good morning. charging ahead, the post election rally lifts stocks to new heights. all hitting record highs. today's test for the markets. traders await a crucial ecb meeting that will determine the fate of the central bank's bond buying stimulus plan. and trump takes on union bosses in his latest twitter attack. it's december 8, 2016, and "worldwide exchange" begins right now. ♪

>> good morning. welcome to "worldwide exchange" on cnbc on a thursday. i'm sara eisen. >> i'm wilfred frost. because it's thursday, it's throwback thursday, throwing it back with british rock greats, this one two of the greats in one song, david bowie and queen. >> being very nice to you today. >> i didn't even request this. they just delivered. >> let's check global markets. after another spectacular session on wall street yesterday, which lifted the dow almost 300 points. records all over the place were quiet this morning in terms of future activity. dow futures down about 9, s&p futures down 1. nasdaq futures up less than 1 point. ten-year treasury note yield early this morning, the story has been the selloff in bonds. money coming out of bonds and into stocks. we saw that again yesterday. we see yields even higher again this morning. very little in the way of economic data.

here we are pushing up towards 240 again on the ten-year yield. it's been a dramatic move for stocks and for bonds. >> yeah. though i'd say on the bond and dollar front the post-election event has slightly turned around from what it was. that correlation is growing. near 2.39 at the end of last week, now nearing 2.37. the dollar is set for its fifth session out of six in declines. that's something i am just wary of. yes, stocks continue down momentum, both the dollar and bond market have paused. whether they retraced or not, they've paused. is that positive for equities that they can continue without the momentum coming out of bonds or a sign that equities are enjoying a slowdown. >> just when you thought it was running out of steam, bam. they took off yesterday. you had different groups leading, telecom was the stand-out sector perhaps on the fact that yields are not spiking to the highs we've seen recently. those are rate sensitive, participating in the rally. we'll talk more about the stock

market action. there is something to dive into. it's this sector outperformance and really extreme divergence sector-wide. >> one sector down yesterday, healthcare. a lot of bullishness in european equity markets this week. treading water this morning before the ecb meeting. a point of note the dax was up 4.5% week to date by yesterday. just shows that positivity baked in ahead of this ecb meeting, even if it's not showing up on today's boards, slightly higher. the dax up 0.2. let's look at asian trade. chinese trade data, a slight prize, up 0.1%. it was expected to decline a bit. japanese third quarter gdp revised down. that was a bit of a negative. as you can see markets are still higher in the nikkei, up 1.5%. shanghai down slightly. in general we have positivity in

a risk-on sentiment in asia. >> as for the broader markets right now. let's show you what's happening with the price of oil which struggled to hold that $50 a barrel level. that's where we are right now on wti. up a half percent over that threshold. brent goes below 54. it's up 0.6. 53.33. natural gas prices are lower. as for the dollar, ahead of a crucial ecb meeting the euro has been strong. at a three-week high. i wonder how much that is about the areeuro after this giant mo higher. we can say the dollar has held near its recent highs against the japanese yen. it is below that 1.14 level we hit earlier in the week. down again about a quarter percent. worth watching, you'euro at 1.0.

the question is if the ecb disappoints and doesn't add or extend stimulus as much as the market was expecting, is that weak for the euro or strong? usually more qe and stimulus is weaker for a currency. the euro matches to its own drum. it's been strong on expectations of more qe and the fact it will boost growth in the euro. >> i would say there's been leadership from european equities this week for u.s. equities. equities have been strong. why are we cheering this? we have the dax up 4.5% week to date. so far the last three or four weeks, bullishness in equity markets have been driven by rising yield curves, higher inflation hopes and higher growth hopes, the idea that we don't need stimulus anymore. >> in europe. >> sure. abroad. not that global reflation trade that we've been hoping for. i think this is a bit super

official. whether or not it's only sup superfici superficial. the fact we will need stimulus again and the markets are cheering that, i don't see why that's a fundamental reason to celebrate. >> because you have what happened in italy, you have a prime minister stepping down, all sorts of question marks about what that will mean for the banking sector. the one hope is that the ecb will be the lender of last resort. the more active they are on that front gently has been celebrated as a good thing. you're right. we have a fed meeting in one week from now. the fed is expected to raise rates and take away the punch bowl. no matter what central banks do the focus is on fiscal policy, higher inflation. >> overall, it's a reminder of the fragility of the situation in europe. this stimulus may be needed. you add to that what's going on in china, which has been strong recently. but it's stimulus led, not fundamentally led. could we be in january, where

