good morning. markets are on a tear after a new agreement to cut output. the trump transition, the ceo of exxonmobil is expected to be the secretary of state, adding more fueling concerns over russia. and the hills of the made for tv match-up between the dallas cowboys and the new york giants. it's monday, december 12, 2016. and "worldwide exchange" begins right now. good morning. a very warm monday morning welcome to "worldwide exchange" on cnbc. i'm wilfred frost alongside

courtney reagan in for sara this morning. >> good morning. >> happy monday to all of you and our viewers. let's get straight to the market action. record highs throughout the week. last week we ended the week with the s&p down 3%. the nasdaq was the leader at 3.5% for the week. it's worth pointing out the nasdaq since the election up only 4.8. so much of the gain coming last week. it was playing catch-up having lagged behind some of the other indices since the election. the one really up most of all since the election is the russell 2000. as you can see this morning, we're pretty much flat in the pre-market. the dow eking out a slight gain on the futures market there, the s&p and the nasdaq slightly negative. the big market mover this morning is oil. oil prices up some 5%. if we have a look just shy of that now, 53.94 comes off a week of gains.

they were up 1.3% as a whole last week. but prior weeks, they were up 12% when the initial opec deal was struck. the reason we have the extra bounce today is because of other non-opec countries, most importantly russia, also the likes of mexico, throwing their names into the hat as well to say they will agree collectively to cut production. and that is giving another boost to the oil price, just shy of $54 for wti this morning. we'll take a look at what is going on around the world with trade, starting in europe. pretty marginally mixed day to begin here in europe. italy is the outperforming up by more than 1.3%. remember, of course, it's been a little over a week now since the italian referendum. and there is news that the italian foreign minister gentaloni will be the new prime minister after matteo renzi's resignation. we'll see exactly what happens there. and germany is down a bit, but last week it did gain more than 6%. it was quite a week for the german markets.

we'll take a look at what is going on in asia. china stocks dropping over banning insurance companies from buying stock in overnight action. the shanghai down 2.5%. the hang seng down more than 1%, almost at 1.5%. the nikkei, the outperformer, up 0.8%. so we still need to watch what goes on and see if we have any of the fallout with the futures. but we are mixed, slightly higher for the dow this morning. >> the point before we go into broader markets, the note for the european markets, on the tail last week some 6% for the dax. a 4% gain for the ftse 100. a 5% gain for the french evaluations. we have been questioning the u.s. equity markets, can we get the eps growth to justify evaluations? and can we see inflation in the gdp growth to justify the run we have seen. evaluations in the u.s. have been full, but they have been quite the opposite in europe because of all sorts of fears about growth and political pressures.

i think that is why we have seen it take off in europe. even though the outlook for growth and such in europe is much less exciting than it is in the u.s., it's a big room for evaluations to catch up. that's what we started to see last week. we didn't get disaster in terms of political fallout and things like that. but we did get stimulus catching up. >> but we have more to come to be sure. >> the banking sector is the best way to look at it. the likes of jpmorgan at 1.5 times book. it shows the significance still to co. we'll look at the broader markets, the ten-year treasury note did continue its rise last week. so the bond sell-off in terms of prices picked up pace as you can see. and starting this week at 2.5%. we are around 2.4% the pryer week. the yields are ticking up again. we'll look at the dollar, week to date, the dollar index was up about 1%. a big move coming against the euro. of course, as we saw the euro

weaken following more easing, what we're seeing as an extension of the easing. you can see the dollar higher against the yen, but it is softer against the euro and the pound. the big question, of course, for the dollar will be whether the fed eases this week. 92% expected with the rate hike. only 8% expected, bigger rate hike of 50 basis points. so there's little room for maneuver in either direction for the fed to surprise, whether it didn't hike at all or whether it hiked more than expected. the question for the dollar might be whether we see that we get to the hike, given the run that the dollar has had since the election. we'll move on to politics. president-elect trump is expected to nominate exxonmobil's ceo rex tillerson as the secretary of state. the oil exec has no government experience. tillerson is the former chairman of the committee of the american petroleum institute. he has brokered deals with russia. his ties to russian president

