good morning. stocks soldier on. five u.s. benchmarks sit at all-time highs as the rally reaches nearly every corner of the markets. oil prices continue to rally this morning on hopes of a production cut. and the trump transition. another business leader tapped for a top job. the latest on the president-elect's appointments straight ahead. it's friday, december 9, 2016. "worldwide exchange" begins right now. ♪ good morning. warm welcome to "worldwide exchange" on cnbc. i'm wilfred frost alongside

courtney reagan who is in for sara today who is on assignment. good morning. >> good morning. >> let's get straight to the market action. rallies across the board. record highs across the board yesterday as we said already. the dow, s&p, the nasdaq, russell 2000, s mid caps and th dow all hitting fresh highs yesterday. extraordinary stuff. broadness of the rally. the dow called higher this morning by 42 points. s&p by 3. nasdaq by 3.5 points. u.s. equities doing well. we also saw equities in europe do well yesterday. let's look at what the euro did over the last 48 hours or so. it moved very sharply. initially going about a percent higher. when the decision from the ecb was announced, the market was focusing on the fact that the monthly size of purchases was reduced, there fourth euro rallying on the expectation,

that meant stimulus was being withdrawn. about an hour later, when the press conference began, the euro fell sharply. about a percent and a half down for the day. that was when mario draghi started to speak and people focused on the time frame of bond buying was extended and that he said the size of the purchase could be increased again at any point. significant moves there yesterday. ended up meaning more stimulus is being delivered, weaker euro, stocks higher and a steepening of the yield curve. mario draghi playing a blinder, somewhat. >> european equities were higher across the board yesterday. been a very strong week. if we look at what's going on in europe this morning. more of a mixed picture it does look like the italian market is the laggard of the day. and for the week it's been quite a week. we had that italian referendum vote on sunday. going into this week's trade.

>> you think you got rallies here, the dax is looking at the moment finishing 6% up for the week. >> incredible. >> significant moves in europe this week. in china a bit more of mixed picture for equities, producer prices did rise at the fastest pace in more than five years, as prices of building materials soared. the hang seng down about 0.4%. the shanghai composite up about a half percent. the nikkei up more than 1%. also weighing on some markets over there, the gaming stocks because of what potentially could be going on in macau from beijing. so i know wynn was really down quite sharply over there. >> in hong kong. >> as for broader markets, oil prices, particularly strong last week. a bit more mixed this week. decent day yesterday. they're up 0.7% today. 51.2 for wti. the dollar, which, of course,

last week did slip a bit, but it bounced back sharply yesterday. the broader index up 0.9%. large part of that coming on the euro/dollar pairing. the euro soft to the teen of 1.5% to the dollar. movements today more muted. the dollar a bit stronger against the yen. 0.4%. ten-year treasury note, just below that 2.4% yield level, it has gone back above that, a decent move back above that, 2.44. gold prices to round things off, coming up gold is a bit -- it's flat. 1,172. what has been fascinating is the broadness of the rally. what's come in. everything is catching up from small caps to mid caps. the nasdaq, which had been the laggard in terms of the post

trump rally is up 3% for the week as a whole. t the dow is up 2.3%. despite it broadening out, we see the likes of the financials soaring. financials are up 4.7% this week on pace for fifth week in a row of gains. it really shows no sign of abating. a lot of momentum behind the rally. >> consumer discretionary hitting highs yesterday. risk-on names leading the way. the financials are quite interesting. making your job more interesting, beyond "worldwide exchange." >> interesting all year. >> that's true. that's true. >> absolutely right. interesting that the highs the financials index has seen goes back to 2007. this is pre-crisis highs. >> yes. >> they had lagged for a decade. this is not just a 2016 bounce back rally. this is a ten-year bounce back rally now that people are hopeful that the yield curve is

attractive for them and that regulation is less negative. that's why we've seen the extent of this rally. but the rally is huge, over 30% the rally for bank of america since the election. massive short-term rally. >> it is. a lot of catching up in a short period of time. we had to. titans weighing in on the rally. billionaire investor and trump support eer carl icahn voicing concern how far and how fast we have come in an interview yesterday on "power lunch." >> ahead of itself somewhat. but there's obviously, you know, very good news. it's morning now, wall street and -- not so much wall street but across the country, and it may be too exuberant. i do think that all the things donald's doing point to a much, much better economy. >> icahn also said he wishes he had placed a bigger bet on the post-election rally. he's probably not alone in that bet. >> that's why i think things continue to run up. i'm sure some people made a lot