regardless of having hiked the rate -- seeing rates hiked once, we know how much that derailed markets last january and february. that's one concern. the other one is on the ecb meeting today. we could have volatile moves. yes, consensus is for a six-month extension of the 80 billion euros per month bond buying program. it's not a strong consensus. some people expect more 9 to 12-month extension. some people thinking they could taper in the opposite direction. we could get volatility around the decision today. the yields have risen across europe as here, but they've been dragd higher dragged higher by expectation of u.s. inflation. suddenly you turn on the taps of bond buying again, we could see european bonds move sharply today. >> for u.s. stocks, domestic stocks, can't fight the trump

rally. that's prove n resilient t has legs, and that there are sector stock winners and losers in the group. i'm thinking about trump yesterday saying we will crack down on high drug prices. clearly you have to do your homework and see the comments trump made, the tweets, the populist rhetoric around certain sectors and stocks. on the flip side, which sectors are okay. i think cramer said bank of america is trading like first bank of national trump. celebration of the sectors that are in favor because trump doesn't seem to be going after them. >> bank of america, as jim and i discussed, the perfect example. lots of things sidonly coming together for it. that's why it's particularly strong. up 30% since the election. goldman sachs has another 14% of

upside. >> it led the dow yesterday. bank stocks doing well. tech tech, facebook has not recovered well since the election. >> the nasdaq only up 4% since the election. the russell up 14%. >> not quite at the record. >> we'll talk politics now. donald trump launching a new twitter attack last night this time targeting carrier's union president. jones who is president of united steel workers 1999 accused trump of exaggerating the number of jobs he saved at the carrier manufacturing plant in indiana. trump said he helped save close to 1,100 jobs, jones says the number is closer to 800. so the president-elect took to twitter last night. tweeting chuck jones has done a terrible job representing workers, adding no wonder companies flee this country. the union firing back on twitter calling jones a hero who tried to save jobs.

trump returning to twitter to blast the entire steel workers union. chuck jones says he has been harassed and threatened in the wake of the twitter feud. he's certainly, trump, using the bul bullipulpit of twitter to get things done. the question is how much tit-for-tat retaliation is there going to be. >> not just that twitter is the medium, what's awesome is how business focused and economics focused everything is. yesterday it was the interview of "the today" program, it was so business focused, a mainstream breakfast television show. we were talking about boeing, carrier, about retaliation with china. all these things that are so business focused. this is not a typical president in any means. it's fascinating. >> his background, his promises. how he won the election. he wanted to keep jobs back in

america. starting to get a taste of how he'll do that. >> we are. more on trump's cabinet picks as well as it continues to take shape. the senior transition official says the president-elect has tapped oklahoma attorney general scott pruitt to lead the environmental protection agency. pruitt is an ally to the fossil fuel industry and fought against environmental regulations. trump picked retire ed general john kelly to head homeland security. linda mcmahon, the co-founder of wwe pro wrestling empire will lead his small business administration. some comments now that another general in the mix, another former military man, perhaps one too many. >> it is changing the shape of the cabinet. business and generals. a report in the "new york times" calling into question what trump will do with his business once he becomes president. according to the paper, trump is

considering formally turning over the operational responsibility for his real estate firm to his two sons, but he intends to keep a stake in the business resisting calls to divest. the times also reporting ivanka trump would take leave of absence from the trump organization, a sign she is exploring that move to washington, d.c. to a stock on the move. helping to fuel the bullish sentiment among consumer discretionary stocks, lulu lemon reported a much better than expected quarter after the close yesterday. shares are surging in the premarket and after-market action. up 15%. they've been hammered since the last quarter in august. landon dowdy has three things to watch or highlights, three things to highlight from the report. >> shares of liululemon are soaring. they posted 47 cents per share versus 43 cents that the street

