good morning. it's jobs friday. we'll talk expectations and what the report could mean. >> and the president-elect has another cabinet announcement. and starbucks shares slide after schultz announces he will take on a new role. "worldwide exchange" begins right now. good morning and a we warm friday. welcome to "worldwide exchange"

on cnbc. courtney reagan is in for sarah. happy friday. >> i'm always excited to hear what the first song is. good pick. >> and i actually know who this is. old school. let's check in on the global markets this morning. futures trading right now after some declines yesterday. we did see slight gains for the dow, slight declines for the s&p. a bigger decline for the nasdaq. it was down just over 1%. week to date, we're looking at nearly 3% of declines for the nasdaq, 1% for the s&p, dow just in positive territory. and we're staring at slight declines in the futures market as you can see, the dow doan by 14 points or so, nasdaq by 24. so this will he said tend the w streak if things stay like this. let's look at the ten year treasury note in that had an effect on stocks yesterday because it spiked more meaningfully in terms of daily

performance than it had in recent days b. we saw the ten year note go just shy of 2.5%, it was 2.49 at the highest point of yesterday's trade in terms of yields. it's at 2.42 today. so just retracing some of that. but we're certainly seeing a pickup yesterday in terms of bonds set off yields rise across the curve yields really at their highest since the middle of last year. >> it's amazing how far we've come since trump was elected to now. 1.7 i think in the ten year to almost 2.5. >> massive move. and interesting on the stock and dollar front and that started to retrace a little bit. >> so we take a look at europe, there is a big referendum happening in italy this weekend. also a big jobs report here. so markets balancing those two. you can see shares in france the equity market there town most sharply of all down 1.4%. we know president hollande has said he will not run for re-election in 2017. we have germany town also about a percent. and a lot of thing it is to

weigh here as the dollar does take a bit of pause ahead of the jobs report. and i know that we will speak with julia chatterley later today for some of those details. >> historic in the point that the tapping president hasn't gone for it, but you might say a rational decision. >> he probably wouldn't win. but then again, the polls, remember -- >> that's true, but 4%, a big margin to make up. >> let's take a look at asia. a bit of a down market in. you can see hang seng, shanghai and the japan nikkei all lower. hang seng largest of all. again taking a little bit of pause here with the dollar, investors waiting for the u.s. jobs report it see what really happens here. we have an analyst at cmc markets saying that we're looking to see what happens in the u.s. and italy over the weekend. so really a global picture and a lot of wait and see for asia

right now. >> let's have a look at the broader markets oil prices which have of course had a roller coaster ride over the course of the week. ending the week if today holds down 0.6%, but above 50 bucks for wti, 50.74. gained about 3% yesterday. week to date before today's move up 10.7%. so looks like a strong week after the opec meeting was reached albeit after a couple weeks of decline. the dollar has retraced some of its post trump election victory strength. yesterday was down about half a percent. items four its fourth negative session in five. week to date looking at about laugh a percent of declines. today you can see it's about to bounce back a little bit about that to the tune of a quarter of a percent against the yen and about 0.2 against the euro. gold prices just to round things off which have been soft since

the election are getting strength today at 1176. so we're seeing the impact of the recent selloff in bonds. new data shows investors pulled $4.1 billion from u.s. based taxable bond mutual funds last week. that is the most since june. investors also pulled $335 million from european funds ahead of this sunday's italian referendum. >> and donald trump kicking off his victory tour in indiana and ohio. in cincinnati last night, the president-elect told the crowd this is our window for action. he repeatedly pledged to unite the country. >> there is no global anthem, no global currency, no certificate of global citizenship. we pledge allegiance to one flag and that flag is the american flag. >> trump also surprised the crowd by announcing that he will

appoint james mattis as secretary of defense. >> so we will be announcing him on monday of next week. keep it inside the room. but that's what we have. and he's our best. they say he's the closest thing to general george patton that we have and it's about time. >> we'll to haon have more on ts victory tour in a few minutes. i was have former secretary of defense robert gates and he applauded this particular pick. so we'll analyze more of those potential other picks as well coming up. other political news breaking early this morning, xi jinping telling henry kissinger that china is watching the u.s. political situation very closely following the election of donald trump. the president says he would lining to see the china/relationship should move ahead in a stable and sustained manner. and to the top corporate stories, howard schultz announcing that he will step