of money but not everyone. even though you see move, bring it back to financials, tuesday this goldman sachs financial conference, a lot of attention from london and europe. so they've run up a lot, and everything is looking rosie. as you warned at the top, has it gone too quick? we'll have to see. mark lasery sounding off, the co-founder of avenue capital group said he was cautiously optimistic and warned about overexcitement in the market. >> it's a bit like you're on a sugar high. a lot of sugar, everybody is excited. the question is how long do does that continue? if you have tax cuts, a much larger deficit in a rising rate environment that's not beneficial unless you have 3%, 4% gdp growth. you'll have inflation, and the

question is what is going to happen in gdp growth. if it ends up being 3%, 4% that will be positive. >> he also commented on trump's appointment saying it's a big experiment, but if they can reduce regulation and increase gdt growth that would be greats. as the trump rally rolls on, through new data on how peop investors are piling on? it's mostly in cash. investors pulled nearly $10 billion from stock mutual funds. let's discuss the rally and how investors should be positioning themselves with ed keon. good morning to you. >> good morning. >> thank you very much for joining us. the rally continues very, very broad. there seems to have been a pause end of last week, we plowed

through that. does that continue through the rest of the year? >> i think so. there could be a pullback. that's the nature of markets. hard to predict. we had a sharp run-up. i think that could happen, but the broader trend of more bull market is in place and is likely to continue in the next year. >> when we talk about valuations, something that for most of this year each time we come to earnings season we thought valuations are high. expectations of earnings are low. we've been so focused on that topic. i don't think we mentioned valuations once, certainly not n enough in the last three, four weeks. >> the stocks are not cheap by historical standards. it reduces the long-term expected return. if historically you got 10% with the valuations that use the to pertain, you probably are looking more like 6%, 7% in a world are relatively low inflation, competition from other asset classes, 6%, 7% from

the stock market is not a terrible thing. also you won't get that in a steady -- every year. you have to seize the rosebuds while you may. gather them while you may. get the bigger returns, like we're seeing now when you can. maybe try to be more nimble about getting out when the market is falling. >> what does lipp epelippor dat you? >> there's a much more conservative approach to investing. i don't think it says that much more about the market, it's more about earnings, inflation, what will the fed do. >> you say in your notes, financials have had a great run, but we still like them. where within that space? >> financials are the only sector, the only investment i could think about before the election that looked genuinely cheap. by their own historical standards.

part of what you're seeing, they had been lagging for many years. they have gone from being cheap to getting closer to fair value. you still also have these gigantic potential tailwinds of steeper yield curve, plus the possibility of a lighter regulatory touch, which should help earnings in multiple ways. i think it's still a good idea to be overweight financials even with the run they've had. >> likes of bank of america, which we know are very much geared towards that steeper yield curve, they have run up particularly strongly. any names that haven't had that bounce? >> i can't talk about individual names. you can take advantage of the financials by using broad etfs and other instruments that will give you a chance to play that without being dependent on one particular name. >> great stuff. thank you very much for joining us. >> thank you. now to a developing story overseas. south korean legislature voted to impeach president park geun-hye. the news follows uproar over influence pedalling accusations. the prime minister will become

the acting prime minister of es country. she already announced she would stand down in her own right. this is just compounding the consequences for her. >> i understand it could take 180 days for the process to go through, for another re-election. a pair of economic reports are on today's agenda the first read on december consumer sentiment is out at 10:00 a.m. eastern, along with october wholesale inventories, vail resorts reports earnings. we are setting up the day ahead for you when "worldwide exchange" returns in just a couple moments. you get ed to swty odors in youl