was expecting, on revenue of 445 million dollars. the company raising its full-year guidance and says the board has improved a $100 million share buyback program. while sales were initially mixed during the quarter, they have improved said the ceo suggesting that lululemon is overcoming industry wide discounting and sluggish traffic. it is showing no signs of slowing heading into the holiday season. and piper jaffray pointing out lululemon should be in strong demand. shares are up 20% in the past week. >> it is a stunning performance. a real surprise quarter. thank you. margins were a good story in the lululemon report. the idea they don't have to take markdowns. the idea that wall street thought athleisure was a trent that peaked. forget about it. they saw record days for holiday

shoppi shopping. core categories are working. $100 yoga pants for women. men, sweat pants are a hot category, they're looking to expand internationally. looking to expand online. and they're looking to expand categories. >> do i need to get lululemon sweat pants? >> yes. >> you told me under armour. >> no. >> wasted a fortune on that. >> abc pants are a game changer. >> what is abc? >> anti ball crushing. >> oh, my god. >> amazon knocking down reports that it may open 2,000 physical grocery stores. this follows that story in the "wall street journal" that the e-commerce giant is looking to open a slew of brick-and-mortar locations. amazon saying that report is not correct. amazon unveiled a new convenience store concept on monday called amazon go. the idea basically allows shoppers to buy items without waiting in the checkout line.

the company said they are still learning about the grocery store business. they are pouring cold water on those reports that are everywhere. amazon is secretive. let's get to the economic agenda. the ecb is in the spotlight. the central bank will announce its rate decision at 7:45 a.m. eastern. followed by mario draghi's press conference at 8:30 a.m. at 8:30 we get weekly jobless claims. hov nanian and sears holdings have their earnings forecasts. the central bank is expected to extend its stimulus measures. a report live frlive report com.

we're watching the euro this morning stronger against the dollar, up 0.4% at a three-week high ahead of the ecb rate decision. that mario draghi news conference which moves the markets at 8:30 a.m. annette joins us from frankfurt with what to watch in the decision. good morning. >> good morning to you. well, there are three main factors we are watching here. it's an extension of the qe program, consensus here is 80 billion of assets they will keep

on buying for the next six months starting through september 2017. so we should rather see that extension at the same run rate of asset purchases, then, of course, questions will be how they will handle political instability in the eurozone with the italian referendum having actually voted the government out, matteo renzi resigned so we have political instability back here in the eurozone. another big topic of course will be the inflation and ecb forecast which will give us more of their reasoning, whether we will see tapering as soon as next year. very unlikely we see them use the taper word today, but nothing impossible. back to you. >> thank you very much for that. i suppose i've already given my ten cents worth on the ecb.

i think we could have a lot of volatility. i'm not so convinced that markets should be rallying off the back of it. >> you feel the celebration of stimulus is something that is years past, and we're over it. >> exactly. >> though there's still political shocks all over the place. >> but european equities have rallied on the hope of this global reflation trade, the opposite of what more stimulus would deliver. >> can the trump bump extend to europe? >> right. >> we're all connected. >> has a little bit. that's why i question why we're celebrating markets in europe this week off the back of hopes of stimulus. i'm not sure whether it's sustainable in that sense. >> we'll see what the markets do post draghi. trump's cabinet taking shape. a run down of his latest picks and what news we can expect from him. more onth reco the record rallyl street.

back with more in a couple minutes.

>> good morning. welcome back to "worldwide exchange." let's get you caught up on the market action. potentially a pause here in the buying. futures are mixed to little changed. dow futures up barely a point. nasdaq futures up four. another extraordinary day on wall street sent the dow, s&p, small caps, mid caps, transports all to record highs. how about the transports which

tend to lead the markets and send a bullish signal about economic growth? up 2.5% yesterday. first record high for this group in two years. up 40% from the lows that we saw earlier in the year when they got crushed on concerns about higher interest rates, china and all the other negativity happening earlier in year. a lot has changed over the last few months. >> it certainly has. let's move on to politics. and tracie potts has the latest on the trump transition. earlier this morning, carter page, a policy adviser for donald trump landed in moscow. but according to reports out of moscow, he says that he is there on a personal trip to meet with business leaders. apparently not on behalf of the trump transition or the