down as ceo of starbucks in april. he will remain executive care man of the company, however. schultz says he wants to focus efforts on starbucks' new initiatives, high end coffee shops. the chief operating officer kevin johnson will take the roll of ceo. both men will join "squawk box" live at 7:30 a.m. in a first on cnbc interview on a call last night, schultz told investors johnson is more equipped for the top job. >> i think kevin is better prepared to be the chief executive officer on a go forward basis than i am in terms of his skill base capabilities, his understanding of technology and how that will be integrated into the customer experience and put starbucks once again reaffirming our leadership position in all things retail. >> so here to discuss the surprise transition of leadership at starbucks is chief investment strategy at the street.com and research director of jim cramer's charitable trust

portfolio. thanks for joining us, jack. nobody thought that he would be around forever and he's done this once before, stepped down as ceo. shares pulled back still nonetheless. is this a buying opportunity to get into starbucks? >> you know, definitely was a buying opportunity when it was down 12% immediately after. but i think that this is an end of an era. i mean this is a retail titan. this is the most important person i think in probably retail history. and he of course is still going to be part of the company. he's been focusing his efforts. but this is a change. and i think that kevin johnson has -- you know, we know a little bit about him, but we don't know a lot. and i think that it's going to be very difficult for investors to stomach the fact that there is a new ceo and to replace -- i mean you can't replace howard,

but to rise to the position where kevin really has to it a voice leading role and really grow into it is critical. in . >> as you said, down 12% and we've recovered, up to 3% at the moment. is one of the fears with the 3% decline that mr. schultz is deciding to step down because he feels he's kind of taken the company as far as he can go and that there is not really much else easy growth to find? >> well, that is actually a great point because i think reacting to the last earnings, it was the fourth consecutive miss. and i think that it's very difficult to innovate this retail. howard schultz has managed to tee defy lack of innovation, to take a premium food coffee and commercialize to 75 countries,

25,000 locations. but they actually had a decline in traffic year over year in the u.s. and actually globally this past quarter. so i think hitting the numbers is going to be extremely difficult. it's going to take another channel of innovation. i think that kevin johnson what he provides is a more focused narrowed view of essentially building out their i.t. infrastructure, their mobile order in pay and driving that home. because that is the near to medium term opportunity. but absent that, i don't want to say mature, but relatively mature. >> relatively mature. you said the fact that it's down 3% is still not a buying opportunity yet you hold the stock. so just sum that up for us. why you hold but not a buyer. >> i think you have to give the guy a chance. i mean you have to listen -- no one fully understands, like

think about when tim cook stepped into the ceo position in the shadows much steve jobs, i think if kevin johnson can execute -- the issue is through-put. price is not a problem. so if you can find to really innovate on the technology side, i think it's worth owning it. you have to give him a chance. it will take a few quarters to really understand what his vision is, where he adds value and we certainly are holding it here. and so i think it's not necessarily a great buying opportunity, but if you own shares, i would not sell them. >> jack, thanks so much for joining us. jack mohr. and don't miss howard schultz and kevin johnson at 7:30 a.m. and of course reaction throughout the day on whether the stock should still be a buy or not. so today's top market story, the november jobs report. landon dowdy joining us with three things to watch.

over to you. >> good morning. november's jobs report will be out at 8:30 a.m. eastern and here are the three things to watch. first, the numbers. unemployment is forecast to stay at the 4.9% with the u.s. expected to add 180,000 jobs just last month. and that is up slightly from the 161,000 added in the previous month. and yesterday's stronger read of adp private secretary are tore payroll suggesting the jobs report could be better than expected. secretary, the sectors, job growth is expected to remain strong in education and health care services. however, energy and trade sensitive manufacturing remain under pressure with economists expecting job creation in these areas in the future as this was a center piece of president-elect donald trump's campaign platform. and the third thing to watch, wages, average hourly wages are forecast to rise 0.2%. an all of this should be the green light for the fed to raise rates for the second time in ten years when it meets december 14th. back over to you. >> thanks very much.

i think the whole world is watching this jobs report and for what it means for the fed and down the road. a few other things on today's agenda. a trio of fed officials are speaking. retailer big lots reports earnings before the opening bell. still to come, italians will vote on a key constitutional referendum this weekend. global markets on high alert. we have a live report from rome coming up. is my headquarters. this is where i trade and manage my portfolio. since i added futures, i have access to the oil markets and gold markets. okay. i'm plugged into equities- trade confirmed- and i have global access 24/7. meaning i can do what i need to do, then i can focus on what i want to do. visit learnfuturestoday.com to see what adding futures can do for you.