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the euro logging its biggest one-day drop on the heels of the european central bank's decision to trim its bond buying program. joining us is kit jukes. what did mario draghi do yesterday exactly? was it a good move on his part? >> the ecb decided to slow the pace of bond purchases from $80 billion a month starting next april to 60 billion. so a 20 billion slowdown in the pace of bond buying, and extend to the end of next year. so, fewer bonds per month for longer. with a statement that kept open the possibility that they would

re-increase that amount if the economic outlook deteriorated. not an option that they put forward that they would slow it further. they also widened the bands of what they could buy a bit to give themselves room. the important part of the -- important part of the message was that this was not tapering, because tapering is a series of reductions in purchases, according to mr. draghi. but just a one-off move that should be perceived as being dovish. >> kit, where does the euro go from here? we heard your views before, previously you felt the euro was due a bounce, aside from a wild card political risk. does this change your view on that? i suppose it increases the differentiation between monetary policy expectations in the u.s. and the ecb. >> yeah. it doesn't do much to that

story. in my mind the eventual tapering, steady slowdown, end of quantitative easing in europe will be a significant factor that will start being the case from the middle of next year if the economy is already. it puts the monetary policy for the next few months into the rearview mirror. it's all about politics between now and the french elections. >> is parity possible? >> i think so. i think, you know, how long is a piece of string in a sense? i think it's going to be hard for us not to be at times pretty worried about both the possibility of national front candidate, marine le pen winning and what that might mean for the european political outlook more generally. yeah. we're bound to have days when we're scared about what's coming. if you put that in at the same time as the fed is hiking rates, and if that continues to

support, we can get to parody. just quickly, who wins the central banker of the year award this year? >> mario draghi to me. he managed to find a way to taper without tapering. we all knew what he was trying to do. we didn't know how he would do it. yet again he pulled a rabbit from his bag. the man's a genius. >> great stuff. thank you very much for joining us. kit juckes. described mario draghi yesterday as masterful. big fan of mario draghi. apollo global management tapping gary parr. he will join apollo as senior managing director. parr has a long track record on wall street advising firms like jpmorgan and blackstone on everything from mergers to ipos. he'll take up that role. coming up, president-elect trump continues his thank you tour in louisiana today. the latest from the transition

team is straight ahead. >> before we head to break, here's the national forecast from the weather channel's reynolds wolf. >> well, good morning. let's look at that forecast across the country, bismarck going to minus 3. that's all they'll manage today. that's the air temperature. 3 below zero. when you bring in the windchill factor, it will feel much cooler than that. dallas, plenty of sunshine. dry air for the central plains. out to the west, rain, sleet, snowfall. snowfall in higher elevations. in the mountain passes, all rain. atlanta, 43. the showers belong to central and south florida. new york city 38 degrees. western new york, chance of snow showers and maybe some snow showers for parts of the appalachians. more "worldwide exchange" coming up after these megs.

welcome back to "worldwide exchange." let's get you up to speed on the market action. it's friday, but we have a whole day of trade ahead. futures are indicating a higher open for the s&p, the dow and nasdaq. we had another record day yesterday. unbelievable this meltdown keeps happening. a record day for the dow and s&p. the russell 2000 is up 16% since the election. just phenomenal. if we look at what's going on today in the world of currency, the dollar a little bit stronger. we saw that big fall in the euro after the ecb announcement.

the dollar is stronger against the yen and the pound is stronger against the dollar. again, relatively flat compared to what we saw yesterday after the ecb move. look at oil prices up again today. crude above $51. brent is above $54. there's some hope that non-opec members maybe looking at production cuts. there's a meeting over the weekend. let's head over to wilfred. the latest on the are trump cabinet. president-elect trump tapping andy puzder to be labor secondary. puzder, the ceo of carls juniors and hardee's. to get reaction on potential possible presidential announ announceme announcements, let's join tracie potts. >> democrat joe manchin is scheduled to meet with president-elect trump today to possibly talk about being energy

secretary. he is from a coal state. that plus the pushback on puzder has him on defense. president-elect trump talked about his cabinet choices and china last night. >> they haven't played by the rules. and i know it's time that they're going to start. they're going to start. >> reporter: president-elect trump on china at an evening rally in iowa. iowa's governor, with close ties to china, is trump's choice for ambassador. >> better to like china if you're going to be over there. >> reporter: trump stacking his cabinet with billionaires. >> the greatest kronnys and stooges we've seen in a presidential administration. >> instead of draining the swamp, he's filling it up with hungry crocodiles. >> i want people who made a fortune because now they're negotiating with you.