president-elect. president-elect trump is trying to decide who will handle his foreign affairs. he has another interview for secretary of state today. >> everything fine. >> reporter: president-elect trump meets today with retired navy admiral james dorites. there is concern his administration is stacked with former military leaders and millionaires like linda mcmahon. his choice to head the small business administration. >> at certain point, you don't want everybody from a certain back browned. >> reporter: president obama and bush appointed more generals. the latest for trump, retired general john kelly he'll be nominated to lead the department of homeland security. trump's national security adviser, retired general mike flynn, met with his former obama counterpart, susan rice on wednesday. >> she was unbelievably gracious. >> democrats are concerned that trump may cut medicare and

medicaid. >> we will expose the scheme to end medicare. >> mr. trump we will hold you accountable. >> reporter: now, we are told by sources that oklahoma's attorney general has been tapped as leader of the epa, which is interesting because he's suing the epa now over climate change. >> thank you very much. tracie potts live in washington. mentioned that mr. flynn spoke to his predecessor, also revealing in that "today" program yesterday that president-elect trump spoke to obama a number of times. >> appointing people that are completely opposed to a lot of the ideas from the obama administration. it's nice to see them talking. that peaceful transition of

power that we like to see. coming up, more on the top stories. we'll talk to two market watchers to discuss what investors should do next. and the next hurdles to be fearful of.

good morning. the post election rally lifts stocks to new heights. all hitting records. today's test for the markets, traders awaiting that crucial ecb meeting that will determine the fate of the central bank's stimulus program.

and video gone viral. the material girl rides shotgun in the latest edition of carpool karaoke. it is thursday november 8, 2016. you're watching "worldwide exchange" on cnbc. ♪ >> december 8th. >> did i read it wrong? >> i think it said november. >> said november. it's december 8th. welcome back to "worldwide exchange" on cnbc. i'm sara eisen. >> i'm wilfred frost. it is definitely thursday. >> yes. >> throwback thursday, throwing it back with some british rock. >> for you. >> i didn't even pick it. thank you to a great team. >> let's check in on the global markets after another breath taking rally on wall street. the trump rally is relentless. the dow surged another nearly 300 points yesterday. s&p closed higher bay percent. record territory around the board for the s&p 500 and the

dow. the nasdaq a few points away from that. futures are turning positive here. not a lot of action. dow futures little changed. nasdaq futures up four. s&p futures are flat. early action in europe is mostly positive. looking at three-month high for european stocks. have not gotten the trump boost the way u.s. stocks have. but they have joined in on the rally. >> certainly in the last week. german dax up 4.8%. >> italy up a half percent. spain up almost a full percent. the dax, up 0.3% again. overnight action in asia. japan has been celebrating the weakness in the japanese yen. the nikkei shot up 1.5%. hong kong, markets closed higher by 0.3. shanghai down about 0.2%. revision on japanese gdp was

worse than expected. nfrnl >> let's look at oil prices, they have slipped the last couple of days. last we're they were up about 12% after that opec decision. oil prices slipped back in the last couple of sessions. wti below $50 a barrel. specifically it is 50.03. so above $50 a barrel again. below it this morning. oil prices yesterday slipping back. the ten-year treasury note has paused. it's paused its rise, pulled back. 2.37. settled below that 2.4% level. the rise just tapering off. the dollar has certainly changed direction in the last week or so. five sessions out of six we're looking at today for dollar weakness against the broad

index. of course for the week, week as a whole last week, the dollar was softer, and softer again today. only a small turnaround from the post election rally, but worth noting. a half percent of declines against the pound today. gold prices which have been soft since the election, are flat today. 1,176. >> the ecb will be the focus today and the trump rally continues. what's worth highlighting here is the sector divergence, really extreme when you see moves like healthcare yesterday finishing lower, beaten down by biotech after some comments trump made to "time" magazine in his person of the year article, that he would crack down on drug prices. some suggesting that maybe the biotechs may not be safe. it's a populist issue in the line of fire.

