good morning. investor s poring record amount of money into stocks following the election. sales force soars. the cloud company posted better than expected results, and sets an ambitious $10 billion goal. and could mitt romney, one of the president-elect's biggest critics become secretary of state? it's friday, november 18, 2018. "worldwide exchange" begins right now. very good morning and a warm

friday welcome to "worldwide exchange" on cnbc. i'm wilfred frost alongside courtney reagan. good morning. thanks for coming. >> last time i was here, we did not have a new president yet. a lot has changed. >> a lot has changed. markets have rallied. let's check in on what markets are doing right now. yesterday we had a pretty typical trump risk-on day again. we saw bond yields rise. we saw equities rise, the dollar rise. financial financials in particular leading the charge, the best sector out there. that's typical since the trump election victory. there were some tweaks of that. telecoms did well and techs did well. today we expect the market to open down. the dow called lower by 2 2 points. yesterday the dow was the laggard, up just around 0.2%. the s&p 500 was up a half percent. the nasdaq up 0.7%.

lower in the futures market this morning. let's look at the ten-year treasury note. it continued its march higher in terms of yield yesterday. doing the same again today. the ten-year yield, 2.326. the two-year note hit its highest level since early january yesterday. those yields keep ticking up. slightly interesting yesterday that the markets did react to janet yellen confirming that december was a possibility. that was pretty much priced in. >> i thought we knew that. >> we kind of knew t but still got a market reaction. >> strong wording saying it could be dangerous if they wait too long. let's look at what's going on in europe. we see a downbeat market across the board with the major european market indices. mining stocks are struggling over there. news out of volkswagen.

in asia, mixed last we look. you can see the nikkei up 0.6%. this is the highest close in 11 months. a bit of a boost from the weaker yen. hang seng is higher, but still around that correction territ y territory. as for broader markets, let's look at oil prices. down the last two sessions, but is up almost 5% for the week as a whole. just shy of 4% now those really coming from the gains we saw on tuesday on opec related news stories. we just slipped for three days in a row. bang on $45 for wti. down almost 1%, the better part of 4% for the week. the dollar hit its highest level in 14 years earlier this morning against a broad index of currencies. it is stronger across the board. most notably again against the yen, 110.62, up a half percent.

the euro a little higher. no the dollar is higher against the euro and the pound, but just less than the yen. gold prices have had eight sessions in nine negative. clearly gold has been a loser of the trump election victory. gold is again weaker by a percent today. almost falling below $1200. >> so many going on. new data this morning on post-election investments. investors pouring $26.6 billion into u.s. based stock funds over the past week. l lippor reports u.s. stocks took in 26 billion. healthcare funds recorded 2.7 billion. municipal bond funds posted $3 billion in outflows, the largest in three years. very big moves here on the back of those election results.

>> mario draghi speaking at a conference in frankfurt this morning. the ecb president says the central bank will focus on whether a recovery in eurozone inflation can sustain itself even if its monetary stimulus is withdrawn. >> we remain committed to preserving the very substantial degree of monetary accommodation which is necessary to secure a sustained convergence of inflation towards a level below but close to 2% over the medium term. we cannot yet drop our guard. >> draghi says he sees a significant degree of uncertainty for the economy. elon musk is one step closer to merging his two companies. share holders voted 85% in favor of merging tesla and solarcity. the $2.1 billion stock offer could create or would create one firm that sells emissions-free

cars and rooftop solar panels to power them. musk says the deal will be completed within the next couple of dales, critics say it's essentially tesla bailing out solarcity. but musk said the solar panel firm would not way on the bottom line. sales force i'm third quarter revenue rising 20% on higher sales of subscription and support services. the commuting company is forecasting fourth quarter revenue above fourth quarter estimates. >> i've been a huge bull around growth in 2017, 2018, 2019. i feel when you look at the global economy and talk to customers whether here in the united states, japan, or in europe, i've seen a lot of customers burn off the 2008 problem, and i'm optimistic for what's coming in the future. >> salesforce up 5%.

marvell technologies third quarter results beating analyst forecasts on third quarter growth. the company launching a $1 billion stock buyback. gap's third quarter profit fell 18%. the retailer posted its seventh straight quarter of declining sales. the company says it is still struggling to bring shoppers into stores. they plan to close 64 shops this year. more stocks to watch. yum brands adding $2 billion to its stock buyback program which will run through the end of next year. williams-sonoma reporting lackluster sales in the third quarter and the retailer is giving a downbeat forecast for the fourth quarter. the chain continues to face weakness at pottery barn. same-store sales falling 4% in the fourth quarter.