>> andrew puzder his choice for labor secretary. >> the president-elect is heading in the direction of the bosses, not of the workers. >> reporter: even conservative breitbart news is against him. hillary clinton showed up for an event on capitol hill and told congress to do something about fake news. >> this isn't about politics or partisanship. lives are at risk. >> reporter: she spoke to the d.c. pizzeria owner who received threats after his restaurant was targeted in a conspiracy theory tied to clinton's campaign. and we'll continue to watch those developments today. also president-elect trump will head down to louisiana today to help out a republican senate race down there that is still ongoing. there's a runoff happening tomorrow. >> tracie potts, thank you. now to sports, a year ago there were no nfl teams in los angeles, but soon there could be

two. the rams moved from st. louis back to l.a. before this season. now sources say a plan to move the san diego chargers is almost a done deal. the team has reportedly expected to sign a lease to play in a new staydium which would open in 2019. the chargers would share that space with the rams. the chargers have been in san diego since 1961. i hope l.a. is ready. i hope they can bring it for their two teams. that's what they need. >> i still find it amazing that teams can just move. at least this is a small move. not -- >> same state. >> not too far. but i don't know. just can't get my head around that side of it. >> crazy, right. still to come on "worldwide exchange," more on the stocks huge runs, record-hitting highs that we've had over the last couple of days. >> that's right. we're drilling down on one sector hitting new records, consumer discretionary. dana telsey is coming up.

. good morning. stocks soldier on. five u.s. benchmarks sit at all-time highs. what's hot and what's not? the best and worst stock performers in this post election rally. and could phone calls be allowed on flights? the details of the new controversial proposal straight ahead. it's friday december 9, 2016, you're watching "worldwide

exchange" on cnbc. ♪ very good friday morning. warm welcome to "worldwide exchange" on cnbc. i'm wilfred frost alongside courtney reagan. sara on assignment today. great to have you with us. let's check in on the global market action. lots of all-time highs hit yesterday across pretty much every index that we looked at. small caps, big caps, sector specifics. we are expected to go higher again today. the dow called higher by 45 points, s&p by 3. nasdaq by 5. the individual gains we saw yesterday not massive. we were looking at about 0.2, 0.3% of gains. given we've been hitting highs earlier in the week t meant new all-time highs yesterday. europe was particularly strong yesterday after mario draghi convinced markets that more easing would be there if

necessary, while reducing the size of the monthly purchases at the same time. that led to a percent and a half of gains for the german index which looks likely to end the week higher by over 6%. yes, we've seen rallies stateside but this week has been very, very strong for europe as well. today, ending the week with a mixed picture. keep that in mind following the strong gains we've seen. asia, strong move higher in the nikkei because of yen weakness today. shanghai is up as well producer price inflation coming in at 3.3 year on year rise in novr. well above the 2.2 percent expected. follows a 1.2% rise in october. decent producer price inflation performance. the consumer price inflation performance slightly positive. not going to have much impact on global inflation rates, but desedee dee decent data out of china.

we have brent crude up by 0.8% -- wti 0.8%, brent crude up by a half percent. there's some hope that non-opec members, potentially russia, could also cut some production. they will be meeting this week. the dollar is stronger, but certainly not like the moves that we saw yesterday after we heard from mario draghi and what he had to say about the ecb program, the euro and dollar just about flat in today's trade. the dollar is stronger here against the yen. the pound just a hair stronger against the dollar here. if you can look at gold prices, they were unchanged earlier in the morning. we'll look and see if they moved off that. they have a bit. but not very far. down just slightly for gold. >> let's check in and focus on which names are benefiting from the post-election rally. and the stocks that are not. landon dowdy has the latest

numbers. >> reporter: good morning. in just about a month after the election there's no doubt that wall street has been letting the good times roll with the markets continuing to hit record highs. while the trump rally has gone by like a flash for many investors, it dragged on to many others. these are the best and worst performers in the s&p 500 since trump was elected on november 8th. transocean up a whopping 50.7%. it's no surprise. the off-shore drilling contractor has enjoyed a bump from trump as he promised to help revive the mining and fossil fuel industries. chesapeake energy, united rentals also spiking. which stocks in the s&p are suffering the most? tanking nearly 24% on weaker earnings is tripadvisor, centene corp and paterson also sliding. these healthcare companies have