on the other hand, banks continue to strengthen. goldman outperforming, again driving the dow to a record high. transports, i want to highlight because it is very bullish what we have seen. a move to record highs for dow transports. first time we've seen that in two years. if you bought them at the low, just this year, you'd be up 46%. >> it's right to highlight the differentials in sector performances. very broadly you could say higher beater did better than lower beater. it's been interesting to see telecoms catching up. they're one of the lower beater stocks. that's a bit of rotation, yet as you say, the financials continue on a tear. i think it's hard to call the top in this current momentum. in the medium term, i think we have to remember that transition from low rates to higher rates, december last year, we were positive coming into december.

we got that rate hike, not as euphoric at the moment, quickly that unwound when people started to focus on that transition. even if we have got growth coming through and inflation coming through, we have to go through a transition from the norm of the last eight years, monetary policy, to no longer having that behind us. >> there's the trade headwinds which continue to be mentioned and cited as some of the risks. you see this reflected in some of the big cap technology stocks. q which would be huge beneficiaries if they could repatriate their overseas cash into lower fax rates. it's america first, that's considered a big risk for the rally, but if you're domestic a small cap or a mid cap or in one of the sectors that trump has been benevolent towards in terms of how he speaks what his policies look like, including

some republican policies, then it's all good. >> and it's been a u.s. centric rally. just keep an eye on the rest of the world if stimulus is needed in europe that could derail markets. china. it's been supported this year by loose policy. will that run out next year? those are things to keep an eye on. >> it helps to have earnings like lululemon last night. consumer discretionary that has been -- that investors were on a down mood on all year. lululemon coming out with better sales growth. better outlook. i pulled up the abc pants for you. you can get them, they're $128. >> for sweat pants? >> that's the thing. they don't take markdowns. >> but they are particularly comfortable. so, it's worth the money. >> and $100 pants for women. >> the men's are more expensive?

that's rare. i will check it out. i won't, because i know christmas is coming and you will get me gifts. the ecb is expected to announce an extension to its bond buying, and kathy lee joins us this morning. quickly for us break down what the consensus expectation is for mario draghi today and what you expect yourself? >> this morning we have the euro trading at a three-week high. clearly the market is expecting hawkishness. three things we're looking at is how long will the ecb extend the targeted end date for its asset purchases. the minimum expected is six months. if it does less than that it will be widely euro bullish, if they do more that will be euro negative. the second question is how many

bonds will they purchase per month? keep it at 80 billion euros or reduce that amount to 60 or maybe less? finally, is it time to talk tapering? i think based upon the price action we see in the markets, clearly the market expects a combination of either six months extension followed by a reduction in the bond buys, or a short extension and a preservation in the monthly bond buys. while eurozone data has been extremely positive, i think investors may be slightly overly optimistic. the reason for that is because a lot of the improvements we've seen in the eurozone economy has been driven entirely by the weakness of the euro. draghi knows that if he comes out and starts talking about tapering, that the euro will go from 1.08 to 1.10. that will remove a lot of the support that's been provided in the economy. a lot of the benefits that we're seeing in inflation. in general, inflation remains

relatively low. i'm not sure whether he will jeopardize the recovery as well as the rebounds in inflation at this point. >> it's a tricky balance he has to strike there. kathy, in the time we have left, i want to get your similar thoughts and your view of what we can expect in one week from the fed, which is widely expected to raise interest rates for the first time this year. what that may mean for the dollar on the flip side of this trade. >> sure. we're beginning to see u.s. yield stocks lose momentum. this reinforces a story that i believe the fed will raise interest rates next week but indicate that they have no plans to raise interest rates again for the next three, four, six months. the fed fund futures are not pricing in above a 50% probability rate hike until after may or june. so you could see a scenario where the dollar is a more aggressive sell after the fomc

rate decision, rather than a buy. this reminds me of last year's ecb where ecb eased and the euro skyrocketed because of guidance. >> that interesting relationship now between currencies and stimulus. less than a week now. next wednesday. thank you. good to see you. kathy lien. to today's top trending stories. the material girl gets her shot at carpool karaoke. madonna hopped in the passenger sheet of james corden's show. ♪ they had style, they had grace, rita hayward gave good face ♪ ♪ bette davis, we love you ♪ ladies with an attitude, fellas that were in the mood ♪ ♪ don't just stand there, let's get to tshit, strike a pose, vo. >> madonna opening up about her