shares down 3% before trade opens. ross store's third quarter profit rising 13% beating forecasts. the retailer benefitting from strong revenue and margin growth. the company raising its full-year guidance, comp sale there's were strong, up 7%. analysts looking for an increase of 2.5%. nike's board announcing a dividend increase. the company's quarterly payout will rise by 13% to 18 cents a share. a lot of retail movers. my kind of day. let's go hop ishopping. >> the big one yesterday, walmart. when we broke those on "squawk box" shinitially felt positive, but ended down. >> there's some short-term pain going on there. but traffic was still positive. so were same-store sales. a bit decelerated from the quarter before. that was causing a bit of concern. >> as for today, the trading

week wraps up with remarks from several fed officials, bill dudley, james bullard, esther george, charles evans, rob kaplan and jerome powell. lots of fed speak today. lots more commentary to add to janet yellen's yesterday. earnings, results from foot locker and abercrombie & fitch before the opening bell. >> we are not done with retail yet. landon dowdy has three things to watch in abercrombie's report. good morning. >> good morning. the street is looking for earnings of 21 cents a share on revenue of $831 million. beyond those numbers, here's the three things to watch. first traffic and same-store sales. the teen retailer cited traffic headwinds in the domestic mall business and a significant drop off in tourism. investors will wanted to see if this trend continued in the quaushter and what abercrombie expects for the holiday season.

the branding, the hollister brand has been losing steam, however they feature denim and other basics. in may, the company expected better results in the back half of the year. the third thing to watch, the one bright spot is its digital performance. direct sales grew, and can they continue that online sales growth. shares of abercrombie are down about 25% over the past three months. in corporate news, volkswagen plans to cut 30,000 jobs worldwide. the automaker is looking to cut costs as it tries to recover from the diesel emissions scandal. the company says 23,000 cuts will come in germany. they say the move will save about $4 billion a year starting

in january. the shares are up 0.8% on that news. still ahead on "worldwide exchange," we'll talk banks, that's your cup of tea. the best performing sector since the election. and what did fed chair janet yellen tell us about the economy in her congressional testimony yesterday? and later, the trump transition, a live report from washington with the president-elect's latest cabinet pick. you're watching "worldwide exchange" on cnbc. welcome b

exchange." banks are the best performing sector since the election the kbw bank index is up 13%, in part due to the hopes of a more favorable regulatory environment. the question now is is the regulatory change actually materializing? hanging hopes on that it will. >> i've spoken to major sources at the banks to see what they feel on the topic to investigate this. the first significant takeaway is that they feel the optimistic expectations are premature. one senior source saying to me investors seem to have wide eyes in terms of what's possible and likely. second is that the repeal of dodd-frank is not expected, not least because it would require 60 votes in the senate, also it's not even wanted. would they like to see it simplified and reduced? yes. but in general banks welcome the increased in safety in the system. if repealing the bill is off the

table, goldman sachs points out it would be easier to change the way dodd-frank is implemented in terms of basel 3 risk based and leverage capital rules, overcall ccar processes, and upcoming ruling net funding ratios. banks would like to see more transparency in terms of how regulators reach the decisions and who is appointed to certain positions. so overall, the sense of optimism comes more from no extra regulation, which may have arrived under clinton, as opposed to rolling back of existing terms. important also to note that the effect of rising and steepening yield curve has had on the bank share prices and the less talked about factor of possible lower corporation tax. morgan stanley estimating a 12% boost. the big takeaway, a little too

much optimism in the marketpl e marketplace. >> and they spent a lot of time, money and resources complying to what we have in place now. if we pull back on that does that cause disruption? >> exactly right. they all feel like they've gone through the work, they're in this position, brian moynihan saying overall they feel safe, they don't need to see that go back. they want to have clarity and certainty going forward and hopefully they think the pendulum won't continue to swing against them like it may have done under a clinton presidency. >> your thought about no extra regulation. >> exactly. exactly. either way, share prices are doing well and the yield curve had a big factor on that. let's talk more generally about markets. joining us from pittsburgh is gus fochet from pnc bank. good morning to you. thank you very much for joining us. there is a lot of optimism out there. we don't have to focus just on the banks. a lot of optimism that all sorts