vladimir putin could lead to bipartisan resistance in congress. trump acknowledged the relationship on fox news yesterday. >> in his case, he's much more than a business executive. he's a world class player. he's in charge of, i guess the largest company in the world. it's been a company that's been unbelievably managed. and to me, a great advantage is he knows many of the players. and he knows them well. he does massive deals in russia. he does massive deals for the company, not for himself. >> arizona senator john mccain weighed in on the potential nomination himself yesterday. >> i believe that vladimir putin is a thug and a bully and a murderer. and i believe that the relationship between mr. tillerson and vladimir putin needs to be examined. i have no doubt that the russians were involved in very serious breaches that we have all seen about. whether they were intended to

help donald trump or not, i do not know. that has to be the subject of overall hearings that we're going to have on the armed services committee. >> though tillerson spent his entire career in the energy sector, exxonmobil operated in more than 50 countries. and a separate appointment to report, late friday trump said he would name andrew liveris, the chairman and ceo of dow chemical advise the u.s. secretary of commerce. here's where we stand in terms of the president's cabinet and who he intends to nominate. it's taking shape. all eyes will be on whether he does, in fact, announce rex fillerson or tillerson as secretary of state. it's a more positive look for mr. putin. >> some people are concerned about mr. putin as well. >> it's a different approach than we expected, certainly.

he's almost confirmed it. he said, if i announce tomorrow it's rex tillerson, dot, dot, dot. we are expecting that today. that's one of the ones that we just said that may face opposition in terms of senate approval. >> that's right. china is reacting to other comments the president-elect made yesterday. the president-elect questioned whether the u.s. should continue its one china policy. >> i don't know why we have to be bound by one china policy unless we make a deal with china. having to do with other things, including trade. >> under the policy the u.s. has formal ties with china rather than taiwan, which china sees as a break away photograph province. this prompted an angry response from chinese state media. an editorial in the global times warned trump that the one china policy cannot be traded. >> it's an interesting perspective because there's always been a sort of de facto protection of taiwan by the united states given the presence in the region and places like japan and allies of it. so the fact that over the last

administration, you have only been allowed to speak to china and not acknowledge that, dating back to the protection of taiwan, it does need clearing up. that's what he's suggesting at this moment. there's a lot of risks for doing that. it may be easier to ignore the issue, but we'll see what happens. >> he's not one to ignore. he likes the risk. he's a risk-taker. more on sort of the geopolitical concerns linked to the corporate world. boeing reaching a $17 billion deal to sell 80 jet liners to iran. this is the first major transaction between an american company and iran since the donald trump election win. u.s. companies like boeing began to talk to the iran agency after they moved sanctions on tehran, but there are questions now about whether president-elect trump might look to slow or stop dealings with the islamic republic. meantime, europe's airbus is reportedly close to finalizing a deal to sell dozens of its passenger jets to iran. on this issue, not to be

questioning whether donald trump will push through this sort of deal, given his opposition to trade deals that exist already and some that president obama struck. on iran itself, maybe he can get involved in individual company deals. it's much harder to unwind this than nafta where the u.s. had such a leading position in it, because the iran deal has u.n. security council approval. it has buy-in from all the other western allies of the u.s. and i think it would be huge opposition from the all lice iee tried to scuttle the broader nuclear deal that the u.n. reached with iran under the obama administration. so this one perhaps is a little safer than the likes of nafta. >> he doesn't like the deal made with iran and says boeing needs to make money, but not so much money. >> right. there's definitely a lot of rhetoric that may point against this, but i think there are more hurdles for him to undo this particular deal, for all the criticism it has, than perhaps the likes of nafta or tpp, which has not been approved yet.