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welcome back. italians head to the polls on sunday to vote on reforms. a referendum is seen as a vote of confidence in renzi. it could spark extreme market moves potentially. julia chatterley joining us from rome. good morning. >> you're quite right, the whole point of this constitutional reform referendum was to try to streamline government, re duduc the you spoker of the senate and concentrate power in rome. if you combine that with electoral law reform, the hope is more stable government here in italy. remember this is a country that has had 63 different governments in 70 years. now, no one outside of italy should have really cared except as you pointed out, if a no vote

wins, prime minister renzi has agreed to step town ushering in a period of volatility likely for italy in particular. so we have this element of a confidence vote now for renzi. if you add that layer of complexity on the technicalities of this vote, i think it's no surprise that people here in rome have been telling us they're concerned that people don't understand the full implications of what this vote means. >> many italians, they still don't understand it's not very easy. >> i think that it is a little bit difficult to understand because the text is written in a language that we don't understand. >> so it's no surprise that up to a third of voters here in italy are still undecided. but whatever their reason is for voting, the result is clear. if the no vote wins in the early hours of monday morning, prime minister renzi will likely step down and even if he stays at the

helm while they search for replacement as the finance minister said this morning, it will mean more instability for the country's banking sector and that has broader european implications. this isn't the only vote in europe in the coming months. we ha us a tree have us a tree, france and the netherlands. so crucial implications for all of them.tree have us a tree, a france and the netherlands. so crucial implications for all of them. >> if the vote as you say goes against the incumbent government and it leads to fresh elections however quickly they might materialize or not, talk us through the implications of that and how other parties are poll. because there is significant anti-eu polling in terms of the parties that represent that view in itry. >> you're right. and one of the biggest here is the populist party, the five star movement. they're currently garnering

around 27, 28% of the popular vote. but the timing of this election if it comes to that will be critical. because following this referendum, there will be electoral law change. and because of the power of this populist party, all the others here have got an incentive to try to change the laws to restrict their abilities to coming to power. so even if you went to elections guys, they would have to win by a land slide in order to come to power. so i think this is a critical thing that perhaps some investors are missing. even if we go to elections, par try to stop them from winning. >> other parties are not particularly pro europe anymore, are they. >> what we've got here if you add it up, voters are supporting parties that are eurosceptic to the tune of around 44%. so i think that's what makes people nervous about italy.

but even if one of the eurosceptic parties decided that they want a referendum on euro membership, it's illegal here in italy. you'd have to change the constitution first. and this whole process proves how tough that is. so even when we talk about a possible euro prureferendum it' illegal and that would take time. >> and gridlock would continue. great stuff, julia. >> a lot to watch there on sunday. french president francois hollande announcing he won't seek a second term next year. it is the first time in decades that an incumbent french president has not sought re-election. recent polls have predicted that neither hole lalande would win,y predict a runoff. still to come here, america's top political stories

including donald trump's pick for secretary of defense. we'll break all that down for you.

to politics. donald trump kicking off his victory tour an announcing a major cabinet pick. tracie potts joining us with more. >> reporter: we're wondering if it slipped out or if it was deliberate, but last night president-elect trump said that he would be announcing at the beginning of next week retired general james mad dog mattis as

he's called as his secretary of defense. problem is that is a civilian position and mattis habsn't bee retired quite long enough, so they might need democrats to help. >> we aring fare going to appoi dog mattis as our secretary of defense. but we're not announcing it until monday, so don't tell anybody. >> reporter: a surprise announcement during president-elect trump's evening rally in ohio. known as a hard liner on iran, retired marine general james mattis faces an uphill battle for confirmation. he needs a special civilian waiver because he's only been retired three years. this morning mr. trump is back in new york after announcing 1,000 carrier manufacturing jobs not moving to mexico.