of trump policies will be delivered and boost the economy. what is your latest expectation in terms of gdp? how much have you changed it since pre-election? >> we have not changed other forecast yet. obviously there's a lot of uncertainty out there about what policies president trump will implement. we're at about 2.25% growth in 2017. we could move that up if we see big stimulatory moves. >> are the moves in the bond market premature? >> perhaps a bit. they may be a bit overdone. markets are sensing the potential for higher inflation with stronger near-term growth, and greater federal government borrowing. looks like we maydeficits. >> how closely are you watching the trump administration's cabinet picks? would any of that inform your

forecast for policy going forward and whether or not you go extra bullish or pull back a bit? >> certainly i think it does make a difference in terms of tax policy. are we going to get someone who looks to be a tax cutter as treasury secretary? obviously we'll follow federal reserve picks. president trump will likely nominate a new fed chair sometime in 2018. so we'll be following that closely. >> gus, were you surprised we got a market reaction yesterday from janet yellen? essentially confirming what was priced in? that december is very much on the table in terms of rate hikes? >> no, there's still a lot of uncertainty out there. we have not heard directly from chair janet yellen about how she viewed the implications of the presidential election. it confirmed the general sense out there. nothing particularly new, but reinforced the story that everyone already thought was in place. >> to what expect is this already priced in to where the

dollar has moved? the bank of japan committing to loose policy and buying bonds earlier in the week. mario draghi saying they stand by to do what it takes to improve loose policy. does that mean we have a long way further for the strong dollar to go or do the recent moves price that in? >> i think the recent moves price that in but there's questions about the dollar and what the trump administration decides to do about trade. if we see trade restrictions that could push the dollar higher. there's still a lot of uncertainty out there. there's monetary policy, fiscal policy, questions about trade, about what other central banks are going to be doing. i expect a lot of volatility in the dollar. >> gus, great stuff. thanks a bunch. a lovely pittsburgh backdrop there. >> a lovely city. have you been there? >> no, i haven't. coming up, the trump

transition, learning more about the cabinet picks. details next.

what's critical thinking like? a basketball costs $14. what's team spirit worth? (cheers) what's it worth to talk to your mom? what's the value of a walk in the woods? the value of capital is to create, not just wealth, but things that matter. morgan stanley

we'll be with you shortly.. yeah right... xerox predictive analytics help companies provide a better and faster customer experience. hello mr. kent. can i rebook your flight? i'm here! xerox customer care services... ...soon to be conduent. wait i'm here! mr. kent? (gasp) shark diving! xerox personalized employee portals help companies make benefits simple and accessible... from anywhere. hula dancing? cliff jumping! xerox human resource services... ...soon to be conduent. . welcome back. president obama is in berlin today. he'll meet with german, frank, uk, italian and spanish leaders. yesterday he met with an la merkel followed by a joint news conference. mr. obama called on president-elect trump to stand up to moscow, but he said he doesn't expect the next

president to share his russia strategy. >> i watched this in the coverage as it was coming through yesterday. a sad downbeat ending. they would have loved the two of them if the last year of politics had gone differently to be in a much more celebratory mood. a lot of things they stand for are starting to go against them. they're being resolute, committing to it. it's expected now in germany that angela merkel will stand for a final term coming up. which she might not have done if not for the trump victory. >> he was asked if he would vote for her, which was a funny way he had to dance around that. he couldn't say yes or no. >> they don't want to be seem to infringe on their politics. what a downbeat good-bye rather than a celebratory one. back in the u.s., president-elect donald trump is continuing his white house planning. tracie potts has more.

good morning. >> reporter: good morning. so, here in washington mike pence is doing the work for him, hooking up with some of his old colleagues including democrats to get their agenda on the agenda on capitol hill. out of new york, trump tower, weather hearing the president-elect selected another top level adviser. >> president-elect is in full control. >> reporter: a senior transition official tells nbc, lieutenant general mike flynn has been offered the job of national security adviser. flynn, controversial for his foreign policy, would not require senate approval. even more controversial -- >> donald trump is a phony. a fraud. >> mitt is a very sad guy. >> reporter: a transition source says president-elect trump will meet with former nominee mitt romney on sunday to discuss romney as a possible secretary of state. >> mr. romney would be quite capable of doing a number of

things. but he'll be one of those, i'm sure, that's reviewed. >> reporter: with his transition taking shape, mr. trump turned to foreign policy, meeting japan's prime minister. >> i've renewed my conviction that together with mr. trump i will be able to establish a relationship of trust. >> reporter: the vice president elect is on capitol hill selling his boss's agenda to democrats. >> we're beginning to discuss areas that we might move forward on together. >> try to find our common ground where we can. of course stand our ground when we can. >> reporter: pence back there familiar territory setting up the first 100 days. donald trump back on the road campaign-style but now as president-elect. looks like his team is setting up a thank you tour after thanksgiving to go back to some of those blue states that turned red. >> thank you very much. now to sports and thursday night football. the saints traveling to charlotte to take on the carolina panthers.