>> yes, just an interesting intersection of things he's gone after. interesting. in other news, at the intersection of politics and business this morning, ford's ceo says president-elect donald trump's threats won't change the company's plans to move a small production to mexico. trump is going to impose tariffs on companies who move jobs abroad, but ford will move production of the focus from michigan to mexico as planned, in part because american consumers demand low prices for small cars. and it would cost less to produce them in mexico than here domestically. talk tech executives will attend a summit with preside president-elect trump on wednesday. among those reportedly to attend, eric schmidt, amazon's ceo, apple's ceo tim cook, facebook coo sheryl sandberg, and the intels of ibm and cisco

are expected to attend. in other news, bill gates is heading a $1 billion fund on fighting climate change. it's called the break through energy venture response. all together nearly two dozen of the world's most successful business leaders will invest in the fund to aim to reduce greenhouse gas emissions to almost zero by financing clean energy technology. now to this week's wall street agenda, there's plenty of information on the docket. tomorrow we import prices with the two-day fed policy meeting. on wednesday look for november retail sales and the ppi. the fed decision at 2:00 eastern on wednesday. along with members' latest economic outlooks, on thursday it's the cpi and the philly fed survey. finally, friday, housing starts.

we'll look at the stocks to watch today. major sky shareholders are voicing displeasure with the fox takeover bid with one calling the $14 billion offer, quote, far too low. on friday rupert murdoch stocks offered $13.52 a share in cash for the british paid economy. and johnson & onton could rally 20%. among the reasons, barron's says they are less subject to price disparities. and the company should benefit from president-elect trump's tax benefits. and goodyear could see shares rise 20% as they look to benefit from cost-cutting demand for 17-inch truck tires.

is that big for a truck? >> i'm not up on wheel or tire sizes. and the countries agree to cut production of oil. more for the biggest market movers coming up. you're watching "street signs," on cnbc, the first in business worldwide. no matter how the markets change...

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good morning.

if you are just joining us, welcome back to "worldwide exchange." the dow is expected to open lower by 20 points. the nasdaq is slipping down 0.6%. it was, however, the best performer of the trio last week up around 2.6%. the others up around 2%. so about 3.6% last week and the others up 3% as we hit various new highs for these indices and others, including the russell 2000 and the dow transport. a little soft but off record highs. oil prices are up nicely this morning as you can see, some 5%, just shy of that level for wti. just below $54. that comes as some non-opec members, most importantly russia, have agreed to a production cut with opec there for solidifying that positive momentum we have seen in the marketplace since the opec meeting some 10 to 12 trading days ago. and on that topic this morning on cnbc europe, nigeria's oil minister had a few comments to

add. >> i hope the groups understand that both sides have to keep to the deal otherwise it falters. >> both sides need to commit to keep the deal but the optimism in the oil market is out there up 4% this morning. the news out of europe this morning, the italian foreign minister paolo gentiloni has been chosen to be italy's next prime minister. he asked to form a new government and the political prices triggered by last week's no vote in the constitutional referendum, although it's actually quite interesting that this is the, what, 63rd government in 70 years. in other political news overseas, new zealand's prime minister has been sworn in as the country's new prime minister. the transition of power comes a week after former prime minister

for new england said he will be stepping down. and the imf chief lagarde faces negligence trial in france after serving as the finance minister. still to come, china hits back at trump. we'll take you to beijing where government officials say they are seriously concerned over the president-elect's latest comments. but before we head to break, here's today's national forecast from the weather channel's kelly cass. >> good morning, courtney and wilfred. we are still seeing snow across the upstate of new york and the interior sections of new england as well. great news for the ski resorts, that's for sure. we're picking up anywhere from 1 to 2 feet of snow in some spots. it's all rain, though, once you get down to new york city, d.c., all the way into atlanta where we'll see the much-needed rain across the southeast. a little bit of snow and arctic cold across the northern plains. temperatures struggling to even get above zero today. and we are finding another storm system moving into the

northwest. that means a mix of rain and snow for seattle, certainly much more snow for the higher elevations and the cascades. 41 for your high in seattle. 44 in denver. mid-50s in dallas. even a touch above average in atlanta, typically in the 50s. we'll see about 61 today. and 82 degrees down towards miami. that's a look at your national forecast. we'll be right back.