been taking a hit as suspected economic growth was seen as a headwind for these companies. >> those oil names also benefiting from the opec deal. >> very much so. from specific stocks to one of the many sectors hitting records, consumer discretionary hitting fresh intraday highs yesterday, joining us now is dana telsey. she's the ceo and chief research adviser fr adviser. every year online takes a bigger and bigger share. we know it's still small compared to the big picture and how many sales are actually still done in store. so i guess what i'm worried about is if miss says is pulling sales away from store and online, isn't that a problem in some way only because those sales are more expensive for macies to do? >> i think one thing that's happening is you need both. you need an online presence and you need a physical store presence. one of the most effective things that's happening for holiday

season and retail this past year, buy online, pick up in store. on average, when consumers are coming back to buy online and they pick it up in the store, there's an attachment rate sometimes that could be nearly 30%. people are spending more. the physical presence is needed to enhance digital and vice versa. >> the pick up in store helps drive the transaction value higher for many. home depot sees a particular benefit. do you think consumers are using it in big numbers? >> i think overall, i think exactly what you said. i think it's first being pit in place in a lot of retailers. i think they're first learning from it, which consumers use it, which category is most effective. it just began last year. it's expanding this year. also ship from store is important. because given the increasing online presence, more retailers are now shipping goods from

stores that they don't need to open distribution centers everywhere. and that's important, too. it's teaching retailers what are the best sellers faster for them to react. >> dana, investors feeling euphoric since donald trump's election victory. what about consumers? are they spending significantly more because of this optimism that we're getting in financial markets? >> i think they still are cautious spenders. one of the things that this thing that changes is more confidence and certainty. it puts more money in the pocket. the other element is there's more newness out there for what consumers want to buy, whether it's what's happening with 4k tvs, the new snapchat glasses, velvet in the apparel world, look at those lululemon numbers from the other day.

there's more items that consumers want. if we can sort of wrap it up here with lululemon picking up on your point, the third quarter results were strong. the guidance was pretty weak. investors did not seem to care. those shares went on higher. why is that? >> one of the things that happened, the guidance for the year, for the quarter coming up, the fourth quarter, 96 cents to just over a dollar. that was in line with the consensus. leaner inventory levels, higher margins, those gross margins this quarter are up 420 basis points. the conference call, speaking with them afterwards, there continues to be more opportunity and the consistency of the sales with new store productivity being solid. we don't have a lot of retailers doing that. most retailers, same-store sales growth is less than what we have from lululemon. >> that's true. profitability very important. much of the reason for that stock run up in lululemon. thank you very much, dana. dana telsey of the telsey

advisory group. we can look at some stocks to watch today. restoration hardware's third quarter results beat forecasts, but the home furnishing retailer is cutting its fourth quarter outlook washing of slower holiday sales and delaying the launch of its own catalog. sales in november were pressured by the u.s. election. one of those, throw every excuse in the book at the reason for the quarter. restoration hardware sharply down after hours, almost 11%. and insys therapeutics says it is cooperating after six former managers were arrested yesterday. they were accused of bribing doctors to prescribing a drug with fentanyl. better than expected third quarter earnings for finisar. results were powered by strong demand for its equipment.

more stocks to watch. du duluth recording third quarter sales, bristol-myers is raising its quarterly dividend by 2.6%. just below fair value this morning. broadcom swung to a third quarter loss. adjusted results beat forecasts. the chipmaker gave a rosy outlook for the fourth quarter. to top trending stories. astronaut and senator john glenn has died at the age of 95. his death is sparking an o outpouring of tributes. tweets coming from politicians, the u.s. marine corps and even bill nye the science guy.

nasa is a tweeting we are saddened by the loss of john glenn, the first american to orbit earth. a true american hero. godspeed, john glenn. >> and next trending story, donald trump is reportedly keeping his executive producer title on nbc's "the apprentice." mgm, which produces "celebrity apprentice" for nbc says it will pay the president-elect's fees as opposed to nbc paying them. a trump spokesperson confirming the news saying he has a big stake in the program. the show went off the air during trump's presidential bid will air again in january with new host arnold schwarzenegger. a little bit of a conflict there, but we'll see what

happens. >> airline travelers who are already upset over shrinking seats and riding fees may need to brace themselves for a new cabin reality, in-flight calls. the department of transportation is proposing allowing some calls with conditions. airlines would have the option to provide the service. if they do passengers must be informed ahead of time. officials have to analyze public opinion. i think this is a horrible idea. i don't like it. i want peace and quiet on the plane. you like it? >> i don't know. it's the obvious next step. i think for short-haul flights, not long-haul. >> you're sitting next to the kla chattiest person, you can't get up, the seat belt sign is on. >> fair point. coming up, the must reads, and another check on futures. cdw implemented dell poweredge servers