>> companies are not going to leave the united states anymore without consequences. >> reporter: but 1300 carrier jobs are headed south of the border. >> we feel like we've been forgotten from the very beginning. >> reporter: after last night's rally, today it's back to work on the transition. the secretary of state nominee still unannounced. sources tell joe scarborough they're looking at new candidates. the current and former ceos of exxonmobile. and in an interview last night, president-elect trump said that he's narrowed down his supreme court choices to three or four candidates. >> let's talk about the potential secretary of state appointment. there was some talk of course that there might be too many military men in the room. he's gone for that of course for secretary of defense. therefore is it less surprising that we're now seeing a change in tactic to go to a businessman potentially for secretary of state? >> reporter: not necessarily.

there have been a lot of ceos in and out of trump tower because we did not see a lot of support for major corporations during his campaign, but now they all seem or many seem to want to get on board. what is interesting about this though is what does it mean for mitt romney. we saw those two meetings. we heard a lot of talk about romney. it seen that had they had buried the hatchest. both have spoken very compliment hear of each other. but now at this late date, it looks like they're expanding the search. so it raises questions about what is going on on the inside and where romney stands as a potential candidate. >> tracie potts for us in washington. great stuff. the other big part yesterday was that speech by carrier. and i find it extraordinary the level of sort of celebration from pence and trump yesterday patting themselves on the back. yes, it's a win, but it's a small win. it's 1,000 jobs and it's costing a lot in terms of tax breaks. and there are a lot of jobs more than what they are saving that are still departing.

so i don't quite get why they went on celebratory tour. >> perhaps it's just one small win and that's what they're going for right now because how many big wins can you have right out of the gate. >> i just think that it will cause increased pressure moving forward and not something that is easy to repeat. in th >> that's a fair point. on to sport, tiger woods played his first tournament in nearly 16 months. tiger was on fire early on at the hero world challenge, but he faded late putting a ball in the water on the final hole. tiger finishes at 1 over par and 17th place in a field of 18 players. >> but great to see him back. small steps. still to come this morning's top stories, plus don't miss a news making interview on "squawk

box." hour howard shuttchultz and kevin sk s johnson will be live. \ skrop johnson will be live. skro johnson will be live. johnson will be live. johnson will be live. johnson will be live.

jobs in america the november employment report tops today's market agenda. >> starbucks shares slide after

howard schultz announces he will take on a new role. florida a >> and pokemon go meets 1600 pennsylvania avenue. we'll have all those stories for you. you're watching "worldwide exchange" on cnbc. a very good morning. courtney reagan is in for sarah. >> it's a busy friday. >> and lots more to come. but first let's get straight to the market action. we saw declines yesterday, over 1% of declines for the nasdaq. just slight declines for the s&p with the dow eeking out a small positive gain as you can see, looking at declines once again, the dow down 23 points in the pre-market, s&p down five, nasdaq down 26. for the week as a whole, we are looking at declines almost 3% for the nasdaq, 1% for the s&p and about flat for the dow.

so the post trump optimism looks like it will peter out for the week as a whole. and very marked turn around in futures. let's look around the world. europe soft today, a lot of political risk coming up over the weekend with that constitutional reform referendum in italy on sunday. also austrian presidential vote, ceremonial vote, but still significant in terms of where public opinion is towards populist or establishment level. and we are looking at declines, down about 2% as a whole for the week. about 1% in declines in european trade. asia was soft after declines on wall street. ending down about 1% for shanghai and a little bit more than that for hong kong. >> we take a look at the broader markets, oil prices pulling back for wti rn ichltwti, down about

but still holding above $50 a barrel. on track for an 11% gain just this week, so pretty significant there. best weekly performance since august of 2015. brent crude is also lower by about 1% or so but also holding above $53 a barrel. we saw yields spike up yesterday with the ten year hitting just shy of 2.5%, now sitting around 2.43%. of course we have the jobs report coming. so a bit of pause to see what is going to happen there. but this is one of those metrics that we will be watching very, very closely when we get that number at 8:30 which may be strong and maybe that's not such a good thing depending on your spec differenc perspective. the dollar a little bit of a pause. dollar index down about half a% on the week. we can see pretty flat against the euro, although the pound is a little stronger here as we go into the trading day on wall

street. gold prices have been a little stronger this morning as well. and this is a little different from what we've seen otherwise because for the week, gold is down about three quarters of a percent. but gold is up just slightly here this morning. . >> yields continue to rise. that is it a continue and i was the theme since the election. >> yields continue to rise. that is it a continue and i was the theme since the election. but we've seen the dollar four sessions in a row declines. and stocks looking like they will end down certainly for the nasdaq and s&p anyway. and that is showing the separation. so initially the rise in yields was helping stocks in the dollar. this week towards the end of the week at least it's not. and it's a big question now for the year ahead and for the rest of the year whether that continues or whether it can reignite today of seeing yields rise and stocks rise alongside it. we will have to see.