welcome back to "worldwide

exchange." president-elect trump is calling into question a nearly four-decade-long policy. >> i don't know why we have to be bound by the one china policy unless we make a deal with china, having to deal with other things including trade. >> eunice yoon is joining us with the government's reaction to all the back and forth from president-elect trump. eunice, good morning. >> reporter: good morning, wilfred. well, like you said, beijing came out with strong reaction to trump's remarks, saying they were extremely concerned about his comments over the weekend. and now the foreign ministry said they are also urging the trump administration to really understand the sensitivity of the taiwan issue. this is what they had to say early today. >> the one china principle is a political backlock for the u.s./china relationship. if it is compromised or disrupted, the growth of china's

relationship -- will be out of question. >> reporter: the official statement came after much more strident comments in the stayed media, which was lashing out at trump this morning, basically saying that the one china policy is not a bargaining chip. and also that chinese sovereignty cannot be traded. now, the one china policy has been a core interest of the communist party here. and, in fact, the u.s. had recognized it back in the 1970s. that's why one of the reasons there's so much shock and still so much shock over trump questioning this policy, which has been seen as important foundations for china/u.s. relations. >> i get off the backlog to this, the background to it, that said, it's been a defact to protection for the u.s., even though they have agreed to the headline of the one china policy. so what is driving this latest reaction? because the prior two, three weeks, the chinese reaction was

relatively muted to president-elect trump's victory. >> reporter: well, right. i think the first reaction we saw was beijing waiting to be much more muted in their reaction. when he first started to talk about taiwan, however, since then all the people i've been speaking to say beijing wants to send a message to trump that if he does want confrontation with china, that china is ready to stand up and that it won't be bullied. and we saw that when it was revealed over the weekend by u.s. officials that china had sent up some nuclear bombers in the south china sea. yet another disputed area between the u.s. and china. and so with that, as well as some of the other concerns about trump's behavior, a lot of people here are worried he's much more erratic than they feel comfortable with. that is something that the business community here is watching very closely.

one thing, wilfred, is that i was speaking to one long-time china watcher here who said that they're happy with the push-back from trump in some ways because there's so many concerns about china. at the same time, he said, it's very dangerous to poke a tiger in the eye. >> eunice, it is, indeed. thank you for us, reporting from beijing. trump wasn't done there and spoke out yesterday on the cia findings that the russian hackers tried to help him with the election. >> i think it's ridiculous. i think it's just another excuse. i don't believe it. every week it's another excuse. >> key members of the senate armed services committee took a tougher stance in response for trump calling for a full investigation into the election cyber attacks. the committee, which is led by john mccain, and includes republican lindsey graham, called for democrats and republicans to work together to examine the incidents. switching to sports, in "sunday night football" the new

york giants faced the dallas cowboys who were on a winning streak until last night. the giants beat the cowboys 10-7 and improved their nfc playoff chances. also, the eagles sadly lost this weekend. meantime, the arsenal were over the english premier league. >> that's soccer for all of you. >> it's that kind of football. coming up, the top stories including a big jump in oil prices. plus, a new report on the unstability of the eu. why more shocks are said to be coming in 2017. stay tuned, you're watching "worldwide exchange" on cnbc.

good morning. will the fed decline? we'll have trade prices straight ahead. and details on the soaring oil market. and some best buy employees are caught on tape. it's monday, december 12, 2016. you're watching "worldwide exchange" on cnbc. ♪ a very good morning to you on "worldwide exchange" here on cnbc. i'm wilfred frost in with courtney reagan in for sara.