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time for today's must reads. my pick is in the financial times by robert schrimley, titled we have a situation, president trump's twitter feed has been hacked. it mentions a fictitious phone call between jack dorsey and kellyanne conway, talking about some of the themes behind the tweets, saying the account must be hacked. kellyanne conway says, nope. >> how would you know? isn't that the problem?

>> it's a fake conversation, of course, this is my favorite part, some tweets that you would know would prove that we had seen a hack indeed, including one suggestion, if trump tweeted on second thought i think there's a subtle genius to alec baldwin's portrayal of me. you have to laugh at yourself. there's a long list of potential tweets saying do my hands look small in this? if it's a nice comedic article which you don't often get in the financial times. >> i like the humor. my pick is from the "wall street journal." the paper's tribute to american icon john glenn. it's called john glenn, the first american to orbit the earth in what was an age of possibility. we live now amid the wonders of the digital age, many miracles of technology, even digital software cannot create the

wonder of what it felt like to be an american alive for john glenn's trip into space as it was for those who experienced ve day in 1945. john glenn is really an american hero. fellow ohioan, a national hero, world hero. i wasn't around or alive when that happened, but, you know, all these years later i can appreciate the wonder of how special that once was and how special he is. >> i enjoy reading about him, as a britt, he was less well known compared to the first astronauts on the moon. very amazing reading about him. national hero. may he rest in peace. coming up, the dow, s&p 500, nasdaq, russell 2000 at record highs. will the rally roll on? jack cafferty joins us next. you're watching cnbc.

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approaching the top of the hour, the team is getting ready for "squawk box." joe kernen joins us. >> looking at this great ohioan. really. there are still men like this, i think. don't know if it's us, first time you'll try something like going into orbit, you're sitting on top of that -- going to light that candle. you really don't know. it may work, it may not. i'm willing to try this just beyond comprehension. that's when we use the term hero too loosely these days. i see that word used -- maybe some sports guys, for a little while during their performance are heroes to fans. but these are guys, military guys, these are the guys that define what it is. >> couldn't agree more. >> wilfred, you put a primate up there, not a human primate, but a monkey, he's like -- eating a banana, looking around. he has no idea.

he has no idea. that's why you send those guys first. the minute you put a man up there you are staring mortality in the face. different kind of men. and they were test pilots before that. i don't know we're doing business news. i can tie it in. transportation average. that's kind of a transportation. didn't hit a new high until wednesday. it was back in 2014 the last time it did it. very unlikely that all of these articles about how is this -- kelly evans is here. is this -- you didn't mean it to be that way, your article. you don't have a mike on. we immediately write the headline, whoa, whoa, this could be a january swoon. this is probably nonfundamentally val dat nonfundamentally validated. the lead story on this indicator says the markets

are too high. we'll see. futures are up again today, aren't they? unbelievable. >> it is. dow 20,000 -- >> i was going ask about that. we talked about dow 19,000 hats. are we going to get 20,000 hats? >> i think round numbers are big. do you think an s&p 2250? that doesn't do it for you. >> not really round enough. i want a 20k hat? >> we just happened to count in base tens. >> which is a good thing. if it was base nines, we would have already done this, i think. it's weird. i think we will have hats. yes. >> great stuff. look forward to "squawk box" in nine minutes time. for the rest of "worldwide exchange," let's dive into some of those record highs and what we can expect, whether this rally can continue. joining us now on the news line -- not the news line, we get to see him as well, jack caffrey from jpmorgan private

bank. good morning to you. thank you very much for joining us. as joe just said, people now questioning whether this rally can continue. dow transports adding themselves to the record list of highs. can it continue? >> we certainly think it can continue. seasonally this is a great time of year for the markets. basically the institutional selling is done. i think people are normally a bit more enthusiastic around the holidays. you have that. then the important issue, which is the economy, it's been performing better than analysts have been forecasting. you had this good underpinning economic story, positive revisions, earnings edging higher. the earning recession being over. and lastly the prospects for a political situation moving towards more deregulation, letting of businesses operate businesses the way they think it's right rather than being told how to do things. >> how important is the perspective of where stocks were