relationship with michael jackson saying they kissed. she also shared how she had been excommunicated by the vatican three times and said she is square living a predictable life. outstanding stuff. >> really square. >> really square. >> just, again, i say this every time. so much respect to james corden. >> he has. he gets them to do things. >> it's a great thing. they're having fun. nintendo's newest video game console getting a test run on the tonight show with jimmy fallon. they unveiled the switch there. adding to the nintendo theme on the show, the roots performed the super mario brothers theme song. listen. ♪ ♪ >> so good. in the center playing the acoustic guitar is the creator

of mario brothers himself. >> there we go. >> this is nostalgic. >> you're like the princess character. >> i did play super mario. which one would i be like? >> luigi. >> really? >> did you play it? did you play it growing up? >> with my knowledge of the euro and the ecb? no? not picking up on it. when we come back, the must reads. as we head to break, u.s. future now just turned a bit more positive. dow futures are up 5. can we continue this record rally after another record close for the dow and the s&p? stay tuned. you're watching "worldwide exchange." th is nage my portfolio. i aess tokay. oils, marketand kets i'm ugged to equitie tre confme and i have global acce 24/7. meaning i can dodowhat ,

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welcome back to the must read section. my pick is by ken roguff. titled the trump boom question mark. it's an excellent balanced piece of where we could be getting things right, where we could be seeing a big boost to gdp next year and some pit falls and risks in terms of the bullishness. he writes the world is a risky place if global growth collapses u.s. growth could suffer severely. still it is far more likely that after years of slow recovery the u.s. economy might at least be ready to move significantly faster at least for a while. i would say that's his conclusion. it is literally his conclusion. it's tilted towards a positive

outlook but a detailed look at what things to look out for. >> i like that he actually takes shots at fellow economists like paul krugman for saying don't let those left pundits tell that you this will be bad for the economy. if you would have listened to them on election night, would have lost a lot of money. >> a lot of snipe. >> yes, which they have done before. where are all the economists who were warning about donald trump, warning about the policies hurting our economy? where are they now? so many people changed their tune. >> this is getting attention in the british press, niles ferguson changed his stance. my pick is an interview with theresa may. they spoke to her at financial times magazine. she says she wants a smooth and orderly brexit but admits nexus will be complex. may says the eu doesn't want other members to break away like britain plans to do. when asked about relations with

an angela merkel, may said it is important to have relationships with all. it looks back at her life, her personal story, political story, gives color and character near her style which has attracted a lot of attention and criticism. that she's controlling, that she's sort of following in the steps of a monarchy rather than a prime minister. it gets her thoughts on those issues. >> it's a great read. i didn't pick it because i thought i would be getting grief from you for being too british. >> i let you be luigi. >> thanks. now, approaching the top of the hour. that means the team is getting ready for "squawk box." joe kernen has a look at what's coming up.

>> one thing you can put in a time capsule many times, a hat. i think the make america great hats, those will go in there. that will bring us back to where we are at this point in history. another one might be better, that's a dow 20,000 hat. don't know if you guys remember, but dow 10,000 was a big party. sounds like a low number, doesn't it? when you consider -- i was once a final -- an f.a., a stockbroker back then. it was 780. the dow was 780 when i was in training. to see something go from 780 to 10,000, now almost doubled from there to 20,000, i might put the dow 20,000 -- have we ordered any yet? >> i'm sure they have them on the floor. >> i'm sure they do. it's weird, because we watch the s&p more. i don't know, something about dow 20. you guys might remember, there was a guy named glassman, i think all the way back in the

'90s. we were supposed to go to 30,000 or 40,000 by now. >> 36,000. >> he was the poster child for maybe overdoing it, but here we are. it's exciting. but the one thing that people don't seem to learn, they never get perspective, is that when the market moves quickly higher, everybody every day is saying is this the top? is this the top? and it takes, like, months before people finally realize, wow, the train is leaving the station. this might be something i want to get involved with. it's human nature. yesterday it was drugs and biotech looking like it would set the tone. suddenly we're up 300 points. something happening here as buffalo springfield once said. >> we'll get you a hat. i'll bring you one. >> do you have my head size? >> no, i don't. >> i don't know what abc pants are either.