given the run we have had recently, the dow is essentially flat, just higher. the s&p is showing a slightly more meaningful decline. this comes on the back of the nasdaq being the best performer last week up 3.5%. the s&p and dow were up 3%. so just expecting to have a little bit of profit-taking within the nasdaq this morning. let's have a look at oil prices. that's the big mover today on the news that some non-opec countries have agreed to the opec production cuts, in particular, russia is the most important one there coming to the party. that's led oil prices to rise higher by about 5% or 4.5% as we look at things now. so we're just shy of $54. we have the oil prices coming in just a moment. there they are, up 4.3% now. wti sitting at 53.7. so that's spurred oil prices. and energy sectors are higher as

we look at european trade. we're seeing a little bit more muted performance than we saw last week as you can see some declines across the mains there. this comes on the back of big gains last week with the dow up 6.6% for a week as a whole. the ftse up 4%. france up 5%. a little bit of profit-taking there, somewhat expected. the asian trade was more negative. shanghai, in particular, was down a couple percent. and hong kong was down 1.5%. japan, though, managing to gain about 0.8% in the face of a stronger dollar against the weaker yen. and as we take a look at the broader markets ahead of the fed meeting this week where the market is expected with almost 100% certainty we'll see an interest rate hike. you can see here the yield on the ten-year just slightly above 2.5%. last friday, december 2nd, we were at 2.39%. so we have run over a .10% in

just over a week. and if we can take a look at the dollar, it was marginally lower earlier this morning against a basket of currency, but still sitting near highs again ahead of the fed meeting here. you can see some stronger reaction against the yen and the euro for the dollar this morning. then what we had seen overnight at least. and if you can take a look at gold prices, last week gold hit the lowest level since february. and friday it actually fell about 0.9%. we're extended the losses again today, about 0.6% for the precious metal. now to politics, president-elect donald trump is expected to nominate exxonmobil's ceo rex tillerson. he has no government experience. the former chairman of the committee of the american petroleum institute. he's brokered deals with several countries including russia. he has ties to vladimir putin and it could lead to bipartisan resistance in congress. trump acknowledged the relationship in an interview on

fox news yesterday. >> in his case, he's much more than a business executive. he's a world class player. he's in charge of, i guess the largest company in the world. it's been a company that's been unbelievably managed. and to me, a great advantage is he knows many of the players. and he knows them well. he does massive deals in russia. he does massive deals for the company, not for himself. >> though tillerson spent his entire career in the energy sector, he's experienced foreign governments as president-elect trump just said given that exxonmobil operates across more than 50 countries globally. in corporate news, boeing reaching a $17 billion deal to sell 80 jet liners to iran. this is the first major transaction between an american company and iran since donald trump was elected more than a month ago. the deal was first announced in june and officially sealed yesterday. u.s. companies, including boeing, began to talk to iran earlier this year after a nuclear court removed sanctions

on tehran. but there are questions about whether president-elect trump could look to stop dealings with the islamic republic. meantime, europe's airbus is reportedly close to finalizing a deal to sell dozens of passenger jets to iran. now back to global market views on concerns about the stability of the eu that was a human theme this year. how should investors prepare for next year? joining me is the chief strategist to talk more about this. the dlaollar strength is a concn for investors and what it does to u.s. stocks next year, which of the companies across the u.s. have the highest exposure to international earnings we should be focused on? >> well, i mean, when looking at the percentages of sales abroad, you look at companies like qualcomm, skyworks solutions,

lam research, these companies have 85/90% of their revenues abroad. and what that means for the companies and what investors need to know about that is a strong dollar means that if you have year income, you will get less dollars for the year income and that becomes an issue at the top dollar and sinking through. >> when you consider how much of an effect this has on translation of earnings as you mentioned versus actual impact on u.s. gdp growth across the board, where does the balance stand? is this just a translation issue? or is it actually something that derails gdp growth for the nation when we see the dollar rise? >> i think from a revenue point of view of companies, it ends up being cash, not just some translation. it ends up being, hey, i used to get for euro 150, i would get $1.50 per euro. now i get 1.20.