as for the short term, top item today november employment report, likely adding 180,000 jobs. the unemployment rate seen holding steady at 4.9%. average hourly earnings are expected to rise by 0.2%. also worth watching, a trio of fed officials speaking. loretta mess ter and dan tarullo and brainard. back to the markets, the dow closing at an all-time closing high. here to discuss, chief global head of g 10 epic strategy. steven, good morning to you. thank you very much for joining us. so it's the month of a potential rate hike. so traditionally we'd be obsessed with what this number is, but we're so priced in and confident of a rate hike, is it slightly less important unless it's a massive miss? >> i think even if it was a big miss, the other numbers have

been so strong and consistently strong whether looking at claims or the confident number, i don't think the fed would be deterred even if we got 140 or 130. i think that they would just think that is the random component of month to month payrolls which is large. so i think that is a done deal. what we're playing to is what we think the market will to next year. and whether or not the economy has such a head of steam going into next year, that any kind ever fiscal will overheat the economy and lead to more hikes that are now priced in. so a weak number, not much market reaction but a strong number and we start debating two, three, four next year. in explain that more for us because it's relevant in terms of whether it will derail the growth and markets that we're seeing. strong 34r0i7employment numbers suggest full employment and fiscal stimulus means that it will cause inflation in a bad

way rather than a good way. >>. >> most people think we're pretty close to full employment. if we end up with numbers over 200,000 suggesting that the economy is even before the election had a head of steam, you get half a percent of fiscal stimulus even if it's divided between between 2017 and 2018, you begin to think that you will be running hotter than anticipated. so i think that the market will be looking to see what the launching point is, whether it's a moderate economy where the kind of stimulus would add a little bit or whether it's an economy that is already at full employment or possibly beyond depending on what the earnings numbers tell us. in which case even modest fiscal stimulus will be putting upward pressure and much less ability

to increase real growth. >> we haven't been in an inflationary environment in a number of years. what are you watching out for or what things should the market be cautious of when we start to get closer? >> i think the flip side of being able to keep jobs in america is that you're moving away from the low cost producer. so in so far a there is any kind of trade disruption, if you have trade diversion back into the import substitution in the u.s., you see as a supply shock and pushing up costs. if in addition domestic demand is picking up, you do worry about inflation in the u.s. even if there are no signs that inflation abroad is picking up. shocks are sufficiently i had i don't idiosyncratic that we could diverge on the rest of the world. nothing is suggesting that inflation will break out 3%, 4%, but the numbers that we've seen over the last couple of years are likely to be the bottom,

likely to be on an upward trajectory and the market is interested in seeing whether or not that will be sustained and take us beyond 2%. >> steven, just very quickly to round things off, the dollar index has had four negative sessions in the last five. is dollar strength for the rest of this year now done? what do you expect for the rest of the month? >> i think that we could be back in two hours, three hours if the u.s. numbers are strong. i don't think that is done. i do think that basically the reaction to the trump election is done. now we have to get more news. how much fiscal, how much corporate tax reform, what he does on the deregulation side in order to know which way it will go. but i think what we're seeing is the fact that the initial shock is fully priced in and now we're waiting for new news. >> steven, great stuff. thanks very much for joining us. steven englander of citi. >> now to the top corporate stories. howard schultz announcing that

he will step down a' as ceo at starbucks. he wants to focus on new initiatives. kevin johnson will take the role. on a call last night, schultz said johnson is more equipped for the top job. >> i think kevin is better prepared to be the chief executive officer on a go-forward basis than i am in terms of his skill base capabilities, his understanding of technology and how that will be integrated into the customer experience and put starbucks once again reaffirming our leadership position in all things retail. >> don't miss both schultz and johnson on "squawk box" live at 7:30 a.m. eastern in a first on cnbc interview. >> plus worth pointing out shares were down about 12% initially when that news was announced. it's now down about 3%. and as thomas mohr was telling us, people got over the initial