>> oh. >> i don't. have they already been chewed? >> you'll make me say it again? >> don't. >> i didn't see it. i saw cramer tweet. he was laughing that wilfred didn't know. i felt embarrassed. >> i didn't know. >> i don't either. >> i think they're something every man can use. >> sarah, tell us what they are? >> anti-ball crushing pants. >> oh, my god -- maybe i wint have brought that up. >> thanks. >> i feel a pair of trousers coming his way. the dow up by 1200 points since election day alone. striking distance, as joe said, within 20,000. the dax has crossed 11,000 today. you're less bothered by that. phil orlando joins us next. caths gottenseto sme.in her kitcheg garge..

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soaring to record highs. the dow climbing 7% since the election. extraordinary move in u.s. stocks. with us to discuss where we go next is phil orlando from federated. joe made a good point it's hard to time the peak of this. but are you telling clients, are you suggesting that after this tremendous run we've had that there's more runway for rallies? >> there is a longer runway, but you have to look out over the next two years. that's the problem here from a timing standpoint. we got through the election. we were cautiously positioned going in. excited coming out. we reduced bond allocation, but the s&p target full year was 2250. and we're about ten points away from that. there's been a tremendous run here in a short period of time. >> will we see financials pare

back a bit but gains in other sectors? >> the gacall a month ago is th defensive stocks would pull back and we would get a play in cyclicals. but there's been such a tremendous rally there. at this point we're saying left the defensive names for dead. there ought to be a re-evaluation of those names. we started to see some of those stocks which have gotten crushed here do better over the last few days. >> is it primarily a sector rotation moving out of tech and into the losers like banks which are winners for the year? is there fresh money coming to work? are these record closes after record closes bringing money off the sidelines? >> there's fresh money. people were extraordinarily conservative going into the election. frankly the fiscal policy uncertainty of who would win, what sort of policies we were going discount. you look at the banks, the combination of stronger economic

growth, stronger inflation, the fed tightening, that is a change in terms of what might happen in terms of bank earnings. so that reevaluation, rerating is not just a phenomenon taking place over the last months, it's something that theoretically ought to continue over the next couple of years. >> everything looks positive domestically. what about the rest of the world? are we ignoring pit falls or risks that could derail things? >> i think that's right. we look at the world. the united states right now domestic large cap, particularly domestic small cap are the best places to be. as you look at the emerging markets with the dollar strength, you have some issues there. there are questions about japanese growth. you have a number of pitfalls in europe. we seem to have dodged a bullet with italy over the weekend but a number of elections coming up next year who will the leaders be and policies be? as you look at the world, the

u.s. is where you want to be. in terms of valuation and what might happen overseas, that's risk for 2017. >> how do you navigate the new risks around twitter, where trump could mention a company like boeing or mention in a "time" magazine article a group like drug costocks, how do you manage that element of surprise and risk? >> it's just that, surprise. we have no idea what tomorrow's twitter leak will be, the category and market impact. you have to have some lnelementf caught, not knowing what the next shoe is to drop. we are in a different age. trump going on twitter, giving an interview, making an offhanded comment -- >> the market doesn't seem worried about it. >> this is the way he's trying to adjust psychology and

financial markets. >> thank you. >> that's it for "worldwide exchange." "squawk box" is coming up next. t thmarket. but through odmes ba.. .at t.owe price..... ...we'ped ouinves onfide for over 75 years. call us or yo advisor. t. re price. invest with confidce.

good morning. the trump rally rolling on. the dow posting its best daily performance since the day after the election, closing at a new high. transporting rocketing up 2.5%? what do you do now? that debate is straight ahead. a crucial ecb meeting will determine the fate of the central bank's bond buying program. we still care. seems like we kind of looked inward a bit more now. and jefferson vsonenfeld has a

deal with trump. it's thursday, december 8, 2016. >> live from new york where business never sleeps, this is "squawk box." welcome to "squawk box" on cnbc. we'll start the morning with, yes, the trump rally. the dow and s&p 500 closing at an all-time high. the dow gained nearly 300 points led by home depot, ibm and goldman sachs. since the election the dow is up more than 6.5%. also dow transports gaining 2.5% in yesterday's session. on pace for its sixth positive week in a row. since the election, up 12.5% -- joe gives me the stink eye. >> you got