what risk management am i doing? and what we have fireapps do, we talk to a lot of ceos and cfos. and the concern son is on both sides, because a lot of the qualcomms are worried about what this means long-term. but if you're in europe, and you have cost in united states, that also becomes an impact. the companies are looking at how to mitigate that. some companies have taken the position that if i'm going to sell in the united states for, for example, as a european company, maybe i need to start manufacturing more in the united states. and that, i think, plays right into president-elect trump's strategy there. >> the dollar has strengthened so far so fast already. do you think that it is possible we could see a correction here quickly? >> i actually don't see too much of it, just because of the interest rate move going forward. that is not the concern i'm

hearing ceos talk about. one of the dollar strengths that people are talking about with china is that china, over the last two years, has depreciated so the dollar appreciated for more than 12%. people think that's tightly pegged, but really, you've had significant appreciation of the dollar already. now the strategy is to force them to unpeg more. that's a shock that people need to start looking for. it surprises people every time i talk to them, dollar china is pretty close. no, actually, the depreciation is significant and could increase more. the surprises typically come when people don't see it coming. and i think when you're looking at how volatile china is becoming in the conversations you just had in the previous segment, talking about china and poking the tiger in the eye, the volatility could very much increase there. and it's something that most people aren't used to, even if they are managing that risk, that's a risk they haven't been

managing too closely and need to pay more attention to it from the investor point of view as well as from the ceo perspective. >> wolfgang, thank you for joining us this morning. there from fireapps. now to media news and the big numbers from the box office. landon dowdy has details. >> reporter: good morning. "moana" is at the top of the box office featuring dewayne "the rock" johnson leaving the domestic box office with $18.8 million, totaling $145 million since its opening weekend. coming in in a close second, "christmas party," starring jennifer aniston and jason bateman raking in $17.5 million given the modest $45 million budget. and "la la land" is a critically-acclaimed musical and one of the top contenders for the oscars coming up featuring

emma stone and ryan gosling to bring in $855,000, the second biggest for a specialty film. the movie business continues to be in a holding pattern eagerly awaiting the "star wars rogue one" next week. that's expected to score the second biggest opening in history with about $130 million domestically in its initial weekend. guys, back over to you. >> landon, thank you. so many great movies coming out. >> did you see "the fantastic beasts"? >> i haven't seen that one. that's top of the remaining films. it's always good this time of the year. >> i can see it having not been a brand of the "harry potter" franchise. >> and even the "harry potter" officianados will say it's worth seeing. turning to "snl" this weekend, "breaking bad's" walter white joined donald trump's

cabinet. >> mr. white, how did you even get considered for this job? do you know donald trump? >> no! >> no? >> but i'm a big fan, i like his style. he acts first and then asks questions later. i also like the wall he wants to build. nothing comes in from mexico meaning a lot less competition for the rest of us. >> you mean jobs? >> sure. >> donald trump chose water white as they poked fun of his recent cabinet choices. but there was no alec baldwin, so it is progress in donald trump's eyes, i would imagine. >> perhaps. >> anyway, a nice gesture by employees -- sorry, we have moved on to the next story. this is a good one. outstanding gesture from a group of employees at a best buy store in new york is going viral. take a look. >> on behalf of all of us here

at best buy, we got you a wii so you don't have to come here every day to play, all right? it's something that we did for you. we all got together and chipped in to buy this for you, all right? >> so the team decided to chip in to buy a wii-u for a child who came into the store every day to play the free game display. as you can see, the boy was totally speechless at their generosity. according to the manager who uploaded the video, the team went the extra mile driving the boy home to his parents who were thrilled by the christmas surprise for their son. i love that! >> i love that, too. the boy was speechless. the best buy team wasn't, although we must apologize for the quality of the sound there. it sounded like they were, but it's a great clip there. very generous. >> it's so sweet. i kind of makes me tear up, actually. >> very nice. coming up, today east must reads. but first, as we head to break, check out the trading at this hour. largely lower, but it was a big

week last week. stay tuned, you're watching "worldwide exchange" on cnbc.