shock and now just focused on the question is he stepping down because he's done all that he can for what is a mature company. >> right, where is the growth that is left. >> and he's seen the share price go up 8 fold since he tooko ove in 2008 and people are wondering does howard position that the share price not much further to dough. now to today's top trending stories. the white house borrowing technology from pokemon go to open up the doors of 1600 pennsylvania avenue. the white house launching this new augmented reality app called 1600. it allows anyone with a smartphone and a dollar bill to take a tour. just point your camera at george washington's face and an interactive 3d model appears. you can watch events like the easter egg roll. the administration hopes the app inspires americans to learn what the people's house stands for. pretty cool. >> very cool. so more news from the white house.

the first family lighting the national christmas tree for the final time last night. the event taking place just outside the white house grounds. president obama, first lady michelle and daughter sasha took the stage. the ceremony was filled with musical performances. and the first lady then read the night before christmas to the crowd. i learned the nice before christmas from the chipmunk song. it's like a little rap. i could do the whole thing if you want me to. >> i would, but maybe in the break. i love the ceremonial lighting of christmas trees. we sougaw the stock exchange on yesterday which was pretty awesome. >> i had a sceremonial lighting of my cubicle upstairs, as well. >> her desk is covered in lights. >> looks very good. >> very festive indeed. next trending story, harry

potter may be headed to broadway. producers of the play are in talks to bring the show in london to new york. owners are planning a multimillion renovation just for the production that includes remove building 400 seats to make the venue pore intimate. the play expected to open in 2018 takes place years after the events in the final harry potter book with a grown-up harry bringing his son to the hogwarts school. >> you also keep us abreast of the latest harry potter news. >> more proud of that title than anchor of "worldwide exchange." >> be careful. just kidding. coming up, today's must reads and we'll discuss expectations for the big jobs report. we're drowning in information. where, in all of this, is the stuff that matters? the stakes are so high, your finances, your future.

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the story catching our attention, my pick coming from the "wall street journal." titled a potential banking crisis awaits the next eurozone exit. and it goes through what this would mean in terms of national government debt. this is different from a potential brexit because of course britain had its own currency whereas someone leaving the eurozone would see he a big difference. and it says in one level euro nations that you can inflate away by bringing out a new currency, whereas there are some debts denominated and issued by other countries which you cannot

inflate away. and the quote we have on this, it goes throughout countries which are most exposed economies. netherlands is the most enter nationally exposed in the eurozone with more than $1.9 trillion in foreign law bonds outstanding. france with more than 1.4. italy around 770 billion. so the data suggests whatever the country the likely outcome of a euro exit would be a full blown banking crisis. quite a geeky explanation of why the mechanics are worse than a bregs because brexit because of the currency issue. lot are more hurdles would have to come, but it explains why the exit would be so bad particularly for the banking sector. >> and italian banks are very much in focus. >> so i think if we got a no vote this weekend, i think you'd see he a reaction from bank share stocks in europe

particularly regardless even though we're not anywhere near the country exiting the euro. coming up, we'll get ready for today's jobs report with two economists. ands later this morning, howard schultz and kevin johnson will be on "squawk box" at 7:30 a.m. they say the world does not revolve around you. but today, maybe it can. i am helping 1-800-flowers find the perfect gift out of trillions of combinations. and working with the new york genome center to find treatments as personal as dna. and i am helping sesame street make education unique to every child. hello, my name is watson. working together, we can outthink anything.

welcome back. today's top story, the november jobs report. joining us to look at expectations, president of money strong and former adviser to the dallas fed and also chief economist and strategist at glasskin. daniel, let's start with you bhap is your expectation for the number today and how far wide of consensus would it have to be to derail expectations? >> i think that we could possibly see something north of

200,000. but i think given the acute focus on the ten year and also on where the euro is trading vis-a-vis the dollar going into this weekend as you have been talking about, we'd really have to see something north of 250,000 or something in the double digit range south of 100,000 really to shock the markets. >> daf >> david, is there a number that is too strong and would derail some of what we've even in the markets? >> will, i guess if it was a blowout number being i think the fed will go no matter what. the fed will take a look at not just this particular number, but the numbers that preceded it. the ism, the fact that fourth quarter looks like it's coming in? and around 2.5% gdp growth. so it's fairly simple math.