panthers quarterback cam newton hits his wide receiver in the back of the end zone for a 40-yard touchdown. the catch initially ruled out of bounds, but after review the call was overturned. the panthers won the game 23-20. >> i was watching that. that's awesome. >> american football is great. your football is all right, american football is awesome. >> i agree both is good i have a stronger favoritism -- you sounded like joe there. at least here i can talk a little about soccer. a big game this weekend, arsenal versus manchester united. you nodded yes as if you did. >> i didn't. >> coming up, the week's big retail reports.

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good morning. markets now. the dollar soaring to its highest level since 2003. . the retail wrap. many of the sector's biggest names rolling out results this week. a look to the holiday season straight ahead. and donald trump taking credit today for having ford keep a manufacturing plant in the u.s. that story coming up. it's friday, november 18, 2016.

you're watching "worldwide exchange" on cnbc. ♪ good morning. i'm wilfred frost alongside courtney reagan in for sara. you enjoy that song? >> i love that song. >> i put in some requests for british hymns, but they don't listen to me on the music choices. probably the correct decision. i don't admit that in front of sa sara. let's look at global markets. futures at this hour were a bit softer. the s&p down 5 points. the dow around 30. the nasdaq about 4 points. a typical post trump election rally yesterday. dollar rose, yields rose, equities rose led by financials. the broader indexes, the dow up by a half percent.

let's look around the world. the broader stoxx 600 in europe is up about a percent for the week before today's moves. it will be shedding about half of that for friday's afraid. ftse 100 down 0.6. germany down 0.2%. volkswagen applauding some moves to cut jobs and is up about a percent in germany. asian trade is mixed. the knnikkei is at the best lev since february. up 0.6%. the yen is softer again. moving largely are the broader markets with what's going on and with janet yellen. wti moving up a tick, still down on the session. actually up weak to date but we could break the three-week losing streak. we'll see what happens today. brent there above 46. if we can move on and look at what's going on with yields. this is really amazing. this story here.

last time i was with you, i think the 10-year was 1.8. that's before the election. here we are above 2.3 for the ten-year. moving up higher on expectations for trump's potential expansion of fiscal policies. a look at dollar which continues its run against all the other baskets of currency here. the euro is now back above 1.05. the dollar continuing its strength across the board. we'll see what happens if we keep hitting these multi-year highs. if we can look at gold. gold continues its downward slide. down about 1% or so earlier in the session. still sitting right about there now. just above 120$1200. >> i enjoy these highs. >> i can't keep track.

high since then. >> sale force.com beat estimateses on subscriptions. and they are expecting higher fourth quarter revenues. here is marc benioff's appearance on "mad money" last night. >> the fall of the great british pound with brexit, we are past that. we are anticipating a great fourth quarter. looking at a great year next year. >> i like that he called it the great british pound. sales force up on that news. intuit is down after the company gave an optimistic outlook for the fourth quarter. the tax and softwaremaker saw an increase in its quick books online brand. applied material's fourth

quarters fell sharply. revenues missed estimates due to slowing smartphone sales. donald trump taking credit for convincing ford to keep a manufacturing plant in louisville, kentucky instead of relocating to mexico. the president-elect tweeted i got a call from my friend, bill ford, who advised me he will be keeping the plant in kentucky, no mexico. i worked with bill ford to keep the lincoln plant in kentucky. i owed it to the great state of kentucky and their confidence in me. in a statement to cnbc, ford said they're hoping to keep manufacturing in the u.s. speaking today, bill dudley, james bullard, esther george, charles evans, rob kaplan and jerome powell. lots of fed speak today.