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and that unlimited 2% cash back from spark means thousands of dollars each year going back into my business... which adds fuel to my bottom line. what's in your wallet? may not always be clear. but at t. rowe price, we can help guide your retirement savings. so wherever your retirement journey takes you, we can help you reach your goals. call us or your advisor t. rowe price. invest with confidence. welcome back to "worldwide exchange." my pick is entitled "russian hackers and american hacks." they have high confidence that the russians did the hacking to help elect mr. trump. but we are told the evidence is far from definitive.

and multiple agencies offered no such judgments when briefing the committee on the election-related hacks last week. it's a very serious allegation. i think the american people, democrats and republicans alike, really want to know, really want to get to the bottom of what happened. but it is a little confusing about what the evidence is and if we'll find out. and what we do with it once we do find out. >> right. but also what even the cause of this was, if it is just a rogue nation acting on their own will, that has nothing to do with who ended up winning or not. that should have been on the intelligence community to stop it as opposed to anything else. either way, there's not much character on this at the moment. >> not at all. >> there's nothing that can be done off the back of it. my pick is in ""the wall street journal"" entitled "what 1980 and 2016 have? common." the nice picture of ronald reagan and margaret thatcher at the top of it. the owner writes, brexit and the trump cabinet could demonstrate

how great a free and unlimited government can restore prosperity as thatcher and reagan did a generation go. and it is focused on the causes of where we are today and how that was similar to 1980 in terms of the stagnation leading to big changes in terms of governments and political positions. and it's a great little comparison, some of the factors in the article. the difference in terms of not expecting too much to see the same types of economic booms is where we were in terms of inflation already, where we were with interest rates, and with it in terms of the level of full employment already in the economy. so the scope to improve, but similarities coming in with lots of questions about the similarities coming out on the other side. >> reagan and trump. whoever thought uncle ronnie would be compared to him. and the team is getting ready for "squawk box."

michelle caruso-cabrera is joining us. good morning. >> good morning. we are going to be talking about rex tillerson, the guy who extracts fossil fuels from the ground running to be secretary of state. what does that mean for business? what is turning out to be the most pro-business cabinet that we have seen perhaps since ronald reagan, wilfred. just like that article you were referring to. plus, we'll talk to jeremy seagle. the dow at 20,000 just around the corner as a result of the election. and we'll discuss trump trades, what is good, who is bad, who could he target at any point, would it be bad or good for certain stocks? all that coming up on "squawk box" at the top of the hour. still to come here at "worldwide exchange," we'll talk about the markets and the big central bank decision coming from the fed with chief economist michelle girard. stay with us on cnbc.

welcome back to "worldwide exchange." we'll have janet yellen's report on thursday. all eyes on the fed this week, yet the expectations for investors is that it is not actually something to focus on because we know what is going to happen. >> you're right, the market is 100% priced in for action. so this isn't one of the meetings where we are wondering, will they or won't be? and truthfully, so much has change in the wake of the election, but the markets are really looking for has anything in terms of the fed's outlook changed? it's not so much about what they are going to do this week, but what are they going to do next year and beyond? and i think that's what people are really going to be trying to, particularly from the press conference, to pick up any signals from the fed chair that, you know, that the fed themselves may see better growth prospects or the fact they might

not be able to move as gradually as before. >> is there room for growth prospects? it seems in terms of the stock market, the euphoria about what trump means for gdp next year, could janet yellen and the fed forecast put a damper on the enthusiasm? >> when he said disappointment, there could be disappointment that the fed is not going to say a lot. because we already had some clue from janet yellen when she testified in early december, she was sort of asked about might more expansive fiscal policies mean the fed change in what the fed was thinking? she said, hey, we need to see more information before we can actually change our forecast. so i kind of think she's going to take that same tone, which is that they haven't really changed much. they aren't going to, i don't think, change their dot forecast in terms of where they think that the fed fund rate will be. the gdp inflation forecast. i suspect they will stay and wait and see. the markets may be a bit more disappointed wanting more