if you get a number close to 200,000, i think it would have to be something more than just the employment number today being a coincident indicator to know the fed off course. and if it's a blowout number and markets continue with a santa rally, then the question will be not what the fed does, but what the tone of the press statement will be. >> danielle, we heard earlier in the week from steve mnuchin the treasury secretary that 3% was achievable and where do you stand on that and many of course say it's a bit higher than that. >> i understand campaign promises afrnd expectations, bui don't see the economy pulling out 3.5%, 4% figures. if you look at the repostings of enwanted ads, they have been trending downwards.

so we're not seeing a lot in the way of pents up demand. and we've seen the peak in the current cycle in manufacturing employment in the country which at the he margin tends to drive economic growth. down 112% from that peak. and i don't see where they pull out increment fall growth and push it into that 3%, 3.5%, 4% arena. >> david, when looking at the jobs report, is there any seasonalities that we need to pay attention to or the weather, the hurricane in october, retail jobs during the holiday season? anything in that you need to be watching? >> well, i think that pole could have a moderate impact. in-t i think the most important number is goods producing employment. because when you look at the data, there is an interesting divergence where service sector employment is accelerating at a time when goods producing employment is contracting. now, goods producing employment relatively small share, but it's very cyclical. and the last time it was going

below zero year over year as it is now was in the opening months of 2007 and actually gave you a good reading if you had say a 6 to 9 month view of what the economy was going to look like at that point. so focus on -- i wouldn't focus so much on the retail or some statistical noise because of the weather. the first number i will go to after the headline and wage number is going to be goods producing employment because that is the leading indicator within the entire report. >> do you expect for the u.s. dollar going forward next year? the last four sessions out of five we have seen the broader index move down. so lightly a turnaround from the post trump election victory momentum. but what do you expect moving forward? >> i think that the u.s. dollar right now has become just about the most overcrowded trade that there is. and the big rally has really been coinciding with this trump rally and somehow this revised expectation that we will see gdp

growth revised sharply hire because of donald trump. i would fade that trade. i think that the u.s. dollar is right now take mdramatically overbought and my sense is that it will be flat next year. all the good news is fully priced in. >> and when you're looking at what the fed may or may not do, whether or not janet yell lyen in that position, how are you forecasting the hikes? >> possibly may and guess next year. so really half of what the expectations were going in 2016. we'll have to see. i think that the fed is going to give us a lot of direction on december the 14th in terms of what to expect in the year ahead. but again, as david just said, it looks like we're peaking out for the current economic cycle and i wouldn't be surprised if the fed had to ratchet back the market's expectations going into the new year. there are too many moving pieces. and as david just said, the market is priced for perfection.

>> david, what isn't priced for perfection at the moment? what currencies do you think have room to move up? >> well, i think that if your premise is that we've had the dramatic supply cut backs in the base metals and oil for example, so that at this stage all you need is just a small amount of global growth given the supply cut backs to cause the commodities complex to continue to drift higher, i think that is an area that you might want to look at. i'm not just talking my book of course. but i would say that if there is a source of inflation out there, that i've started to warm up to, it's in the base material area. >> david, thank you very much for that. and danielle, thank you also. great stuff from you both. that's it for worldwide exchange. we have 20 seconds left where we'll watch the jobs number.

>> futures down, oil down. >> big interview coming up on "squawk box" on the starbucks and of course over the weekend watch developments out of it lil.

good morning. starbucks ceo howard schultz stepping aside and kevin johnson will take over the top job. and both men will join us this morning in a first on krchl ncn interview. donald trump surprising his supporters at a thank you rally in the heartland in cincinnati last night announcing his pick for secretary of defense. and i can't believe it, i say this every month, where does the time go, another jobs friday. we'll tell you whether a surprise number could gderail te

fed's plans to hike interest rates. how can they? it's friday, december 2. "squawk box" begins right now. >> live from new york where business never sleeps, this is "squawk box." >> good morning and welcome to "squawk box" here on cnbc. i'm melissa lee. along with joe. howard schultz will become executive chairman, current president and chief operating officer kevin johnson will take over as ceo. much, much more on this story in just a moment. and later we will bring you a first on cnbc interview with howard schultz and kevin johnson. that is coming up at 7:30 a.m. eastern time. >> stepping down,