as for earnings, results from foot locker and abercrombie & fitch before the opening bell. just one week to go until black friday putting retail and customers in focus and retailers as well. joining us is jim nippon. we what is going on with retail. home depot good, lowe's not so good. >> i would like to say who cares, because we're going into the fourth quarter where we really do care, but it is mixed. seeing strength in the home business but that will probably slnhrowing out. if w place. we're not talking about a big economy like over here. >> fifth biggest in the world. >> what's that? >> fifth biggest in the world. i know you get a gold for first,

silver for second. bronze for third. hog for fifth, is there? >> yeah, all right. >> you know, the woolsly dude. i would love a flat over in -- somewhere over there. you said kensington? is that my -- >> that's where mine is it's yours if you want to make me an offer, joe. >> i can't just use it? >> no, because it's currently occupied by tenants. >> all right. >> you would have to make me a good offer to kick them out. >> you know what? interesting -- >> it's built from bricks and mortar, my place. >> very good. bricks and mortar, maybe you can do something on twitter about it today. one thing that is amazing, the would have thought if you told someone that the dollar would be where it is, vis-a-vis the other currencies and what the markets

would be doing, you might think it's tough sledding. another good session yesterday. how long this lasts, nobody knows. still interesting to watch all the things going on at trump tower. who is going in? whose going out? mitt romney? that mitt romney? it is mitt romney. weill see a lot of -- you know reagan's first cabinet appointment was six weeks. six weeks after election day. >> didn't know that. >> are we behind? no. >> great stuff. joe, we look forward to "squawk box." >> was it great or fifth place stuff? >> you know what? it was second place. >> medal contending at least. >> see you guys. still to come, fed speakers out in force today. we'll get more when steven wieting joins us next.

welcome back. futures this morning are fractionally lower after another risk-on day yesterday. joining us is james wieting. earlier we had a pause from the post-trump rally. banks pulled back. risk-on yesterday. further to run? >> announcement effects, big qe programs, political shocks, they get priced fast. these are relatively efficient markets. relatively liquid. we don't think you'll see what you saw in the last week go on indefinitely. trees don't grow to the sky. i think a good amount of this we need to take a step back. this is not the same thing as taking the obama administration, adding tax cuts, there's a great deal of unpredictability for us on how this will go. it's a big issue.

while we could be optimistic about parts of this, we have to be clear, there's a whole grab bag of possibilities out there for us and we have taken a step back to a more cautious stance around the rest of the world. >> are there sectors in particular that you feel more confident about and that there's less uncertainty around them? >> one thing about the financial sector and the run, the financial sector was cheap going into this. whether we got to the higher interest rates for the right reasons or not, there's certain high benefits here. liquidity that gets marked up with higher interest rates when the fed tightens, these things have helped a lowly valued sector. the questions swirling the i.t. sector, that we'll stop trade. these are secular growers, and some of these stocks have been sold off a lot. >> some of those have been sold off because of the fear it might be disproportionately affected by rhetoric around trade, immigration. if we did get negative action on

that, that would affect every sector, wouldn't it? >> it's important to see this is not all clear. you saw with the case of brexit, this is very much the same politics as brexit. three months later, after lots of benign views, suddenly something happens. brexit means brexit. we don't care much about the london fim senancial sector. we want to make sure the promises are kept. >> joe asked when does the dollar start to be something negative, now we seem relaxed about it. what's your take on that? we shouldn't be too relaxed on it. it's our dollar, it's your problem was once said. there are parts of the world dependent on low american interest rates, and u.s. dollar funding will be an issue. yesterday we took down some weightings in southeast asia equities. we think the politics of this is playing out in a way that's difficult. cohere's between eurozone

countries is more important than cohesion between the united states and europe. this is a reason for us to be kau slus abocautious about this. when reagan was president, inflation was 14% and falling. we're at a low interest rate, low inflation rate and the dollar has been strong. this is a different starting point for all these financial assets. >> just 20 seconds left, around the world you're negative on emerging markets? >> i wouldn't say negative on emerging markets. we've taken a step back from some developed markets and some emerging markets. latin america came in cheap, it's a negative. >> steven, thank you very much. that's it for "worldwide exchange." thanks so much for joining us. have a lovely weekend. "squawk box" is next.

good morning. investors pouring record amounts of money into stocks following the election, just as predicted by all the pundits and experts. more on that straight ahead. and mind the gap. the retailer posting its seventh straight quarter of declining sales. and the trump transition. could mitt romney -- mitt romney, that mitt romney, one of the president-elect's biggest critics become secretary of state? would trump be his boss? i think so. it's friday, november 18, 2016. "squawk box" begins right now. ♪ live from new york where business never sleeps, this is "squawk box."

>> "happy together" that's a funny song for that story. welcome to "squawk box," i'm michelle caruso-cabrera, along with joe kernen. becky and andrew are off. >> not together. >> not together. not that we know of. equity futures suggest that the nasdaq would open flat. dow jones would open lower by 21 points. the s&p would open lower by four. a decent day in the stock market yesterday. look at yields. across the board, u.s. treasury yields, bank of america, set