insight. in terms of the growth outlook, two, whether or not it ends up disappointing, a lot will depend on the details of what we actually get. i'm pretty optimistic, i think. i'm not -- i think that the growth prospects are better, but i think the fed, as i said, is going to be a little more cautious in terms of not putting the cart before the horse. >> we could see 3% to 4% gdp growth they are saying, is that right? could we get there? >> i do think we can get there. i this i the economy has been held back for a long period of time by the regulatory -- we just have had bad -- both tax and regulatory policies for growth. and i do think that some of those burdens and headwinds are removed and i think the economy can perform, you know, certainly at a better than 3% rate. the one thing i will say near-term is, though, we are going to get, i think, more aggressive fed action as we look ahead to 17, in particularly 2018. and the market is expecting

that. we see it already. the dollar strengthening, interest rates rising, those are going to be some offsets to perhaps what we're going to get on the fiscal side. so i think that that is something to keep in mind. >> but you sound very upbeat about the prospect of growth under trump. the fiscal stimulus that it is partly predicated on, you believe it has the long-lasting multiplier effects of growth throughout the presidency rather than a year or so? we are very close to full employment. >> that's absolutely true. and that is a question i get a lot. boy, we are late in the cycle, can we really get as much bang for our buck? and it is true, there isn't like a lot of pent up demand with tax cuts to unleash. and we're talking 3% to 4%, which is going to look very good in the context of what we have seen. i mean, in an early cycle, if we were talking about a different -- part of the economic cycle that we got this

stimulus, we would perhaps be talking about the golden days of 5% growth or more. so i think we actually have realistic expectations of 3% to 4%. it just seems like very aggressive because we haven't had anything close to that on a sustained basis, in particular. >> and trump's cabinet is shaping up to look like one which we have not seen in many, many years. how much attention are you paying to that? how much credence do you give business leaders in these roles? >> i'm so excited to see what business leaders can accomplish in washington. i mean, in some ways, this is a bit untested or certainly it's been a long time since we have seen it. i think this is what the economy, what the economy needs. and so you talk about my optimism about what we can get, you know, i think that that's a large part of it, that we're going to see a whole new set of actors here in a way. the one thing is, there's not a lot of precedent. and that is to some extent in terms of what we can price into

the forecast. and by looking at the cabinet members, it's -- going to be a little bit of waiting to see what they do in terms of giving us guidance about -- we know the direction that they are going, but in terms of specifics. >> michelle, we have seen a lot of sector differentiation in terms of stock market performance since the election. just diving into one of them, consumer, how do you feel about the strength of the consumer at the moment? are we late cycle or a long way to go? >> we are late cycle, but we have very healthy wage and salary growth. i don't mean hourly earnings, i mean, we all know that the pay and that's been very slow to rise. but because more people are working and they are working longer hours, the aggragate pool of income that can be spent has been outpacing the pace of spending. we have actually had savings moving higher. i think now that confidence, and we're looking at confidence levels in terms of the consumer rising to cycle highs, some of that, we may see more of that income being put to work. so i'm pretty optimistic. i think it's a great holiday shopping season. we have heard a lot about that.

some of us have been doing that a lot ourselves. and i think the consumers have great fundamentals going guard. >> that's an awesome upbeat end to "worldwide exchange."

good morning. crude prices are surging today after major oil producers cut a deal for a cut in production. we'll see if shale will bring down the prices. and rex tillerson is expected to be named trump's secretary of state. and boeing reaching a $17 billion to sell jet liners to iran. but could the trump administration slow or stop dealing with advertise lambic republic? it is monday, december 12, 2016.

and "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 along with joe kernan and melissa caruso-cabrera. the dow would open 21 points higher. the nasdaq looking to open 25 points down in the s&p 500 looking down as well, but only largely. stocks in china tumbled overnight after regulators banned insurance companies from buying stocks. the shanghai composite fell 2.5%. the hang seng fell nearly 5%. and the nikkei closed higher by .08. >> do the rules ever stay the same there? every day there's new financial regulation that you can do this.