before this rally continued as opposed to what happened? i ask that in relation to the financials who are not only rallying off a weak 2016, but off a weak decade. >> i think that is certainly -- the prior weakness lets you start thinking are things well-owned, under owned? i think there's a perspective -- not certainly, you can find data which indicates the financials have been underowned. people have looked elsewhere for growth, whether it's in the technology sector, healthcare sector. you can tie this back to when i see better economic growth, more companies can participate in the rally, whether they're financials, industrials or transports. >> jack what would it take to get the retail investor involved in the market? the lipor data suggests many of them are sitting in cash. >> retail -- step back, not just retail, but this has been a hated rally for more or less eight years now. that's been so frustrating. the indices move, people say they'll buy the dip. they find a reason when the dip

has happened to say i'll buy it at a deeper level, they haven't and markets turn and move higher. that's been so frustrating for so many. nonetheless that implies there's legs to this mar ret. still liquidity, cash, still fixed income investors looking for gains. i think that continues powering higher. i think it will be an earnings led rally, much less so than the valuation rally that's helped so much this year where you've seen stocks trading at 17 times earnings. >> jack, we got a reminder yesterday of the difference between international monetary policy expectations, the directions of where it will head in 2017, coming ahead of the fed meeting next year. with it we saw a rally in the dollar yesterday. do you expect that rally in the dollar to continue moving into next year, potentially get a number of rate hikes? is that something we need to watch in terms of derailing the equity market rally? >> i think we have to be mindful of the stronger dollar with 40% or so of s&p 500 revenues being

generated. i think that's more of a translation problem rather than a transaction problem. you think about consumer staples companies, they built their businesses in international markets. their costs are not necessarily rising. i look at the dollar and anticipate the dollar weaker. when we think about tax cuts, when the impact of tax cuts happened. when spending happens, those will happen quickly versus the growth those can potentially engender, generating higher taxes. that comes in the longer term. in that regard i think that prospect for higher deficits should actually be putting a bit of dampener on the dollar. we'll have to watch the fed. will they become more hawkish or say we've been asking for fiscal stimulus for so long, why will we work to counter act it by raising rates too quickly? >> as we look at potential things that could derail this rally, and take ourselves back to this time last year where things were looking rosy towards

the end of the year, suddenly january and february, big selloffs based around the rest of the world, china. what do you think about the situation in europe, in china? is that something that could derail this domestic-based rally? >> the s&p is effectively an increasingly global index, tied to the world so we have to be mindful of what goes on in the world. i would say domestically there's always going to be a challenge between we want to think things can happen quickly but progress is not linear and not always as fast as we want in that regard markets are rallying on the hope of getting dramatic changes in policy quickly, the reality is you put congress together and it's hard to get necessarily the uniformity of opinion that i think markets are trying to find now. that reality won't become apparent until february or march. >> great stuff. thanks for joining thus this morning. in terms of things to watch today, more highs, will we get

them? >> more highs, cabinet picks for trump. >> don't go anywhere. "worldwide exchange" is finished, but "squawk box" is coming up next.

five u.s. benchmarks sitting at all-time highs, as the rally reaches nearly every corner of the market. president-elect trump picking another business leader and another friend of "squawk box" for a top job. the latest on the trump transition is straight ahead. and staying connect the at connected at 30,000 feet. a new proposal would allow cell phone calls on 30,000 flights. it's friday, december 9, 2016, "squawk box" begins right now.

♪ live from new york where business never sleeps, this is "squawk box." good morning. welcome to "squawk box" here on cnbc. i'm andrew ross sorkin, with joe kernen, kelly evans hanging out with us. the march to dow 20,000 continued yesterday. the dow gained 65 points closing at a record high again. led by goldman sachs and disney. the s&p 500, nasdaq, russell 2000 and transports all logged new highs. at this hour, we're looking at another up day. at the moment, the dow would open up higher by 53 points. the s&p 500, 4 points, and the nasdaq 12 points. >> overnight in asia, japanese stocks hit a one-year high.