudden it changes on a dime. i think calling it a jekyll and hyde economy. we get a blowout number like yesterday's home sales. then a disappointing jobs report. and then it makes us question everything. what happens when we get a report that disappoints? >> i'm not smart enough or fast enough to change my mind that frequently. you know i've been optimistic for a while now. unless you see claims pick up and job growth stall, at the same time, i can't imagine anything is wrong with the economy. if claims just pick up on their

own, maybe people are finally respond to low productivity in the united states and shedding low-end workers and trying to pick up new workers. if job growth on its own slows and you don't see any pickup in claims what that tells you we're rung out of workers to hire. claims are very low. job growth seems to be slowing which tells you things are tighter in the market which should be good for wages going forward. >> we've seen the u.s. dollar strengthen during the course of this month. how much is priced in the dollar moves over the last couple weeks? is it the hike in june and july with pricing are, and when we get there, if we get it do we see a big rally in the dollar? >> our fx people are sanguine on the dollar. they're thinking we're seeing what we're going to see. the big story is who goes first. the one story that hasn't changed, the u.s. is going first.

and other people will follow it at varying degrees. that's been a constant. >> durable goods out on thursday. is that a big market mover? it's a good gauge of corporate spending. >> we'll watch it out but it's hugely volatile. i like my data simple. >> the only thing i would push back on, if everything is okay with the economy as you say, and everything is just fine and the fed is on track to raise rates, why is the ten-year yield still below 2%. >> that's a great question. we debate that a lot. people feel it's because yields overseas are so low. i'm not so sure i'd buy into it, i think bond markets work independently of each other so that people who can move behind bond markets are fewer and farther than people generate credit. i think there's this idea that inflation has been killed. i think it's a very risky thing. >> drew we're going to have to

leave it there. drew matus from ubs. that's it for "worldwide exchange" this morning. "squawk box" is up next.

good morning, could it be? two in a hrow, stocks rallying answer the world with crude at highest level in seven months. and st. louis president bullrd signaling that july will be a meetinging. we also hurt his comments on jobs and the brexit straight ahead. and ant anti-trump protest turns violent in new mexico. police in riot gear use pepper spray and smoke bombs to disperse the crowd. it's wednesday, may 25th, 2016. and "squawk box" begins right

now. ♪ the heat is on >> announcer: live from new york where business never sleeps, this is "squawk box." good morning, everybody. welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernin and andrew ross sorkin. check out equity futures. dow futures indicated up by 85 points this comes after a big rally yesterday for stocks. s&p up by 11.5. and the nasdaq up by 28 points above fair value. check out what happened overnight in asia. again, all of this started kind of yesterday with the european markets that really took off. you can see it followed up in japan with the nikkei up by 1.5%. the hang seng was up by 2.7%. it was just the shanghai composite with a decline of a quarter percentage point. in europe, once again, you'll see plenty of green arrows. the dax in ger